PROBATE PROCEEDING, WILL OF NORMAN ALTSTEDTER, Deceased
PROBATE PROCEEDING, WILL OF NORMAN ALTSTEDTER, Deceased. (337/12) ó In this probate proceeding, an instrument dated February 12, 2010, has been offered for probate as the last will and testament of the above named decedent by the executrix nominated therein. In addition to a decree granting probate, petitioner requests that "the Court shall determine that the gifts contained in Paragraphs Fourth & Fifth to Peconic Landing Community Fund & Peconic Landing Employees Appreciation Fund shall not be affected by reason of the Employment of Peconic Landing of the Attesting Witnesses."
Jurisdiction has been obtained over all persons listed in the petition as necessary parties. The record reflects, and the court notes, that decedent's distributees are his three nieces, who share decedent's residuary estate equally. All three nieces have consented to the relief requested.
With the request for construction of decedent's will, the relevant paragraph of the propounded instrument provide:
FOURTH: I give and bequeath the sum of Fifty Thousand ($50,000) Dollars to the PECONIC LANDING COMMUNITY FUND, located in Greenport, New York, for the unrestricted use by the Fund Directors to be used for the purposes of the FUND.
FIFTH: I give and bequeath the sum of One Hundred Thousand ($100,000) Dollars to the PECONIC LANDING EMPLOYEES APPRECIATION FUND, located in Greenport, New York, for the unrestricted use by the Fund Directors to be used for the purposes of the FUND.
Section 3-2.2 of the Estates, Powers and Trusts Law provides, in pertinent part:
§3-3.2. Competence of attesting witness who is beneficiary; application to nuncupative will
(a) An attesting witness to a will to whom a beneficial disposition or appointment of property is made is a competent witness and compellable to testify respecting the execution of such will as if no such disposition or appointment had been made, subject to the following:
(1) Any such disposition or appointment made to an attesting witness is void unless there are, at the time of execution and attestation, at least two other attesting witnesses to the will who receive no beneficial disposition or appointment thereunder.
(2) Subject to subparagraph (1), any such disposition or appointment to an attesting witness is effective unless the will cannot be proved without the testimony of such witness, in which case the disposition or appointment is void.
The record reflects that all three attesting witnesses to the execution of the will were employees of Peconic Landing at Southold, Inc. ("Peconic Landing") at the time of the execution of the will.
The issue presented herein, which appears to be one of first impression, is whether, under this will, a "beneficial disposition" has been made to the attesting witnesses. As discussed more fully below, no "beneficial disposition" was made to the witnesses under Paragraph FOURTH of the will, but a "beneficial disposition" was made to the witnesses under Paragraph FIFTH of the will.
Counsel for petitioner submitted to the court two relevant documents, a "2012 Committees and Clubs" brochure, and the "Peconic Landing Resident Handbook, Re-issued October 2011." The "2012 Committees and Clubs" brochure provides the following description of the "Community Fund":
The mission of the Community Fund is to raise funds and recommend to the Sponsor Board disbursements of funds to enhance the quality of life for residents at Peconic Landing. Funds may also be disbursed for the benefit of individual members of the community requiring financial assistance in meeting their monthly service fee obligations.
The 12 members of the Community Fund are elected annually and meet monthly to discuss fund raising ideas and possible disbursements. Residents may seek to serve on this committee as vacancies arise by submitting a letter of interest to the chair or vice chair. Residents who wish to share their ideas for possible disbursements are encouraged to contact members of this committee. Donations are always welcome.
From the above description, it appears that the exclusive purpose of the Community Fund is to benefit the residents at Peconic Landing. As such, there was no "beneficial disposition" to the attesting witnesses to the will, and this bequest stands.
The "Peconic Landing Resident Handbook," with respect to the Employee Appreciation Fund, provides:
As Peconic Landing has established a NO TIPPING POLICY, residents may show their appreciation for good service by contributing to the Employee Appreciation Fund. Please see the "Tipping/Gratuities" section. Monies donated to this fund are distributed to staff, typically at the end of the year, based on a fair and equitable plan approved by a resident committee. Residents may contribute to this fund at any time during the year, All donations are kept confidential.
From the above, as all three witnesses are members of the class of people who may benefit from the Employee Appreciation Fund, there was a "beneficial disposition" to them. For this reason, pursuant to EPTL §3-3.2(a)(1) and (2), the bequest under Paragraph FIFTH is void.
Upon review of the papers filed herein, the court finds that the propounded instrument was duly executed and, at the time of such execution, the decedent was in all respects competent to make a will and not under restraint. The genuineness of the will and the validity of its execution having been shown to the satisfaction of the court, probate is granted (EPTL 3-2.1; SCPA 1408). While there is nothing in the record or otherwise to suggest that the employee/witnesses herein had any knowledge of the contents of the will or the potential for any benefit to them, as discussed above and pursuant to EPTL §3-3.2 (a)(1) and (2), the bequest under Paragraph FIFTH must be declared void.
Letters testamentary shall issue to petitioner upon qualification and without bond, as the same is dispensed with, according to law.
Upon the issuance of letters testamentary, the preliminary letters testamentary issued by this court on April 25, 2012, shall be revoked.
