Miller's Will, In re
| Decision Date | 20 March 1975 |
| Citation | 365 N.Y.S.2d 740,80 Misc.2d 916 |
| Parties | In re WILL of the George C. MILLER, Deceased. In the Matter of the judicial settlement of the account of L. E. GRANNING and Lincoln First Bank of Rochester (formerly known as Lincoln Rochester Trust Company) as Executors of the Last Will and Testament of George C. Miller, Deceased. Surrogate's Court, Monroe County |
| Court | New York Surrogate Court |
MICHAEL A. TELESCA, Surrogate.
In this proceeding, the executors and trustees are seeking a construction of the provisions of the Will of George C. Miller, deceased, creating a trust for the benefit of his daughter during her lifetime, and resolution of a dispute regarding the disposition of surplus accumulated income.
The testator, George C. Miller, died on March 15, 1970 and was survived by his only child, Aynn V. Schuhart, and two grandchildren, Nancy Lee Rodee and Anne Dashley Schuhart. The Will, Inter alia, created a residuary trust naming testator's daughter, Aynn Virginia Schuhart, the life beneficiary of the trust. Paragraph TWENTIETH of the Will directs the trustee to pay to the life beneficiary the sum of Three Hundred Dollars ($300.00) per month so long as she may live, out of the net income of the trust, and from the principal thereof, if necessary. Upon the death of the life beneficiary, the remainder of the trust fund and any gains and increases thereof are to be paid over to the testator's two grandchildren.
The accounting of the trustees indicates that the current principal balance on hand in the trust is $219,506.02 and that the current income balance on hand is $23,013.20. The trust corpus, clearly, is earning annually a sum far in excess of the amount necessary to pay to the life beneficiary the sum of $300 a month.
The question, then, is what disposition, if any, should be made of the accumulated surplus income and any future excess income. Two possible resolutions of this problem have been suggested: (1) the accumulated surplus income and any future excess income must be accumulated and paid over to the remaindermen upon the death of the life beneficiary; and (2) the accumulated surplus income and future excess income must be paid over immediately to the remaindermen.
Estates, Powers and Trusts Law (EPTL), § 9--2.3 provides that 'when income is not disposed of and no valid direction is given for its accumulation it passes to the persons presumptively entitled to the next eventual estate'. Thus, unless there can be found in the Will a valid direction for the accumulation of the excess income, the accumulated surplus income must be distributed to the next eventual estate, namely, the remaindermen.
The trustees contend that a valid direction to accumulate can be found in paragraph TWENTIETH of the Will, which states, in part: 'Upon the death of my said daughter, I direct that my said trustees pay and deliver the remainder of the said trust fund, And any gains and increases, or the part thereof then remaining, unto my said grandchildren then living or to the survivor of them, in equal parts, share and share alike' (Emphasis added). It is the words 'and any gains and increases' which the trustees contend constitute a valid direction to accumulate. This contention, however, is without merit, for it completely disregards the fact that the technical words 'gains and increases', when applied to the corpus...
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