ESTATE OF JOSEPH LOMBARDO, Deceased (2010/287/D) ó In this intermediate accounting proceeding, petitioner, Nicole Katz ("Nicole"), is the sister of the decedent and the executrix of decedent's estate. Decedent's last will and testament dated August 21, 2009, was admitted to probate by this court by decree dated May 21, 2010, and letters testamentary and letters of trusteeship issued on that date to petitioner. Decedent's sole distributee is his son, Joseph R. Lombardo ("Joseph"), an infant over the age of fourteen years. Pursuant to the relevant provisions of decedent's will, decedent's entire residuary estate passes to his son, in trust, until Joseph attains the age of twenty-five years.
Decedent's testamentary estate is relatively nominal; petitioner's account, as amended, shows principal received of only $36,247.53. After deductions for funeral and administration expenses in the amount of $20,566.00 and creditors' claims actually paid of $4,135.00, decedent's net estate is only $11,546.53. This amount is subject to further reduction for statutory commissions payable to petitioner. In addition to these assets, decedent had a one-half interest as tenant in common with his ex-wife in what was once the marital residence, in which Joseph and his mother now reside. As it remains unsold, this realty was shown on Schedule J, Statement of Other Pertinent Facts, of the accounting with an estimated gross value of $137,500.00, but which is subject to a mortgage. As discussed more fully below, there does not appear to be any dispute regarding the assets of the estate or the expenses shown in the account as amended.
Jurisdiction has been obtained over all persons listed in the petition as necessary parties. A guardian ad litem was appointed to represent the interests of Joseph. Decedent's ex-wife, Pamela Lombardo ("Pamela"), also appeared in this proceeding.
In the context of his divorce proceeding, decedent apparently entered into a stipulation of settlement which required him to maintain a life insurance policy on his life in the amount of two hundred and fifty thousand dollars, payable to Joseph. Although decedent owned a policy in the required amount at the time of his death, this policy predated decedent's marriage and the birth of Joseph, and the policy beneficiary was not Joseph, but decedent's sister, Nicole, petitioner herein. Pamela, as mother and natural guardian of Joseph, could maintain an action against the estate for decedent's failure to fulfill his obligation under the stipulation of settlement in divorce. The pursuit of such an action, even if successful, would likely be an exercise in futility in light of the fact that any recovery by Pamela from the estate for the benefit of Joseph would only serve to reduce the amount passing to Joseph under decedent's will.
After his appointment and a review of the file, the guardian ad litem recognized several issues with the accounting as filed. The guardian ad litem requested a conference with counsel for petitioner and a member of the Law Department. As a result of several of such conferences, including conferences with counsel for Pamela, petitioner agreed to file a supplemental accounting and supplemental petition for judicial settlement thereof. The parties were able to settle their differences, prior to the filing of objections, by way of two separate stipulations of settlement, both of which have been filed with the court, one dealing with estate matters and the other with the proceeds of decedent's life insurance policy and decedent's failure to comply with the terms of his divorce stipulation. Numerous other issues were raised by the parties in the context of settlement discussions concerning the accounting, most of which were not directly related to the pending proceeding.
The stipulation in the estate matter provides, inter alia, for the distribution of certain personal property of decedent to Joseph; for the transfer of decedent's one-half interest in the marital residence to Joseph; and for the waiver of commissions by petitioner.
The second stipulation, dealing with decedent's life insurance, provides for the establishment of "The Joseph Ryan Lombardo Irrevocable Trust" (the "Trust"), an unsigned copy of the which was submitted by the guardian ad litem as an exhibit to his report and recommendation. The Trust provides, inter alia, for the support, education, and maintenance of Joseph, with Nicole as trustee. The trust terminates when Joseph attains the age of twenty-five years, at which time all principal and undistributed income shall be distributed to him.
The guardian ad litem has submitted his report, in which he recommends the creation of the irrevocable trust for his ward's benefit, and recommends the settlement of the matter pursuant to the terms of the filed stipulations. He requests that the court approve and "So Order" the stipulation regarding life insurance as reguested by the parties, and requests that petitioner be required to furnish proof that she has complied with the terms of the stipulations.
In light of the lack of opposition, the petition for judicial settlement of the account of the executrix, as amended, and all incidental relief requested therein, as modified by the written stipulations of settlement filed with the court, is granted. As the real property of decedent will be distributed pursuant to the terms of the stipulation, and as there will be no property remaining to be sold or otherwise disposed of after such distribution, the filed accounting will be deemed a final account.
Petitioner is hereby directed to file with the court an original, executed trust indenture within thirty days of the date hereof and to file any and all documents evincing the transfer of the balance of the AXA Equitable Life Insurance Policy, as shown on Schedule J, Proposed Distribution, Item 4, into The Joseph Ryan Lombardo Irrevocable Trust. In addition, within thirty days of the date hereof petitioner is directed to file her oath and designation as trustee of the Trust, as well as a bond in the amount of $230,000.00.
Settle decree on notice incorporating the terms of the stipulations of settlement.
September 18, 2012