In re the Estate of Stralem

181 Misc. 2d 715, 695 N.Y.S.2d 274, 1999 N.Y. Misc. LEXIS 354
CourtNew York Surrogate's Court
DecidedJuly 26, 1999
StatusPublished
Cited by7 cases

This text of 181 Misc. 2d 715 (In re the Estate of Stralem) 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 the Estate of Stralem, 181 Misc. 2d 715, 695 N.Y.S.2d 274, 1999 N.Y. Misc. LEXIS 354 (N.Y. Super. Ct. 1999).

Opinion

OPINION OF THE COURT

C. Raymond Radigan, J.

By order to show cause, Lynn Stralem, an income beneficiary under an inter vivos trust created by the decedent (PAP II), seeks a determination that certain provisions of the decedent’s last will and testament and amendments to PAP II are either void as against public policy or do not trigger any forfeiture by Lynn Stralem of her beneficial interest under either instrument.

The decedent, Jean Stralem, died on December 20, 1994. She was survived by her daughter Lynn Stralem and two granddaughters, Robin Becker Maki and Donna Russell Cronin, the children of her predeceased daughter Sandra. The decedent’s will and codicils were offered for probate and the trustees of PAP II submitted their account for the period August 1989 through December 1994. Objections to the will and codicils along with the instrument creating PAP II and its subsequent amendments were filed by Donna Russell Cronin. Those objections were settled with the will and codicils admitted to probate and PAP II and its amendments left intact. This settlement was arrived at between Robin Becker Maki along with her counsel and Donna Russell Cronin along with her counsel with little participation or input from Lynn Stralem or her counsel.

Lynn remains an income beneficiary of PAP II from which the settlement was largely funded. As a party to the accounting of PAP II, Lynn Stralem has a vested interest in the funds taken from the trust to settle the contests. She is concerned, [717]*717however, that certain steps she might take from this point forward might trigger forfeiture languáge contained in the will and the PAP II trust amendments. The actions contemplated by Lynn Stralem include but are not limited to (1) a proceeding to revoke the letters of trusteeship, (2) filing objections to the accountings of the trustees and the executors, and (3) a construction proceeding relating to language in the trust amendments.

The last will and testament of Jean Stralem establishes a residuary pour over into an inter vivos trust herein referred to as PAP II. Additionally, the testatrix exercised certain powers of appointment she held over some family trusts created many years before. The provisions of the will and PAP II that are the subject of this proceeding may be summarized as follows:

Article 5 of the Will: This provision requires the beneficiaries of any appointed trust properties to execute releases to the trustees of such trusts as a precondition to receiving such benefits. Failure to execute such releases will result, in the case of Lynn Stralem, in the beneficiary being deemed to have predeceased the decedent. The only event that will save the beneficiary’s interest, if no waiver is executed, is if the court judicially determines that the trustees are guilty of fraud, deceit or dishonesty.

Article 7 of the Will: This provision requires the beneficiaries to accept and agree to all provisions of the will in order to share. Further, it includes in terrorem language that disinherits any beneficiary and their issue who institute, maintain or join in any proceedings to either prevent the probate of the will or set aside as invalid or ineffective the trusts set up under PAP II.

Article XIII of the May 9, 1991 PAP II Amendment: This article, like article 7 of the will, requires full acceptance of all terms of the trust as a precondition to benefitting. It also contains the same in terrorem language as article 7 of the will regarding proceedings to set aside the will or invalidating any portion of PAP II.

Article XIV of the May 9, 1991 PAP II Amendment: This article requires the beneficiaries of PAP II to execute releases to the trustees as a precondition to sharing. Failure to release said trustees would result, in the case of Lynn Stralem, in the beneficiary being deemed to have predeceased the settlor/ decedent.

Article XX of the May 9, 1991 Amendment to PAP II: This article creates as a precondition for anyone seeking to qualify [718]*718as a trustee under PAP II the execution of releases to the existing and prior executors under decedent’s will and trustees of PAP II.

It is well settled that no-contest provisions are not favored by New York courts and are strictly construed (Matter of Alexander, 90 Misc 2d 482, affd 63 AD2d 612; Matter of Robbins, 144 Misc 2d 510). The forfeiture language of paragraph seven of the will limits the sanctioned activity to those which are designed to prevent “the (i) probate of the will or (ii) setting aside as invalid or ineffective (a) the trust created under said agreement * * * or (b) after my death, the trusts that are to be set aside pursuant to said agreement or any outright gift thereunder” (emphasis added).

It is clear from a reading of the pertinent language of paragraph seven that nowhere is a challenge to the executor’s or trustee’s appointment set forth as a grounds to void any benefit conferred or to be conferred upon Lynn Stralem. Accordingly, this language is construed by the court as not to trigger a forfeiture by Lynn should she commence any proceeding to revoke the letters testamentary or trusteeship since such action could not constitute either an attempt to prevent the probate of the will or to set aside any of the trusts. The court need not deal with public policy issues on this part of the application since the activity contemplated by Lynn Stralem is not specifically proscribed in the will.

The court does not accept the proposition of counsel for the fiduciaries that paragraph seven-A of the will should be read broadly enough as to require Lynn Stralem to accept the fiduciary designated without resistance, if she is to enjoy her benefits. If such were a correct reading of seven-A, then Lynn Stralem and others would be forced to accept without challenge a designated fiduciary even if such designee were a known convicted felon or a judicially declared incompetent or an infant (SCPA 707). This is a proposition too silly to even discuss.

Lynn Stralem also seeks a determination that her potential filing of objections to the accounting of the trustees and executors will not trigger any forfeiture language in the will. The dilemma faced by the movant herein is that the language of article 5, paragraph B of the will mandates that Lynn Stralem must execute a release to the trustees as a precondition to receiving any benefits. It is academic that one cannot execute a general release and still file objections to the account. The will does carve out one exception for claims made [719]*719against the fiduciary which “are finally determined judicially to have resulted from fraud, deceit or dishonesty by such trustee.” (Emphasis added.) Thus it would appear that if claims are made against the trustees, albeit in good faith, the claimant would forfeit her interest in the estate or trust unless the actions of the fiduciaries are eventually determined by the court to be fraudulent or dishonest.

The prerequisite that the beneficiary accept whatever accounting is presented and execute a release in order to receive benefits usurps the beneficiaries’ rights to challenge the fiduciaries’ accounting on grounds of negligence or failure to exercise reasonable care and prudence. The issue here is whether such a precondition violates public policy and is therefore void.

EPTL 11-1.7 is the statutory authority dealing with public policy vis-a-vis the will provisions. It reads as follows:

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Cite This Page — Counsel Stack

Bluebook (online)
181 Misc. 2d 715, 695 N.Y.S.2d 274, 1999 N.Y. Misc. LEXIS 354, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-estate-of-stralem-nysurct-1999.