New York Probate and Estate Administration Lawyer Blog
This is a proceeding to construe and reform the last will and testament of a decedent who died on August 31, 2006 survived by four adult children. The will was admitted to probate by decree dated March 7, 2007, and the children were appointed as the coexecutors of the estate. The court has appointed a guardian ad litem to represent the disabled daughter’s interests in this proceeding. Jurisdiction is complete. The guardian ad litem has filed his report, and the matter has been submitted for decision.
A Kings County Estate Lawyer said that the daughter has filed a document entitled “Response to Executor/Fiduciary Petition for Construction of Will” in which she terms herself “petitioner.” The guardian has submitted a report in which he informs the court that after an article 81 hearing on April 23, 2008, the judge rendered a decision wherein he concluded that the daughter has certain deficiencies and limitations and further concluded that son would be appointed as daughter’s guardian with certain limited powers, which the ward does not enumerate.
Although the New York State Department of Health (DOH) has no current claim or pecuniary interest, it was cited and appeared in this proceeding by its attorney, the Attorney General of New York. DOH consents to having the will reformed to name trustees for the ARTICLE FOURTH trust, but takes no position as to who should be named as trustees. DOH opposes Irwin’s request to reform the ARTICLE FOURTH trust into a supplemental needs trust. DOH asserts that reforming the trust to create a supplemental needs trust is not necessary or appropriate given the language the decedent used in the will to pay Susan all of the net annual income of the trust without any trustee discretion or interference about how the money is to be used. DOH points out that the will postdates the enactment in 1993 of EPTL 7-1.12, the statute that authorizes the establishment of supplemental needs trusts for individuals with severe and chronic or persistent disabilities.
In opposing the establishment of a supplemental needs trust, DOH points to the decedent’s direction to the trustees to provide Susan with the “lifestyle that would provide for her the standard of living which she had enjoyed during [the decedent’s] lifetime. I direct that my Trustees provide her with the proper residence, a full time companion, all her physical needs, recreation, support, maintenance and welfare to the fullest entend [sic] possible.” DOH acknowledges that the payment of income from the trust to daughter will likely disqualify her from some governmental benefits. DOH argues that it is for the court or for a guardian of daughter’s property to determine whether Susan’s best interests are served by receiving the income payments from the ARTICLE FOURTH trust or whether she requires the creation of a self-settled supplemental needs trust.
In support of its position, DOH relies upon a case that consolidated two proceedings, the court refused to reform various inter vivos trusts created for two disabled individuals. The court determined that reformation is available to correct mistakes, but “not . . . to change the terms of a trust to effectuate what the settlor would have done had the settlor foreseen a change of circumstances that has occurred”.
Courts are generally loathe to reform testamentary instruments and, as a rule, will not, unless reformation effectuates the testator’s intent. When construing a will, the testator’s intent is to be gleaned from a sympathetic reading of the instrument in its entirety and not from a single word or phrase. It is of paramount importance that the testator’s actual purpose be determined and effectuated to the extent it comports with the law and public policy.
“It is divorced from the realities of life to presume that if testator were aware of the facts as they now exist, he would desire to pay the immense cost for his daughter’s care in preference to having society share this burden” (id. at 959).
When the case reached the Court of Appeals, it held that, as a matter of law, the trustee did not abuse her discretion by refusing to invade the trust’s corpus to reimburse the Department of Mental Hygiene.
Courts have shown a willingness to reform wills to obtain the benefits of a supplemental needs trust where the testator’s intent to supplement, rather than supplant, government benefits is evident from the language of the testamentary instrument. In deciding whether to reform a testamentary trust to create a supplemental needs trust, the “courts have not focused upon whether the decedent’s will was executed before or after either the decision in Matter of Escher (94 Misc 2d at 952) or the enactment of EPTL 7-1.12. Similarly, the courts have permitted testamentary trusts to be reformed to create a [non-self-settled supplemental needs trust] notwithstanding the fact that the trusts have been operative for many years prior to the reformation application.
The proposed reformation of the ARTICLE FOURTH trust for Susan’s benefit meets the criteria first enunciated in Escher and later in EPTL 7-1.12. Susan, the income beneficiary, suffers from chronic disabilities. The will evidences the decedent’s intention that the trust’s assets be used to supplement, not supplant, government benefits. In that regard, it is significant that ARTICLE EIGHTH of the will directs that the trust “shall not in any way jeopardize any monies that she is now receiving from any government agency or that she will be entitled to receive after my death.” Susan has no power to dispose of any trust assets. The requested reformation does not alter decedent’s testamentary plan, and the court finds the requested reformation to be in Susan’s best interests. There is no evidence that Susan is currently receiving or has received governmental benefits. Under the facts of this proceeding, the court declines to follow the restrictive analysis set forth in a case.
Accordingly, the court adopts the guardian ad litem’s recommendations to construe and reform the decedent’s will to (1) appoint Irwin as the trustee of the ARTICLE FOURTH trust, and (2) create a third-party supplemental needs trust in conformance with EPTL 7-1.12. The court has reviewed the proposed supplemental needs trust and is satisfied that it conforms to EPTL 7-1.12.
Here in Stephen Bilkis and Associates, our Kings County Estate Administration lawyers will assist you for the proper disposition of your estate. In case a petition for probate was filed and your right was violated, you can consult our Kings County Will Contest attorneys, who will represent you and protect your rights.