Queens

Published on: December 3, 2014

Court Reviews Will Provisions

by Stephen Bilkis

Probate Lawyers saidiIn this Probate case, Decedent died on January 7, 1881, leaving a last will and testament, the third and seventh clauses of which are as follows: ‘Third. I desire to make ample provision for the support and maintenance of my said wife, and, in addition to what I have above given, I order and direct that my executors, before paying the legacies hereinafter mentioned, do set apart of my estate the sum of one hundred thousand dollars, and keep the same invested and out at interest, and that they apply the interest or income therefrom to the use of my said wife, in half yearly payments, or oftener, if convenient, during the term of her natural life; and that from and after her death they pay over the said sum of one hundred thousand dollars to our adopted son, if he shall then have arrived at the age of twenty-eight years; but if at the decease of my wife he shall not have arrived at the age of twenty-eight years, then my executors are directed to keep the same invested until he shall have arrived at that age, and that they apply the interest or income to his use, and on his arrival at the age of twenty-eight years the said principal and the accumulated interest (if any) is to be paid to him; but if my said adopted son shall die before he arrives at the age of twenty-eight years, and not leaving lawful issue him surviving, then the said sum of one hundred thousand dollars shall be divided as follows, and I do give and bequeath the same accordingly.

An Estate Lawyer said it was held by the surrogate, and upon appeal by the supreme court, that the heir took a vested remainder in the $100,000 which the executors were directed to set apart and hold for the benefit of the widow during her life, and that he took it by virtue of the language contained in the third clause of the will; that, therefore, the testator did not die intestate as to any portion of his estate; and that his next of kin were not entitled to any hearing upon the accounting. Without determining whether or not the courts below were right in their construction of the third clause of the will, we have no reason to doubt that he took a vested interest in remainder in the $100,000 under the residuary clause. It is clear that the testator did not intend to die intestate as to any portion of his estate. He had taken particular care as to the dispositions made in the prior clauses of the will, and it is true that in several of them he provided distinctly that in certain contingencies the gifts should become part of his residuary estate, and that he made no such provision in reference to the $100,000. But we do not deem that circumstance of much importance.

Nassau County Probate Lawyers said in this case the residuary estate was large, and no direction was given in the will for the disposition of the income thereof until the heir reached the age of 28 years; and the next of kin of the testator, therefore, claim that such income was undisposed of, and that they were entitled to the same. We think the disposition of the income is controlled by the provisions of the Revised Statutes, which provides that ‘when, in consequence of a valid limitation of an expectant estate, there shall be a suspense of the power of alienation or of the ownership, during the continuance of which the rents and profits shall be undisposed of, and no valid direction for their accumulation is given, such rents and profits shall belong to the persons presumptively entitled to the next eventual estate.’ There was no direction whatever for the accumulation of the income.

Published on: December 2, 2014

Court Decides Apportionment of Estate Taxes

by Stephen Bilkis

Probate Lawyers said that according to sources, in two of three consolidated proceedings the trustees under two indentures of Inter vivos trusts, seek judicial settlement of their accounts and construction of certain provisions of the trusts. Specifically, as holders of shares of stock of a regulated investment company (sometimes called a ‘mutual fund’), they seek instructions whether within the purview of the provisions of the trusts, capital gains distributions made by the company are income distributable to the income beneficiaries of the trusts or are principal allocable to the corpora of the trusts. They also request instructions concerning the allocation of estate taxes and attorneys’ fees among the persons interested in one of the trusts. In the third proceeding the executors of the will of the settlor of the trusts request instructions concerning the allocation of estate taxes and attorneys’ fees insofar as they are referable to one of the trusts and other property. The parties have stipulated, with the approval of the court, that examination and settlement of the trustees’ accounts shall be deferred pending determination by the court of the issues on which instructions are sought. There shall be considered first the treatment of capital gains distributions, as between principal and income, paid to the trustees on the shares of stock of the regulated investment company. At the time of the institution of these proceedings the trustees held 81,247 shares of stock of an investment company in the corpus of the 1931 trust and 120,000 shares in the corpus of the 1935 trust.

An Estate Lawyer said that the investment company has qualified as an open-end regulated investment company, having registered under the provisions of the Investment Company Act of 1940, as amended. Each of its investors own a pro rata share of the securities held in its portfolio. Its earnings are acquired from dividends and interest paid on securities in its portfolio which are classified as ordinary income, and also from the net profits realized on the sale or exchange of its investments which are designated as capital gains. As required by the Investment Company Act, its statements to its shareholders and the public specifically characterize the source of the earnings. It is not disputed that ordinary income is properly treated as income distributable to the income beneficiaries. The issue arises as to the allocation of the capital gains distributions. The petitions of the trustees allege that each year the Investment company pays capital gains dividends which are payable at the election of the owner of such shares in cash or in additional shares of the corporation’s stock. They are uncertain as to whether such capital gains dividends are income and distributable to the income beneficiaries of the trusts or are principal to be retained by the petitioners in the corpora of the trusts. The income beneficiaries maintain that they should be treated as income and distributed to them. The guardian ad litem appointed to represent the infant remainder men on this issue contends that they are principal and should be added to the corpora of the trusts. Initially, consideration must be given to the trust instruments to determine whether the settlor’s intention concerning the distribution can be ascertained therefrom. If it can, it would be controlling.

