Alexander Hamilton, Trusts and Estates Attorney: Part 2

In June 1801, Hamilton was summoned to the deathbed of Robert Richard Randall who resided in a mansion and farm called Minto.  Minto Farm, located at Broadway between Eighth and Tenth Street in what is now Greenwich Village, sat on 21 acres with a mansion and other buildings.  Hamilton had once owned part of the property in partnership with John Jay and Isaac Roosevelt before selling the parcel to Baron Poellitz in 1787. In 1790 Robert Randall had purchased the farm and mansion formerly owned by the British Andrew Eliot, Collector of the Port, from Anne Stuart, baronne  von Poellnitz, the wife of Frederick Charles Hans Bruno, baron von Poellnitz.  Hamilton had also been involved in the sale and purchase of the property by Randall because he managed the Poellnitz’s affairs in the United States.

Hamilton was counsel to Randall’s sister Catharine Brewerton, and it is likely through that relation that he was asked by Robert to draft his Will.   In addition, Randall knew that Hamilton shared his philanthropic vision for the support of aging sailors.   George Washington, Hamilton, and Randall were all members of the very prestigious Marine Society.  Hamilton, John Marshall (who would become Chief Justice of the U.S. Supreme Court and who would play a part later in this story), and Leonard Lispenard (a wealthy merchant and large landowner of what is now TriBeCa, and commemorated by street names for both his first and last names) all served as presidents of the Marine Society that had been founded by Robert’s father, Captain Thomas Randall.

Captain Thomas Randall had made his fortune as a privateer (or buccaneer), a private person authorized by a government to attack and plunder enemy ships during wartime.  Thomas Randall had been a part owner of “La Jeune Babe” from 1773-1776 with Stephen Girard, who personally saved the U.S. Government from financial collapse during the War of 1812 and one of the wealthiest people at the time. Thomas Randall died in 1797 after a long maritime, governmental (he was Vice-Consul to China), and philanthropic career.  He had been the founder of the Marine Society in New York for the relief of sailors and their families.  Upon his death, his fortune was distributed in large part to his three children:  Paul R. Randall, Catharine Brewerton, and Robert Richard Randall.

It came as no surprise to Hamilton then that Robert Randall chose to leave his fortune in trust for the purpose of maintaining and supporting aging sailors.  But what Hamilton did next was pure genius:  he drafted a perpetual testamentary charitable trust that would be made viable by an act of the state legislature, thereby creating a road map for the legislature to transfer property for charitable purposes without the use of confiscation or eminent domain.  In addition, this Will provision established the private right of an individual to transfer property to a charitable corporation.  The charity would be created for the benevolent purpose of supporting fifty or more aging sailors from the proceeds of the rents from the residuary estate.   Here is the genius clause in its entirety:

“Sixthly.  As to and concerning all the rest, residue, and remainder of my estate, both real and personal, I give, devise, and bequeath the same unto the Chancellor of the State of New- York, the Mayor and Recorder of the city of New- York, the President of the Chamber of Commerce in the city of New- York, the President and Vice President of the Marine Society of the city of New-York, the senior Minister of the Episcopal Church in the said city, and the senior Minister of the Presbyterian Church in the said city ; to have and to hold, all and singular the said rest, residue, and remainder of my said real and personal estate, unto them, the said Chancellor of the State of New- York, Mayor of the city of New- York, the Recorder of the city of New-York, the President of the Chamber of Commerce, President and Vice President of the Marine Society, senior Minister of the Episcopal Church, and senior Minister of the Presbyterian Church in the said city, for the time being, and their respective successors in the said offices, forever, to, for, and upon the uses, trusts, intents, and purposes, and subject to the direction and appointments hereinafter mentioned, and declared concerning the same ; that is to say, out of the rents, issues and profits of the said rest, residue, and remainder of my said real and personal estate, to erect and build upon some eligible part of the land upon which I now reside, an Asylum, or Marine Hospital, to be called ” The Sailors’ Snug Harbor,” for the purpose of maintaining and supporting aged, decrepit, and worn-out sailors, as soon as they, my said charity Trustees, or a majority of them, shall judge the proceeds of the said estate will support fifty of the said sailors, and upwards. And I do hereby direct, that the income of the said real and personal estate, given as aforesaid to my said charity Trustees, shall forever hereafter be used and applied for supporting the Asylum or Marine Hospital hereby directed to be built, and for maintaining sailors of the above description therein, in such manner as the said Trustees, or a majority of them, may, from time to time, or their successors in office may, from time to time, direct. And it is my intention, that the institution hereby directed and created, should be perpetual, and that the above mentioned officers for the time being, and their successors, should forever continue and be the governors thereof, and have the superintendence of the same : and it is my will and desire, that if it cannot legally be done, according to my above intention, by them, without an act of the Legislature, it is my will and desire that they will, as soon as possible, apply for an act of the Legislature to incorporate them for the purposes above specified. And I do further declare it to be (my) will and intention, that the said rest, residue, and remainder of my real and personal estate should be, at all events, applied for the uses and purposes above set forth ; and that it is my desire, all courts of law and equity will so construe this, my said Will, as to have the said estate appropriated to the above uses, and that the same should, in no case, for want of legal form or otherwise, be so construed, as that my relations, or any other persons, should heir, possess, or enjoy my property, except in the manner and for the uses herein above specified. And, lastly, I do nominate and appoint the Chancellor of the State of New- York for the time being, at the time of my decease, the Mayor of the city of New York for the time being, the Recorder of the city of New- York for the time being, the President of the Chamber of Commerce for the time being, the President and Vice President of the Marine Society of the city of New-York for the time being, the senior Minister of the Episcopal Church in the city of New- York, and the senior Minister of the Presbyterian Church in the said city, for the time being, and their successors in office after them, to be the executors of this my last Will and Testament.”

