Triggering In Terrorem Clauses With Out-Of-State Will And Trust Contests
In terrorem provisions, which are more commonly known as “no contest” clauses, generally state that beneficiaries forfeit their interests in estates and trusts by contesting the validity of the governing instruments (see Matter of Kalikow, 23 Misc3d 1107[A], at *2 [Sur Ct, Nassau County 2009] [discussing in terrorem clauses]). While strictly construed, such clauses are enforceable in New York (Matter of Ellis, 252 AD2d 118, 127-28 [2d Dept 1998]). They serve several important purposes, such as preventing challenges to wills which might result in trials, jeopardize the testator or grantor’s testamentary or inter vivos plans, or harass other beneficiaries (Matter of Singer, 17 Misc3d 365, 370 [Sur Ct, Kings County], aff’d, 52 AD3d 612 [2d Dept 2008], leave granted, 11 NY3d 716 [2009]; Tumminello v Bolten, 59 AD3d 727, 728 [2d Dept 2009]).
In Shamash v Stark, Surrogate Kristin Booth Glen of the Surrogate’s Court, New York County, recently addressed an issue of first impression in New York (Shamash v Stark, NYLJ, 6/16/2009, at 38, col. 2 [Sur Ct, New York County]). The issue was whether will and trust contests in Florida, where no contest clauses are void as against public policy (F.S.A. § 732.517), triggered an in terrorem clause contained in a New York trust instrument (Shamash, supra).[1]
In Shamash, the decedent’s revocable trust, which was governed by New York law, provided that any beneficiary who contested his will or trust would forfeit his or her interest in the trust (id.). After contesting the will and trust in Florida, the petitioner commenced an accounting and removal proceeding with respect to the trust in the New York Surrogate’s Court (id.). The respondents moved to dismiss the Surrogate’s Court proceeding, arguing that the petitioner was not a beneficiary of the trust estate, and therefore lacked standing to maintain the proceeding, because he had triggered the trust’s in terrorem clause by contesting the will and trust in Florida (id.). In opposition, the petitioner asserted, among other things, that he did not trigger the in terrorem clause because no contest clauses are void under Florida law (id.).
The Surrogate’s Court dismissed the petition, holding that the petitioner lacked standing to seek an accounting or removal with respect to the trust (id.). The court reasoned that: (1) the trust is governed by New York law; (2) in terrorem clauses are enforceable in New York; and (3) the petitioner triggered the trust’s in terrorem clause by contesting the decedent’s will and trust in Florida (id.). The fact that no contest clauses are void as against public policy in Florida was immaterial (id.).
The lesson to take away from Shamash is that the contest of a will or trust in another state, where in terrorem clauses are not enforceable, may trigger such a clause in a New York instrument and result in the forfeiture of a beneficiary’s interest in the subject estate or trust.
Tales from the Crypt: Disposing of Human Remains in New York
Trusts and estates litigators often see families at their very worst, fighting over everything from money to decision-making authority, and virtually anything else imaginable. So, it should come as no surprise that there have been disputes over the disposition of human remains, which necessitated legislative action to resolve these conflicts.
