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MATTER ESTATE ALFRED JACOBSEN (03/11/69)
SURROGATE'S COURT OF NEW YORK, NEW YORK COUNTY
1969.NY.40786 <http://www.versuslaw.com>; 306 N.Y.S.2d 290; 61 Misc. 2d 317
March 11, 1969
IN THE MATTER OF THE ESTATE OF ALFRED JACOBSEN, DECEASED
Perkins, Daniels & McCormack for petitioner.
Cadwalader, Wickersham & Taft for executors.
Barrett Knapp Smith & Schapiro for respondents, Haight, Gardner, Poor & Havens for respondent, Dewey, Ballantine, Bushby, Palmer & Wood for respondent.
Louis J. Lefkowitz, Attorney-General, for State of New York.
Samuel J. Silverman, S.
This is a proceeding by testator's widow to determine the validity of her election under EPTL 5-1.1 to take her elective share of testator's estate.
The will was executed in 1965. Accordingly, the substantive rights of the parties are governed by subdivision (a) of EPTL 5-1.1.
Although at least one provision of the will gives the widow a trust interest in the estate that, on its face, would appear to be sufficient to defeat her right of election, the widow contends that she is entitled to elect to take against the will because this is only an alternative provision which she deems only conditional, and because of certain administrative provisions of the will.
A. THE ALTERNATIVE PROVISIONS
Article Fifth of the will provides alternative provisions for the widow's benefit. The first alternative gives her $250,000 in tax-exempt bonds, gives her son by her prior marriage $50,000, and makes a gift in trust of an amount which will produce $50,000 per year in net income exempt from New York and Federal income taxes, directing the trustees to pay or apply all of the income from the trust to or for the widow's benefit for life together with a discretionary right in the trustees to invade principal to meet emergency needs of the wife or other unusual or extraordinary circumstances. All estate taxes would be borne by the residuary estate. The will provides that the election by the wife to accept the first alternative would constitute a waiver by her of her rights under sections 17 and 18 of the then Decedent Estate Law, i.e., her right of election to take against the will as well as her right to object to the charitable bequests.
The second alternative is obviously an attempt to comply with what is now EPTL 5-1.1 (subd. [a], par. , subpar. [D]) which, in essence, provides that where the will contains an absolute disposition to the widow of $2,500 and a trust with income payable to her for life of an amount equal to or greater than the difference between the absolute disposition and the elective share, the surviving spouse has no right of election. Thus, the second alternative gives the widow the sum of $2,500 outright and creates a trust of one half of the net estate after deduction of debts, funeral and administration expenses, the income from the trust to be payable to the widow for life.
The will gives the widow the choice of which of the two alternatives she wishes to elect. The mechanics of the election are stated to be that the widow shall be conclusively deemed to have elected the first alternative unless within six months of the date of testator's death she delivers to the legal representatives of the estate a written election to accept the benefits of the second alternative.
The widow contends that this makes the gift of the second alternative conditional and therefore not a compliance with EPTL 5-1.1 (subd. [a], par. , subpar. [D]) and that therefore she is entitled to elect to take against the will.
I have recently had occasion to state what I think should be a basic premise in proceedings where the surviving spouse claims that she has a right of election to take against the will: "The statute gives both a decedent and his surviving spouse certain substantial rights. To the decedent, it gives the right to arrange his estate so as to devote one third [here one half] of his estate to the support of the surviving spouse, of which $2,500 shall be in cash and the balance may be held in trust to pay the income to the surviving spouse for life. To the surviving spouse, the statute gives the right in certain circumstances to receive one third [here one half] of the estate outright or in trust. Neither of these provisions should be defeated by technical interpretations or traps." (Matter of Jaffer, 58 Misc. 2d 948, 950.) I think this is the basic teaching of the much discussed case of Matter of Baileson (16 N.Y.2d 757). Relying on the Baileson case, the Appellate Division for this Department has recently said: "Minor deviations from the right of election statutes or minimal invasions of the trust income do not give the surviving spouse an absolute right of election contrary to the intention of the decedent spouse." (Matter of Brettschneider, 30 A.D.2d 59, 60 [1st Dept., 1968].)
The first alternative gives the widow very substantial rights. In given circumstances it might well be that a widow might prefer $250,000 outright plus $50,000 to her son plus $50,000 annual tax-exempt income (as provided in the first alternative), all free of estate taxes, rather than $2,500 outright and the income of a trust of one half of the net estate for her life (as provided in the second alternative), subject to estate and income taxes.
If we assume that the second alternative, standing alone, is sufficient so that the widow would have no right to elect to take against it, and if having given her that, the will then went on to say that if the widow preferred she could take the first alternative, that would surely be not a cutting down of her rights but rather an increase. Instead of having only the provision of the second alternative in accordance with EPTL 5-1.1 (subd. [a], par. , subpar. [D]), she would now have the additional right to choose between that and the first alternative. And if the will said that the widow should be deemed to have elected the second alternative unless within six months she wrote the executors saying that she wanted to take the first alternative, it would be clear that she would have no right of election.
I cannot believe that the right of election can turn on the mechanical detail of whether the letter is required if the widow wants the second alternative or whether it is required if she wants the first alternative. Either way she has the free choice of the two alternatives, with no burden other than to say what she wants. If this is a deviation from the right of election statute, it surely comes within the class of "minor deviations from the right of election statutes" which "do not give the surviving spouse an absolute right of election contrary to the intention of the decedent spouse." (Matter of Brettschneider, 30 A.D.2d 59, supra.)
In Matter of Williamson (N. Y. L. J., Jan. 23, 1942, p. 347, col. 6) Surrogate Foley of this court held that a widow did not have a right to elect to take against a will where the will contained an alternative provision establishing a trust for the widow's benefit in the amount of her elective share in the event that the ...