In re the Probate Matter of WB
2017 NY Slip Op 50193
February 9, 2017
In re the Probate Matter of WB
2017 NY Slip Op 50193
February 9, 2017
This is a trustees’ accounting and, as an incident thereto, the Court is required to determine the validity of the exercise of the power of appointment granted in article ‘Eighth’ of the testator’s will to his daughter as appointee.
The testator died May 11, 1933, leaving a will which was admitted to probate. By article ‘Eighth’ he created a trust of a fund, the income of which was to be paid to his daughter during her lifetime and upon her death the principal was to be paid to such persons as she designated by her last will, and should she die intestate, to those persons who at the time of her death shall constitute her next of kin. The residual provision contained in article ‘Eleventh’ of the said will provides for an identical disposition of the portion of said residual fund bequeathed to the daughter.
The daughter died a resident of Kings County on September 9, 1957, and under article ‘Fifth’ of her will she attempted to exercise the power of appointment of the corpus of the trust created for her benefit by dividing the same into as many shares as her son may leave issue living at her death which shares were to be held in trust for their respective lives, the income to be paid them from time to time and upon the death of each beneficiary the principal to their issue or, in default of issue, to the remaining children per stirpes. The children of the testator’s grandson, the only issue of the daughter are four infants, each under fourteen years of age, all of whom were born subsequent to testator’s death.
This is a proceeding (Article 79, Civil Practice Act) for the judicial settlement of their account as surviving trustees of an express trust created by the decedent in a letter writing dated March 10, 1902, and for the construction of the trust instrument in conjunction with the will of the decedent for whose immediate benefit the trust was created.
In March, 1902 decedent had four sons. On March 10th of that year he established the instant trust in a letter addressed to a son and a few days later delivered the securities constituting the corpus of the trust to his other sons as trustees.
The settlor augmented the corpus of the trust pursuant to instruments executed in 1905, 1907, 1909, 1910 and 1911. On December 24, 1909 the sons, as trustees, properly designated their brother Samuel (now a co-petitioner) as a co-trustee.
This is a petition to terminate a testamentary trust pursuant to EPTL 7-1.19. The trust was established under the will of a decedent, which was admitted to probate on January 23, 2004. Under her will, the testator left her residuary estate, consisting of her residence located at 2531 Ocean Avenue, Brooklyn, New York, in trust. The trustee was authorized to distribute the income to her daughters for their “maintenance, education, advancement, health, comfort or benefit, including but not limited to the need for a suitable residence of the two daughters.
Upon the death of the survivor of the two daughters, the trust terminates and the principal is distributed to the testator’s son, or, if he does not survive her sisters, to his children living at the testator’s death.
On February 18, 2005, the daughter entered into a contract to sell the Ocean Avenue property for $990,000. In April, 2005, the siblings entered into a stipulation allowing the sister to borrow $175,000, secured by a mortgage on the property, to enable her to buy another home. The mortgage was to be satisfied upon sale of the property and the amount used to satisfy the mortgage charged to the daughter’s share of the sales proceeds.
There are three proceedings pending in the estate of the decedent: (1) a miscellaneous proceeding to declare the decedent’s Living Trust dated March 19, 2001 invalid; (2) a proceeding to probate an instrument dated March 19, 2001 as the decedent’s last will and testament; and (3) a proceeding by respondent as trustee of the decedent’s Living Trust dated March 19, 2001, to judicially settle his account for the period from March 19, 2001 to May 9, 2007. On July 1, 2010, the court appointed a guardian ad litem for one of the decedent’s daughters, in all three proceedings.
The decedent died on May 9, 2007, survived by four distributees: two daughters, a son; and a granddaughter, the only child of the decedent’s predeceased son. The propounded will pours over to the living trust. The living trust provides only for the son, specifically omits the two daughters, and does not mention the granddaughter.
The guardian ad litem has filed a preliminary report in which he details his findings to date and, based upon them, recommends that he continue to represent his ward’s interests in all three proceedings. The guardian ad litem reports that the daughter has alleged that the son exerted undue influence and fraud upon the decedent at a time when he was physically ill and depressed. The guardian ad litem states that, based on his investigation, he deems it appropriate to participate in the SCPA 1404 examinations in the probate proceeding and to continue to represent his ward’s interests in all three proceedings. The court agrees with his conclusions.
