February 27, 2009
Eric Penzer, at the New York Trusts & Estates Litigation Blog, posted the newsthat the New York County Surrogate ruled last week that Leona Helmsley‘s 5-8 billion dollar Charitable Trust need not limit its beneficience to dogs.
Ms. Helmsley had already tried to leave 12 million dollars, from her Will, to a trust for her dog’s benefit. But Surrogate Renee Roth reduced the amount of that trust to 2 million because one can only leave money in an estate for the benefit of an animal to the extent that that money can actually go toward the care of the animal.
But her much larger $5-8b Charitable trust contained language in its mission statement that the trust should “provide for the care of dogs and such other charitable activities as the trustees shall determine.”
The Surrogate ruled that since the mission statement indicated that the trust funds may be used for “such other charitable activities as the trustees shall determine,” the instructions that the trust be used “for the care of dogs” is non-binding, precatory language, and the trustees may use their discretion to distribute the funds to causes that would benefit needy human beings.
The rule regarding the non-enforceability of language that merely expresses a preference or a hope by a Decedent in a Will or Trust was explained in Matter of Samuelson, 110 AD2d 183, 187 (2d Dept 1985). The Appellate Division stated that it is well established that “precatory language contained in a will is merely an expression of the testator’s wish or desire and is not legally binding on the person to whom the wish or desire is directed… Thus, the named party ‘can carry out the wish and desire of the testator or not as he sees fit.’ ” (citations omitted).
Most of us do not have multi-billion dollar estates to dispose of, but many of us do want to see that our property is disposed of appropriately and that the surviving members of our family are cared-for properly. Our office has a large Wills, Trusts & Estates practice, so I have been able to see a wide variety of situations arise, including decisions about whether to include this kind of “precatory language” in a will or other testamentary document. So give us a call!
Picture of Leona Helmsley and her beloved dog, Trouble, courtesy of abcnews.com.
February 24, 2009
The Brooke Astor Estate is in the news again. Gerry W. Beyer, of the Wills, Trusts and Estates Prof Blog, reported that this coming Monday, March 2, the trial against Mrs. Astor’s son Tony, will begin.
It is alleged that while Tony Marshall was guardian for his mother, he swindled millions of dollars from Mrs. Astor, who was suffering from Alzheimers until her death in August, 2007. For more information, see The Battle for Mrs. Astor, Vanity Fair, October 2008.
Elliot Schlissel, my employer, was consulted by National Public Radio for the program, All Things Considered on November, 27, 2007 regarding this matter. He can be heard starting at about minute marker 1:50 in this report on NPR.
Picture of Tony Marshall courtesy of CNN
Professor Volokh at The Volokh Conspiracy reported on a New York County Surrogate’s Court case, which granted “surviving spouse” status to a “husband” whose same-sex marriage was performed in Canada. In the case of In re Estate of Ranftle, a man married another man in Quebec and they moved to Manhattan. One of them died, leaving his husband and three siblings.
The question was whether New York should recognize the Canadian same-sex marriage as valid for the purpose of giving the surviving husband the decedent’s entire estate, where the decedent died without a Will. Had he left an inheritance to his husband in a Will, this would not have been an issue. But since he did not, his property passes pursuant to New York State intestacy law under EPTL 4-1.1.
The Surrogate ruled that, pursuant to the general presumption of the validity of foreign marriages, New York should recognize any marriages performed in a foreign jurisdiction unless the marriage violates some major public policy or “Natural Law.” Case law in New York has established that this exception only applies in cases of marriages involving incest between close relatives. Also, it argued that since all that was at stake in this case was the distribution of property, there was no reason to go outside of the generally held principal of recognizing foreign or out-of-state marriages.
Interestingly, Prof. Volokh also pointed out an interesting case from 1948 in California, In re Bir’s Estate, where a man who married two wives died, where he had married both wives legally in India, where polygamy was legal at the time. The California court held that in the case of recognizing a polygamous marriage, if all that’s at stake is the distribution of property, the public policy against polygamous marriages would not cause that state to actively not recognize that marriage.
I wonder what would happen if a man married two wives today in a country where that is legal, and then moved to New York. But let’s say the issue is not related to the distribution of his property. What if the husband got a job working for New York City or State government and the issue was whether both of his wives could receive health benefits as a spouse under his insurance plan?
January 29, 2009
The Illinois State Supreme Court will soon consider the case of In re Estate of Max Feinberg. With thanks to John T. Brooks from T&E.com, I found this interesting case. Max and Erla Feinberg created a trust with their substantial assets to care for their children and grandchildren. They placed a provision in the trust that if any of their five grandchildren married outside of the Jewish faith, unless their spouses converted to Judaism within one year of marriage, they were not to benefit from the trust at all. Only one of the five grandchildren actually married within the faith.
The numerous adversely affected parties sued, arguing that the “Jewish Clause” created an unconstitutional restraint on marriage, and should not be enforced by the court, because it violates public policy. In accordance with the majority of the cases that related to similar clauses in Wills and trusts throughout the country, the trustees argued that since the grandchildren were still able to marry many people, it was only a “partial restraint on marriage,” and the Clause should be enforced.
Both the trial court and the Illinois appeals court held that that the clause was unenforceable and violated public policy. They argued that even though the trend until recently has been to enforce such clauses because they are only “partial restraints” on marriage, since the authors of the Restatement (Third) of Trusts §29 (2003) approves breaking with that legal tradition and supports voiding any, even partial, restraint on marriage, they would do so as well.
Given the vociforous debate between the majority and dissenting opinions in this case, the Supreme Court of Illinois may hear the case. The case was on the Court’s 11/18/08 “Leave to Appeal” docket, but I can find no record regarding whether they have agreed to hear the case. Given that the current cases in the Illinois courts attempt to reverse the general trend that American courts have traditionally validated these “religion clauses,” it will be interesting to see whether the tide has turned, or whether the Illinois court is going to be the “odd man out” on this issue.
It would make sense for anyone making an estate plan, with or without a “religion clause,” to consult with an attorney who is competent in these matters and can advise you of the latest developments.
Picture courtesy of the ChicagoJewishNews.com