Estate Administration

Published on: June 11, 2016

Surrogates Court Called to Establish Lost Will

by Stephen Bilkis

This is a proceeding brought before the Surrogate’s Court, Kings County, to prove the last will and testament of AEF – to establish a lost will pursuant to the provisions of Section 143, Surrogate’s Court Act.

On 11 February 1958, the decedent AEF died.

According to the subscribing witnesses of the will, on 4 February 1958, the decedent duly executed a will in accordance with the provisions of Section 21, Decedent Estate Law, and that, at the time of execution, he was fully competent to execute a will and was under no restraint.

Published on: June 10, 2016

Petitioner Files for Custody of Child

by Stephen Bilkis

This is a proceeding for the custody of minors under Article 6 of the Family Court Act brought before the Family Court of Kings County.

The petitioner is the natural mother of a child born in 1976 in Brooklyn.

The respondent is the child’s paternal grandmother who was appointed in December 1977by the Surrogate of Kings County as guardian of the person for the child.

Published on: June 8, 2016

Court Discusses Will Construction Issue

by Stephen Bilkis

The testatrix died January 10, 1914 leaving a will which was admitted to probate April 15, 1914. By paragraph ‘Fourth’ of her will she left her residuary estate in trust, and in substance provided that income be payable to a grandnephew for life, and upon his death that the trust be distributed to such of his children or their issue in such proportions as he might be will appoint, the power of appointment being limited, however, to his children or their issue who survived him, and in default of any such will or any such appointment, that the trust pass to the children of the grandnephew and the issue of any who had died per stirpes.

By paragraph ‘Fifth’ of the will testatrix provided that in case the grandnephew dies ‘intestate after me without lawful issue him surviving’ the trust shall be distributed to ‘my heirs at law and next of kin’. Such grandnephew died without issue on October 20, 1957, but whether or not he died intestate is questioned. The reason for the question is because he left a will under which he gave his entire estate to his mother and named her executrix. His mother, however, had predeceased him so that his will was wholly ineffective as a dispositive testamentary instrument as well as ineffective to name an executor. The will was, nevertheless, admitted to probate in another county, and letters of administration issued to one of his distributees who has since died.

Since the grandnephew had no children, the limited power of appointment could not have been and was not exercised and for the same reason the gift-over to children and issue of the grandnephew under paragraph ‘Fourth’ in default of appointment could not take effect. The result is that testatrix must be considered intestate as to the disposition of the trust after death of the income beneficiary unless some other provision of the will prevent such intestacy. If intestacy does result distribution must be to decedent’s heirs and next of kin determined as of the date of her death in 1914.

Published on: June 7, 2016

Court Looks at Construction of Charitable Trust

by Stephen Bilkis

This proceeding was originally commenced by the son of Mrs. NED, now deceased, who was testator’s niece and one of his two distributees, for a construction that the charitable trust created under paragraph Tenth of testator’s will is invalid. The special guardian for testator’s half-sister, who was testator’s other distributee, takes a similar position. Both distributees and four other persons were given lifetime specified annual legacies under the will and codicil.

Thereafter the said son, who is a residuary legatee under his mother’s will and one of her coexecutors, in his representative capacity, and his mother’s other coexecutor made themselves parties to this proceeding by adopting, amending and supplementing the original petition. The conservator appointed for testator’s half-sister, by a separate instrument adopted the petition and the amended and supplemental petition herein.

The special guardian urges that a hearing be held to ascertain the facts surrounding the execution of an agreement dated December 12, 1936 by and among his ward, Mrs. NED, the nominated corporate executor, and the Attorney-General of the State of New York. Under said agreement the objections to probate of the testator’s will and codicil, which had been interposed by testator’s half-sister, were withdrawn, conditioned upon the payment of a substantial sum of money to each distributee, in addition to the benefits given to each of them under the will.

