Matter of Catapano
Annotate this CaseDecided on June 30, 2007
Sur Ct, Nassau County
In the Matter of the Petition of Andrew Catapano as a remainderman of the trust created under Article Fourth of the Will of Andrew Catapano, for a Determination as to the Validity, Construction or Effect of the Disposition of Property Under Article Third (B) of the Decedent's Will.
141201
The appearances of counsel are as follows:
McCoyd Parkas & Ronan(for petitioner)
1100 Franklin Avenue
Garden City, NY 11530
McGinity & McGinity, P.C.(for respondents)
100 Quentin Roosevelt Boulevard, Suite 401
Garden City, NY 11530
John B. Riordan, J.
In this proceeding to construe a will, petitioner and respondents each move for an order granting summary judgment.
Testator Andrew Catapano died on July 17, 1969 survived by his wife Josephine Catapano and three children, Frank Catapano, Carole Cozzi and Frances Catapano. His will dated July 3, 1965 was admitted to probate by a decree of this court dated August 27, 1969. Albert Cozzi is the sole current executor and trustee.
Article THIRD" subdivision "A" of the will provides:
"If my wife, JOSEPHINE CATAPANO, shall survive me, I give and bequeath to my Trustees a legacy in an amount equal to the maximum marital deduction allowable in determining the Federal Estate Tax payable by my estate under the laws in effect at the time of my death, diminished by the value of all other property which shall be included in my estate for Federal Estate Tax purposes and which qualifies for said marital deduction and which passes or has passed to my wife, either under any other provisions of this Will or in any other manner. My Trustees shall hold such legacy as a separate trust for the benefit of my wife and shall pay or apply all the income earned from and after the date of my death to her in annual or more frequent installments so long as she shall live. I hereby expressly provide that if any provision or provisions of this Will would cause the marital deduction to be disallowed then I direct that such offending provision or provisions shall be ineffective if and to the extent that the same, if effective, would disquality [sic] for the marital deduction the legacy given and bequeathed to my Trustees by this Article."
Article THIRD" "B" provides:
"Notwithstanding any other provision of this Will, I give my wife the right at any time and from time to time beginning with my death and continuing during her life to appoint the whole or any part of the principal of the trust created by this Article to her estate (but not to [*2]herself) free of the trust. Any such appointment shall be revocable by her at any time, and each exercise and each revocation of an exercise of the appointment shall be by written instrument (other than a Will) executed by my wife and delivered to my Trustees during her life. Any revocation by my wife of an exercise of such power of appointment shall not prevent my wife from subsequently exercising such power, it being my intention that my wife shall have the right during her life to exercise the power alone and in all events. If and to the extent that my wife shall fail effectively to exercise completely such power of appointment, then upon her death the remaining principal shall be added to and disposed of as part of my residuary estate which is disposed of under the provisions of Article FOURTH of this my Last Will and Testament, and I give, devise and bequeath the same accordingly."
Josephine Catapano died on February 10, 2004. Her last will and testament dated September 22, 1997 was admitted to probate by a decree of this court dated February 10, 2006 and letters testamentary issued to her daughter Carole Cozzi, The beneficiaries of her residuary estate are Andrea Readan and Dante Cozzi, adult grandchildren who are parties to this proceeding.
In a letter dated September 22, 1997, Josephine Catapano purported to exercise the power of appointment over the Article "THIRD" trust conferred by the will of Andrew Catapano, in favor of Carole Cozzi. The letter is addressed to the executor/trustee Albert Cozzi (husband of Carole Cozzi.) Albert Cozzi has petitioned for settlement of his accounts as executor and has proposed distributing the remaining principal of the Article THIRD" trust to Carole Cozzi.
The petitioner in the instant construction proceeding is the son of Frank Catapano, who died on August 7, 1997. It is the petitioner's position that the exercise of the power in favor of Carole Cozzi is invalid. Petitioner argues that the will requires the power of appointment to be exercised in favor of the "estate" of Josephine Catapano.
Respondents Albert Cozzi, Carole Cozzi, Andrea Cozzi Reagan and Dante Cozzi argue that Josephine Catapano had a general power of appointment pursuant to EPTL 10-3.2(b) and could therefore appoint to any beneficiary under her own "testamentary scheme," including Carole Cozzi.
A power of appointment is general to the extent that it is exercisable wholly in favor of the donee, his estate, his creditors or the creditors of his estate (EPTL 10-3.2[b]). The ability to appoint to any one of the four listed appointees will make the power general (2-13 Klipstein, Drafting New York Wills §13.02). A power of appointment may be exercised during lifetime or by will, or only after the expiration of a stated time or after the occurrence or non-occurrence of a specific event (EPTL 10-3.3). The effect of conferring a general power of appointment upon the donee is to give him a power of disposition as broad as though he was disposing of his own property (Matter of Ramdin, 11 AD3d 698 [2d Dept 2004]).
The will of Andrew Catapano gives Josephine Catapano the power to appoint the trust property to her estate during her lifetime. It is clear from the language of the will that the testator intended to give Josephine the broadest possible power. Article THIRD B provides that Josephine may revoke any appointment made by her. From a reading of the will in its entirety and in view of all the facts and circumstances, it is evident that the testator intended to give [*3]Josephine a valid general power of appointment, endowing her with the authority to dispose of the trust property, in all respects, as if it were her own.