New York Public Health Law section 4201 “sets forth a prioritized list of [individuals] who shall presumptively have the right to direct the disposition of a decedent’s remains” (Maurer v Thibeault, 20 Misc 3d 631, 632 [Sup Ct, Cortland County 2008]). An agent appointed in a written instrument executed in accordance with section 4201 shall have first priority (Public Health Law § 4201 [requiring, among other things, that the principal and agent sign the instrument]). Absent a written instrument, the following individuals shall have priority to control the disposition of a decedent’s remains, in descending order:
(1) “the decedent’s surviving spouse;”
(2) “the decedent’s surviving domestic partner;”
(3) “any of the decedent’s surviving children eighteen years of age or older;”
(4) “either of the decedent’s surviving parents;”
(5) “any of the decedent’s surviving siblings eighteen years of age or older;”
(6) “a guardian appointed pursuant to article seventeen or seventeen-A of the surrogate’s court procedure act or article eighty-one of the mental hygiene law;”
(7) “any person eighteen years of age or older who would be entitled to share in the estate of the decedent as specified in section 4-1.1 of the estates, powers and trusts law, with the person closest in relationship having the highest priority;”
(8) “a duly appointed fiduciary of the estate of the decedent;”
(9) “a close friend or relative who is reasonably familiar with the decedent’s wishes, including the decedent’s religious or moral beliefs, when no one either on this list is reasonable available, willing, or competent to act, provided that such person has executed a written statement pursuant to subdivision seven of this section [stating that he or she has no knowledge that the decedent executed a written instrument containing directions for the disposition of his or her remains]; or”
(10) “a chief fiscal officer of a county or a public administrator appointed pursuant to article twelve or thirteen of the surrogate’s court procedure act, or any other person acting on behalf of the decedent, provided that such person has executed a written statement pursuant to subdivision seven of this section” (id.).
The person with priority must faithfully carry out the decedent’s directions to the extent permitted by the law and the circumstances (id.).
In Maurer v Thibeault, the petitioner did something that no parent should have to do, she requested permission to determine the disposition of her deceased daughter’s remains after the daughter died under suspicious circumstances (20 Misc3d at 632-37). Although the respondent, the decedent’s husband, asserted that he should decide how his wife was laid to rest, the petitioner argued that the respondent should not be given priority because he was estranged from the decedent and, therefore, did not qualify as her “surviving spouse” under the statute (id.).
Noting that the decedent never executed a written instrument in accordance with section 4201, the court then addressed whether the respondent had priority over the petitioner as the decedent’s surviving spouse (id.). The court concluded that he did not (id.). In doing so, the court relied on evidence that established the decedent’s hatred, loathing and fear for the respondent immediately before her death (id.). The court also referenced the police report she filed against the respondent just one month prior to her death, accusing him of attacking and strangling her “to the point of unconsciousness” (id.).
Based upon those facts and the line of cases precluding a separated or estranged person from qualifying as a “surviving spouse,” the court rejected the respondent’s claim of priority (id.). The court also granted the petitioner’s request for permission to control the disposition of the decedent’s remains (id.). As the decedent’s surviving parent, the petitioner had priority to do so, since there was no written instrument, the respondent did not qualify as a surviving spouse, and the decedent had no domestic partner or child age 18 or older (id.).
In New York, the disposition of remains is presumptively governed by section 4201. Absent a valid written instrument appointing an agent for that purpose, section 4201 sets forth which individuals shall have priority to make decisions concerning the disposition of remains.
Unsealing Adoption Records
Adoption records are generally confidential in New York, but at times they are unsealed for medical purposes. While it is rare for these records to be unsealed for other reasons, courts will at times determine that it is proper to do so in a particular case.
Under New York law, adoption records are sealed “to protect and insure [the] confidentiality [that] is ‘vital to the adoption process’” (Matter of Victor M.I. I., 23 Misc3d 1103[A], at *1 [Sur Ct Nassau County 2009]; DRL § 114[2]). The confidentiality serves several important purposes (Matter of Linda F. M., 52 NY2d 236, 239 [1981]). First, it “shields the child from possibly disturbing facts surrounding his or her birth and parentage” (id.). Second, “it permits the adoptive parents to develop a close relationship with the child free from interference or distraction” (id.). Third, “it provides the natural parents with an anonymity that they may consider vital” (id.).
Notwithstanding the preference for confidentiality, there are circumstances in which it may be appropriate to unseal adoption records (DRL § 114[2]). Indeed, “adoption records may be unsealed upon a showing of good cause” and “due notice to the adoptive parents” (Victor M.I. I., 23 Misc3d 1103[A], at *1 [internal quotation marks omitted]). “Good cause” typically arises for medical reasons, such as a serious health issue (id.). Further, while adoption records may be unsealed for non-medical reasons, exceptions to the rule for non-medical reasons are “rare” (Matter of Lewis, NYLJ, 4/20/2007, at 32 [Sur Ct Kings County]).
