Court of Appeals: Extra Deposition Did Not Violate In Terrorem Clause
In a rare venture into the world of trusts and estates and its most significant recent ruling regarding in terrorem clauses, the Court of Appeals in Matter of Singer, 2009 NY Slip Op 09265, reversed both the Surrogate’s Court and the Appellate Division, holding that a beneficiary’s conduct in deposing the testator’s former attorney regarding drafts of prior wills did not violate the in terrorem clauses in the propounded will. Specifically, the Court held that the safe harbor provisions of SCPA 1404 and EPTL 3-3.5 are not exclusive, and must be applied on a case-by-case basis. The decision has essentially set forth a two-prong analysis to determine whether a beneficiary’s conduct triggers an in terrorem clause, consisting of the following inquiries: (1) whether the conduct falls within the statutory safe harbor provisions, and if not (2) whether it violated the testator’s intent.
In Singer, the decedent had executed a last will and testament approximately one year prior to his death, in which he appointed his daughter, Vivien, as executor. He also created a corresponding revocable trust through which he bequeathed to Vivien his home, most of his tangible personal property, and the sum of $200,000. In the trust instrument, the decedent stated that Vivien’s inheritance was in recognition and gratitude for her extreme dedication and constant care. The decedent’s son, Alexander, received one-half of the remainder of the estate, to be split with Vivien, and each of Alexander’s sons was given a $15,000 bequest.
The will contained a typical, broad in terrorem clause, which stated, “if any beneficiary, shall, in any manner, directly or indirectly, contest, object to or oppose, or attempt to contest, object to or oppose the probate or validity of [the] will or revocable trust created by [the decedent], or any part of [his] estate plan, or any gifts made by [him], . . .” that beneficiary’s share of the estate would be forfeited (id. at *2). The decedent also included a second in terrorem clause that was explicitly directed at Alexander. That clause directed that Alexander “not take [decedent’s] daughter . . . to a . . . (religious court) or to any other court for any reason whatsoever . . . ,” and stated that if he did, the result would be the forfeiture of his and his sons’ inheritance (id.).
Immediately after Viven submitted the will for probate, Alexander served a notice for discovery and inspection pursuant to SCPA 1404 and Article 31 of the CPLR. He sought documents and the deposition of certain individuals, including the decedent’s previous attorney, Mr. Katz. Alexander pursued this particular deposition despite a warning from Vivien’s attorney that this examination was outside of the scope of SCPA 1404 exams and would result in a violation of the in terrorem clause.
At his examination, Mr. Katz testified that he had drafted seven prior wills for the decedent, and stated that he did not believe the decedent lacked testamentary capacity or was unduly influenced by Vivien. In light of this information, Alexander decided not to contest his father’s testamentary plan. The will was subsequently admitted to probate by a decree that explicitly stated that it had not been contested. Notwithstanding this fact, Vivien commenced a construction proceeding seeking a determination that Alexander’s deposition of Mr. Katz resulted in a violation of the in terrorem clauses, as he was the decedent's prior attorney, not the attorney-draftsman of the propounded instrument. The Surrogate agreed, holding that the deposition of anyone aside from those specified in SCPA 1404 triggered the clauses. The Appellate Division affirmed, and further opined that the deposition of Mr. Katz was not protected by any of the safe harbor provisions in EPTL 3-3.5 or SCPA 1404.
EPTL 3-3.5 enumerates specific conduct of a beneficiary that will not trigger an in terrorem clause. Relevant to Singer is the statute’s provision that protects a beneficiary from forfeiting his or her bequest as a result of examining the following individuals (see EPTL 3-3.5[b][3][D]):
· The nominated executor(s) and proponent of the will
· Witnesses to the will
· The attorney-draftsman or other individual who prepared the propounded instrument
Although the statutory safe harbor provisions limit permissible depositions to the above-listed individuals, the Court of Appeals recognized that there might be circumstances that render it permissible to examine individuals outside of the foregoing parameters without an in terrorem clause violation. In so concluding, it was held that the safe harbors of EPTL 3-3.5 are not exclusive, and that if a beneficiary exceeds these parameters, a court must then inquire as to whether there has been a violation of the testator’s intent. This is an analysis that must occur on a case-by-case basis, looking to the language of the clause in issue. As always, such language must be strictly construed.
Applying this rule to the facts in Singer, the Court of Appeals noted that the language of the subject in terrorem clauses demonstrated that the decedent sought to prevent Alexander from commencing any type of court proceeding against, or attempting to contest, the estate plan. Construing the clauses narrowly, the Court held that the deposition of Mr. Katz, an attorney who had a long history of representing the decedent in connection with his testamentary plans, was simply a method of information gathering, not disputing the estate plan.
Indeed, because Alexander decided not to object to the instrument, the Court explained that the purpose of the in terrorem clauses, as well as the general public policy in favor of permitting broad investigation to allow a beneficiary to weigh the risk involved in contesting a will, was actually satisfied by the additional deposition. According to the Court, “[a] broader construction of these clauses as manifesting testator’s intent to preclude the examination of this witness would essentially cut off all other persons from being asked for information, no matter the potential value or relevance . . .” (Singer at *5).
In a concurring opinion, Judge Graffeo noted that the decision has implied that a testator may draft his will to explicitly limit the scope of permissible inquiries to the statutory safe harbor provisions. Thus, he interpreted this decision as granting further latitude to the testator to determine exactly how strict he really intends his in terrorem clause to be (id. at *5-*6).
While this case permits more relevant inquiries into an estate plan when the language of an in terrorem clause allows, it is also likely to result in many more construction proceedings at the Surrogate’s Court level. Notwithstanding this potentially inconvenient consequence, Singer is a landmark decision that implements and emphasizes the concept that testamentary intent must be the paramount consideration in any will construction proceeding.
