In re BNY Mellon, N.A.

47 Misc. 3d 825, 2 N.Y.S.3d 757
CourtNew York Surrogate's Court
DecidedDecember 30, 2014
StatusPublished

This text of 47 Misc. 3d 825 (In re BNY Mellon, N.A.) is published on Counsel Stack Legal Research, covering New York Surrogate's Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re BNY Mellon, N.A., 47 Misc. 3d 825, 2 N.Y.S.3d 757 (N.Y. Super. Ct. 2014).

Opinion

OPINION OF THE COURT

Edward W. McCarty III, J.

Before the court is the petition of BNY Mellon, N.A., as trustee of the trusts created under Article Fourth of the will of Fred A. Dorie. Petitioner seeks the settlement of the trustee’s account, permission to resign, the appointment of successor trustees, and a determination of the validity, construction and effect of various provisions contained in Article Fourth of the decedent’s will.

Background

Fred A. Dorie (the decedent) died on February 2, 1991. Decedent’s will, dated April 23, 1987, as amended by codicil [827]*827dated October 11, 1990 (the will), was admitted to probate by this court on February 22, 1991. Letters testamentary were issued to Donald V. Balistreri. On November 19, 1991, letters of trusteeship were issued to The Bank of New York, now known as BNY Mellon, N.A. (the trustee), in connection with the trusts created under Article Fourth of decedent’s will.

Decedent was survived by two children, Jane Helena Roden and Arthur Frederick Dorie (Jane and Arthur). At the time of decedent’s death, Jane had six children: John F. Roden, born 1949; Joanne H. Roden, born 1951; Margaret M. Coleman, born 1953; Thomas M. Roden, born 1958; James F. Roden, born 1960; and David M. Roden, born 1964 (John F., Joanne, Margaret, Thomas, James, and David).

Decedent also had seven great-grandchildren at the time of his death. John F. had three children: Jennifer Appelton, born 1976; John D. Roden, born 1977; and Brian Roden, born 1980. Margaret had two children: Derrick J. Coleman, born 1984; and Lawrence J. Coleman, born 1987. James had two children: Shawn Roden, born 1987; and Clay Roden, born 1989.

After the death of decedent, three additional great-grandchildren were born: Deidre M. Coleman, born 1992 to Margaret; and Kelly Roden, born 1993, and Pierce Roden, born 1996, to James.

Arthur had no issue.

The trustee asks the court for: (1) permission to resign as trustee; (2) the appointment of John F. and David as successor trustees; (3) judicial settlement of the trustee’s account for the period of February 2, 1991 through June 22, 2014; and (4) a determination as to the construction, validity and effect of Article Fourth of the will, in order to determine how property should be distributed to the decedent’s great-grandchildren who are contingent remainder beneficiaries of trusts established under the will, including whether or not certain provisions of Article Fourth violate New York’s rule against perpetuities (EPTL 9-1.1) (the RAP) and, if so, the effect of that violation. No objections were filed to those portions of the relief that seek: (1) permission for the trustee to resign; (2) appointment of successor trustees; and (3) settlement of the account. However, as discussed below, a verified answer was filed in opposition to that portion of the relief that seeks a construction of Article Fourth of decedent’s will.

At the time of his death, decedent’s assets were valued at approximately $1,400,000, which included his home, a piece of [828]*828commercial real property (the Merrick Road property), securities, cash and cash equivalents. Under Article Fourth of the will, decedent directed his executor to divide his entire estate, after the distribution of decedent’s personal property and cash legacies totaling $7,000, into two equal shares. The shares were to be held in separate trusts for the benefit of decedent’s children, Jane and Arthur. The trusts were funded on January 1, 1992 with the Merrick Road property, valued at approximately $900,000, and cash of $125,000.

Trust for Jane

The trust provides that Jane is entitled to the trust’s net income, payable monthly, during her lifetime. She can access principal for extraordinary medical expenses. In any year in which the annual net income earned by the trust is below $15,000, she can receive an amount sufficient to make up the difference from the principal. Upon the death of Jane, the trustee is directed to divide up the trust corpus for the benefit of Jane’s children, who are the decedent’s grandchildren, in the following percentages: John F. 15%; Joanne 20%; Margaret 15%; Thomas 15%; James 15%; and David 20%.

Under subparagraph (1) (d), these shares are to be held in a separate trust for each grandchild in accordance with sub-paragraph (1) (e). Under the terms of subparagraph (1) (e), each grandchild is to receive the net income from that grandchild’s trust, with the principal being distributed at specified ages: one fourth at age 50; one third of the trust then remaining at age 55; one half of the trust then remaining at age 60; and the balance at age 65. In the event a grandchild predeceases Jane leaving issue (subparagraph [1] [c]), or dies leaving issue before the full distribution of the principal from that grandchild’s trust (subparagraph [1] [f]), then such grandchild’s trust shall be held in further trust for such grandchild’s issue, who are decedent’s great-grandchildren.

Subparagraph (1) (c) of Article Fourth provides:

“The share set aside for the issue collectively of any child of my said daughter who shall have predeceased her shall be paid over to the issue of said deceased child, per stirpes. Payments to said child are to be made in the same manner as set forth in Paragraph ‘FOURTH’ 1. subdivision (e) herein.”

Subparagraph (1) (f) of Article Fourth provides:

“If any such child should die before receiving the full amount of the principal of his or her Trust, the [829]*829principal of such Trust as then constituted, together with any accumulated income, shall be transferred to the then living issue of such child and be paid in accordance with the plan set forth in Paragraph ‘FOURTH’ 1. subdivision (e), in equal shares per stirpes; or if there be no such issue, to my daughter’s then living issue in equal shares per stirpes, provided, however, that if a Trust created under this Will for any such issue of my daughter shall then be in existence, the share of such issue shall be added to such trust and shall be subject to all of the terms and conditions thereof.”

While subparagraph (1) (f) directs how the share of a grandchild shall pass if the grandchild dies before age 65 leaving issue, the will does not contain a direction concerning the share of a grandchild who dies before age 65 without leaving issue. Although this ambiguity is not a current issue, the trustee asks the court for a construction in case the issue arises in the future.

The trustee believes that the provisions of subparagraphs (1) (c) and (1) (f) may violate the RAP. Due to the recent deaths of Arthur and Margaret, the trustee requests a construction of these two provisions to determine whether they violate the RAP and, if so, a determination of the effect of the violation.

The trustee also asks the court to provide a construction to determine whether, when applied to the interests of decedent’s great-grandchildren, the age contingencies provided in sub-paragraph (1) (e) are based upon the age of the great-grandchild’s deceased parent, who was a grandchild of decedent, or whether the age contingencies are based upon the age of the great-grandchild. This construction is necessary to apply the remedial provision of the RAP (EPTL 9-1.2) if the court determines that the trust language violates the RAP.

Trust for Arthur

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Cite This Page — Counsel Stack

Bluebook (online)
47 Misc. 3d 825, 2 N.Y.S.3d 757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-bny-mellon-na-nysurct-2014.