estate-planningSpurred on by financial abuse of the elderly, New York will change its laws with regard to executing a valid “Power of Attorney” (“POA”) document. The new law will be effective September 1, 2009, although POAs executed before that date in compliance with the old law will still be valid. 

This development makes it especially important to use an attorney who activly practices Wills, Trusts and Estate law and is familiar with these significant changes in the law.

The following are some of the changes that attorneys must now consider when drafting and handling executions of General POA documents starting Sept. 1st, pursuant to the new New York General Obligations Law §5-1501:

  • The principal’s signature of the POA document must be both notarized and witnessed by two disinterested witnesses.
  • The agent must also sign the power of attorney and his/her signature must be notarized (although the signature does not have to take place at the same time as the principal’s signature).
  • If a principal intends to give the agent power to make gifts on his behalf to anyone he has not been accustomed to giving to or which exceed $500 per beneficiary per year, he must simultaneously execute a Statutory Major Gifts Rider (“SMGR”).
  • The statutory “Caution to the Principal” and “Important Information for the Agent” sections must be included.

These changes were originally set to become effective March 1, 2009, but Gov. Patterson agreed to sign off on an extension to September 1st, 2009 in order to allow attorneys to fully familiarize themselves with these sweeping changes.  So give us a call if you are planning to execute a Will, Power of Attorney, Health Care Proxy, or other estate planning document.

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father-divineThe latest in a series of law review articles has been released that relate to the tort of “Tortious Interference With Expectation of Inheritance.”  In those states that recognize this tort, it gives someone the right to sue a decedent’s beneficiary or distributee for money that is allegedly wrongly received in an inheritance when the following elements proved by preponderance of the evidence (i.e., 50.1% proof for each element):

  1. the existence of the expectancy;
  2. that the defendant intentionally interfered with the expectancy;
  3. that the interference involved tortious conduct such as fraud, duress, or undue influence;
  4. that there was a reasonable certainty that the plaintiff would have received the expectancy but for the defendant’s interference; and
  5. damages.

Irene D. Johnson,  Tortious Interference With Expectation of Inheritance or Gift – Suggestions for Resort to the Tort, 39 U. Tol. L. Rev. 769, 771 (2008) (citing Sonja Soehnel, Annotation, Liability in Damages for Interference with Expected Inheritance or Gift, 22 A.L.R. 4th 1229, § 2 (1983)).

In New York, however, this tort is not recognized. But aggrieved beneficiaries may resort to the remedy of “imposition of a constructive trust” in many, although not all, situations in which that person would have sued for tortious interference with expectation of an inheritance in other states, and with similar benefits. Diane J. Klein, A Dissappointed Yankee in Connecticut (or Nearby) Probate Court: Tortious Interference With Expectation of Inheritance – A Survey With Analysis of State Approaches in the First, Second, and Third Circuits, 66 U. Pitt. L. Rev. 235, 282-86 (2004).

The leading case for the imposition of constructive trusts in New York surrogate’s court, as a remedy for the same kinds of fraudulent actions that the tort of interference with expectancy of inheritance is meant to address, is the New York Court of Appeals decision in Latham v. Father Divine from 1949.

In that case, Lucy Latham bequeathed Father Divine, a charismatic preacher, and several of his associates, the bulk of her assets in her Will. Several cousins of the deceased testatrix brought significant evidence that Ms. Latham intended to draft a new Will for their benefit, but that associates of Father Divine physically stopped her from executing it and the cousins allege that the preacher’s associates ultimately killed her to prevent her from executing another Will. After a settlement in Surrogate’s Court, these cousins sued Father Divine and his associates in order to have the court impose a constructive trust on the assets Father Divine received.  This would effectively force him to turn over the money and property that he received to the plaintiffs.

