Wills

Published on: May 30, 2016

Surrogate Court Decides Validity of Will

by Stephen Bilkis

This petition was brought before the Surrogate’s Court, Kings County to prove the last will and testament of AAC, and for a determination as to the validity, construction or effect of the disposition of property contained in the said last will and testament of the decedent.

The testator was a physician. He made a holographic will which was admitted to probate. By the decree, all questions of construction proffered by the petitioners and the fixation of the fees of the special guardians were reserved for future determination.

As maintained by the two special guardians, the Court found no difficulty in upholding the validity of the testator’s testamentary scheme. Although inartistic in form, the testator’s intentions in the will were clear.

Published on: May 29, 2016

Plaintiff Files Motion for Summary Judgment

by Stephen Bilkis

This is a motion for summary judgment filed by plaintiff as executor under a last will and testament before the Supreme Court, Special Term, Kings County.

The plaintiff filed a motion for summary judgment under Rule 113 of the Rules of Civil Practice. This action is brought pursuant to Section 500 of the Real Property Law to have a mortgage cancelled of record on the ground that it is outlawed by the statute of limitations pursuant to Section 47-a, Civil Practice Act.

In the answer, general denials and two affirmative defenses were stated, namely: (1) that on 17 September 1949, the mortgagors acknowledged the mortgage and the indebtedness in writing, thereby extending the statute of limitations, and (2) that sometime after 17 September 1949 and prior to the expiration of the statute of limitations, upon information and belief, the mortgagors absented themselves from the jurisdiction of the instant court in that they or either of them were then and still are residing in Italy.

Published on: May 28, 2016

Petitioner Claims Undue Influence in Will Contest

by Stephen Bilkis

In a contested probate proceeding, the objectant appeals, as limited by her brief, from so much of a decree of the Surrogate’s Court, Kings County, dated April 11, 1986, as, upon a ruling made after close of all the evidence at a jury trial dismissing all her objections as a matter of law, dismissed her third objection alleging that the will was procured by the undue influence of the petitioner, admitted the will to probate and awarded letters testamentary to the petitioner.

The testimony at the trial established that the decedent had executed a will in 1977 which would have distributed her estate equally to her two sisters, who were then living, and the proponent of the will in question, the surviving son of a third sister. In the event either of the decedent’s two sisters predeceased her, their shares would go to the objectant, the daughter of one of those sisters. In December 1977 the decedent fractured a hip bone and the proponent of the will came to her aid and assisted her in getting to the hospital. A few days after the decedent’s accident, the proponent of the will ended his employment as a tenured college professor and devoted his energies to assisting his aunt in her affairs, primarily acting as her financial advisor. Specifically, he executed a power of attorney in favor of him; the decedent’s securities were removed from her safe deposit box by proponent of the will and he transferred them to a box in his name; the bank accounts were transferred by the proponent of the will into an account in the joint names of the decedent and the proponent of the will, and he signed the decedent’s name on the account application at her request; he arranged for the dividend checks from the decedent’s securities to be deposited directly into another joint account which was opened in a similar fashion; and the bank statements from the joint accounts were sent to the proponent of the wills home although the proxy materials were sent to her. In addition, the proponent of the will assisted the decedent in finding various nursing homes wherein she resided after her 1977 accident and until her death in 1984.

In 1981, the proponent of the will drafted and typed a new will for the decedent which named the proponent of the will as the sole beneficiary and executor of her estate. Although by that time the two sisters had died, no provision was made in the new will for the objectant.

Published on: May 27, 2016

Respondent Appeals Attorney’s Fee Provision

by Stephen Bilkis

In a probate proceeding, Respondent appeals from so much of an order of the Surrogate’s Court, dated April 13, 2005, as, upon its application to fix an attorney’s fee, fixed its fee at the principal sum of $109,620, inclusive of reimbursement of a handwriting expert’s fee of $60,884, and directed the petitioner to refund to Plaintiff the sum of $25,391, and the latter cross-appeals from so much of the same order as partially dismissed her counterclaim, in effect, to reduce the sum owed as reimbursement to the petitioner for the handwriting expert’s fee.The order is modified, on the law and as a matter of discretion, by (1) deleting the provision thereof awarding the petitioner attorney and expert fees in the sum of $109,620 and substituting therefor a provision awarding the petitioner attorney and expert fees in the sum of $58,736, and (2) deleting the provision thereof directing the petitioner to reimburse the respondent the sum of $25,391, and substituting therefor a provision directing the petitioner to reimburse the respondent the sum of $76,275; as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

It is settled that the determination of a reasonable attorney’s fee in a matter concerning an estate lies within the sound discretion of the Surrogate’s Court. Where, as here, a dispute arises over the terms of a retainer agreement, the responsibility of interpreting the agreement rests with the Surrogate’s Court. In cases of doubt and ambiguity, an agreement between a client and the attorney must be construed most favorably to the client. Here, the Surrogate’s Court properly construed the subject retainer agreement between the petitioner and the respondent.

