Estate of Trigoboff, Matter of

• Decision Date: 15 January 1998
• Citation: 669 N.Y.S.2d 185,175 Misc.2d 370
• Parties: , 1998 N.Y. Slip Op. 98,057 In the Matter of the ESTATE OF Martin TRIGOBOFF, Deceased. Surrogate's Court, New York County
• Court: New York Surrogate Court

Page 185

669 N.Y.S.2d 185

175 Misc.2d 370, 1998 N.Y. Slip Op. 98,057

In the Matter of the ESTATE OF Martin TRIGOBOFF, Deceased.

Surrogate's Court, New York County.

Jan. 15, 1998.

Nesenoff & Miltenberg, New York City (Andrew Miltenberg, of counsel), for Craig Trigoboff, executor.

Lonnie G. Tishman, New York City, for Jacqueline Trigoboff, respondent.

EVE PREMINGER, Surrogate.

This application by the executor of the estate of Martin Trigoboff seeks a determination of the beneficiary of decedent's individual retirement account ("IRA"). At issue is whether a testamentary disposition of an IRA in a will pre-dating decedent's marriage supersedes the IRA's generic default designation in favor of the surviving spouse. For the reasons described below, the Court holds that, absent evidence of a contrary intent of the testator, a specific testamentary disposition overrides a default designation.

Martin Trigoboff died on January 6, 1997, survived by his spouse, Jacqueline, and two children from a prior marriage, Craig Trigoboff and Sherri Paige Arkerson. Mr. Trigoboff's estate is estimated at $180,000, excluding the value of his individual retirement account (IRA) which is approximately $400,000.

The IRA application, a simple one page form, provides that "[i]f no designation of beneficiary is set forth [on this form], the beneficiary shall be deemed to be his/her spouse, if surviving, or, if not, his/her estate." This provision is also included in the IRA custodial account. ¹ There is no beneficiary designated on the IRA application form.

At the time decedent established the IRA, in December, 1988, he was married to his second wife, Linda. After he divorced Linda, he executed a will, dated March 31, 1995, in which he specifically bequeathed "... monies held in any and all accounts, ... including, but not limited to [several enumerated accounts, including the IRA]," ² in equal shares, to Jacqueline, Sherri and Craig. Subsequently, decedent married Jacqueline and died without changing his will or altering his IRA beneficiary designation.

Smith Barney, the IRA custodian, first received a demand for distribution from the executor and thereafter received a demand from Jacqueline. Smith Barney then declined to make distribution. This application followed. A temporary restraining order precluding distribution pending the outcome of the litigation is in force.

In general, the designation of a beneficiary to receive a payment upon the death of the person making the designation must be made in a writing signed by the designator (EPTL 13-3.2[d] ). Although EPTL 13-3.2 does not expressly refer to IRAs, it has been held to apply to them (Matter of Morse, 150 Misc.2d 415, 568 N.Y.S.2d 689).

IRAs, like pension plans and insurance policies, typically set forth a procedure for designating a beneficiary (Matter of Morse, supra). The payor is entitled to require strict compliance with such procedural rules, and if it does so, the designated beneficiary receives the asset irrespective of whether the beneficiary designation reflects decedent's actual intent (Matter of Jaccoma, 142 A.D.2d 875, 530 N.Y.S.2d 909; Matter of Dorb, 58 Misc.2d 734, 296 N.Y.S.2d 735; Matter of Ziolkowski, 47 Misc.2d 752, 263 N.Y.S.2d 72; Matter of Stephan, 199 Misc. 118, 98 N.Y.S.2d 416). Conversely, the payor may waive compliance with procedural rules and seek or await a judicial determination of the proper payee (McCarthy v. Aetna Life Insurance Co., 231 A.D.2d 211, 661 N.Y.S.2d 625; Kane v. Union Mutual Life Ins. Co., 84 A.D.2d 148, 445 N.Y.S.2d 549; Matter of Morse, supra). Conditioning the designated beneficiary's absolute right to payment upon the decision of the stakeholder to waive or require compliance with procedural rules reflects the purpose of such rules which is simply to protect the payor (Matter of Morse, supra; see generally, Annot., Effectiveness of Change of Named Beneficiary of Life or Accident Insurance Policy by Will, 25 A.L.R. 4th 1164).

If the payor waives compliance with the procedural rules, the court must "... exercise equity and seek to do what the insured apparently intended and award the fund to the claimant having the strongest claim under existing conditions" (Kane, supra, at 154, 445 N.Y.S.2d 549). Establishing intent different from that expressed in the beneficiary designation provided in accordance with the contract requires proof of steps "... beyond a statement, uttered during the decedent's lifetime, of mere intent" (McCarthy, supra, at 216, 661 N.Y.S.2d 625). In addition to intent, there must be proof of an "... act or acts designed for the purpose of making the change ..."(Aetna Life Ins. Co. v. Sterling, 15 A.D.2d 334, 335, 224 N.Y.S.2d 146, aff'd 11 N.Y.2d 959, 229 N.Y.S.2d 9, 183 N.E.2d 325).

For example, a will that specifically disposes of an unambiguously identified IRA or insurance policy may effectively override a beneficiary designation executed prior to the will (Compare, Matter of Morse, supra; with Kane, supra ). In the absence of any other evidence, the will stands as the uncontradicted evidence of clear intent to change the designation and the will execution is an affirmative act toward effectuating that intent (See, McCarthy, supra; Matter of Morse, supra ).

At the call of the calendar in this case, the IRA custodian, Smith Barney, informed the Court that it was taking no position with respect to the dispute. By doing so, Smith Barney waives its right to enforce procedural requirements. This waiver, although not in the form of a deposit into Court or an interpleader action, enables the Court to disregard procedural formalities and determine the proper payee based upon an evaluation of the evidence of decedent's manifest intent (See, McCarthy, supra; see also, Turano, 1991 Supp. Practice Commentary, McKinney's Cons. Laws of N.Y., Book 17B, EPTL 13-3.2, at 143). ³

In this case, the question of intent arises because decedent executed his will after the IRA application but at a time when the presumptive default designation to his surviving spouse was inoperative (after his marriage to Linda and before his marriage to Jacqueline). As noted above, if Jacqueline had been affirmatively designated by name on the beneficiary designation form, decedent's subsequently executed will specifically disposing of the IRA otherwise would evidence an intent to change the designation and, in the absence of other evidence, would be sufficient to...