Matter of Victor M.I. I. involves one of those rare exceptions (23 Misc3d 1103[A], at *1-3 [Sur Ct, Nassau County 2009]). There, the petitioner sought to unseal adoption records for the purpose of obtaining certified copies of his pre-adoption birth certificate (id. at *1). The petitioner did so “in order to establish his Hungarian lineage [and] become a citizen of Hungary, based upon the status of his biological mother [as] a Hungarian citizen” (id.). In support of his application, the petitioner asserted that he “would benefit from Hungarian citizenship because he frequently travels to Hungary for business and personal reasons and resides there on a part-time basis” (id.). He also submitted an affidavit from his then-deceased biological mother, which evidenced her consent to the requested relief (id.).
Nassau County Surrogate John B. Riordan granted the petitioner’s application, noting that the policies favoring confidentiality did not weigh against the petitioner’s prayer to obtain copies of his pre-adoption birth certificate (id. at *2). As Surrogate Riordan explained, the petitioner’s adoptive parents were deceased, his biological mother had consented to unsealing the records, and the petitioner could not obtain his original birth certificate from any other source (id.). Those factors, when taken in conjunction with the “substantive benefit” the petitioner would enjoy if afforded the opportunity to secure copies of his original birth certificate, constituted “good cause” (id.). Accordingly, the court granted the application to unseal the adoption records to permit the petitioner to obtain copies of his pre-adoption birth certificate (id. at *2-3).
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Although the confidentiality of adoption records is favored, there are circumstances in which such documents may be unsealed. Those circumstances generally stem from health-related reasons, but may occasionally arise for non-medical reasons as well. The Victor M.I. I. case makes that much clear.
Discovery in Probate Contests
Discovery in a contested probate proceeding is generally governed by what Surrogate’s Court practitioners call the “three/two” rule (22 NYCRR 207.27). This rule limits discovery to the “three-year period prior to the date of the propounded instrument and two years thereafter, or to the date of the decedent’s death, whichever is the shorter period” (id.). It is a “pragmatic rule" intended to prevent the abuses associated with a “runaway inquisition” or “wild goose chase” (Estate of Das, NYLJ, 5/1/2009, at 31 [Sur Ct Nassau County]).
Notwithstanding that general rule, however, the time period for discovery may be extended by the Surrogate’s Court when “special circumstances” exist, such as when “a scheme of fraud or a continuing course of conduct of undue influence” is alleged (id.). For example, in Matter of Kaufman, the objectants sought discovery with respect to the entire period of cohabitation between the proponent of the decedent’s will and the decedent, which lasted from September 1948 until the decedent’s death in April 1959 (11 AD2d 759, 759-60 [1st Dept 1960]). The objectants argued that the departure from the three/two rule was warranted because the proponent’s long relationship with the decedent gave rise to testamentary capacity and undue influence concerns (id.). Although the Surrogate’s Court denied the objectants’ motion, the Appellate Division reversed, reasoning that a full examination of the decedent’s relationship with the proponent was warranted (id.).
However, conclusory allegations of “special circumstances” will not suffice. In Estate of Das, the Surrogate’s Court recently denied the objectant’s motion to depart from the three/two rule (Das, supra). There, the decedent died in July 2002, but the petitioner, the decedent’s son, did not offer the decedent’s will for probate until September 2006 (id.). The petitioner attempted to explain the delay by filing an affidavit of lateness stating that he had trouble locating the deed to real property the decedent owned in India (id.). Nevertheless, the objectant, another one of the decedent’s sons, filed objections to probate, alleging that the will was the product of fraud, duress, and undue influence, among other grounds (id.).