The Court, in that case, explained  (page 30) that:

The answer is in Ahrens v. Jones (169 N. Y. 555, 561[]): “‘The trust does not act directly upon the will by modifying the gift, for the law requires wills to be wholly in writing, but it acts upon the gift itself as it reaches the possession of the legatee, or as soon as he is entitled to receive it. The theory is that the will has full effect by passing an absolute legacy to the legatee, and that then equity, in order to defeat fraud, raises a trust in favor of those intended to be benefited by the testator, and compels the legatee, as a trustee ex maleficio, to turn over the gift to them.'” (emphasis added)

As noted by Prof. Johnson (supra at 239), constructive trusts may not have all of the advantages of the tort remedy. For instance, an aggrieved expected beneficiary cannot use this remedy against an innocent third party to whom estate property was sold after receipt of the assets by the fraudmeister. Also, a constructive trust will not allow a plaintiff to get actual damages, compensatory damages, punitive damages, or a jury trial. 

But for those of us in New York, the constructive trust is all we’ve got!  As readers of this blog know, our office has a very busy estate litigation practice so if you think that you, or someone you know, has been cheated out of an inheritance by some wrongdoing by another, you can call us to discuss your case.

Picture of Father Divine courtesy of tailorstreetstudio.

semen-storageThe New York Law Blog reported on the recent case of  Speranza v Repro Lab Inc., which was decided  by the Appellate Division, First Department, on March 3rd.

In this case, a man, Mark Speranza, deposited several semen samples with Repro Lab in advance of a medical treatment that he had reason to suspect might affect his ability to have children. In his contract with the lab, he directed that in the event of his death, the samples should be destroyed. Unfortunately, he passed away and his parents became the administrators of the estate. They paid the lab’s storage fees and sued to have the Court order the Lab  to release the sperm to them so that they could implant it into a surrogate mother and have a grandchild.

The Court found that such a result would violate NY health law, which mandates extensive testing for sperm that will be implanted in someone other than the regular partner of the sperm donor. Also, the Court found that Mark’s contract with the lab was very clear and that the lab was bound to honor that contract by destroying the sperm.

I am certainly very sympathetic to the parents’ position. Most of us cannot imagine that grief felt by parents who have lost a child. One can also imagine that the parents would want to see some continuity of their child’s life through a grandchild. But such a thing is nevertheless unhealthy on so many levels.

First, as a matter of public policy, it is wrong to make someone into a parent against their express will and without their consent, as  Mark’s parents understandably wished to do.

Second, the result Mark’s parents were suing for violates Mark’s freedom of contract. The fact that his parents had an extremely strong desire for a result different from what their son desired does not give them the right to vitiate the terms of Mark’s contract with Repro Lab.

New York Legal Update commented that it was “sleazy” of the lab to accept the storage fees from the parents while they litigated the matter with them.  They argue that they should have just destroyed the sperm right away upon Mark’s death, as per the contract. I disagree for two reasons.

One, the lab had no way of knowing that Mark’s parents would not be successful in obtaining a court order that Repro turn over the sperm. Once they destroy the sperm it is too late to go back. The lab could have been more concerned about covering its own behind in case the parents won, than about quickly fulfilling their part of the contract with Mark. Thus, I think they could have seen discretion as the better part of valor and decided to sit tight with the sample in storage until the courts settled on an answer to the question.

Second, I doubt that they were cynically pocketing the storage money for profit. Repro was a named party in the law suit and I have no doubt that their legal fees in this matter far exceeded any storage fees they received from Mark’s parents. Thus, the lab probably suffered a major loss, despite receiving the storage fees. So I see the lab’s behavior more as a way of trying to avoid liability than some kind of money-grabbing scheme.

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helmsley-and-her-dogEric 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

tony-marshallThe 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

man-two-wives-brides-polygamyAs a law clerk in a law office that does a tremendous amount of Wills Trusts and Estates work, I found this story pretty interesting.

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?

jewish-clauseThe Illinois State Supreme Court will soon consider the case of In re Estate of Max Feinberg. With thanks to John T. Brooks from T&, 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.

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