Within five years after the death of Robert Randall, the New York legislature, on the application of the trustees who were also the executors of the Will, passed a law that constituted the persons holding the offices named in the Will and their successors as a corporation by the name of “The Trustees of the Sailor’s Snug Harbor” so that they could execute the trust in the Will.

Of course, this novel clause would not go without legal challenge, one that would reach the U.S. Supreme Court in the case of Inglis v. Trustees of Sailor’s Snug Harbor, 28 U.S. 99 (1830).  That case and its aftermath will be the subject of Part Three of this story.  Stay tuned!

#AlexanderHamilton #Hamilton #SailorsSnugHarbor

Alexander Hamilton, Trusts and Estate Attorney: Part 1

When we think of Alexander Hamilton, we think of him as George Washington’s aide-de-camp, as the writer of the majority of the Federalist Papers, as this country’s first Secretary of the Treasury, and the founder of the New York Post. Less well known is Hamilton’s career as an attorney and the lasting impact that he had as a practicing lawyer, a practicing estates lawyer.

After leaving public service, Hamilton established his law practice in New York. Well-known for his pro bono work with destitute women and orphans, Hamilton was also an astute corporate and trusts and estates attorney. Because of his brilliance in these domains, he wrote a Last Will and Testament that not only created the wealthiest and most successful charitable bequest in New York history, the Sailors’ Snug Harbor for aging sailors, but the trust he created would later establish the right of the State to create corporations in response to charitable bequests in Wills. An ardent advocate of individual property rights, Hamilton drafted a Will that not only withstood legislative debate but also a legal challenge by an heir of the testator that would end up in the US Supreme Court.

What made this trust and estates practice unique was that Hamilton was carving out new legal ground when it came to estates. Prior to the revolution, all lands had been the property of the Crown. The original grantee would then sell off parcels of land under his original grant. The Treaty of Paris (1783) that ended the Revolutionary War also put an end of any residuary rights held by the Crown, but this only meant that a landowner in the United States no longer had any allegiance to the British Crown. Land ownership per se was not addressed by the Treaty.

During the colonial period in New York City, the merchant class under both the Dutch and the English held land by occupying it and forcibly holding it. Some of the large estates were owned by Loyalists (or Tories) who remained loyal to the British Crown during the Revolution. After the Revolution, under the leadership of New York’s first governor (and future vice president under both Thomas Jefferson and James Madison) George Clinton, the legislature passed three laws that effectively confiscated the property of the former Loyalists and forfeited their rights to their land: the Confiscation Act (1779), the Citation Act (1782), and the Trespass Act (1783). Hamilton opposed these laws as flouting fundamental democratic property rights, and he defended Loyalists against these takings by the State. All the while, he was looking for a way to the State to legitimately transfer land without the use of confiscation or eminent domain. The opportunity presented itself with the drafting of the Last Will and Testament of Robert Richard Randall.