Published on: June 6, 2016

Deceased Leaves Majority of Estate to Charity

by Stephen Bilkis

JB died a resident of the City of Poughkeepsie, Dutchess County, New York, on April 5, 1954, leaving a Last Will and Testament (and Codicil) which were thereafter on the 30th day of April, 1954, duly admitted to probate in this Court. At the time of his death testator was survived by his wife Mrs. JB and his brother MR. TB. On October 18, 1965, some 11 1/2 years after probate, a petition was filed by Mrs. JB, the widow, praying for a determination of the validity, construction and effect of said Will, particularly of paragraphs ‘FOURTH’, ‘FIFTH’, and ‘SIXTH’, whereby it is alleged that more than 50% Of decedent’s estate was left to a religious association in violation of Section 17 of the Decedent Estate Law. This section provides as follows:

‘No person having a husband, wife, child, or descendant or parent, shall, by his or her last will and testament, devise or bequeath to any benevolent, charitable, literary, scientific, religious or missionary society, association, corporation or purpose, in trust or otherwise, more than one-half part of his or her estate, after the payment of his or her debts, and such devise or bequest shall be valid to the extent of one-half, and no more. The validity of a devise or bequest for more than such one-half may be contested only by a surviving husband, wife, child, descendant or parent. When payment of a devise of bequest to such society, association, corporation or purpose is postponed, in computing the one-half part of such society, association, corporation or purpose, no allowance may be made for such postponement for any interest or gains or losses which may accrue after the testator’s death. The value of an annuity or life estate, legal or equitable, shall not be computed upon the actual duration of the life, but shall be computed upon the actuarial value according to the American Experience Table of Mortality at the rate of four per centum per annum. Such value shall be deducted from the fund or property, which is subject to the annuity or life estate, in order to ascertain the value of a future estate or reminder interest passing to such society, association, corporation or purpose.’

The Last Will and Testament of Mr. JB, after making certain specific bequests and naming his wife Mrs. JB (petitioner), his brother Mr. TB and his friend and attorney Mr. DM, as executors, provided as follows:

Published on: May 31, 2016

Court Decides Uncontested Proceeding for Reformation of Will

by Stephen Bilkis

This is an uncontested proceeding for reformation of Article FIFTH of decedent’s last will and testament dated November 21, 1979, as amended by Article II of a codicil thereto dated March 24, 1982 (collectively, the “will”). Decedent died on December 12, 1984. The will was admitted to probate by decree of this court.

Petitioner, the sister of the decedent, is a co-trustee of the trust created under Article FIFTH of the will (the “Trust”) for the benefit of decedent’s son, MR. BB, who suffers from chronic physical disabilities, including malfunctioning kidneys, for which he is receiving dialysis treatment. On July 14, 2006, following the death of MR. JJ, who had been serving as co-trustee with petitioner, successor letters of trusteeship were issued by this court to MRS. LL, who is petitioner’s daughter as well as a remainderman of the trust.

Under Article III of the codicil, a trustee who is also a beneficiary of the trust is prohibited from (1) exercising discretion to pay or not to pay income or principal from the trust; (2) determining whether a beneficiary of the trust is disabled; (3) terminating any trust or life estate thereunder; and (4) exercising discretion to allocate receipts or expenses between principal and income. Petitioner and MS. LL, who are remaindermen of the trust as well as the co-trustees, are thus unable to act in respect to these decisions.

Published on: May 25, 2016

Court Decides Reformation of Trust Issues

by Stephen Bilkis

RL died a resident of Wyoming County on January 18, 2006. His Last Will and Testament dated October 3, 2005 was admitted to probate in this court on April 3, 2006. Under the terms of his will the testator divided his estate in equal shares for his three children, but established a testamentary trust for the share for the benefit of his son, JB. The trust provides for the distribution of income as well as principal for the benefit of JB and is not a Supplemental Needs Trust (SNT) as authorized and defined in EPTL 7-1.12.

Although there has been no formal appointment of a guardian for JB pursuant to SCPA Article 17-a or Mental Hygiene Law Article 81, he is alleged to be a person under disability and receives Supplemental Security Income (SSI) and Medicare benefits as a result of his disability. There is no indication that JB is receiving or has received Medicaid or other, local benefits through the Wyoming County Department of Social Services (DSS) or other agency.

