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Court Rules That Trust Acted as a Substitute Will


A man created a living trust. A living trust is one where all the man’s assets are put in a trust with a bank or trust company and the income earned by his assets will be paid out to the man himself. The problem with this living trust the man created was that he bought the trust document in a pre-printed fill-in-the-blank form: he never went to a lawyer to have the lawyer create a trust document for him, tailor-cutting the provisions of the document so that it would fit his circumstances.

The trust he created came in a document that was sent to him in the three-ring-binder contained a Certificate of Trust, and Affidavit of Trust, a Living Will, a property power of attorney, a health care power of attorney and a copy of the man’s will which was stapled. The man can just cut out and paste those provisions that he didn’t like and keep the provisions that he did like and wished to retain. Glued to the ring binder is a sticker that showed the name and copyright of the lawyer who created the fill-in-the blank trust and will. The three-ring binder is part of an estate-planning product that also includes a seminar, a handbook and a computer software program which allows the person who purchased the portfolio to create a will and print it.

A New York Probate Lawyer said the living trust was created sometime on April 30, 1996. On the same date, the man also executed a will. The man’s will provided that all of the properties of his estate which were included in the living trust will be revoked upon his death and the entirety of his estate will pass on to his dear friend. This provision was later amended by the testator before his death on September 9, 1996. The amended provided that only 99.75 per cent of the entire estate under the living trust will be given to his dear friend and the remaining .25 will pass on to another friend.

When the testator died, it was discovered that he had made an earlier will in October 1990 that provided that 1/10 of 1 per cent was given as an outright gift to the other friend while the balance was given outright to the dear friend. Nassau County Probate Lawyers said this 1990 will was filed with the court.

At the time of the testator’s death, he had and estate that was worth about $1,000,000. $950,000 of this estate was already converted into the living trust. The properties worth around $60,000 remaining in the testator’s name at the time of his death which were not included in the trust will pass in accordance with the provisions of the will.

The dear friend submitted the 1996 living trust and the 1996 last will and testament for probate. Manhattan Probate Lawyers said when the Surrogate’s Court looked at the document creating the trust and the will, the Surrogate’s Court discovered the haphazard cut and paste trust and will and declared that it was impossible to determine what the testator actually desired. The Court had problems when it found so many inconsistencies and ambiguities.

First the court found that the pre-printed generic trust and will documents paid for by the testator was created for a husband and wife who intended to make a mutual will. The testator was a single man who was never married and had only one child: the named executor in the will.

The Court was in a dilemma as to what to do with the trust and the will. The Court could not make heads and tails of the testator’s desire as to how to dispose of his estate. To complicate the legal tangle, the executor of the will (the son of the testator) asked the court to interpret the provisions of the trust and the will so as to pour the entire estate into the trust which shall then all pass to her father’s dear friend.

During the probate, five nephews and nieces appeared. They were distributees in the will. They claim that the trust should be made ineffective but they contended that the will was valid. They asked the Surrogate’s Court to declare the trust ineffective and so prevent the transfer of the entirety of the estate to the trust. They asked the Surrogate’s Court to dispose of the entire estate of the testator in accordance with the provisions only of the will. Some of these nieces and nephews were still infants and so the Surrogate’s Court appointed a guardian ad litem for them so that their interests in the will can be safeguarded.

The Court admitted that the Surrogate’s Court has the power to interpret and construe a will to determine the legal questions presented before it and to make a complete distribution of the estate covered by will. The Court also ruled it best to interpret the will now during the probate proceedings to see whether or not they can figure out the intent of the testator. The Court also resolved to interpret the trust as the two documents are so closely related that the testator’s will can only be fully determined by scrutinizing both.

The Court adapted the issues as worded by the guardian ad litem: will the merger of the will and the trust render the trust invalid? Are the assets of the estate to be held in a continuing trust after the testator’s death? Is the provision of the will pouring all the estate properties into the trust effective? Are the nieces and nephews of the decedent excluded from any share in the estate or in the trust?

The Court held that the revocable living trust is really a substitute will. It disposed of the decedent’s estate to another or others upon his death. The Court held that upon the decedent’s death, the principal of the trust shall be given outright to the petitioner and in the event that the petitioner pre-deceases the decedent then the nephews and nieces will stand to inherit the entirety of the principal of the trust.

The Court also held that the trust cannot validly receive all the properties of the estate. The language of the will requires the distribution of the estate as conditional. And the will states that if the trust is not legally effective, all his property shall pass onto his dear friend who will only hold and administer the properties until it is distributed as a testamentary trust.

In conclusion, the Court held that, after scrutinizing the provisions of the will, the properties constituting the trust will pass on to the dear friend. The remaining properties of the estate which were not included by the decedent in his living trust cannot be incorporated into the trust and cannot be poured-over into the trust or be given outright to the dear friend. The remaining properties of the estate shall be distributed to the nephews and nieces who will share in the properties as intestate distributees. The Court directed the Surrogate’s Court to proceed with the probate of the will and to distribute the assets of the estate in accordance with the findings and holdings of this Court.

Are you like the testator in this case who wanted to create a do-it-yourself will? Do not think that you can create your own will without any advice or assistance from a New York Probate lawyer. Our legal team can explain to you the legal requirements so that your will can be considered as having been duly executed. At Stephen Bilkis and Associates, we can help you draft your will in accordance with your wishes, but taking into account all the requirements of the law. Do not attempt to do your own will without consulting us so that your will need not be invalidated instead, it can be probated and distributed in accordance with your wishes.

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