Having determined that Josephine had a general power of appointment, the question thus becomes whether she validly exercised her power by appointing the trust remainder in favor of Carole Cozzi rather than to "her estate." Petitioner argues that "[b]y granting a power of appointment exercisable only by a lifetime writing, and only in favor of Josephine Catapano's estate, the decedent required Josephine Catapano to make a lifetime appointment of the principal of the Article THIRD trust to her estate that would then be disposed of by will or intestacy after her death (as part of her estate)." Secondarily, petitioner points out that the written instrument purportedly exercising the power of appointment was not acknowledged by Josephine and was testamentary in nature. Respondents argue that Josephine simply accomplished by a "direct appointment to her daughter Carole what she undeniably could have accomplished by appointing the trust corpus to her estate, then disposing of the corpus to Carole in her will."
EPTL 10-6.3 provides that a power of appointment can be exercised "only by a written instrument which would be sufficient to dispose of the estate intended to be appointed if the donee were the actual owner." The directions of a donor as to the manner, time and conditions of the exercise of a power must be observed (EPTL 10-6.2). EPTL 10-6.1 provides that "a power is effectively exercised if the donee manifests his intention to exercise it." Moreover if any part of the exercise of the power is invalid, generally the court will give effect to the valid portion while striking the invalid portion (Matter of Sheedy, 20 Misc 2d 900 [Sur Ct, New York County 1959]).
Concerning the petitioner's argument that the power could only be exercised by a two-step process, a similar situation was presented in Matter of Rossi (166 Misc 2d 507 [Sur Ct, Richmond County 1995]). In Matter of Rossi (166 Misc 2d 507, 509 [Sur Ct, Richmond County 1995]), the decedent gave his wife a testamentary power to appoint the trust remainder to "her estate." The spouse's will referenced the power of appointment and, thereafter, directed that a portion be used for certain specific bequests to several beneficiaries. There, it was argued that she had failed to specifically appoint the corpus to "her estate." The court concluded that the spouse had validly exercised the power since "[w]here the donor creates a general power under which an appointment can be made outright to the donee or outright to the donee's estate, it is a necessary inference that the donor intends that the donee can accomplish by an appointment to others whatever the donee could accomplish by first making the appointive assets owned property of the donee or of the donee's estate and then disposing of [the appointive assets as] owned property." (citing Restatement, [Second] of Property - Donative Transfers §19.1)
Since a general power of appointment gives the donee absolute control over the appointive property, Josephine had the right to appoint the property as if it were her own. Josephine chose to appoint the property in favor of Carole to the exclusion of the other potential distributees of her estate. Petitioner concedes that Josephine would have validly exercised the power if she executed a lifetime instrument in favor of her estate and then a will disposing of the property to Carole. They contend that the testator intended this two-step process in order to restrict Josephine's exercise because of his desire to favor his children. The court disagrees and finds the facts here analogous to the situation in Matter of Rossi (166 Misc 2d 507 [Sur Ct, Richmond County 1995]) where the court determined that the two- step process was not [*4]necessary. Moreover, the court notes that, while the will does state the decedent's intention to provide for his children, petitioner is not a child but a grandchild of the decedent thereby making it difficult for him to claim that he was an object of the testator's favor.
With respect to petitioner's argument that the letter was not acknowledged and was testamentary in nature, the court finds that the letter was a valid exercise of the power. EPTL 10-6.3 provides only that the power must be exercised by a writing sufficient to dispose of the estate and does not specifically limit the writing to a deed or will. Moreover, the testator here directed that the power be exercised by a writing (other than a will) and, therefore, Josephine followed the directions of the testator (EPTL 10-6.2). Clearly, the letter manifested Josephine's intention to exercise the power in favor of Carole (EPTL 10-6.1). The letter signed by Josephine was sufficient to dispose of the estate over which she had the power of appointment to Carole (Gruen v Gruen, 68 NY2d 48 [1986] (letter sufficient to dispose of personalty); Matter of Manville, 117 NYS2d 220 [Sur Ct, Westchester County 1952] (letter sufficient to exercise power but letter in this case indefinite). To the extent petitioner argues that the writing was testamentary in nature, even if any part of the exercise of the power was invalid, (i.e. the gift over in favor of Carole's children), the appointment in favor of Carole would still stand (Matter of Sheedy, 20 Misc 2d 900 [Sur Ct, New York County 1959]).
Accordingly, based upon the language of the will and the broad power of disposition conferred by a general power of appointment, the court finds that the testator intended to give Josephine the broadest possible power and that Josephine had the absolute right to exercise the power solely in favor of Carole.
Settle decree.
Dated: June 30, 2007
JOHN B. RIORDAN
Judge of the
Surrogate's Court
The appearances of counsel are as follows:
McCoyd Parkas & Ronan(for petitioner)
1100 Franklin Avenue
Garden City, NY 11530
McGinity & McGinity, P.C.(for respondents)
100 Quentin Roosevelt Boulevard, Suite 401
Garden City, NY 11530
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