The objectant moved to expand the three/two rule for discovery, while the petitioner cross-moved for an order appointing him to act as Executor of the decedent’s estate (id.). In support of his motion, the objectant argued that “special circumstances” existed, justifying the requested departure from the three/two rule (id.). Specifically, the objectant asserted that: (1) “the petitioner and his wife sold property owned by the decedent during the decedent’s lifetime;” (2) “there was a delay in offering the will for probate;” (3) “the petitioner exercised a health care proxy ‘resulting in the decedent’s death’;” (4) “the petitioner failed to investigate injuries sustained by the decedent as the result of a fall in the hospital and did not bring a wrongful death action;” (5) “the purported will reflects a ‘fatal disregard for forced heirship laws of India’;” (6) “the proposed executor[] and his counsel ‘displayed conduct during the probate proceedings including but not limited to initial non-responsiveness followed by less than adequate disclosure’;” and (7) the “fact that [the] proposed executor’s wife has and continues to wield undue influence over the estate is further highlighted by her recent communiqué with an Indian attorney on the forced heirship laws of India” (id.).
Upon considering the objectant’s contentions, the court concluded that there were no special circumstances to justify departing from the three/two rule (id.). The court reasoned that there were “no allegations of a ‘scheme to defraud’ or a ‘continuing course of conduct of undue influence” (id.). As a result, the court denied the objectant’s motion to expand the three/two rule for discovery (id.).
While the three/two rule governs discovery in probate contests, it should not serve as an absolute bar to obtaining discovery of activities that occur outside of the permissible period when special circumstances exist.
A Matter of Faith: Conditioning Bequests on Religious Observance and Marriage
In Matter of Feinberg, an Illinois appellate court recently addressed the enforceability of a will clause that provided that the testator’s descendants could only inherit from his estate if they married within the Jewish faith (or their spouses converted to Judaism within one year of the marriage) (383 Ill App3d 992, 992 [Ill App Ct 2008], app. all’d, 229 Ill2d 667 [Ill Sup Ct 2008]). The court found that it was not enforceable in that it violated public policy (id.). In doing so, the court analogized the Feinberg clause to will provisions that imposed similar faith-based marriage requirements on beneficiaries, and concluded that the clause impermissibly restrained marriage and encouraged divorce (id. at 994-95).
Would such a clause likely be enforceable in New York? The answer may be “yes.” Although no New York court has addressed the issue recently, several older decisions opine that such a clause is enforceable. Those decisions are, of course, subject to the general rule that the clause not encourage divorce or discourage marriage (cf. Robinson v Martin, 200 NY 159, 167 [1910] [discussing a bequest as a restraint on marriage]).
Matter of Silverstein’s Will is illustrative (155 NYS2d 598 [Sur Ct Queens County 1956]). There, the testator’s will provided for the equal distribution of his personal property to his grandchildren, but only if they married Jewish spouses (id. at 599-600). The Surrogate’s Court held the clause to be enforceable, explaining that conditions “not to marry a person of a particular faith . . . are not [per se] invalid” (id.). As a result, the court also concluded that one of the testator’s grandchildren was not entitled to a share of the testator’s personal property, since he married outside of the Jewish faith (id.).
The Appellate Division, Fourth Department, reached a similar conclusion in Matter of Kempf’s Will (252 AD 28, 29-34 [4th Dept 1937]). In that case, the testator’s will bequeathed $5,000 to his grandchildren, provided that they were raised as Roman Catholics (id.). Although the Surrogate’s Court, Oneida County, concluded that the subject provision violated public policy, the Appellate Division reversed, noting that “the testator had the right to burden his gift with conditions” (id.). Accordingly, the Appellate Division explained that the grandchild who was not raised a Roman Catholic did not have a right to the $5,000 bequest (id.).
