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Petitioner Brings Action for Settlement of Trustee’s Account


In this action for a judicial settlement of a trustee’s account and for a construction of the will and codicils of the testator, the trustee moves for summary judgment.

Probate Lawyers said the testator died in September 1918, leaving a will and five codicils which were admitted to probate in January 1919. By his will and codicils, the testator gave his nephew, C, an outright legacy of $500,000 and created fifteen trusts. Eight of the trusts provided that upon the death of the life tenant the corpus of each trust was to be disposed of as part of the residuary estate which was left entirely to charities (hereafter charitable trusts). The remaining seven trusts provided in each instance on the death of the life tenant for the delivery of the remainder of such trust to non-charitable beneficiaries (hereafter non-charitable trusts).

By Article Twenty-Second of his first codicil, the testator provided that the charities to which the residue was lift should not receive any benefit from the estate until all other trusts and legacies were fully paid. The testator’s foresight in making this provision is demonstrated when it was determined shortly after his death that the estate could fulfill the legacies and trusts only to approximately ninety per cent thereof. By a judicial construction of this provision it was determined that as each charitable residuary trust terminated, no payment would be made to the charitable residuary legatees until the then continuing trusts and all previously terminated non-charitable trusts had been funded in full and the legacy to the testator’s nephew had been paid in full.

A New York Estate Lawyer said three charitable trusts have terminated by the death of the life beneficiaries, and in carrying out the testator’s prophetic direction, the corpus of such trusts has been applied to make payments on account of the legacy, payment to all continuing trusts and payment to all prior terminated non-charitable trusts. From the date of the death of the testator in 1918 to the date of this accounting, the legacy to the nephew remains partly unpaid and in addition the principal of nine terminated trusts has not been fully funded.

Manhattan Probate Lawyers said in this accounting, no objections have been filed to the account or to the distribution of principal and income on hand. The only questions raised by the answers to the complaint are whether the legatee is entitled to interest on the unpaid portion of his legacy for the period in which it was not fully paid, and whether the remaindermen of the non-charitable trusts are entitled to any interest for the period their remainder interests were not fully funded. This presents an issue of law and properly determinable on a motion for summary judgment.

Interest on legacies generally runs from the time of the completion of the publication of notice to creditors, if such a notice be published, or, if none be published, from the expiration of seven months from the time of granting letters testamentary. If the will shows the intention that interest on a legacy will begin at a definite time, such intention controls; otherwise interest begins to run from the time when the legacy is payable. Unless a different intent appears in the will, interest on a sum left in trust, with the direction that the beneficiary is to receive the use and income, begins to run from the date of death of the creator of the trust.

New York Probate Lawyers said if payment of a legacy or the remainder interest of a trust is to be suspended beyond the time provided by statute, the intention of the testator, so to postpone such payment, must be found in the will and codicils themselves when interpreted in connection with the circumstances surrounding the testator at the time of making his will and codicils. The intent of the testator as expressed by Article Twenty-Second fairly leads to the inference that the testator intended that the legacies and remainder interests of the non-charitable life estates become payable when sufficient money had been realized after the termination of the charitable trusts.

He understood the condition of his property and by that Article of his first codicil provided that the charities to whom the residue was left should not receive any benefit from the estate until all other non-charitable trusts and legacies were fully paid. The very nature and character of his estate prevented earlier payment. Therefore, the time when such payments became due was postponed until the source from which they could be made came into existence. The general rule as to interest on a legacy or a sum left in trust is that it runs from the time when due. It follows, therefore, that no interest should be allowed. The motion for summary judgment is granted in accordance with the views expressed herein.

To learn more when should an interest run in cases of non full payment of legatee or other dispositions in a will, call the Kings County Probate Attorney and Kings County Estate Lawyers of Stephen Bilkis & Associates.

Call us at our toll free number or visit our office near you and we will give you free consultation on matters pertaining to last will and testament and the rights created thereunder.

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