A Probate Lawyer said that incidental to this proceeding to judicially settle decedent’s final account, covering the period from December 1, 1984 to July 31, 1999, is a plea for construction of paragraphs Fifth and Sixth of his will. National Bank (petitioner), the successor executor and trustee under the will, maintains that construction is necessary before final distribution can be made. Petitioner, the stakeholder of testamentary trusts created under paragraphs Fifth and Sixth, takes no position with respect to the ultimate remaindermen of the trusts.
Mr. FC (hereafter decedent) died testate on January 18, 1944. His last will and testament of February 27, 1942 was admitted to probate by this court on February 10, 1944. Decedent was survived by a daughter, M, and a son, L, his distributees. Decedent’s wife predeceased him in 1942.
After directing the payment of debts and expenses and leaving personal effects, real property and the sum of $1,000 to M, decedent’s will directed that the residue be divided into three equal shares. From these shares, the will established two testamentary trusts: one funded with two thirds of the residuary estate (the article Fifth Trust) and one funded with the remaining one third of the residuary estate (the article Sixth Trust).
An New York Estate Lawyer said that with respect to the article Fifth Trust, the will named M the life income beneficiary thereof and then provided as follows: “If my said daughter, M, predecease me, or if she survive me, then upon her death, I direct my trustees to divide the principal of the trust fund set up for my daughter, M, into two parts or shares.”
Queens Probate Lawyers said with respect to the article Sixth Trust, the will named L the life income beneficiary thereof and thereafter provided for a contingent disposition in favor of any children born to him. If L died without issue (he did), the will provided that the net income from L’s trust be paid to M for life. Upon M’s death, the will directed as follows: “then I direct my trustees to convey, transfer, pay over and deliver the principal of the trust fund created by this Article Sixth of my will to the issue of my said daughter, M, in equal shares, per stirpes and not per capita.”
The family history includes the following pertinent facts: M, decedent’s daughter and the life income beneficiary of the article Fifth Trust and the successor life income beneficiary of the article Sixth Trust (after the death of L), died on October 11, 1998, outliving her two children (decedent’s grandchildren), A and D. A attained the age of 30 years but died intestate on October 19, 1982, at age 55, domiciled in Santee, California. A had two children, R and RX. R died on January 17, 1990, domiciled in Sparks, Nevada; RX is still living. R was survived by an infant adopted daughter, B, and his wife J. R died testate but his will has not been propounded. B, who was adopted by R and J on November 29, 1983, was subsequently adopted on August 2, 1995 by Thomas, whom J married after R’s death.
Long Island Probate Lawyers said that the decedent’s grandson, D, also attained the age of 30 years but died on October 2, 1996, at age 65, a resident of Los Angeles, California, predeceasing M by two years. D had no issue and was never married. D created an inter vivos trust disposing of all his assets.
Under these facts and circumstances, petitioner poses several questions for the court’s determination: (1) Whether the shares of the remainder of the article Fifth Trust designated for A and D vested in them at age 30, despite the fact that they both predeceased the life income beneficiary, their mother M, and thus pass under the will to A’s and D’s estates? or (2) Whether there was a condition that A and D survive M in order to take, and thus their remainder interests were not vested but pass instead to A’s issue living at the death of M? and, in such event, (3) Whether A’s issue consist solely of her living son RX, or also include her predeceased son R’s adopted daughter, B, who had been “adopted out” by her stepfather Thomas by the time of M’s death? and, finally, (4) Whether B shares in the remainder interest of the article Sixth Trust as issue of M?
After the deaths of both the income beneficiary and the successor income beneficiary of the article Sixth Trust, L and M respectively, decedent’s will directed that the principal of the trust be paid over to the issue of M, in equal shares per stirpes. Thus, a definition of the term issue is necessary before a determination can be made as to the remaindermen of the trust. Unless the instrument indicates otherwise (decedent’s will does not), issue are the descendants in any degree from a common ancestor. The terms “issue” and “descendants” include adopted children. However, if a child is adopted out of a family unit, the child’s rights to inherit from that family are terminated.. The few exceptions to this rule are not applicable here.
Applying the law to the facts, it becomes clear that RX is the sole remainderman of the article Sixth Trust.