Queens Probate Lawyers said the paramount rule in the construction of Inter vivos trust indentures is to ascertain the settlor’s intention as expressed in the instruments in the light of the circumstances surrounding and attending their execution, and when ascertained to effectuate that intention unless contrary to public policy or an established rule of law. Other than those heretofore related, the record is devoid of any extrinsic circumstances existing at the time of the execution of the instruments which would shed light on the settlor’s intentions concerning the allocation, as between principal and income, of the capital gains dividends with which we are here concerned. There is no evidence that at the time of the amendment of the 1931 trust in 1935 and the creation of the 1935 trust that the settlor was familiar with the corporation of regulated investment companies or the nature of their dividend distributions. As a medium of investment those companies grew in popularity as a result of the enactment of the Investment Company Act of 1940, and the tax advantages accruing to the companies and shareholders under sub-chapter M of the Internal Revenue Code of 1954 where the company submits to federal regulation thereunder. It was not until the settlor decided in 1958 to exchange Pine’s assets for the shares of an investment company that the evidence discloses the settlor’s awareness of their form of distribution of income and capital gains dividends. Looking to the trust indentures the only reference to the treatment to be accorded to corporate dividends is found in the provisions that ‘any and all dividends payable in the stock of the corporation or association declaring or authorizing the same, and declared and authorized in respect of any stock constituting in whole or in part the principal of the trust fund, as well as all rights to subscribe for new or additional stock, shall be wholly principal and not income of the trust.’ However, those provisions do not contain any express direction concerning the allocation of dividends payable at the election of the trustees in cash or in additional shares of the Investment company. It is so conceded by the guardian. Nor may the distribution by the Investment Company be considered as a right to subscribe for new or additional shares of stock. Implicit in the term ‘rights to subscribe’ as used in the law there is contemplated an increase in the capital of the corporation giving its shareholders the right to subscribe to new shares at less than the market value of the shares. When capital gains distributions are made by the investment company, they are not accompanied by any increase in its capital stock, nor are their shareholders required to pay for the additional shares they may elect to receive. Being unable to glean the settlor’s intention concerning the treatment to be given those capital gains distributions guidance must be sought in the presumptive canons of interpretation adopted by the courts and the Legislature ‘to fill such gaps and to supply that for which the settlor has not lawfully provided.’

Published on: November 23, 2014

Court Reviews Petition to Modify Endowment Fund

by Stephen Bilkis

A New York Probate Lawyer said this is a petition to modify restrictions on an endowment fund, pursuant to section 8-1.1 of the Estates, Powers and Trusts Law or, in the alternative, section 522 of the Not-for-Profit Corporation Law. Petitioners, Trustees of a University, seek an order authorizing the subdivision of an endowment fund created by a testamentary bequest to the College of Medicine. The Attorney General of the State of New York (on behalf of ultimate charitable beneficiaries) has reviewed the current audit of the fund and raises no objection to the relief requested in the petition.

A Kings County Estate lawyer said that a decedent died on March 9, 1985. Her last will and testament was admitted to probate by a decree of this court dated April 5, 1985.

In September 1986, Columbia University received $1,500,000 from the estate of the decedent. The University established the Professorship (“Chair”) for Clinical Medicine. As of September 30, 2009, the value of the endowment fund had increased to over $5,000,000.

Published on: November 18, 2014

Court Settles Who is “Next of Kin” in Probate Proceeding

by Stephen Bilkis

Decedent died in 1949 leaving a will which he had executed in 1919, some 30 years before his death which was duly admitted to probate.

A New York Probate Lawyer said in Article THIRD, the will created a trust for the life income benefit of testator’s wife. Upon her death, the principal was to be paid to son and if he should predecease to his issue. In fact the son predeceased the testator himself as well as his mother the income beneficiary without issue. It that contingency, the will directed the Trustee to pay over, transfer and deliver the principal of the trust fund to and among my next of kin in equal shares but Per stirpes and not Per capita.

A New York Estate lawyer said that the direction is clearly to distribute the principal among Testator’s next of kin. The issue is as of what date are the next of kin to be determined (1) 1919 the date of execution of the will; (2) 1949 the date of testator’s death or (3) 1975 the date of death of the income beneficiary, testator’s wife?

