Scrivani's Estate, Matter of

• Decision Date: 18 October 1982
• Citation: 116 Misc.2d 204,455 N.Y.S.2d 505
• Parties: In the Matter of the Application of Joan ROSSI as Conservator of Julia Molinelli for Leave to Serve and File a Renunciation under the Estate of Marie Scrivani, deceased.
• Court: New York Supreme Court

Page 505

455 N.Y.S.2d 505

116 Misc.2d 204

In the Matter of the Application of Joan ROSSI as Conservator of Julia Molinelli for Leave to Serve and File a Renunciation under the Estate of Marie Scrivani, deceased.

Supreme Court, Special Term New York County, Part 1.

Oct. 18, 1982.

Joseph Winston, New York City, for Conservator; Stanley S. Getzoff, New York City, of counsel.

Commissioner of Human Resources Joseph M. Armstrong, New York City, for intervenor; Alan Krams, New York City, George A. Reilly, of counsel.

Isabella Geriatric Center, Dengler, Dengler & Dengler by Theobald J. Dengler, New York City, for intervenor.

MARTIN EVANS, Justice:

This conservator's motion seeking permission to renounce an inheritance requires the Court to analyze the effect of such a renunciation on her charge's eligibility for governmentally afforded medical benefits. In so doing, it raises important questions about the proper roles of the court and the conservator.

Movant Joan Rossi is a granddaughter of Julia Molinelli, an 84 year old patient confined at the Isabella Geriatric Center, a nursing home in upper Manhattan. After a hearing, and upon a showing that Mrs. Molinelli was unable to maintain her affairs, movant Rossi was appointed conservator of her property by this Court on July 20, 1982.

This motion is opposed by both the nursing home and the City of New York; leave for them to intervene is deemed requested, and granted, without opposition.

Mrs. Molinelli's sister, Marie Scrivani, died intestate on December 6, 1981, apparently leaving Mrs. Molinelli as her sole distributee. The Scrivani estate amounts to approximately $50,000. It was obvious that this estate, if not renounced, would be immediately subject to the claims of Mrs. Molinelli's creditors, principally the nursing home and others responsible for her care, upon transfer to her. Evidence in the conservatorship proceeding indicated that Mrs. Molinelli, when able to manage her affairs, expressed the desire that the inheritance go to her children who needed it more than she. Upon Mrs. Scrivani's death, however, Mrs. Molinelli was no longer competent to execute a knowing and intelligent renunciation; having been institutionalized for a prolonged period, Mrs. Molinelli was unable to rationally assess the alternatives and express her wishes. Counsel for movant, when applying for the conservatorship, commendably disclosed that such a renunciation was in contemplation and would be sought from this Court. Because other issues were clearly presented, and because other parties, not before the Court on the conservatorship application might be adversely affected without an opportunity to be heard, this Court directed that a separate proceeding be brought.

I

Movant, by this proceeding, seeks leave of this Court to file a renunciation of the inheritance, in the stead of her grandmother and ward, in the Surrogate's Court, Kings County, where the Scrivani estate is under administration. She contends that it is sought for a proper purpose, i.e., to fulfill her grandmother's desire to provide for her children. She is opposed by two parties: the nursing home and the New York City Department of Social Services. The nursing home indicates that, while it is not now a creditor of Mrs. Molinelli, being regularly reimbursed through the Medicaid program for her care, it may in the future become a creditor if Mrs. Molinelli's Medicaid eligibility is cut off by the rejection of available resources. The City similarly indicates that while it does not seek to assert claims for past Medicaid benefits paid, and, while not waiving any such future claim, it would be constrained to terminate Mrs. Molinelli's Medicaid benefits.

Movant, in reply, represents that Mrs. Molinelli's needs will be guaranteed by unspecified members of her family, and asserts that termination of Medicaid eligibility is properly the subject of a different proceeding. Movant has not herself promised to guarantee her grandmother's needs and expenses; neither does she appear to be authorized to bind any other family member. Movant's second assertion is technically correct: termination of Medicaid assistance is properly the subject of an administrative proceeding, which can be challenged by an Article 78 proceeding; a determination as to continued eligibility also can be sought by declaratory judgment. Nevertheless, since the question significantly bears on the future wellbeing of the conservatee, this Court is bound to consider it, even if the relief sought in all other respects, is appropriate.