However, Respondent is correct that the amount of $60,884 which was included in the principal sum awarded to her as reimbursement for the handwriting expert’s fee was excessive and unreasonable. In our opinion, the appropriate and reasonable amount for the services of the handwriting expert under the facts and circumstances of this case should have been $10,000. Thus, the total award to her should have been $58,736. Since it has already paid $135,011 to respondent, she is entitled to be reimbursed the sum of $76,275.

Published on: May 21, 2016

Court Decides Effect of Divestiture of AT&T Stock

by Stephen Bilkis

This is the first New York decision to consider the effect of the recent AT & T divestiture on a bequest of AT & T stock. This is a proceeding brought by co-administratrix, for a construction of article “SECOND” of the testatrix’s last will and testament. The testatrix died on September 13, 1985 at the approximate age of 89. The last will and testament of the testatrix, dated February 6, 1982 and a codicil thereto, dated September 27, 1984, were admitted to probate by this court on December 2, 1986. Letters of administration were issued to the petitioner and the respondent.

Article “SECOND” of the testatrix’s will reads as follows: “SECOND: I give and bequeath to each of the following legatees the following number of shares of capital stock of American Telephone and Telegraph Company owned by me at the time of my death …” and thereafter names seventeen legatees, each to receive varying numbers of shares. A total of 1,625 shares of stock were bequeathed under Article “SECOND.” The petitioner is a legatee of 350 shares. Under Article “SIXTH”, the testatrix bequeathed the residue of her estate in equal shares to and among the heirs and the petitioner. It is undisputed that the testatrix owned 2,262 shares of AT & T stock at the time of execution and at the time of death. Therefore, 637 shares pass under the residuary.

The value of the testatrix’s gross estate is approximately $600,000 comprised primarily of stocks, valued at approximately $350,000.00, a house and property, valued between $175,000 to $225,000, jewelry and miscellaneous items, valued at approximately $9,500.00 and two bank accounts, in the amount of approximately $15,000. The testatrix’s closest relatives are four first cousins, once removed, of which only one receives a bequest under the will. The need for a construction arises as a result of the reorganization of AT & T, which occurred between the date of the execution of the will, February 6, 1982, and the date of the testatrix’s death, September 13, 1985.

Published on: April 29, 2016

Petitioners File Construction Proceeding to Determine Effect of Tax Exoneration Clause

by Stephen Bilkis

The executors have instituted this construction proceeding, prior to the filing of Federal and New York estate tax returns, to determine the effect of a tax exoneration clause, paragraph second and request a reformation or interpretation of paragraph eleventh, which creates a pre1969 residuary, multiple, split-income, charitable remainder trust so as to qualify it for a charitable deduction under U.S.Code, tit. 26, § 2055 as amended by the Tax Reform Act of 1969 (TRA).

The testator died on September 9, 1973, age 92, leaving a daughter, age 64, as his sole distributee, and a granddaughter and three great-grandsons. His will, executed on December 19, 1967 was admitted to probate and letters testamentary issued to petitioners on October 1, 1973. Paragraph second of the will provides: ‘I direct that all my funeral, administration expenses, just debts, and all estate and inheritance or succession taxes (without apportionment) be paid as soon after my death as may be practicable.’

The residuary probate estate, after deducting the pre-residuary outright and in trust bequests, but before estate taxes, is $845,580. Petitioners allege that the loss of the charitable deduction because the trust is not a charitable annuity trust under TRA would increase the estate tax by $163,000. It should be noted that prior to December 31, 1969, the estate would be entitled to a charitable deduction since the amounts payable to the charities could be readily determined. Before proceeding with the construction of paragraphs second and eleventh of the will, the court is called upon to determine a question of jurisdiction, which appears to be of first impression.

