With a specific statute (Domestic Relations Law §236(3)) mandating that pre-nuptial agreements must be acknowledged, and with a specific statutory form of acknowledgment (Real Property Law §309-a(1)), it is surprising that there has been so much litigation over missing or defective acknowledgements and whether they can be cured after the fact.

In Matter of Koegel, 2018 NY Slip Op 00833 (2d Dept 2018), recently decided by the Appellate Division Second Department, husband died in 2014. Surviving spouse filed a Notice of Spousal Election under EPTL 5-1.1-A.   The estate petitioned to set aside the right of election on the basis of a waiver contained in a pre-nuptial agreement. The spouse moved to dismiss claiming that the acknowledgment on the agreement was invalid in that it omitted the standard language contained in the statutory form to the effect that the signers were known to the respective notaries.

On the motion, each notary submitted an affidavit to the effect the he “did not have to provide me with any identification of who he was because he was well known to me at the time.” The Second Department affirmed the decision of the court below that the defect could be remedied, distinguishing the case from Matisoff v Dobi, 90 NY2d 127 (1997) where the agreement had not been acknowledged at all and Galetta v Galetta, 21 NY3d 186 (2013) where the agreement was acknowledged but defective in the same respect as in this case, but the notary did not know the decedent and although he could describe his usual procedure, could not categorically swear that he took the steps to identify the party acknowledging the agreement in this instance.

In Matter of Brigati, Surrogate Czygier of Suffolk County addressed an application to reform the decedent’s life insurance trust, which contained a significant amount of insurance. The instrument contained a number of terms which could cause inclusion in the decedent’s gross estate. Among other things, it provided that upon the death of the Grantor, the life insurance policy proceeds should be distributed to the Grantor’s executor “so he may pay any estate, inheritance, transfer, succession or death taxes.” 

The court had before it an affidavit from the Trust draftsman indicating that he knew the Grantor for a number of years and the purpose of the Trust was to exclude assets from his taxable estate. On top of that, the instrument itself had an article entitled “Overriding Tax Purpose,” which specifically stated that the purpose of the Trust was to exclude the life insurance proceeds from the Grantor’s gross estate for federal estate tax purposes. 

The court, reciting the general law allowing it to correct mistakes, and relying heavily on the clearly stated purpose of the Trust instrument, allowed reformation to replace the erroneous language with substitute language which would carry out the purpose of the Trust. 

The Pre-Nuptial Agreement entered into by decedent provided that on his death, 70% of the value of his gross estate would be left to trusts to be established for his children “upon such terms and conditions as husband shall specify in his Last Will and Testament.” He died a number of years later at a young age as a result of an accident, leaving two infant children. He died without a Will. 

The Westchester County Surrogate’s Court in Matter of Bruan, 2012 NY Slip Op 22020 decided on January 26, 2012, granted an application to permit payment from the Estate to a proposed inter vivos trust to be created for the children despite the lack of specificity in the Pre-Nuptial Agreement as to the terms of the Trust. In what appears to have been an uncontested application, the Court was asked to approve the transfer of funds to two proposed irrevocable trusts for each of the infant children, each of which provided the Trustees with full discretion to pay or apply income or principal for the benefit of the particular child with payments of principal at ages 25, 30 and 35. The beneficiaries were granted a Power of Appointment, and in default the remainder is payable to his or her descendants and if none, to the surviving sibling. Citing Matter of Topping, 36 Misc 2d 991 (Sur Ct, Suffolk County 1962), the Court stated that “no particular words are required in order to create a trust. What matters is that decedent’s intent to create a trust relationship is established” (Matter of Bruan at *3). The Court found that the agreement clearly set forth three of the necessary elements of a trust: (1) designation of beneficiaries; (2) identification of trustees; and (3) the subject matter of the trust.

The Court, however, noted that the proposed inter vivos trust contained clauses which the Court believed would not be enforceable had the decedent created them under a will. These included an exoneration of the fiduciary under certain circumstances (not permitted in a will under EPTL §11-1.7); Waiver of Court approval for resignation (SCPA §715); waiver of the duty to account; and a prohibition from removing Trust assets from New York (SCPA §710(4)).

The Court granted the application to fund the Trust subject to the revisions noted. 

Although acknowledging that the Appellants’ position was “sympathetic”,  on June 14, 2011, the Appellate Division, Second Department affirmed the decision of Surrogate Riordan of Nassau County, denying two children of the decedent the rights accorded after-born children under EPTL 5-3.2. (Matter of Roy Gilmore Sr., 2011 NY Slip Op 05272 [2d Dept 2011]) .

Mr. Gilmore executed a Will in June 1996. He left his entire estate to a daughter, Angela, although he was survived by eleven children. 

The Appellants were born prior to the execution of the Will, but the Decedent did not know that the they were his biological children until after the Will was executed in 1996.  The proof showed that Decedent, in 2006, learned that Appellants were his children and, in fact, introduced them “as his two children whom he had recently learned of.”

A parent in New York, of course, is under no obligation to leave any part of his estate to his children. However, to address situations where a child is inadvertently left out of a parent’s will because such child was born after the Will’s execution, the Legislature enacted EPTL 5-3.2 which provides that in such a case, after-born children will share with the children provided for in the Will.

Here the children were not after-born, but it was contended that Decedent’s lack of knowledge of the two children who were born prior to the Will, prevented him from benefitting them in his Will.  Appellants argued that children born prior to execution of a Will, but only later gaining status as children of a decedent by adoption, are included as children, thus evincing a policy in New York allowing pre-borns to take in some situations. The Court declined to treat these “after acknowledged” children in the same manner as “after adopted” children, relying on the literal language of the statute and saying that if rights are to be given to such so-called “after known children,” which some states have done, this is a matter for the Legislature, not the Courts.