The article Fifth Trust presents an entirely different situation. In the article Sixth Trust, decedent made a class gift to issue. In the article Fifth Trust, he directed that after the death of the life income beneficiary (M), the trust be divided into two shares for two grandchildren whom he named, A and D. Each grandchild should receive the trust income from his/her share until age 30, at which time the principal of the share for his/her benefit should be paid over to him/her.
RX argues that implicit in this directive is the condition that A and D survive M in order to take as remaindermen. Because they did not, RX opines that the remainder interests under article Fifth pass as substitutionary gifts over to the surviving issue of decedent’s grandchildren as of the date of M’s death, or as failed bequests passing by intestacy. Under either theory, RX maintains that he is the sole remainderman of the article Fifth Trust.
After an independent analysis of the language of the will and the applicable law, for the reasons set forth herein the court concludes that decedent did not intend a condition of survival. Accordingly, the remainder interests of the article Fifth Trust should be paid to the respective estates of A and D and distributed pursuant to California law where both were domiciled at death.
In the absence of words of survivorship in a will, or other evidence of intention to impose a condition of survivorship, the constructional preference for early vesting applies, particularly where the disposition is of a residue or a remainder interest. A condition of survival will not be imputed unless unequivocally expressed. Moreover, where, as here, the remaindermen are named individuals as distinguished from a class, there exists a strong presumption against a condition of survival, so strong as to be almost irrebuttable in the absence of an express requirement of survival or substitution. Again, the reason for this is the uniformly recognized preference for early vesting and indefeasibility.
It follows that when a testator makes a gift of a remainder to a named person, there is a strong inference that vesting in the named remainderman is to occur immediately, i.e., at the testator’s death. Accordingly, where, as here, there is an intervening life estate, the general rule is that a gift to a named person for life, remainder to another named person, indefeasibly vests the remainder interest in the named remainderman at the testator’s death. Such a remainder is not divested by the remainderman’s death during the intervening life estate.
In addition, in situations where, as here, the gift of a remainder interest depends upon the remainderman’s attaining a specified age, he is not divested of the remainder after attaining the required age, even if he dies before the termination of the precedent. An exception to this general rule occurs again only when the will uses express words of survivorship, or manifests the testator’s intent to make survivorship a condition of the gift, neither of which is manifest here.
The court also finds without merit RX’s contention that the inclusion of trust provisions in article Ninth of the will implies a condition of survival. RX maintains that the reason for the trust provisions in article Ninth was that decedent was looking beyond his grandchildren as his ultimate beneficiaries and providing for trusts for any minor great grandchildren and great great-grandchildren who might become remaindermen. Otherwise, these latter trust provisions would be unnecessary as merely duplicative of those in articles Fifth and Sixth. The court disagrees for several reasons. First, since the remainder of the article Sixth Trust might well have vested in issue of M who were minors, the trust provisions set forth in article Ninth still serve a purpose. Second, article Ninth consists of the boilerplate clauses frequently included in wills that enumerate the powers given to executors and trustees and that set up trusts for minors.
Attorney draftsmen generally consider it good practice to include these provisions in the event of unforeseen contingencies.
The court notes that the particular trust provisions in article Ninth provide that the principal and all accumulated income be delivered and paid over to the minor upon attaining majority (not age 30) and further that “in case of his or her death before attaining majority, the principal and all accumulated income of his or her share or part shall be disposed of as a part of his or her estate.” This provision gives added support to the court’s conclusion as to the remainder of the article Fifth Trust.
Finally, the court finds that the presumption against intestacy and the preference for complete disposition are applicable with respect to the distribution of the article Fifth Trust remainder. It is generally presumed that by making a will the testator intended to dispose of his entire estate. Under the circumstances, the court reiterates its findings that there existed no condition of survival of the life income beneficiary and the estates of A and D were therefore vested in the article Fifth Trust remainders at the testator’s death. Otherwise, the article Fifth Trust remainders would pass by intestacy, a result clearly not intended by decedent.
It has already been mentioned that both A and D were domiciled in California at their deaths. Consequently, this court concludes that only the courts of California, construing that state’s law, should determine the ultimate distribution of their estates.
When the provision of a will bears different interpretation by two interested parties the matter should be resolved with the aid of expert estate and probate attorneys of Stephen Bilkis & Associates.
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