Mixter's Estate, In re

• Decision Date: 20 May 1975
• Citation: 83 Misc.2d 290,372 N.Y.S.2d 296
• Parties: In re ESTATE of George W. MIXTER. Surrogate's Court, New York County
• Court: New York Surrogate Court

Page 296

372 N.Y.S.2d 296

83 Misc.2d 290

In re ESTATE of George W. MIXTER.

Surrogate's Court, New York County.

May 20, 1975.

Cadwalader, Wickersham & Taft, New York City (Jay H. McDowell, Anders R. Sterner, New York City, of counsel), for petitioner Samuel A. Galpin.

DECISION

MILLARD L. MIDONICK, Surrogate.

This is an application by a contingent remainderman for an extension of time to file a renunciation and for a determination of the effect of the renunciation.

Article FIFTH of the will provides a residuary trust for the benefit of the testator's daughter, Margaret M. Partridge, and his wife, Felicie Waldo Howell Mixter, to terminate on the death of the survivor of them. Felicie died in 1968. Margaret Partridge is still alive and is the remaining life beneficiary. The will provides that upon the death of Margaret the principal shall be distributed one-half, but not less than $500,000 in further trust for public, charitable and educational uses and the balance to the petitioner, a 'nephew Samuel A. Galpin, if he be then living, and if not, then to his issue then living in equal shares, Per stirpes.' The principal of the trust is $2,500,000.

Petitioner Samuel A. Galpin desires to renounce his interest for estate and gift tax purposes and to have it pass to his issue.

The first question concerns the timeliness of a renunciation. While a renunciation under EPTL 3--3.10 must be made within one year after the will is admitted to probate the time to file and serve such renunciation under that section may be extended in the discretion of the Surrogate upon a showing of reasonable cause (§ 3--3.10(a)). The one year requirement in the statute appears to be geared to renunciation of present interests. This court is of the opinion that the rule should be somewhat relaxed where future interests are involved. In any event where future interests are involved the court has discretion to extend the one year time limit. All necessary parties have consented to the extension in the instant case. Prior to the enactment of that statute the law in New York provided that the renunciation had to be made within a reasonable time (Matter of Wilson, 298 N.Y. 398, 83 N.E.2d 852; Oliver v. Wells, 254 N.Y. 451, 173 N.E. 676).

What is the reasonable time varies with the circumstances of each case. The time may be very long if injury to others will not result (Matter of Wilson, supra.) Although no case has been found in New York, it appears from certain authorities and from case law in other jurisdictions that where contingent future interests are involved a renunciation need not be made until termination of the preceding estate. The reasonable time requirement may not in effect begin to run until the interest is indefeasibly fixed both in quality and quantity (Keinath v. CIR, 8 Cir., 480 F.2d 57; Seifner v. Weller, Mo., 171 S.W.2d 617; In re Estate of Page, 113 N.J.Super. 582, 274 A.2d 614; Dare v. New Brunswick Trust Co., 122 N.J.Eq. 349, 194 A. 61; 6 Page on Wills, § 49.8). A beneficiary should not be required to exercise his judgment at the date of the testator's death, in such a serious matter as renunciation of a remainder interest. The reasonable time requirement should not commence until the date of the life income beneficiary's death. At that time the remainderman would be in a position to know or obtain knowledge as to the amount and nature of the gift and its consequences on his then financial condition. In the instant case the reasonable time period has not commenced since the life income beneficiary is still alive, and no injury will result to others as a result of the renunciation. The extension of time to file the renunciation by the contingent remainderman is therefore approved.

The question of the effect of renunciation may be answered at this time without violating the rule in Matter of Mount, 185 N.Y. 162, 77 N.E. 999. The determination is requested so that petitioner may effectively plan his estate. In many cases, an elective renunciation or disclaimer becomes an important element of flexibility in posthumous estate planning. Cf. Professor Patrick J. Rohan, Supp. Practice Commentary, EPTL 3--3.10, 1974--1975 Pocket Part, pages 47--48. This is an adequate reason for the court to act, at the present time, especially since all parties have appeared in the proceeding and consented to the relief requested (Matter of Coster, N.Y.L.J. March 20, 1967, p. 17, col. 4).

There would be no question of the effect of the renunciation if EPTL 3--3.10 were applicable. Under that statute the petitioner would be deemed to have predeceased the testator with the result that the remainder interest would pass to his issue under the terms of the will. (Cf. Matter of Fordham, 235 N.Y. 384, 139 N.E. 548.) Under that section the renunciation is viewed as the equivalent of the natural death of the person renouncing. However, the will herein was probated March 5, 1947 resulting in the question of whether the new statute is applicable. (Matter of Schloessinger, 70 Misc.2d 206, 333 N.Y.S.2d 683; Matter of Klosk, N.Y.L.J. February 14, 1973, p. 21, col. 1). In Klosk, it was held that EPTL 3--3.10 did not apply to estates of decedents who died prior to November 3, 1971, the effective date of the statute. However, the statute does not expressly negate a retroactive effect.

Prior to the enactment of the statute, the Court of Appeals dealt with a substantially similar question in Matter of Waring, 293 N.Y. 186, 56 N.E.2d 543. In that case the residuary estate was left in trust for the use of the wife for life and upon her death, to decedent's sisters, in equal shares. Testator provided that in the event that one of his sisters should die before the death of his widow leaving descendants her surviving, the share which would otherwise have gone to her should pass to her descendants in equal shares Per stirpes. Mrs. Hoyt, one of the sisters who with her three children survived the widow, renounced a small portion of the gift to her. A proceeding was brought by her children for a construction requiring the trustees to pay to them the renounced part of the legacy on the theory that they were substitutional legatees and devisees under the will. The Court of Appeals held that the children were not interested parties. It stated at page 190, 56 N.E.2d at page 545:

'Substitutional donees were named in the will in the event of the death of Mrs. Hoyt before the death of the widow. That even did not occur.'

The renounced portion passed in intestacy in that case.

The decision in Waring seems unduly harsh especially since the testator provided for a gift over. It does not appear ever to have been followed in an analogous case. Rather as suggested by petitioner the courts are seeking more to uphold gifts by implication. (Cf. Matter of Thall, 18 N.Y.2d 186, 273 N.Y.S.2d 33, 219 N.E.2d 397; Matter of Haber, 281 App.Div. 383, 119 N.Y.S.2d 843, aff'd 306 N.Y. 706, 117 N.E.2d 804; Matter of Selner, 261 App.Div. 618, 26 N.Y.S.2d 783, aff'd 287 N.Y. 664, 39 N.E.2d 287.)

In Vol. 9, Rohan, N.Y.Civ.Prac. § 4--1.3(4), p. 4--67 Note 16, Professor Rohan in discussing Waring suggests that 'in the future, courts may reach the conclusion that a renouncing legatee or devisee should be treated as predeceasing, bringing the lapse statute into play,...