Published on: October 26, 2014

Court Rules on Holdover Proceeding

by Stephen Bilkis

A New York Probate Lawyer said this is a probate proceeding where the decedent’s son, who is the sole distributee and the sole income beneficiary of a testamentary trust consisting of the entire residuary estate, seeks to revoke his waiver and consent to probate so that he may conduct SCPA 1404 examinations and file objections to probate, if appropriate; and, seeks for an order directing the preliminary executors to discontinue a pending landlord/tenant holdover proceeding they commenced against him in connection with his occupancy of a portion of real property that appears to be the sole asset available to fund the trust. The movant’s four sons, two of whom are infants for whom a guardian ad litem was appointed, are the contingent remaindermen of the trust.

The relevant facts are the following:

A New York Estate Lawyer offered for probate is the will dated 30 January 2000 along with a codicil dated 20 July 2009. The codicil amended the will to include a newborn grandson. Both the will and codicil were drafted by an attorney and their execution was attorney-supervised; both were witnessed by three witnesses who also executed self-proving affidavits; it leaves all tangible personal property to the son; in paragraph FOURTH (A) and (C), the entire residuary estate is placed in trust, with all net income, payable to the son quarter-annually or at more frequent intervals if necessary during his lifetime, with the remainder divided equally among the decedent’s grandchildren; and, in paragraph FOURTH (B), the “sole and absolute discretion” is vested in the trustees to invade the corpus of the trust in such amounts and at such times as they shall deem appropriate and necessary for the health, welfare, support and maintenance of the son, and directs that such invasion “shall” be made “without considering the effect such invasion may have upon any third persons, including the remaindermen.”

Published on: October 13, 2014

Court Determines Apportionment of Legal Fees in Estate Administration Case

by Stephen Bilkis

A New York Probate Lawyer said the woman died survived by one sister and thirteen descendants of pre-deceased siblings. The deceased woman’s nephew, the Executor filed a Verified Petition to Probate a Last Will and Testament, dated April 17, 1996 in which he was the nominated Executor and in which he and his two siblings were named as the sole residuary beneficiaries. The Executor was granted Preliminary Letters Testamentary on October 29, 2009. Included in his Petition for Probate was an assertion by the decedent’s Executor that, after a diligent search and inquiry there exists no will, codicil or other testamentary instrument of the decedent later in date. The Petition also listed only the decedent’s one surviving sibling, and the Petitioner and his two sisters, omitting ten of the decedent’s distributees, all cousins of the Executor.

The decedent’s one surviving sister and the ten distributees left out of the Petition for Probate, six nieces and nephews and four great-nieces and nephews of the decedent (Objectants), jointly retained their counsel and conducted an investigation that ultimately determined that the April 17, 1996 will probated by the Executor was not the decedent’s Last Will and Testament.

A New York Estate Lawyer said the evidence was adduced that the decedent had executed a Last Will and Testament on July 11, 2000 and subsequently intentionally destroyed it. As the July 11, 2000 will revoked all prior wills of the decedent, its destruction would, in the absence of a subsequent will, result in the decedent’s property passing pursuant to the laws of intestacy and the Executor not being named as executor. Accordingly, on December 1, 2009, the Objectants filed a Verified Answer to the Executor’s Petition for Probate and Objections to the Probate of the April 17, 1996 Will.

Published on: September 18, 2014

court Decides if Will Should be Held Invalid Due to Statute of Limitations

by Stephen Bilkis

A New York Probate Lawyer said that, this is a proceeding to vacate a decree of probate and to allow the petitioners to withdraw the waivers of process, consents to probate they executed on May 17, 1999. The petitioners are the decedent’s four adult children, the executor of the estate, opposes requested relief. Respondent is the decedent’s surviving spouse; he and the decedent were married in November 1991. The husband is not the father of the petitioners.

A New York Estate Lawyer said that, on February 20, 2008, the court issued a decision and order wherein the court granted the petitioners’ counsel’s unopposed motion to withdraw as the petitioners’ counsel and stayed the proceedings for 30 days after a copy of the order was served by overnight delivery on the petitioners. A copy of the order was served as directed, and the period of the stay has expired. The petition to vacate the decree granting probate and for other relief has now been submitted for decision.

A Bronx Estate Administration Lawyer said that, the decedent died on December 5, 1998 at the age of 57. Her last will and testament dated March 11, 1995 was admitted to probate by decree dated July 29, 1999, and letters testamentary were issued to the husband. The affidavit of subscribing witnesses annexed to the will states that the will was executed under the supervision of an attorney. The decedent left her entire estate to her husband. In the event that the husband had predeceased the decedent, the decedent bequeathed the estate to the petitioners, per stirpes.