This is an estate case where the proceeding raises an issue of virtual representation of unborn contingent remaindermen. The purpose of the virtual representation statute (SCPA 315) is to dispense with the necessity of service of process on necessary or proper parties.
The Testator was survived by his widow and one son. The son is unmarried. His unborn children are contingent remaindermen of two trusts.The first is the usual marital deduction A trust with power in the widow to appoint the principal. In default of the exercise of such power, the son is the remainderman. If he should predecease his mother, his unborn children are the contingent remaindermen. The second is a B trust. The widow and son share the income. Upon the death of the widow, the son receives the principal if then living; and if not, then his as yet unborn children are the remaindermen.
The interests of the unborn contingent remaindermen which may be adversely affected arises in this as in most cases not from the nature of the proceedings or of the trusts but from the predictable impact of the decree. It suffices simply to note that the sole assets of both trusts are shares of stock in a family corporation which represent a controlling interest in the hands of the trustee.
Before the court is a motion for summary judgment filed in connection with petitions for the removal of fiduciaries MRK and TOM in the related estates of Mr. KJJ and Mrs. JJ.
BACKGROUND Decedents Mr. KJJ and Mrs. JJ were a husband and wife who tragically died together in an automobile accident on April 22, 2005. They were survived by their three adult sons, CC, VV and SS, movants herein. Both decedents executed wills on November 19, 1986, and both wills provide that in the event that Mr. KJJ or Mrs. JJ is not survived by a spouse, then Mrs. JJ’s brother, MRK, shall serve as Executor.
The wills were filed for probate on October 13, 2005 and admitted to probate on March 1, 2006. Letters testamentary in each estate issued to MRK on March 3, 2006. At the same time, MRK received letters of trusteeship in Mr. KJJ’s estate.
This is a proceeding to construe and reform Article III, the residuary clause, of the last will and testament of BO, 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. Matter of Glick, N.Y.L.J. Feb. 17, 1989, p. 22, col. 6 (Surr.Ct. New York Co.).
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.
A New York Probate Lawyer said this case is a contested probate proceeding wherein the petitioner, A, the decedent’s second wife, moves for an order pursuant to CPLR 3212 granting summary judgment admitting the proffered instrument dated 21 December 2005 to probate and dismissing the objections filed by three of the four of decedent’s children from his first marriage, X, Y and Z.
On 29 October 2009, the 89 year old decedent died. On 12 September 1984, he was married to petitioner A. An instrument purported to be his last will and testament has been submitted for probate. In his will, petitioner was named the executor. The propounded instrument leaves his entire estate to the petitioner as his surviving spouse and unless she predeceases them makes no provision for the respondents. However, an earlier will dated 29 March 1994, left decedent’s entire estate to objectants.
A New York Wills Lawyer said the respondents have filed objections to probate alleging that: (1) the alleged will was not duly executed as required by law; (2) the propounded instrument was not freely or voluntarily made or executed by the decedent, but was procured by fraud or undue influence practiced upon the decedent by the petitioner or others acting in concert with her; and (3) on the date of the making of the instrument, decedent was not of sound mind or memory and thus incompetent to make a will.
The document sued upon is a Family Trust.
On 19 May 1999, a Family Trust, a revocable inter vivos trust, was created. It is a 29-page document with nine articles. A, the settlor, is the mother of plaintiff and defendant. A, and her husband, B, are the co-trustees.
A New York Probate Lawyer said that according to the Family Trust, its purpose is to hold property, which was attached to and made part of the agreement, together with such monies, securities and other assets as the trustee may thereafter at any time hold or acquire (said monies, securities and other assets, referred to collectively as the “Trust Estate”) for the purposes of providing income to the settlor during her lifetime, paying her funeral expenses, estate taxes, probate fees, legal and accounting fees related to her estate, satisfying any cash bequests, all inheritance taxes, funding a marital share deduction, providing income for the benefit of her husband or their children during her husband’s lifetime and upon his death, paying the balance of the Trust Estate to their children, per stirpes. Further, the Family Trust agreement provided that if A died, the balance of the Trust Estate would be distributed to her husband if he survived her, and that upon his death, or the settlor’s death if her spouse predeceased her, the trustee would pay the balance of the Trust Estate to the settlor’s children, per stirpes.