The story will continue in Part 2 of this story…

The Presumption of Due Execution:The Importance of an Attorney-supervised Will Execution Ceremony

In a contested probate proceeding, proponents of the Last Will and Testament being offered for probate must submit evidence establishing a prima facie case for probate.  Those who object to the probate must raise a material issue of fact.  One such challenge concerns the due execution of the Will.

These days, there are any number of websites that can be used to create generic Last Wills and Testaments.   While these options may seem more cost-effective than hiring an attorney to draft a Will, in the end they may prove to be very costly options, especially in those cases where there is a Will contest.  In addition to not having the benefit of the advice of an attorney knowledgeable in New York’s Estates, Powers, and Trusts Law for the preparation of this very important document, a person availing himself/herself of these low-cost options also deprives himself/herself of something invaluable:  the presumption of due execution.

How does this work in practice?  When an attorney drafts a Will, s/he will then arrange for a Will execution ceremony with the testator and the attesting witnesses present.  The attorney not only supervises the Will execution, but explains the legal significance ceremony to the attesting witnesses and asks the testator certain questions in front of the witnesses to ascertain certain facts being attested to by the witnesses and to establish the publication requirement.  Where the execution ceremony of a Will is supervised by the attorney who drafted the Will, the presumption of due execution exists.

The presumption of due execution creates a significant deterrent to someone who contest a Will offered to probate. In Matter of Leach, 3 AD3d 763, 764 (2004), the testator had a brother with whom he was not close.  The testator, perhaps anticipating a Will contest, hired an attorney to draft his Will. As part of his regular preparation for the drafting and execution of a Will, the attorney whom the testator retained gathered information about  the testator’s family, his assets, and how he wanted to dispose of those assets

When the testator died and his Will was offered for probate, his brother contested the probate alleging, among other things, a lack of due execution.   Both witnesses, the attorney who drafted the Will, and his secretary were deposed.  The attorney testified as to as to his usual routine for the preparation and execution of a Will, and to the facts and circumstances surrounding the execution of the Will.  The Surrogate’s Court of Chenango County admitted the Will to probate, and the brother appealed.

The Appellate Division, Third Department, affirmed the Surrogate’s Court’s ruling because, among other things, the petitioner had met her burden of proof of due execution;  “When an attorney drafts a will and supervises its execution, a presumption of regularity is raised that the will was properly executed.”   Because the Will had been drafted by the attorney who then supervised its execution, the presumption of due execution existed and the petition was able to meet her burden of proof on the issue of due execution.  The burden of proof then shifted to the respondent to produce admissible evidence creating a triable issue of fact.  Arguments are not enough to meet this burden of proof.

Will contests are an expensive proposition for those offering a Will to probate.  When a Will is not prepared by an attorney and that attorney does not supervise its execution, then that Will does not carry with it the presumption of due execution.  Hiring an attorney to draft this exceedingly important document may just be the wisest expenditure that you can make.  You will ensure that those left behind have the the presumption of due execution in their arsenal should they need to defend your Last Will and Testament.

Death and Passwords: Estate Planning for Your Digital Assets, Part 1

If you are reading this, it is because you have Internet access. With Internet access comes a host of services, including online banking, online businesses, and online access to pension savings and other investments.  All of these services require you to create a user name and a password.  Many have challenge questions as well.  What is your plan for these digital assets if you should become incapacitated or die?

With the exception of Oklahoma, state laws that control the disposition of your estate have not been enacted to keep up with this massive societal change in the way we transact our financial lives. For instance, if a family member has given you a power of attorney over their financial affairs, a bank will work with you with respect to their non-virtual accounts. But if that family member schedules payments and transactions through their online account, the power of attorney may be ineffective to gain access to that online account. You must have  at least the password.

But you or your family members may not want to give out passwords to online banking or investment accounts. The possibilities for fraud or mismanagement are large. In addition, many people do not want to reveal the full extent of their financial lives. Access to passwords provide that full view.

On the other hand, there are good reasons to give access to passwords to these trusted sites. Mental incapacity due to illness can rob the individual of the ability to manage their online financial life. At the same time, mental incapacity prevents a person from legally drafting a Will or trust. Thus, estate planning for our digital assets becomes a priority for anyone with anyone who manages their financial life online.

Even if you have a Will, you probably did not make provisions in this document for your digital life. In any case, a Will is not the proper place to list your passwords. If you include your passwords as part of your Will,  a probated Will is   a public document, exposing your digital assets to prying eyes.  These user names, passwords, challenge questions, and other online account identifiers are best protected in a digital assets trust. Trusts, in contrast to Wills, are private documents and a safe way of communicating your online passwords to your trusted family members and advisers.

