Estate of Flynn

• Decision Date: 31 May 1983
• Citation: 119 Misc.2d 561,463 N.Y.S.2d 719
• Parties: ESTATE OF William A. FLYNN, Deceased. Surrogate's Court, Bronx County
• Court: New York Surrogate Court

Page 719

463 N.Y.S.2d 719

119 Misc.2d 561

ESTATE OF William A. FLYNN, Deceased.

Surrogate's Court, Bronx County.

May 31, 1983.

A. Lawrence Washburn, Jr., New York City, for petitioner.

Siben & Siben by Mitchell E. Wilensky, Bay Shore, of counsel, for Alice Lanyo, respondent.

Jerome S. Heller, pro se, respondent.

BERTRAM R. GELFAND, Surrogate.

This is an application which seeks a determination that two totten trust bank accounts established by decedent have been revoked pursuant to the terms of his will. Petitioner is decedent's niece and a beneficiary of one-half of the residuary estate. Respondent is the executrix, who is also the decedent's step-daughter. The step-daughter is the beneficiary of the other one-half of the residuary estate. Petitioner concedes that the accounts at issue were not revoked in accordance with the requirements of EPTL 7-5.2(2), but contends, in the alternative, that either the statute is inapplicable to the accounts, or, if applicable, it is unconstitutional.

Decedent died on January 24, 1982. His will dated October 9, 1981 was admitted to probate pursuant to a decree of this court entered March 5, 1982. Under the terms of said will, other than a legacy of $3,000 to a step-granddaughter, the residuary estate was bequeathed, in equal shares, to petitioner and to respondent step-daughter. However, during his lifetime, decedent created two totten trust bank accounts, the proceeds of which constitute substantially all of decedent's assets. These accounts were established prior to the execution of the will and designated his step-daughter as beneficiary upon his death. It is contended by petitioner that under the circumstances existing in this matter, the totten trust bank accounts, that were respectively established on January 7, 1974 and April 7, 1980, were revoked by the provisions of the will. Respondent contends that the provisions of EPTL 7-5.2, effective September 1, 1975, are dispositive of the issue and mandate a contrary result to that sought by petitioner.

The entire Part 5 of EPTL Article 7 was added to our statutes by Chapter 499 § 3 of the Laws of 1975. This addition to our statutes consists of an entirely new part entitled "Bank Accounts In Trust". The clear intent of the Legislature in enacting the 1975 addition to EPTL Article 7 was to establish an exclusive statutory format governing trusts accounts. This format included as EPTL 7-5.2 a specific and exclusive procedure for altering, by testamentary instrument, the otherwise controlling designation of beneficiary on a totten trust account. The amendment was intended to provide, by a statutory scheme, a certainty and predictability in this area of the law which had long been troubled by the need to decide on a case by case basis whether a testator intended to revoke a totten trust Under the previously applicable statutory and decisional law existing prior to enactment of the present statute, courts were faced with the challenge of being required to reach consistent determinations by pursuing the often illusory search for what was the true intent of a deceased person when he died with assets in the form of totten trusts and a testamentary instrument that raised an issue as to whether the testator sought to revoke the totten trusts by the terms of his will, under the myriad of differing circumstances present in each particular case [see e.g., Matter of Krycun, 24 N.Y.2d 710, 301 N.Y.S.2d 970, 249 N.E.2d 753; Matter of Motta, 64 A.D.2d 985, 408 N.Y.S.2d 823; Matter of Richardson, 134 Misc. 174, 235 N.Y.S. 747; Matter of Beagan, 112 Misc. 292, 183 N.Y.S. 941].

The Legislature now having given us an explicit and definitive statutory procedure which completely encompasses the subject matter, in the absence of a constitutional infirmity in the statutory enactment, the statute must be accepted as controlling. As my learned colleague, Surrogate Bloom, indicated in Matter of Silberkasten, 102 Misc.2d 227, 423 N.Y.S.2d 141, affd. 76 A.D.2d 1039, 428 N.Y.S.2d 768, the issue now before the court in these matters is not what the depositor's intent may have been, but whether the depositor's will complied with the provisions of the statute [see also Matter of Neuman, 106 Misc.2d 135, 431 N.Y.S.2d 256; Estate of Blume, N.Y.L.J., August 15, 1979, p. 12, col. 6; Estate of Margolis, N.Y.L.J., October 20, 1981, p. 12, col. 2].

The germane portions of EPTL 7-5.2(2) provide that: "A trust can be revoked ... by the depositor's will only by means of ... an express direction concerning such trust account, which must be described in the will as being in trust for a named beneficiary in a named financial institution...." It is conceded by petitioner that the specificity required by EPTL 7-5.2(2) is lacking in the instrument in that not only are the specific financial institutions not identified, but the testator's will is totally devoid of any reference, or even any suggestion, as to the existence of bank accounts. Petitioner's position rests entirely upon the contention that if the accounts are not revoked, the impact of the testamentary instrument on the distribution of decedent's assets is relatively minimal.

To reach her goal, petitioner argues that she is entitled to relief on the basis that EPTL Art. 7 is inapplicable to the accounts at issue. She advances this argument on alternative grounds, with her position varying to accommodate the date the respective accounts were established, one account having been created prior to the enactment of EPTL 7-5.2 and the other being created subsequent thereto.

As to the account created subsequent to September 1, 1975, petitioner argues that EPTL 7-5 in its entirety is inapplicable as a result of the language of Section 7-5.7 specifically providing that the statute is applicable to "... all funds in trust accounts ... which are in existence on its effective date ..." (emphasis added). Petitioner contends that as a result of this language, EPTL 7-5.2 should be construed as being applicable only to accounts "existing" on the date that EPTL 7-5 took effect, but that it is not applicable to accounts created after the effective date of the statute since the statute does not contain any additional specific words saying it is applicable to accounts created after its effective date.

Although this argument is ingenious, it is patently divorced from a reading of the entirety of Part 5 of EPTL Article 7 with a sensitivity to its clear purpose. It is ludicrous to believe that the Legislature would enact a statutory scheme designed to bring a sense of definitive order to "trust bank accounts" and then limit this format's applicability to only those accounts existing on the date of its enactment while totally ignoring all accounts which would be created subsequent to its enactment, thus...