The facts are not in dispute and the matter is before the court on cross-motions for Summary Judgment pursuant to CPLR 3212. The two issues presented are:

Published on: April 30, 2016

Plaintiff Seeks to Enforce Charging Liens

by Stephen Bilkis

The law firms seek to determine and enforce charging liens pursuant to section 475 of the Judiciary Law. The liens would secure fees claimed by the Firms for legal services to respondent under a retainer agreement dated July 10, 2006 (the “2006 Retainer”). The Firms represented him in a decade-long dispute among several family members, involving various real estate holdings and family trusts. The dispute had been punctuated by at least two abortive settlements, the latter one in 2004. On January 3, 2008, however, the family internecine battles ended in a global settlement placed on the record in open court and then further memorialized in a written stipulation implemented by a closing on August 27-29, 2008. The liens now claimed by the Firms relate to his share of the proceeds of that settlement.

Discovery having concluded, the Firms and respondent have cross-moved for partial summary judgment. The issues raised on these motions involve the validity of the 2006 Retainer, its allegedly wrongful procurement, and, if it is valid, the meaning of several of its terms and the extent (if any) to which William’s obligations under it are subject to conditions that have not been satisfied. The Firms acknowledge that the sums to which they are entitled for work resulting in the 2008 settlement cannot be fully determined without a hearing. Respondent for his part asserts that a hearing is needed to determine the Firms’ fees for hourly services in the litigation preceding that settlement.

The 2006 Retainer was drafted and executed on its letterhead. As described below, the Retainer provides for fees in respect of both settlement-related work and litigation-related work. Settlement-related work gives rise to two types of fees: a flat fee and a performance fee, both contingent upon the effectuation of a settlement. Settlement itself is defined as “a settlement among substantially all of the descendants of the decedent and the trusts and estates thereof.”

Published on: April 29, 2016

Petitioners File Construction Proceeding to Determine Effect of Tax Exoneration Clause

by Stephen Bilkis

The executors have instituted this construction proceeding, prior to the filing of Federal and New York estate tax returns, to determine the effect of a tax exoneration clause, paragraph second and request a reformation or interpretation of paragraph eleventh, which creates a pre1969 residuary, multiple, split-income, charitable remainder trust so as to qualify it for a charitable deduction under U.S.Code, tit. 26, § 2055 as amended by the Tax Reform Act of 1969 (TRA).

The testator died on September 9, 1973, age 92, leaving a daughter, age 64, as his sole distributee, and a granddaughter and three great-grandsons. His will, executed on December 19, 1967 was admitted to probate and letters testamentary issued to petitioners on October 1, 1973. Paragraph second of the will provides: ‘I direct that all my funeral, administration expenses, just debts, and all estate and inheritance or succession taxes (without apportionment) be paid as soon after my death as may be practicable.’

The residuary probate estate, after deducting the pre-residuary outright and in trust bequests, but before estate taxes, is $845,580. Petitioners allege that the loss of the charitable deduction because the trust is not a charitable annuity trust under TRA would increase the estate tax by $163,000. It should be noted that prior to December 31, 1969, the estate would be entitled to a charitable deduction since the amounts payable to the charities could be readily determined. Before proceeding with the construction of paragraphs second and eleventh of the will, the court is called upon to determine a question of jurisdiction, which appears to be of first impression.

Published on: April 28, 2016

Court Discusses Residuary Clause of Will

by Stephen Bilkis

This is a proceeding to construe and reform Article III, the residuary clause, of the last will and testament of the decedent so as to enable the estate to qualify for an unlimited New York estate tax marital deduction. While an application to reform a will to enable the estate to qualify for a deduction for New York estate tax purposes and not federal may be uncommon, it is permissible.

The decedent died on July 21, 1988 survived by a spouse and three children. His will, dated December 14, 1979, was duly admitted to probate on December 19, 1988. Under Article III of the will the residuary estate, which comprises the entire estate with the exception of some personalty previously bequeathed to his wife, is divided into two trusts, Trust A and Trust B. Under Trust A, the decedent bequeathed in trust for his wife the following: “A pecuniary amount equal to the maximum marital deduction allowable to my estate for Federal estate tax purposes ($250,000 or 50% of my adjusted gross estate, as the case may be, less any adjustment required for marital deduction gifts made by me during my lifetime), less the aggregate amount of marital deductions, if any, allowed for interests in property passing or which have passed to my wife otherwise than by the terms of this Article, and less also the amount if any, required to increase my taxable estate to the maximum amount as to which, considering all deductions and credits allowable to my estate, there will be no federal estate tax payable by reason of my death.”