So who is a candidate for digital asset estate planning? If you can answer “yes” to any of the following questions, then you need an estate plan for your digital assets.

— Do you do online banking?

— Do you regularly schedule payments through your online banking accounts?

— Do you use an online password to access your retirement accounts?

— Do you use an online password to reach your investment accounts?

— Do you have an online business?

— Do you sell items on eBay or other online auction sites?

— Do you have a PayPal account?

— Do you have a business website?

— Do you have a blog or other social media site associated with your business?

In the next part of this series, we will look at why a digital asset trust may be a good solution for your estate planning needs.

If you would like to discuss your own personal situation with me, or how a digital assets estate plan can be tailored to your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

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All Not in the Family? The Dead Man’s Statute and Pedigree Declarations

At times Wills contest expose deep family secrets. There are even cases where the revelation of the secret leaves even more tantalizing questions unanswered. Such is the case of In the Matter of the Estate of Esther T., 86 Misc. 2d 452; 382 N.Y.S.2d 916 (1976), where a son’s use of an exception to the Dead Man’s Statute led to an unexpected result.

One exception to the Dead Man’s Statute in New York is a pedigree declaration. Pedigree declarations, or statements regarding one’s parentage, are admissible in probate proceedings. These declarations necessarily include conversations held by the person testifying with the decedent, something the statute seeks to eliminate because the decedent is unavailable to testify on these same facts.

In In the Matter of the Estate of Esther T. ,the Surrogate’s Court of New York, Nassau County, heard testimony from a contestant, the decedent’s purported son, to the admission of a Will to probate by the proponent, the decedent’s purported husband. According to the contestant, he was the sole child of the decedent and her “purported” husband George M. “Of necessity, proof of pedigree must be based upon hearsay. The issue of lineage rarely comes into question when all of the parties who could testify are available to testify. The necessary foundation for the admission of pedigree declarations is as follows: (1) the declarant is dead; (2) the declarant was related by blood or affinity to the family concerning which he speaks; (3) the declarations were made ante litem motam” Id., at 455. While pedigree declarations are admissible in evidence, the trier of fact must still weight these declarations to determine their truthfulness.

To support his claim, the contestant also submitted the testimony of the decedent’s younger siblings, a brother and a sister. The brother testified that his sister had been born in Brooklyn, NY in 1904 and was about 70 years of age at the time of her death. He further testified that her maiden name was Esther Do, but that she was also known as Estelle Do or Du. In 1928 or 1929, she had married George M, a real estate broker and traveling salesman of novelties, a profession that required frequent out-of-state travel. He was often accompanied by his wife. Esther conducted a tax preparation business from her husband’s real estate office. Over objection, the brother testified that Esther has told him that the contestant was her son.

The sister, an attorney, testified that her law office was located close to her deceased sister’s home and that she saw her sister frequently. She further testified of her sister’s pregnancy in 1946, and that in December of 1946 her sister and George M had closed their office had gone to Florida. She had learned of the birth of her nephew from George M.

It is clear from the record that Esther suffered at least one miscarriage. At issue was whether she ever experienced a live birth and whether the contestant was indeed her son. Conflicting evidence on this point was presented to the court. George M conceded that the contestant had been held out as the son of the deceased and himself. However, he also testified that the contestant was neither the natural nor the adopted son of the deceased and thus should not be a distributee under the Will. To support this claim, he submitted a certified hospital record from North Shore Hospital dated 29 May 1970 containing Esther’s medical history that stated she had experienced one miscarriage and no live children, as well as her blood transfusion record that indicated her blood type was O-RH +.

George M also submitted into evidence a certified copy of a hospital record dated 5 March 1947 from the Atlantic City Medical Center for a certain Estelle Du. Her blood type was AB-RH +. Estelle had given birth there to a child whose footprint was part of the hospital record. Upon recross-examination, the contestant admitted that his blood type was A+.

Because blood typing cannot change, the court determined that the contestant was not the son of the deceased and George M. He was the son of Estelle Du who was 19 years old at the time of his birth, while Esther was 43 years old at the time of his birth. As such, he was not a distributee under the decedent’s Will.

Interestingly, the court noted that George M had not submitted any proof that he was the decedent’s surviving spouse and thus the decedent’s sole distributee. He was ordered to produce proof of his marriage to Esther within 10 days. Absent this proof, Esther’s surviving brother and sister and any children of predeceased siblings would become distributees under the Will if admitted to probate, or intestate heirs should the Will not be admitted to probate.