Published on: September 17, 2014

Court Decides if Decedent Meant to Name Petitioner as Sole Fiduciary

by Stephen Bilkis

A New York Probate Lawyer said that, this case, and an analogous matter decided on the same day, raise troubling questions about the use of pre-printed or form living trusts, which are now being heavily marketed in New York State. The instant case is especially disturbing, because its trust takes the form of loose pages contained in a three ring binder. The proceeding was initiated by the petitioner” for the probate of the Will of the decedent who died on September 9, 1996. The decedent’s Will, executed April 30, 1996, leaves his entire estate to the ” Revocable Living Trust dated April 30, 1996 and any amendments thereto.” The trust agreement provides for lifetime income and principal payments to the decedent as he directs. Upon the decedent’s death the principal remaining is to be distributed to the petitioner, a friend. An alleged amendment leaves 99.75% of the principal balance to the petitioner and .25% to another friend. The decedent is the sole lifetime trustee. The petitioner is either sole personal representative under the Will and sole successor trustee under the trust, or a co-fiduciary in each. A prior Will, dated October 24, 1990, which bequeathed one tenth of one percent of the estate outright to the other friend and the balance to the petitioner, was also filed with the court. The decedent left assets of about $1 million, of which approximately $950,000 had been transferred into the trust and passes according to its terms and $60,000 remained in his name at death and passes according to the provisions of the Will.

A New York Estate Lawyer said that, in reviewing the probate submissions, the court discovered that both the Will and the trust were so ambiguously worded that it was impossible to determine the decedent’s wishes regarding one of the most fundamental elements of his estate plan–the nomination of the fiduciary. Further examination of the documents revealed a staggering number of additional ambiguities, inconsistencies, apparent irrelevancies, and outright errors, many of which pose major problems in ascertaining or effectuating the decedent’s dispositive intent.

A Queens Probate Lawyers said that, at this same time, another construction proceeding involving a form living trust, which contained provisions analogous to those in the document already under review, was brought before the court. The executor of the Will of concerned that the merger of legal and equitable interests in her father’s trust might render it ineffective and hence not a proper receptacle for the pour-over of his estate assets, sought a construction permitting all of the property to be disposed of according to the trust’s terms. Faced with the Howard request for construction of similar provisions, as well as with the immediate need in the instant case to identify the fiduciary and to ascertain the decedent’s intentions regarding other significant provisions of both instruments, this court determined that a construction of the instant Will and trust was necessary at the present time. The Surrogate’s Court has the power to construe a Will when construction is necessary to determine questions in a proceeding before it or to make a complete disposition of a matter. Because one major obscurity concerning the ultimate disposition of the probate estate in the instant matter involved minors or unborn as possible takers, a guardian ad litem was appointed.

Published on: August 31, 2014

Court Determines Proper Amount for Attorney’s Fees

by Stephen Bilkis

A New York Probate Lawyer said this is a proceeding submitted for decision wherein the issue is the source of payment for fees awarded to a guardian ad litem. In this probate proceeding, the will “pours over” into an inter vivos trust. The court is tasked to decide whether trust assets can be used to pay all or part of the fee under SCPA 405(1).

The court finds that the fee may be paid from trust assets.

On 24 January 2006, F died a resident of Nassau County. On 24 October 2003, he had created the “F Revocable Trust U/A dated 24 October 2003.” At that time, F also executed his will, the instrument that is offered for probate. Both instruments were drafted by the decedent’s long-time attorney who also supervised the execution of both documents. As is customary with estate plans of this sort, the bulk of the decedent’s assets were transferred to the trust while he was alive. As a result, the will was designed to be a “catch all” so that any stray assets left in the decedent’s estate would be captured and distributed in accord with the terms of the trust. The probate petition reflects a probate estate of less than $10,000.00 while the trust holds assets close to $1,000,000.00.

Published on: August 24, 2014

Court Decides Whether it Should Grant Settlement of Account

by Stephen Bilkis

A New York Probate Lawyer said that, before the court is the first and final account of the ancillary executor of the estate of the decedent. The court is asked to approve: (i) attorney’s fees; (ii) commissions; (iii) reimbursement of expenses; and (iv) the settlement of the account. The decedent, died on May 3, 2004, leaving a will dated February 13, 2001. At the time of her death, the decedent was domiciled in Florida. Ancillary letters testamentary issued to the executor on July 18, 2005. The accounting covers the period May 3, 2004 to April 21, 2009. An amended accounting covering the period May 3, 2004 to December 22, 2009 was filed on February 5, 2010. The amended accounting shows principal charges to the accounting party of $829,804.35.

A Nassau Estate Lawyer said that, objections to the accounting and the amended accounting were filed by a $10,000.00 legatee and the beneficiary of fifty percent (50%) of the residuary estate. The ancillary executor is the beneficiary of the other fifty percent (50%) share of the residuary estate. By instrument dated December 2, 2010, he withdrew his objections to both the first account and the amended account.

The issue in this case is whether the court should grant the settlement of the account.