New York Probate and Estate Administration Lawyer Blog
A man died and his last will was admitted to probate approximately five months thereafter. A New York Probate Lawyer said the complainant in this matter has a one-quarter remainder interest in the residuary trust established under the man’s last will.
One of the paragraphs in the last will is at issue that states that the hospital will be used to endow charity beds and for charitable purposes only as a memorial to the man’s sister and to himself.
A New York Wills Lawyer said that upon the death of each of several income heirs, the complainant received a principal payment for its remainder interest in the above testamentary trust. The amount of the principal payments received by the complainant is $157,452.10 in total. The present value of the funds held by the complainant, including accumulated interest, subject to the provisions of the deceased man’s last will totals approximately $850,000.00.
Queens Probate Lawyers said the complainant contends that there is no longer a need to provide charity beds as a result of insurance and governmental programs, and therefore, it should be permitted to presently expend the entire $850,000 for its overall charitable purposes relating to the operation, maintenance and building development of the hospital.
A Nassau County Probate Lawyer said that however, the attorney general does not take issue with the complainant’s proposed use of the funds, but he does contend that the gift to it was an endowment, and in accordance with the section of the not-for-profit corporation law.
Specifically, the complainant argues that since the paragraph at issue provided that the funds could be utilized for charity beds and for charitable purposes, its requested construction is in accordance with the deceased man’s intentions. A Staten Island Probate Lawyer said the complainant alternatively takes the position that changed conditions that warrants the court in permitting the complainant to use the fund for purposes other than charity beds.
Sources revealed that a charitable gift given as an endowment is one which has statutorily been given very special characteristics which encumber it with certain restrictions. Moreover, the threshold question to be determined is whether the inheritance to the complainant constitutes an endowment fund.
In addition, the endowment fund defines as an institutional fund not wholly expendable by the corporation on a current basis under the specific terms of all applicable gift instruments. Also, the term institutional fund is defined as a fund for the exclusive use, benefit or purposes of a corporation, held either by the corporation itself or on behalf of the corporation.
If the inheritance is an endowment under the not-for-profit corporation law, it is subject to the provisions of that law which provides that the governing board of the corporation may appropriate for expenditure for the uses and purposes for which an endowment fund is established so much of the net appreciation, realized and unrealized.
Subsequently, the proceeding has been crystallized to a point where the complainant is advancing expressive arguments in support of a position that is not disputed by the attorney general, to wit, that the fund may be used for purposes other than charity beds. Similarly, the complainant has not advanced any authority to contradict the position of the attorney general that the testamentary gift was a donation, and therefore, is subject to the provisions of the law which mandates that complainant preserve the historic dollar value of the fund.
The proposed last will at issue appears to be a detailed attorney-drafted instrument designed with relative care to incorporate an accurate expression of the deceased man’s testamentary intent. It is noted that paragraph sixth of the last will contains provisions for seven separate charitable donations and that with reference to only one other, in addition to the one at issue, is it stated that the gift is to endow. All of the remaining five gifts are outright.
Based on records, great weight must be given to the utilization of the phrase “to endow” in the paragraph of the last will that created the fund that is the subject of the matter. The words “to endow” has an accepted technical legal meaning which must be given full significance when it appears that it is being utilized in the usual and accepted legal sense in a carefully drawn instrument. In the matter, not only the paragraph utilizes the words “to endow” but it also specifically stated that the motivation of the gift was to create a memorial to the man’s sister and to himself. The word “memorial” is then defined as something that keeps remembrance alive. The deceased man’s use of the above words evinces a clear intent to bestow upon the complainant a permanent fund as a memorial. Therefore, there is nothing presented to suggest any basis for not applying the strictest legal implications to the use of the words “to endow”, but the paragraph at issue when read in its entirety is affirmatively supportive of the deceased man’s testamentary intent to create a donation.
Moreover, the complainant indicates that the application is at least partially motivated by a division of opinion on the complainant’s board of trustees as to the complainant’s authority to use the fund at issue for all hospital purposes, both of an expense and capital nature.
On the issue of the language of the last will, the paragraph sixth of it specifically states that the fund is to be used for charity beds and for charitable purposes. Sources revealed that a great weight must be given to the presence of the word and before charitable purposes. To conclude that the gift was limited to being used for only charity beds would require concluding that the words and for charitable purposes are a redundancy. Clearly, a gift for charity beds is also a gift for a charitable purpose.
Based on records, it is a basic rule of construction that to as great an extent as possible meaning should be given to all aspects of the provisions found in the proposed last will.
Appropriately, it is concluded that it was the intent of the deceased man that the hospital may use so much of the gift as is legally available at any given time for such needs of the hospital as the trustees in the exercise of their responsibilities consider prudent. Further, the conclusion is further supported by the very nature of a not-for-profit corporation. It is an entity that is not being operated for financial profit or financial gain.
Implicit in the operation of a hospital that is serving a community on a not-for-profit basis is that the very nature of its operation is one which is charitable, and that any expenditure that is necessary to further its operation is within the framework of the charitable purposes intended by the deceased man when he created the gift through his last will. It is also concluded that the uses sought by the complainant fall within the scope of the original gift, it is not necessary to consider applying the terms.
For the above reasons, the paragraph sixth of the last will is taken to mean as creating an endowment fund. It is further determined that the historic dollar value of the endowment is $157,452.10 and that the sum must be preserved intact. The complainant may expend any amount in excess of the said sum for such hospital purposes as it is considered prudent by its board of trustees.
Whenever you need help in drafting or completing your last will, you can seek assistance from the Bronx County Estate Attorney or Bronx County Estate Administration Lawyer. Furthermore, if you need to explore your legal options on the administration of an estate, you can have the help of the Bronx County Probate Attorney at Stephen Bilkis and Associates.