While pedigree declarations are an exception under New York’s Dead Man’s Statute, they are not automatically admitted as true statements. As the Matter of the Estate of Esther T illustrates, pedigree declarations can sometimes open a Pandora’s box of closely held family secrets.

If you would like to discuss your own personal situation with me, review your current legal life plan, or put together a legal life plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page or the “Subscribe” button at the top of the page so that you can receive a notification when the next blog post has been published.   Thank you.

New York’s Dead Man’s Statute and Oral Promises

Oral promises concerning property made by one family member to another can have devastating consequences after the promisor’s death if these promises are not memorialized in writing.  That is because New York’s Dead Man’s Statute (C.P.L.R. 4519) prohibits the admission of such oral promises by an interested party (in this case, the promisee) in the case of a Wills contest or other litigation.  The family strife that results due to the absence of a writing concerning the future ownership of the property in question can be easily avoided by consulting an attorney. 

Consider the case of Elizabeth Connelly Payne and her brother F. Henry Connelly (Payne v Connelly (1969, 3d Dept) 32 App Div 2d 693, 299 N.Y.S.2d 1013).  At issue in this case was whether Elizabeth could prove that she had been induced to relinquish a present benefit in return for her brother Henry’s promise of future gain.  Elizabeth and Henry’s aunt owned quite a bit of stock in the National Dairy Products Corporation.  Elizabeth Payne alleged that she was persuaded by her brother to dissuade their aunt from changing her will and leaving all of her stock holdings to Elizabeth (the original will left all of the stock to Henry), in exchange for Henry’s promise to give Elizabeth one half of the stock after their aunt’s death.

In due course, their aunt passed away leaving Henry as the sole beneficiary of the stock in question.  And then something unexpected happened:  Henry died as well, but without a Will (intestate).  All of his assets were distributed under New York’s intestacy law to his spouse, Phyllis (the respondent in this case) and their children.   Henry also left behind significant assets in the Valley Coal and Supply Company to his heirs.  The only people present during the conservations concerning the aunt’s will had been Elizabeth and Henry.  The Dead Man’s Statute now prohibited Elizabeth from bringing in those conversations as evidence at trial. 

But what about her sister Florence and her brother-in-law’s assertions concerning statements that Henry made during a Labor Day family gathering in 1962 during which he purportedly said that Elizabeth was to receive half of the National Dairy Product Corporation stock?  The court found that, while it was clear that the parties were discussing the aunt’s Will, Henry’s statement still did not go to the issue of whether the aunt had been induced to not make changes in her Will in favor of Elizabeth in return for Henry’s promise to give Elizabeth half after their aunt’s death.  As a result, Elizabeth’s claim was denied by the court.

When it comes to our family, we want to believe that family members have our best interests at heart.  That is the case more often than not.  However, as in the case of Henry, unexpected events such as a sudden death and legal or mental incapacity can rob the best of intentions of their desired impact.  And once the unexpected happens, New York’s Dead Man’s statute prohibits the testimony of these oral promises with the deceased.

The best course of action when it comes to oral promises between family members or close associates is to memorialize them in writing.  You should consult an attorney to make sure that the proper legal documents are drafted and then properly executed under New York law.  Both parties will then have the assurance that the intentions expressed in oral promises will be carried out no matter what happens to either party.

If you would like to discuss your own personal situation with me, review your current legal life plan, or put together a legal life plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page or the “Subscribe” button at the top of the page so that you can receive a notification when the next blog post has been published.   Thank you.

 

New York’s Dead Man’s Statute: Some Preliminary Considerations

New York is in the minority of states that still have a Dead Man’s Statute.  New York’s Dead Man’s Statute, also known as CPLR § 4519, came into law in 1851.  The legislative concern at the time was over perjury:  that self-interest would prevail when a person testified in a civil matter involving conversations with a now-deceased person where the witness had a pecuniary interest in the outcome of the case.  That concern persists today and is particularly evident in the area of Wills and trusts.