Published on: April 28, 2016

Court Discusses Residuary Clause of Will

by Stephen Bilkis

This is a proceeding to construe and reform Article III, the residuary clause, of the last will and testament of the decedent 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.

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.”

Published on: April 26, 2016

Sister Petitions for Allowance of a Claim Against the State

by Stephen Bilkis

In this proceeding the sister of the decedent individually and as administratrix with the will annexed of the estate of the deceased, for the allowance of a claim against the estate of deceased husband of which respondent is executor. Judgment of the Special Term allowing the claim in part, was affirmed in part and reversed in part by the Appellate Division, and claimant appeals.

In 1903 the husband and his wife, lived in Brooklyn. The wife owned a building at Classon Avenue, in a part of which she lived with her husband. On January 17, 1903, she made her will, and on March 27, 1903, she died. By her will she made her husband executor and gave her sister, $1,000. She then provided: ‘Fourth. I give and bequeath to my beloved husband all of the rest and remainder of my estate both real and personal to have and to hold the same to him, his heirs and assigns forever, with the understanding that at the decease of the said husband all of the estate which he shall derive under this will which shall then remain by him undisposed of he shall give and turn over to my sister.’

Published on: April 25, 2016

Court Discusses Jurisdiction Issue

by Stephen Bilkis

In a proceeding to probate the last will and testament of the decedent respondent appeals (1) from an order of the Surrogate’s Court, Kings County, dated October 14, 1992, which (a) denied her motion, inter alia, to declare that the decedent was domiciled in Florida at the time of his death and to resettle a decree of the same court, dated August 7, 1992, to provide that the decedent was not a New York domiciliary, and (b) granted the administrator’s cross motion for a decree declaring that . validly exercised her right of election and that the decedent was domiciled in New York at the time of his death, and (2) as limited by her brief, from so much of an order of the same court, dated March 17, 1993, as directed the Dime Savings Bank to deliver the entire balance in Account No. 800003241 to the administrator.

The Surrogate erred in finding that the decedent was a domiciliary of New York at the time of his death as the appellant demonstrated by clear and convincing evidence that the decedent had changed his domicile from New York to Florida. Contrary to the recitation in the August 7, 1992, decree and plaintiff’s contention, the appellant did not stipulate that New York was the decedent’s domicile. The record of the proceedings before the Surrogate on July 7, 1992, does not reflect any such agreement.

Published on: April 24, 2016

Plaintiff Seeks to Recover Damages for Breach of Contract

by Stephen Bilkis

In an action, inter alia, to recover damages for breach of contract, which was commenced in the Supreme Court, New York County, transferred to the Surrogate’s Court, Kings County, and joined with a probate proceeding the defendants appeal, as limited by their brief, from so much of a decree of the Surrogate’s Court, Kings County, dated November 29, 2011, as awarded the plaintiff interest at the rate of 18% per annum upon each installment payment due and owing to the plaintiff individually and in his capacity as preliminary executor of the estate of the decedent, payable by the defendant from the date each payment became due, and the plaintiff cross-appeals, as limited by his brief, from so much of the same decree as is in favor of him individually and against the defendant in the principal sum of only $480,000 and is in favor of him in his capacity as preliminary executor of the estate of the decedent and against the defendant in the principal sum of only $480,000.

The plaintiff, individually and in his capacity as the executor of the estate of his mother, commenced this breach of contract action against the defendant to recover monthly installments due and owing both to him personally and to the estate beginning in February 2006, pursuant to a stock purchase agreement executed in September 1996. In exchange for shares of stock in a closely held corporation, defendant agreed to pay the total sum of $1,800,000 in monthly installments over the course of 15 years. The agreement provided for the monthly payment of $5,000 for the first five years, $10,000 for the next five years, and $15,000 for the final five years, with all payments inclusive of interest at the rate of 18% per annum.

A prior determination, this Court modified an order of the Surrogate’s Court so as to grant those branches of the plaintiff’s motion which were for summary judgment on the breach of contract causes of action. The Surrogate’s Court entered a decree upon that determination in favor of the plaintiff and against defendant, both in his individual capacity in the principal sum of $480,000, and in his capacity as the executor of the estate in the principal sum of $480,000, as those amounts equaled the sum totals of the monthly payments due beginning in April 2006. In addition, the Surrogate’s Court awarded the plaintiff prejudgment interest upon each monthly payment from the date it became due at the rate of 18% per annum.