Times have changed since the Silverstein and Kempf decisions were rendered. Could a New York court find that such a will provision violates public policy and refuse to enforce it? Possibly. Despite the authority to the contrary, would a New York court conclude that such a clause is an unreasonable restraint on marriage (Feinberg, 383 Ill App3d at 997)? Perhaps. Might a court analogize such a clause to restrictive covenants concerning religion and real property, which have been held to violate the Federal Constitution and public policy alike (5 Rathkopf’s The Law of Zoning & Planning § 82:8 [4th ed. 2009])? Maybe. It would be interesting to see whether a New York court concludes that such a will provision is enforceable in the twenty-first century.
Is Justice Delayed Justice Denied?
Recent developments in the Martin Tankleff murder case have captivated court observers in New York and attracted the attention of national news media outlets. For the most part, the observers have focused their attention on issues of criminal law, like newly-discovered evidence and the reliability of allegedly false confessions. Yet, the case also has potential trusts and estates-related consequences.
This much we know: Mr. Tankleff’s parents were killed on September 7, 1988 (see People v Tankleff, 49 A.D.3d 160, 162-64 [2d Dep’t 2007]). After an investigation, the police arrested Mr. Tankleff for murdering his parents, prosecutors tried him for the murders, and a Suffolk County jury convicted him of the offenses (id.). In the days, months, and years that followed, Mr. Tankleff and his legal team launched an exhaustive campaign to overturn his convictions on the basis of newly-discovered evidence, which Mr. Tankleff asserted established his innocence (id.). The Appellate Division, Second Department, issued an Order vacating Mr. Tankleff’s judgments of conviction in December 2007, id. at 183, and prosecutors elected against retrying Mr. Tankleff in June 2008 (see Luis Perez, “AG won’t retry Tankleff – or any other suspects,” Newsday, June 30, 2008).
Presumably, Mr. Tankleff did not inherit from his father’s estate (see Brian Harmon et al., “Martin Tankleff’s half-sister: he did it,” N.Y. Daily News, Jan. 4, 2008). Indeed, although court records pertaining to the settlement of that estate were sealed, In re Tankleff, NYLJ, Nov. 7, 1991, at 24, col. 5 (Sur. Ct., Suffolk County), reports indicate that Mr. Tankleff’s half-sister, Shari Mistretta, received the assets of the estate, which have been valued as high as $3,500,000 by the media (see Harmon, supra). This is because the “slayer rule,” which the Court of Appeals first applied more than a century ago in Riggs v Palmer, 70 Sickels 506 (1889), precludes a decedent’s intentional killer from profiting from the decedent’s estate (see In re Bach’s Estate, 53 AD2d 612, 612 [2d Dep’t 1976]). Further, an amendment to the Estates, Powers, and Trusts Law, which, if enacted, would codify the “slayer rule,” is currently pending before the New York State Senate’s Judiciary Committee.
Despite the fact that Mr. Tankleff’s convictions were overturned and prosecutors decided not to retry him, Mr. Tankleff may not be able to inherit from his father’s estate for a variety of reasons. First, although prosecutors ultimately decided not to retry Mr. Tankleff because they were unsure whether they could prove his guilt beyond a reasonable doubt in a criminal proceeding, the question remains whether Ms. Mistretta would be able to oppose Mr. Tankleff’s petition to recover shares of the father’s estate by establishing that Mr. Tankleff killed his parents under the less exacting standard of proof applicable in Surrogate’s Court proceedings. Second, there may not be any estate assets left, now that approximately two decades have passed since Mr. Tankleff’s father was killed and his estate was distributed to Ms. Mistretta. See Harmon, supra. Third, the Surrogate’s Court proceedings pertaining to the estate may have been terminated by stipulation of settlement, which may be difficult, though possible, to vacate (see id.; see also Tankleff, supra).
Absent additional information, it is impossible to say whether or not Mr. Tankleff is entitled to inherit from his father’s estate in light of the slayer rule. What we can, however, take away from this is the number of legal and practical considerations which might inspire or discourage Mr. Tankleff from pursuing estate-related claims or even an accounting against Ms. Mistretta.