New York’s Dead Man’s Statute codified what had been common law practice since the time of Elizabeth I of England.   It is intended to protect the decedent’s estate against claims of conversations or interactions that cannot be verified.  What a Dead Man’s Statute does is make a witness legally incompetent to testify about conversations that the witness had with a deceased person in a case where s/he could benefit financially if the trier of fact found that evidence to be materially determinative.   Since the deceased/legally incompetent person’s lips are forever sealed, so must the lips of the other conversant with respect to the matter in contest.  In New York, the statute has been invoked in cases involving such matters as bequests in Wills; trust provisions;  requests for specific performance; and lack of testamentary capacity. 

There are also interesting cases where the Dead Man’s Statute intersects with the competency of a witness exception of the Federal Rules of Evidence (FRE) Rule 601, at which point the Dead Man’s Statute supplies the state law .  At times, the Dead Man’s Statute serves as a statutory exception to the hearsay rule.  At other times, the hearsay exception in the Federal Rules trumps the Dead Man’s Statute.  Establishing pedigree for either the witness or the decedent in a Wills contest is one such example (FRE 804(b)(4)).

In New York, there are three exceptions to the Dead Man’s Statute:

  1. in a tort action for negligence involving a car, boat, or plane, an interested witness can testify to the general facts and results of the accident;
  2. in estate cases where the estate “opens the door” by offering evidence or questioning an interested witness about conversations or transactions with the deceased;  
  3. where the estate of the deceased does not lodge a timely objection during a Wills contest or trial, then the estate waives it right to object based on the Dead Man’s Statute.

The first exception is an important one in vehicular negligence actions because New York does not have a guest statute.  Thus New York’s interest is to allow a New York State domiciliary the right to recover damages against a negligent driver.  The next two exceptions can be triggered during an estate contest, for instance, where a  substantial “gift” is concerned.

In future posts, I will examine specific cases in which the Dead Man’s Statute figured prominently.  Each case presents an interesting set of facts that prepares the stage for the application of the Dead Man’s Statute. 

If you would like to discuss your own personal situation with me, review your current legal life plan, or put together a legal life plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page or the “Subscribe” button at the top of the page so that you can receive a notification when the next blog post has been published.   Thank you.

Costly Omissions in Wills: The Missing Power of Appointment

We are  a “do-it-yourself” society.  If something needs to be done, then we will find a way to do it.  However, there are certain tasks that we should never tackle without expert professional help (in my case, plumbing goes to the top of the list).  Drafting a Will is one of those tasks because ambiguities and omissions in drafting can be very costly to those you leave behind.

Here are a few reasons why.  Each state has laws that govern the language, including terms of art (language with special legal meaning), the proper means of execution, and a set of distribution rules that must be clearly understood and clearly followed.  In addition, there are tax implications with respect to bequests.  These must be carefully analyzed with your attorney so as to minimize the impact on beneficiaries.  The reason that we write a Will in the first place is to protect the people we love.  By having an attorney draft your Will, you also ensure that the people in your life receive the care and financial support that they will need to carry on.  This is especially true for small children, persons with disabilities, persons with special needs, and surviving spouses or domestic partners.  Finally, things change every year in our lives and it is a very good practice to review the contents of your Will on a yearly basis.  You likely won’t change your Will yearly, but you will better understand its meaning with respect to your present circumstances after this review.

Consider the case of Anita Hamilton [In the Matter of the Estate of Hamilton, 190 A.D.2d 927 (1993)].  She married Milton Hamilton in a second marriage.  Milton had two daughters from a prior marriage, Mary H. McLaughlin and Gwendolyn H. Stevens, and Anita had a son by a prior marriage, John H. Ricketson.  

On February 26, 1989  Milton passed away.  Over the years, Milton had drafted several Wills, one in 1966, one in 1975 revoking the 1966 Will, and one in 1982 revoking the 1975 Will. He had drafted his last Will and testament on April 5, 1982 and directing that his residuary estate should be divided into two funds.  Fund A was a marital deduction trust.  Fund B constituted Milton’s bequests to his daughters.  With respect to Fund A, Milton directed that the remaining principal be “paid,  transferred or distributed … in such manner … as [Anita Hamilton] may by her last Will and Testament direct and appoint” (Hamilton, at 928). 

Milton’s Will was very specific concerning this power of appointment.  It was  “exercisable only by specific reference to said power in [Hamilton’s] last Will and Testament”.  Failure to effectively exercise the power of appointment in this specific way meant that the assets remaining in Fund A passed to McLaughlin and Stevens.