This Court's authority over the question is both inherent and statutory. This Court has the inherent power to supervise the conduct of its officers and appointees, and to safeguard the welfare of its wards. See Berman v. Grossman 24 A.D.2d 432, 260 N.Y.S.2d 736. This important policy consideration is codified in the statute governing procedure for such renunciation on behalf of wards of the Court. EPTL Section 2-1.11(c) states:

"A renunciation on behalf of an infant, incompetent, conservatee or a decedent shall be made by the guardian of the property of such infant, a committee of such incompetent, a conservator of such conservatee or the personal representative of such decedent. Such renunciation shall not be effective unless, prior thereto, the guardian, committee, conservator or personal representative has been authorized to renounce by the court having jurisdiction of the estate of the infant, incompetent, conservatee or decedent."

The statute properly recognized that it is the Court having jurisdiction over the renouncing beneficiary, not that with jurisdiction over the donor's estate, which is empowered to authorize the renunciation.

The procedure for authorizing renunciations cannot be regarded as pro forma or ministerial; it is a significant responsibility. Conservators and other fiduciaries are appointed by the Court to discharge the community's responsibility to protect those who are incompetent to adequately conduct their personal and business affairs. Mental Hygie Law, Arts. 77, 78; see Sporza v. German Savings Bank 192 N.Y. 8, 84 N.E. 406. The appointment of such a personal representative automatically effects a significant loss of the ward's individual freedom, which varies according to the extent of the ward's incompetency and the degree of his understanding. This loss of freedom--often painful to both the ward and the Court which must order it--is deemed necessary to protect a ward who is incapable of freely exercising his own life-choices. It can only be justified if the State, acting through the Court, assures that the ward's best interests are being protected, and if the conservator exercises his substituted judgment accordingly. The Court therefore may, and indeed should, consider any matter which may affect the ward's welfare, including the possible future legal consequences of a fiduciary's proposed course of action. See Carter v. Beckwith 128 N.Y. 312, 19, 28 N.E. 582. Even though it may be argued that the nursing home and the City lack standing to object to an otherwise legal renunciation, since each has at most a speculative stake in the outcome. (see, gen. Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450), each has a relationship with the conservatee (i.e., either as a direct or indirect primary care provider) which gives rise to a responsibility to her. It is thus not only appropriate, but incumbent on them, to bring to the Court's attention any circumstance which might jeopardize the conservatee's wellbeing. ¹

II

It is settled law in New York that a distributee may freely renounce a testate or intestate disposition for any reason or no reason, even if the renunciation has the effect, or indeed, the object, of frustrating creditors or avoiding taxes. EPTL 2-1.11 (which extended the common law rule to intestate distribution); Matter of Schiffman 105 Misc.2d 1025, 430 N.Y.S.2d 229; Matter of Deitch 106 Misc.2d 690, 435 N.Y.S.2d 244.

At first glance, this rule appears to conflict with other long standing and well established values, by seeming to encourage the evasion of one's just debts. Closer analysis indicates otherwise. Any post-mortem distribution, whether by will or by operation of law, is a donative transfer like any other. The law forces no one to accept a gift. To hold otherwise may impose an unintended hardship on the recipient intended to benefitted, as by triggering unanticipated and unnecessary additional tax liability. Moreover, it may frustrate the intent of the deceased, who sought to benefit the distributee and not a private or public creditor. See, Rohan, Practice Commentary to EPTL Sec. 2-1.11 (McKinney ed., 1981) at 260-264; Third Report N.Y.S. Temporary Comm. on Estates, NYS Legis. Documents, 1964 No. 19 at 257-58.

A renunciation speaks retroactively as of the decedent's death, thus effecting a situation equivalent to that where the beneficiary predeceases the decedent: no gift ever vested in the beneficiary. Thus, not even an express purpose of defeating a claim for Medicaid reimbursement would thereby render a renunciation illegal; it is not itself, absent other compelling considerations, sufficient cause for a court to set a renunciation aside. Matter of Schiffman, supra.

It is axiomatic that any act, itself legal, may have unintended and often harmful jural consequences. The renunciation sought here, while not itself illegal, is incompatible with other principles of law, and appears likely to cause adverse consequences for the conservatee. The Medicaid program is intended to provide comprehensive, government-financed medical care for those citizens who would otherwise be unable to afford adequate...