In the Matter of the Estate of JOAN RYAN, a/k/a JOAN G. RYAN, Deceased. (705/G/09) ó Petitioner, decedent's nephew and a twenty percent residuary beneficiary of decedent's estate, requests, inter alia, an order directing Nora Deveau ("Deveau"), the executrix, to make a partial distribution to him individually as a beneficiary of decedent's estate, and a further partial distribution to him as the sole distribute and the executor of the Estate of Maryann Harrison, petitioner's mother and a forty percent residuary beneficiary of this decedent's estate. Maryann Harrison post-deceased decedent, after one distribution was made to her, on February 28, 2011. The record reflects, and the court notes, that petitioner has provided no proof that he is the executor of his mother's estate, as he avers in his petition. The other residuary beneficiary of decedent's estate is John Deveau, Nora Deveaus father.
Jurisdiction has been obtained over all persons listed in the petition as necessary parties. No one has appeared in opposition to any of the requested relief.
Decedent died on February 9, 2009, leaving a last will and testament dated September 6, 2001. The will was admitted to probate on August 29, 2009, and letters testamentary issued on that date to Deveau.
On April 29, 2010, petitioner filed a petition to compel Deveau to account. Pursuant to Decision and Order dated October 14, 2011, Deveau was compelled to account within thirty days of the service of that Decision and Order upon her. By written stipulation between the parties, the time within which Deveau could submit her accounting was extended to December 9, 2011. After Deveau failed to timely account, petitioner commenced a proceeding by Order to Show Cause to hold Deveau in contempt. That petition was returnable March 6, 2012, at which time counsel for petitioner and respondent, who is an attorney appearing pro se, appeared. On that date, the parties agreed that an accounting would be filed by March 13, 2012.
An accounting was filed by Deveau on March 13, 2012; that matter is currently pending (File No. 2009-705/F). This proceeding was thereafter filed by petitioner.
Schedule E, Statement of Distributions of Principal, of the account filed by Deveau shows that distributions were made on March 9, 2010, to John Deveau ($100,000.00), Maryann Harrison ($100,000.00), and John Harrison ($50,000.00). This court notes that these distributions were in the proportions required pursuant to the terms of the will. Specific cash bequests, not relevant here, were also paid at that time.
Subsequent to that date, and as shown on Schedule E of the accounting filed by Deveau, additional cash distributions in the aggregate amount of $187,000.00 were made by Deveau to her father. An automobile, with a stated inventory value of $2,000.00, was also distributed by Deveau to her father. No distribution date is shown. Other than the initial distributions made to petitioner and his mother discussed above, no additional distribution has been made to either of them. As noted above, this application is unopposed.
During the pendency of this proceeding, payment of the pro rata distributive share amounts were made to petitioner and his mother's estate. "Receipt and Release" forms for such payments dated June 22, 2012, were filed with the court as part of the underlying accounting proceeding.
A fiduciary has a general duty to deal impartially with the beneficiaries of an estate or trust (see, Redfield v. Critchley, 252 AD 568, aff'd 277 NY 336; Matter of Hayes, NYLJ, Sep. 3, 1998, at 22, col 6). A fiduciary owes a duty of undivided loyalty to each of the estate beneficiaries (see, Matter of Duke, NYLJ, May 24, 1995, at 27, col 2; Matter of De Planches Estate, 65 Misc2d 501). Undivided loyalty constitutes a duty of absolute loyalty, fairness, and impartiality to all beneficiaries (see, Matter of Muller, 24 NY2d 336; Matter of Heinrich, 195 Misc 803). When a distribution was made to one residuary beneficiary, an equal distribution should have been made to petitioner and his mother (see, Estate of Cogliano, NYLJ, Sep. 29, 2008, at 46, col 5, citing Estate of Welling, 26 Misc2d 182). Accordingly, petitioner and his mother's estate are entitled to interest on the $189,00.00 distributed to John Deveau. All interest payments are to be made by Nora Deveau, personally, as a surcharge against her.
CPLR 5001 (a) provides, in pertinent part, "[i]nterest shall be recovered upon a sum awardedÖbecause of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property, except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court's discretion." The discretion to award pre-judgment interest, and at what rate, for surcharges based upon a breach of fiduciary duty is a matter within the discretion of the court (see, Matter of Janes, 90 NY2d 41; see, also, Matter of Rubinstein, NYLJ, June 16, 2004, at 32, col 1). Pursuant to this power, the court may properly impose interest on surcharges made against a fiduciary when the interest is warranted to fully compensate a beneficiary for any losses which he may have suffered or gains which he may not have fully realized due to the fiduciary's negligence (see, Matter of Acker, 128 AD2d 867; Matter of Rubinstein, supra). The court imposes interest at the rate of six percent per annum, to be surcharged against Deveau and paid directly to petitioner and the estate of Maryann Harrison (EPTL 11-1.5 (e); CPLR 5004). Interest shall accrue from the date of each distribution made to John Deveau through June 22, 2012, the date of distributions to the estate of Maryann Harrison and petitioner. As no distribution date is shown for the automobile, interest on the value of the distribution of the automobile shall accrue from September 11, 2009, the date on which Deveau received letters testamentary, through June 22, 2012.
Accordingly, it is
ORDERED, that Nora Deveau, as executrix of the estate of Joan Ryan, a/k/a Joan G. Ryan, within thirty days of the date of this decision and order, make payment of interest at the rate of six percent per annum, from the distribution dates shown on Schedule E of her accounting, through June 22, 2012, to petitioner, John Harrison, such interest to be paid by Deveau personally and not from estate assets; and it is further
ORDERED, that Nora Deveau, as executrix of the estate of Joan Ryan, a/k/a Joan G. Ryan, within thirty days of the date of this decision and order, make payment of interest at the rate of six percent per annum, from the distribution dates shown on Schedule E of her accounting, through June 22, 2012, to the Estate of Maryann Harrison, such interest to be paid by Deveau personally and not from estate assets.