Anita Hamilton passed away 15 days after her husband died.  Her last will and testament dated December 22, 1967, fifteen years before her husband had executed his last Will.  In Anita’s Will were the following words:  “By this paragraph of my Last Will and Testament, I do specifically exercise the power of appointment given to me by paragraph “Sixth” of the Last Will and Testament of my husbanddated the 26th day of August, 1966, in favor of my son, JOHN HENRY RICKETSON … or to his issue him surviving, to the extent of seven-eighths (7/8ths) of the fund over which I have the power of appointment, and I give, devise and bequeath to SUE M. RICKETSON, wife of my son, one-eighth (1/8th) of the fund over which I have the power of appointment under the said Last Will and Testament of my husband …  By these provisions, I do specifically exercise the power of appointment given to me by the Will of my said husband” (Id. at 928).  Both Milton’s and Anita’s Wills were admitted to probate. 

The Surrogate Court of Albany County looked at the specific language in Milton’s 1982 Will and decreed that Anita had not made proper reference to that specific power of appointment in her Will.  Instead, she had referenced Milton’s 1966 Will that had been revoked by two subsequent Wills.  Consequently, the court decreed that the principal of Fund A be awarded to Milton’s daughter’s.  Anita’s son John Ricketson appealed.

The Appellate Court, Third Department affirmed the Surrogate Court’s decision.  The Court made explicit reference to the language of EPTL 10-6.1:  “[i]f the donor has expressly directed that no instrument shall be effective to exercise the power unless it contains a specific reference to the power, an instrument not containing such reference does not validly exercise the power.”  Because Anita’s Will referenced a Will that had been revoked, her power of appointment failed.  The result was that her stepdaughters received what she had intended for her son and his family.

A carefully review of Anita’s Will by an attorney may have revealed the omission.  A do-it-yourself Will in such a case would also be grossly ineffective to preserve the bequest.  Moreover, the Hamilton case illustrates the dependencies of one Will document on another Will document.  Every family is different and each person in it represents a unique instance.   A Will drafted by another family member could impact or limit your ability to pass on a bequest to a designated beneficiary.  That is why it is always best to consult and work with an attorney who is versed in these matters.

If you would like to discuss your own personal situation with me, review your current Will, or put together an estate plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Subscribe to” on the left-hand side of the page so that you can receive a notification when the next installment has been published. Thank you.

A Thanksgiving Checklist as We Count Our Blessings…

More than any other holiday, Thanksgiving is the time when we gather around the table to celebrate with family and friends.  Many of you are traveling to visit your family, and many of you are receiving family and friends for Thanksgiving.  Soon there will be the familiar and anticipated aromas coming from the kitchen and we will gather around the table to enjoy a fabulous meal prepared by loving hands and give thanks for all of our blessings.

This is also the time of year that I suggest for an annual review of your legal life plan because the people you love and want to protect are right there with you.  So this weekend, as you savor the leftovers, ask yourself the following questions.

  • Do I need a Will?
  • If I have a Will, has anything major occured in my life this past year so that I should review it with an attorney?
  • Do I need to look into setting up a trust?
  • Have I reviewed all of my beneficiary designations on such things as life insurance policies and retirement plans?
  • Do I need a living Will?
  • Do I need a Power of Attorney for financial matters?
  • Do I need a Power of Attorney for health care?
  • Do I need a prenuptial agreement?
  • Do I need a postnuptial agreement?
  • Do I need a domestic partnership agreement?

If you would like to discuss your own personal situation with me, review your current legal life plan, or put together a legal life plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

From my home to yours, I wish you a very Happy Thanksgiving!  May you and your family continue to be blessed.

Mental Capacity and Marriage in New York, Part 3: The Secret Marriage

Marriage fraud has always had as a consequence the disruption of family estate planning, or even the potential of an unfair result where the state’s intestate laws are applied when the decedent dies without a Will.  But if the bride or groom suffers from dementia and their fiance(e) has been in a caregiver position, the resulting marriage could be considered a form of elder abuse because the person suffering from dementia is being exploited for financial reasons.

Consider the case in Matter of Berk, 2010 NY Slip Op 02139 [2d Dept 2010]).  Irving Berk was a very successful businessman, having founded the Berk Trade and Business School.  In 1982, he executed a Will naming his sons Joel and Harvey as co-executors.  Over the next few years, Irving’s memory began to fail.  His physical health also deteriorated, and he became wheelchair bound.    In 1997 his sons decided to hire a live-in caregiver. At the time, Irving Berk was 91 years old.  His caregiver, a recent immigrant from China named Hua Wang (also known as Judy Wang), was 40 years old.

