New York Trusts and Estates: Common Errors and Misunderstandings
Prepared by Prof Bloom
Per Stirpes/Representation
Q What is the difference between per stirpes and representation?
A First, the similarities: you determine the number of shares at the first generation where at least 1 person is
alive. If a person is alive at the generation then a share is also assigned to any other person in that generation
who left issue surviving the relevant ancestor, eg the intestate. Since the person is dead, his or her share will
be shared by his issue.
The difference: In a per stirpal distribution, the share of the deceased person in the 1st generation is shared
by his or her issue.
In a representational distribution, the fraction that remains (after giving to living persons in the first
generation) is dropped down and then equally divided.
The idea of representation is to have equality at each generation. With per stirpes, this
may be the case but not always.
Q Why do students have such a hard time with per stirpes and representation?
A I wish I knew-it’s too late in the day to say I can’t do fractions-but do yourself a favor and finally figure
out how to solve under these sharing arrangements.
Q What is the default rule?
A For intestacy, it’s representation. 4-1.1. In documents, it’s currently representation when “issue” is used
unless document was executed before 9/1/92. 2-1.2
Will execution and probate
Q Can a will be valid if the testator’s signature is not witnessed?
A Yes. 3-3.2 also allows for acknowledgment by the testator at a time after the testator signed the will. Of
course, the witness must then sign.
Q Is intestacy relevant if a person dies with a will?
A Absolutely. SCPA 1403 requires that the distributees-the persons entitled to take by intestacy-must be
served. This gives the distributees the opportunity to contest the will.
Q How does Dead Man’s Statute (CPLR 4519) work?
A It bars testimony from those who would benefit. Thus, a stranger to conversation with the decedent or an
overheard conversation could testify, as could a relative who was not a distributee.
Standing to contest will
Q Who has standing to contest?
A Under SCPA 1410, only persons who would be adversely affected by will’s admission.
Q If a person is a relative but would not be a distributee, can he or she contest?
A. NO.
Self-proving affidavit
Q Is a self-proving affidavit required?
A No, but it’s a good idea since it can eliminate the necessity for witness to have to testify unless an
objection is made. SCPA 1406
Q Must a self-proving affidavit be obtained when the will is executed?
A Absolutely not. It can be obtained at any time, during and after the testator’s death.
Interested Witness
Q Who is an interested witness?
A An interested witness is a person who serves as a witness to a will and is left a beneficial disposition
(including a disposition by the testator’s exercise of a power of appointment). If the witness is only named as
a fiduciary, he or she is not an interested witness and suffers no adverse consequences. Cf 5-1.4 (where
divorce also revokes fiduciary appointment of former spouse).
Q What are the consequences of being an interested witness (IW)?
A It depends. If there were not 2 other disinterested witnesses at the time of will execution, then the
disposition is void, subject to the lesser of the 2 rule for persons who would be distributees.
Q Suppose a will is witnessed by an IW and a disinterested witness. Is it possible for a court to dispense with
the testimony of the IW and have the IW take his or her disposition?
A Absolutely not! 3-3.2 could not be clearer that the disposition will be void. This has been the law since
1942.
Q Can a will be admitted to probate if a will is witnessed by an IW and a disinterested witness?
A Absolutely. In fact, the IW is compellable to testify. Do not confuse the admission of will to probate and
the substantive penalty for being an IW.
Q
When will an IW not be penalized?
A Only if there were 2 disinterested witnesses at time of will execution AND the testimony of the IW is not
necessary to prove the will.
Q Suppose an IW disclaims the bequest, will that undo his or her status as IW so that he or she becomes a
disinterested witness?
A NO. IW status is determined at time of will execution. Subsequent events are irrelevant. Similarly, if
witness was a contingent beneficiary, he or she would still be an IW even if contingency was not resolved in
the favor of the IW.
Q If the IW was a distribute, what will the IW get?
A The lesser of the amount under the will or what the IW would have taken as distributee had there been total
intestacy. EG Residuary bequest of 50 to child who was IW ; total estate of 80; widow, testator, also
survived by a 2d child. IW gets 40-the lesser of 50 or 40 which is what would have received had there been
total intestacy.
Revocation
Q Can a will be partially revoked by physical act?
A Not allowed. 3-4.1.
Q Is there a presumption of revocation if a will was last in possession of testator?
A Yes.
Q What is DRR?