The Due Execution of Wills
The due execution of a will requires that the elements of EPTL 3-2.1 be complied with before the instrument is admitted to probate. However, only substantial compliance with the provisions of the statute need be shown in order for due execution to be found. The meaning and scope of this provision has been the subject of judicial decision in recent years as evidenced by the following opinions:
Signature at the End of the Document
The provisions of EPTL 3-2.1 require that the decedent sign a will at “the end” thereof. The meaning of this provision was discussed by the court in In re Mobley, N.Y.L.J. Mar. 20, 2009, at 35 (Sur. Ct. New York County), in which the court was presented with the issue of whether the propounded instrument should be denied probate due to the irregular order of the signatures of the testatrix and witnesses.
Specifically, after the dispositive provisions of the Will, and the appointment of the executrix, there appeared preprinted two lines intended for the date and the signature of the testatrix. Those lines, however, were blank. Below these two lines was a pre-printed attestation clause, to which the date and signature of attesting witnesses was appended. Following the attestation clause there appeared a preprinted affidavit of attesting witnesses containing the names, but not the signatures of the attesting witnesses. Rather, on one of the lines for a witness, there appeared the signature of the testatrix.
In finding that the Will had been duly executed, the court opined that a testamentary instrument can be admitted to probate even if the procedure for execution and attestation do not take place in the precise order established by statute. In this regard, the fact that the signatures of the witnesses appear before the testatrix’s signature does not invalidate a will. Further, the court held that although the testatrix did not affix her signature immediately after the dispositive provisions of the instrument, but instead after the attestation clause and the preprinted affidavit of attesting witnesses, the signature of the testatrix nevertheless appeared “at the end” of the instrument as required by the provisions of EPTL 3-2.1. Indeed, the court noted that all dispositive provisions appeared before the testatrix’s signature.
Accordingly, probate of the instrument was granted.
Post-Death Signature of Witnesses Invalidates Will
In re Estate of Lederman, N.Y.L.J., May 22, 2002, p. 19, col. 5 (Sur. Ct., New York County), two of the residuary beneficiaries moved for summary judgment denying probate to a codicil that contained a substantial pre-residuary bequest. A Will and four codicils of the decedent were offered for probate. Under the Will and three of the codicils, the decedent made some minor pre-residuary bequests and bequeathed 90% of her residuary estate to her niece and nephew, and a charitable institution. These instruments were prepared by an attorney who supervised their execution.
The contested codicil was executed approximately 10 weeks before the decedent died, and was a one -page typewritten instrument, labeled “Codicil.” Pursuant to its terms, the sum of $300,000 was left to the decedent’s caretaker. Although the decedent signed the instrument, it was witnessed by only one person, who was designated as the executrix under a provision of the penultimate codicil. The witness stated that she prepared the codicil pursuant to the decedent’s instructions, and that the decedent had informed her that the bequest was to be a bonus to her caretaker.
The individual residuary beneficiaries moved for summary judgment on the ground that the codicil had not been properly executed in accordance with the provisions of EPTL 3-2.1, since only one witness had signed the instrument. The proponent acknowledged the deficiency in the instrument, but nevertheless maintained that it could be cured by her husband, who was present in the room at the time the codicil was executed. The proponent requested that her husband sign the instrument as a witness, albeit after the decedent’s death.
The court denied the application, and granted summary judgment in the movants’ favor, finding that a witness cannot effectively subscribe a Will after the testator has died. This principle is designed to prevent fraud. Furthermore, the court found that the second attestation proposed would be unavailing since it would not occur within the thirty day period prescribed by statute.
Witness/Beneficiaries
The due execution of a Will requires that the testator affix his name or acknowledge his signature to at least two attesting witnesses. The provisions of SCPA 1404 require that at least two of the attesting witnesses to the Will be produced before the court and examined before a Will is admitted to probate. When an attesting witness is also a beneficiary under a propounded Will the question arises as to whether the Will can nevertheless be admitted to probate, given the financial interest of the beneficiary in the instrument. Under such circumstances, the law provides that a Will may be admitted to probate, but the disposition to the witness/beneficiary shall be void, if the witness’ testimony is necessary to admit the Will to probate.
The foregoing principles were recently applied in a case of apparent first impression decided by the Surrogate’s Court, New York County, in In re Estate of Wu, NYLJ, April 27, 2009, p.19. Before the court was an application by the executor of the decedent’s estate for an order directing the decedent’s brother to pay his proportionate share of estate taxes. The brother opposed the application arguing that the tax apportionment clause in the Will exonerated him from liability.
The decedent’s brother was the beneficiary of two life insurance policies on the decedent’s life, but also was one of the two attesting witnesses to the instrument. Under the circumstances, the court found that his testimony was necessary to the probate of the Will, and pursuant to the provisions of EPTL 3-3.2, declared the tax exoneration clause of the Will ineffective as to him. Specifically, the court reasoned that the provision, to the extent that it discharged an obligation of the decedent’s brother, was tantamount to a beneficial disposition to him, within the scope of the statutory dictates pertaining to witness/beneficiaries.
The court opined that while the result of its opinion was ostensibly harsh, it was not so harsh as to deprive the decedent’s brother of his inheritance, i.e. the insurance proceeds, albeit net of estate taxes. Indeed, the court noted that in most instances in which the statute is applied, the witness/beneficiary under the propounded Will is denied his entire bequest. Nevertheless, the court cautioned attorney-draftspersons utilizing a tax exoneration clause to be fully informed of the recipients of the testator’s non-probate assets in order to avoid unintended consequences.