Friends of Irving reported that Wang took advantage of Berk’s increasing dependency on her, and that she physically and verbally abused him.  By 2005 Irving Berk could no longer recognize his sons who by then were contemplating guardianship proceedings.   As part of this process, Irving was examined in April 2007 by a physician who diagnosed him as having dementia and stated that Berk did not possess the mental capacity to enter into contracts.  His family physician who examined him a short time later found that Irving did not have the mental capacity to handle his social affairs.

Nevertheless, on 17 June 2005 Irving Berk and Judy Wang were married in the civil ceremony in the New York City Clerk’s Office.   The marriage was kept a secret.  Neither Berk nor Wang wore wedding bands thereafter, nor did family and friends ever witness displays of affection between them.

On 16 June 2006, Irving Berk died leaving an estate worth more than $5 million.  The day before the funeral, Wang informed his sons of the secret marriage as they drove to the funeral home.  When the Will was read, it was discovered that Irving Berk had never changed his Will to make his new wife a beneficiary.  The named beneficiaries remained his two sons and four grandchildren.  Because Irving had made no provision for his new wife in the Will, Judy was now entitled to ask for the elective share.

On 29 December 2006, after the Will was filed for probate and within the requisite six months after the Will was probated, Judy Wang Berk petitioned the Surrogate’s Court in King’s County for a determination of her right to take her elective share as Irving’s surviving spouse.  Under New York law, the surviving spouse is entitled to $50,000 or one-third of the decedent spouse’s estate, whichever is greater.   The Surrogate found that Judy was married to the decedent at the time of his death and that, as a matter of law, she was entitled to her elective share under EPTL 5-1.1-A [a].

Berk’s sons appealed.  The Appellate Division, Second Department found that Judy Wang had married Irving Berk in the full knowledge that he lacked the mental capacity to consent to a marriage.   Under the principles of equity, the court found that Wang should thus not be unjustly enriched because she took unfair advantage of Berk’s mental incapacity at the time of their marriage.

Over 5 million people are affected by Alzheimer’s disease and other forms of dementia, and this number is expected to grow.  The time is now to protect your assets and your loved ones.  You cannot afford to wait for a diagnosis because once you have been diagnosed with dementia, your diminished mental capacity will prevent you from taking the necessary legal steps to protect yourself, your property, and your family.

What can you do to protect yourself?  Irving Berk had a Will, after all.  A Will is certainly a good first step, but it is not enough.  Unless the Will has been carefully drafted by an attorney to make sure that it is in compliance with New York Law and contains the necessary language about the elective share so as to mitigate against unscrupulous persons, then the door is left open for a sham marriage or other forms of unjust enrichment to occur.  Do-it-yourself online wills should be used with extreme caution or not at all as a result.

Secondly, you should meet with your attorney at least once a year in the same way that you meet with your doctor for your annual physical exam.  Your attorney will ask you questions to determine what has changed in your personal and legal affairs, and may suggest redoing your Will or adding a codicil based upon your responses.  Your attorney will also evaluate your mental capacity as you answer the questions.  If the attorney determines that there is a doubt about your mental capacity, then your attorney will strongly advise that any codicils or new Will be videotaped during the execution ceremony.  This service is worth its weight in gold.

Next, your attorney may suggest that you place you assets into a trust.  If you go this route, you may want to execute a pour-over Will, meaning that your assets will go directly into the trust at the time of your death, to be administered according to the terms of the trust.  Remember that assets such as bank accounts and property that can be held jointly are vulnerable to sham marriage schemes.  You may want to re-title these in the name of the trust.  Note that trusts are contracts, and that contracts require the highest level of mental capacity in New York.  If you wait too long, you may not have the requisite mental capacity to execute the trust documents.

You will also need full mental capacity to give a durable power of attorney to someone you trust or to your bank so that your affairs can be managed should you lose mental capacity.  Your attorney will discuss these options with you in detail so that you are comfortable with your choices.

Finally, your attorney will review your planning for medical decision-making including having a living Will and a health care proxy.  These are known as advance directives. The case does not disclose whether Irving Berk had these instruments in place.  If he did not, Judy Wang Berk as his legal wife would have been the one to make the decisions about his health care, and not his sons.

If you would like to discuss your own personal situation with me, you can get a free 30-minute consultation simply by filling out this contact form.   I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Subscribe to” on the left-hand side of the page so that you can receive a notification when the next installment has been published. Thank you.