Simon's Estate, In re
| Decision Date | 13 November 1972 |
| Citation | 348 N.Y.S.2d 462,75 Misc.2d 361 |
| Parties | In the Matter of the ESTATE of Dave SIMON, a/k/a David Simon, Deceased. Surrogate's Court, Nassau County |
| Court | New York Surrogate Court |
Jack Korshin, Mineola, for petitioner.
Bisco, Winkler & Higgiston, New York City, for respondent Reva Simon Hart.
Feldesman & D'Atri, New York City, for Walter Feldesman.
Francis X. Sperl, Mineola, guardian ad litem.
Solomon Nachbar, New York City, for Rose Lippman, Grace Griffel and Manufacturers Hanover Trust Co.
Jerald Hart, pro se.
JOHN D. BENNETT, Surrogate.
Pending the settlement of the account of Robert Black as one of the executors and trustees, he makes formal application for the court to authorize and direct partial distribution of $75,000 to him. This amount is said to be a very small fraction of the total amount distributable.
There are two trusts being accounted for: (1) a marital deduction trust of which the decedent's wife was life beneficiary and (2) the residuary trust for the benefit of the decedent's daughter Reva during her lifetime with half of the corpus payable to her at the age of 25 and the balance when she attains 30 years of age.
The marital deduction trust terminated on the death of the widow, Renee Simon, on February 6, 1971. By the terms of the decedent's will, the widow had a general, testamentary, discretionary power of appointment (EPTL, Art. 10). It is apparently conceded that the corpus of this trust was validly appointed by the widow's will in its residuary clause quoted below in favor of this decedent's step-son Robert Black to the extent of 75% (reduced to 66 2/3% By agreement of the parties) and 25% In trust for his daughter Reva (plus 8 1/3% Outright to her and free of trust, by the same agreement of the parties).
This application is opposed by Robert Black's half-sister Reva, who is a co-executor and co-trustee. Her objections are (1) that, although the marital deduction trust terminated and became distributable on February 6, 1971, it cannot be distributed until there is a complete accounting in the widow's estate; (2) that the corpus is subject to the rights of another legatee, who is to receive $100,000 under a preresiduary clause in the widow's will; (3) that such trust is subject to estate taxes which may be due to the Federal government, the State of New York and the State of Florida on the estate of Renee Simon; and (4) that this trust corpus is also subject to any possible debts incurred by Renee Simon or by her estate, now being administered in the State of Florida. These contentions are based upon Reva's contention that there was a merger of this marital deduction trust and the estate of Renee Simon, 'manifested' by the terms of her will.
Although partial distribution is oposed here, it does appear that a cash payment of $200,000 was made from this estate to the estate of Renee Simon, apparently to furnish funds for the payment of estate taxes. The petitioner herein characterizes such payment as a 'loan' and the objectant terms it a 'cash distribution'.
The will of Renee Simon was made on September 9, 1968 at a time when she was residing in New York, although she died in the State of Florida and her will was probated there. By her will she first directed payment of her debts and funeral expenses without making any reference to her power of appointment. Then, by paragraph 'SECOND' she directed that all estate and other death taxes with respect to any property 'included in my gross estate subject to such taxes * * * shall be paid by my Executor hereinafter named as expenses of administration out of the Principal of my residuary estate, and shall not be apportioned or prorated to any legatee or devisee under this Will * * * or any person Owning or receiving any property not passing under this Will * * *.' (Emphasis supplied)
Paragraph 'THIRD' then bequeathed the sum of $100,000 to a niece, Renee Wolfe. She is not a party to this application.
Paragraph 'FOURTH' reads as follows: 'All the rest, residue and remainder of my property, real and personal and wheresoever situate including a power of appointment granted to me in the Last Will and Testament of my late husband, DAVE SIMON, I give, devise and bequeath as follows:
Seventy-five percent (75%) of my said residuary estate I give, devise and bequeath to my beloved son, ROBERT BLACK, or his issue per stirpes.