A The law of the second best. The intended later (typically 2d) will is not effective for some reason-failure
to comply with will execution under 3-2.1. Should the prior will stand b/c revocation was a mistake or should
intestacy result? It depends on which result is closer to what testator wanted under invalid will. EG, testator
leaves all to child under invalid 2d will, $5,000 under first will and child would get more by intestacy. DRR
will not be applied since the second best result is to treat 1st will as validly revoked and have child take more
by intestacy.
Anti-Lapse
Q Who cares?
A You should. It’s been heavily tested
Q What’s the deal?
A At common law, a bequest to individuals who died before will execution (a void legacy) or after will
execution (a lapsed legacy) would go to others since a person who predeceases the testator cannot take.
Somewhat crassly, we don’t open up the casket and give a dead person property.
Q What’s anti-lapse in NY?
A A legislative default rule(3-3-.3)that applies if the predeceasing individual is either issue of the testator or
a sibling AND the predeceasing relative leaves issue who survive the testator. If both conditions occur, then
the property passes to the surviving issue of the predeceasing issue or sibling.
Q Example?
A Dad dies and leaves $50K to son who dies before dad but leaves a daughter. Daughter of predeceasing son
gets 450K.
Q Does 3-3-3 apply if the will provides otherwise?
A NO! So check out will. Typical override is where will says to my surviving son, or if my son survives me.
In such cases, the statute does not apply. EG in above hypo if residuary were left to X, and will said 50K if
my child survives me, then 50K would pass under residuary to X and granddaughter of testator would not get.
Q Assuming will does not provide otherwise, does 3-3-3 apply if the testator’s issue or sibling in whose favor
the individual disposition was made was dead at time of execution (a void legacy)?
A Absolutely! If you think otherwise, you’re dead wrong.
Q Does 3-3.3 apply to class gifts to issue or siblings?
A Yes, but here a member of the class who was dead at time of will execution is not considered part of the
class so his or her issue who survive the testator will not take. If, however, the class member was alive at time
of will execution, then just like for gifts to individuals, that predeceasing person’s issue who survive the
testator will take.
Q Does anti-lapse apply to nonprobate transfers, such as life insurance?
A Absolutely not!
Q Will 3-3-3 apply if the testator’s issue or sibling renounces?
A Yes. Under 2-1.11, the person renouncing is generally treated as having predeceased the testator so that 33.3 will apply if that person left issue surviving the testator.
Exempt Property
Q What is exempt property?
A Various items of personal property described under 5-3.1.
Q What’s the deal with automobile?
A $15K is exempt but if worth more, spouse (or children) have right to get car and pay excess over $15K.
Q What is the place of exempt property when a person dies?
A It belongs to surviving spouse of if none to children under 21. This is the case in intestacy, under wills and
for elective share purposes?
Q How about an example?
A Decedent dies survived by spouse and children with exempt property worth $40K and other property worth
$45k. Spouse gets $40 of exempt property off the top and remaining $45K under 4-1.1. Spouse winds up
with $85K.
Elective Share
Q Who cares?
A It’s been heavily tested.
Q How does it work in NY?
A First, spouse gets exempt property off the top. Then must figure out value of net estate at date of death
values.
Q What’s the net estate?
A The sum of the net probate estate (property owned at death less debts, administration and funeral expense)
plus the sum of testamentary substitutes (Exception: If spouse owned interest in community property, then
that 50% interest is not included for net estate purposes since surviving spouse will automatically get 50%. 66.3)
Q Then what?
A Assuming net estate exceeds $150K, take 1/3rd to get Elective share. If less $50K or whatever is value if
less than $50K. EG net estate is only 40k, then get 40k; if net estate is 60k, then get 50k. This is in addition to
any exempt property.
Q Then/?
A Reduce elective share by value of all property that passed or has passed to spouse by will, intestacy or TS.
Difference is Net elective share, that is, amount spouse is entitled to elect provided complies with procedures.
In other words, elective share is elective, not automatic, as contrasted with intestacy which is automatic.
Q How does spouse get net elective share amount?
A By ratable contribution from all other takers.
Q How about an example that shows how ratable contribution works?
A Net elective share is $150 as follows: A was left entire estate of $400 and B was Totten trust beneficiary
of $50. Assume that Net estate was $450
(assume no debts and expenses) so that elective share is $150 as is Net elective share since spouse didn’t get
anything form decedent spouse. A contributes 400/450 times $150; B contributes 50/450 times $150.
Q Can there be an election if a spouse dies but does not leave a will?
A Yes due to TSs. Most extreme example: H dies with no Net probate estate because created revocable trust
in favor of friend. Spouse will have right to elect and get share from trust.