The remaining twenty-five percent (25%) of my said residuary estate I give, devise and bequeath to my Trustee hereinafter named, and I direct my Trustee as follows: * * *.'
The only parties to this application are the petitioner Robert Black and his sister Reva Simon Hart and Walter Feldesman. In a pretrial conference with a law assistant referee, it was concluded that the principal question involved is whether there was a merger of the two estates. Counsel for the petitioner conceded, in effect, that if there was such a merger the distribution requested could not be made at this time and both counsel conceded that if there was no merger it would be a relatively simple matter to ascertain the nature and amount of the assets on hand in the marital deduction trust as well as the maximum amount of debts, expenses and charges against the same so that a partial distribution could be made at this time without any danger of loss or harm to any other person or party involved. On this basis both counsel appearing agreed to serve and file memoranda of law, anticipating that the court would pass upon the question of merger and receive proof as to the assets, etc. at the beginning of the hearings now scheduled to begin today in the accounting proceeding, at which all parties will be represented.
The court has carefully examined this question. The briefs of both counsel have been very helpful. The court finds, however, that this question of merger involves a construction of both wills and the rights of other parties, especially Renee Wolfe, may be adversely affected. Accordingly this matter will be consolidated with the accounting proceeding. All other parties interested in this construction should be served with copies of the papers now filed on this application and given an opportunity to participate and perfect whatever pretrial procedures to which they may be entitled before the question is presented to the court for determination.
As an alternative, pending the construction of both wills and determination of the accounting proceeding, the court will consider ordering such partial payment upon the filing of a full refunding bond. Arguments on this alternative will be heard this morning or as soon as convenient.
The question of construction of the above wills was first raised in connection with a proceeding by Robert Black to require partial distribution to him under the will of Dave Simon. By decision of this court dated November 13, 1972, that proceeding was consolidated with the above accounting proceeding and the court also directed that further process be issued to all other parties interested in the construction. Appearances have been filed by all interested parties except Renee Lopez deHaro, who defaulted, and jurisdiction is now complete.
The questions involved and the relevant testamentary provisions are set forth in some detail in the decision of November 13, 1972 which is incorporated herein to avoid unnecessary repetition. Additional memoranda were filed by opposing counsel and the matter was submitted for decision without a hearing based upon the language of both wills and the additional facts appearing in a stipulation dated May 15, 1973 signed by counsel for the appearing parties and by the guardian ad litem who represents the interest of the two infants.
The stipulation shows
(1) The values of the individually-owned assets of Renee
Simon (who apparently died a resident of the State of
Florida), as reflected in the U. S. estate tax return
filed by her executor - $687,606
(2) Funeral and administration expenses incurred or to
be incurred in administering the estate of Renee Simon
including attorneys' fees and executors' commissions
similarly reflected in said estate tax return - 96,485
(3) Estimated Federal and state estate or inheritance
taxes on Renee Simon's estate -
Federal $ 400,000
Florida 48,000
New York 10,600 458,600
------------------
(4) Renee Simon's debts, mortgages and liens as reflected
in the said estate tax return -
Debts $ 2,624
Mortgages and liens 44,719 47,343
------------------
It was further stipulated that between September 9, 1968, the date of Renee Simon's will, and February 6, 1971 cash distributions of $95,000 were made to Renee Simon by the fiduciaries of the estate of Dave Simon, that during the same period Renee received commissions from Dave's estate aggregating $5,817.41 and, further, that as of July 31, 1969 the unpaid principal balance on Renee Simon's first mortgage note held by the estate of Dave Simon amounted to $55,183.39.
The above facts and figures were submitted, at least in part, to illustrate these arguments advanced by counsel on behalf of Reva Simon Hart: 1) that if this court holds that no merger was intended by Renee Simon, the 'so-called vested remainder interest * of the two infants would in all probability never come into existence' because all of Renee's individually-owned assets would probably be exhausted by the payment of debts, administration expenses and estate taxes--the latter being in large measure attributable to the appointive property; 2) that the...
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