Matter of Pessoni

[*1] Matter of Pessoni 2008 NY Slip Op 50446(U) [18 Misc 3d 1145(A)] Decided on March 10, 2008 Sur Ct, Bronx County Holzman, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 10, 2008
Sur Ct, Bronx County

In the Matter of the Estate of Charles A. Pessoni, Deceased



37-P/1996



The appearances are as follows:

Mason & April, LLC (Kantrowitz, Goldhamer & Graifman, PC by John M. Chakan, Esq., of Counsel) for Peter C. Pessoni, Sr., petitioner

James P. Reduto, Esq., Guardian ad Litem for Matthew Meizinger, Ryan Meizinger, Kaylee Johnson, Brandon Johnson, Michael Poppe, Alexandra Poppe, Jenna Pessoni, Skye Loures, Tess Loures, Jack Miller, Jessica Marsh, Jordan Marsh, Jacey Rorech, Dylan Rorech, Charlie Fitzpatrick, Mattie Fitzpatrick and John Shaw, Infants.

Lee L. Holzman, J.

In this proceeding to construe or reform a will dated July 12, 1993, the petitioner, the decedent's son, is the executor and nominated trustee. He seeks to distribute the estate assets outright in five equal shares, one share for each of the testator's three children, one share for the testator's stepchild and one share for the testator's two step-grandchildren, the children of a predeceased stepchild. The guardian ad litem for numerous infant great-grandchildren and step-great-grandchildren opposes the application, contending that the will, as a whole, demonstrates the testator's intent to ensure the continuation of these five shares in trust for the benefit of his wards as contingent beneficiaries.

The decedent died on December 1, 1994. His distributees were three biological children and a spouse who postdeceased on September 9, 1996. However, the parties agree that Article 9.3(b) of the will clearly provides that the testator's stepchildren are included as beneficiaries of any bequest made to his child or children. The decedent's adult children, stepchildren, grandchildren and step-grandchildren all consent to the application. The date of death value of the estate was $286,000 and its value at the time of this application is approximately $400,000.

The will is inartfully drawn. Both sides concede that their respective interpretations of the will are not supported by a literal reading of the will as a whole. Thus, they agree [*2]that the court must reach a determination based upon the intent of the testator gleaned from all provisions of the will.

Unfortunately, this case presents a classic illustration of the problems created where the drafter of the instrument has cut and pasted portions from different forms without understanding the circumstances in which it makes sense to use each of the forms. The principal asset of the estate is the decedent's home. This realty was sold in August, 2005. Although the petitioner and the guardian ad litem disagree with respect to whether Article 2.4 of the will granted a life estate to the testator's daughter or only a right of occupancy, they appear to agree that once the realty was sold, the proceeds were to be placed in the Article Fourth trust pursuant to which the testator's wife was to receive all of the income during her life. However, since the spouse died prior to the sale of the realty, the issue to be determined is the proper disposition of the principal upon her death.

Article 4.8 of the will provides that after the death of the testator's spouse, a sum not in excess of the maximum Generation Skipping Transfer Tax is to continue to be held in trust under Article Fourth and that the excess of that amount should be held in accordance with Article Sixth, a Generation Skipping Trust. The two-fold problem with Article Fourth is that since it never appeared that the testator's estate would exceed $1,000,000, the reference to the Generation Skipping Transfer Tax does not make sense and it fails to contain any specific period for the duration of the trust created thereunder.

Articles Fifth and Sixth of the will also create additional problems because, if their provisions are read literally, they contain contradictory language. Article Fifth of the will bequeaths the residuary trust created in Article Sixth to the testator's grandchildren. Articles 6.1 through 6.4, denominated as "Residuary Part A: Generation Skipping Trust," presumably contemplates that the principal of the trust should skip at least one generation. However, 6.3(a) provides for an equal trust for each surviving child and for each predeceased child survived by issue. Article 6.4 provides that the trust shall be managed for "the principal benefit of a child who is the current beneficiary" and grants discretion to the trustee to invade all of the corpus for any such beneficiary. Article 6.8(a) provides that the term of each trust for "a child of mine be until both my spouse and I are deceased" while subdivision 6.8(c) provides that "when the last of my children are deceased, the balance of that Trust is to be divided in equal Trusts per capita for the issue of my children."

The guardian ad litem contends that the references to a Generation Skipping Trust, the Article Fifth legacy of the Article Sixth residuary trust to the testator's grandchildren and the Article 6.8(c) provision to create trusts for the issue of testator's children, reflect an intent that the trusts continue for the benefit of his wards. The petitioner counters that where, as here, the testator died with less than $1,000,000, Article Sixth of the will clearly reflects an intent that any trust is for the benefit of the testator's children and terminates upon the death of the testator's spouse as stated in Article 6.8(a) .

Each of the parties presents a plausible position based upon their selective portions of conflicting provisions in the will. However, the court finds it appropriate to approve the distribution requested by the petitioner for several reasons. Reading the entire instrument, it appears that the testator's first concern was to provide for his wife and, after her death, he was primarily concerned about the well being of his children. The will expressly states that a trust is to be managed for the principal benefit of the child beneficiary and that [*3]the entire trust, including the corpus, could be used for the child's benefit. Assuming, arguendo, that the decedent understood the ramifications of the Generation Skipping Transfer Tax, it appears that he would have been concerned about creating a Generation Skipping Trust only in the event that his estate exceeded $1,000,000. Since the value of his estate was never remotely close to $1,000,000, it is presumed that after the death of his spouse he contemplated that his more modest estate would be used primarily, or even exclusively, for the benefit of his children. Accordingly, the court holds that the petitioner's proposed distribution is in accord with the testator's intent as stated in Article 6.8(a).

Even if it were to be concluded that the conflicting language in the will is inconclusive on the issue of when the testator intended for any trust to terminate upon his wife's death, the petitioner's proposed distribution is supported by alternative theories. A will is defined in part as providing for the disposition of the testator's property upon death or directing how it should not be disposed (EPTL 1-2.19). Thus, in light of the fact that Article 9.3(b) of the will clearly provides that the testator's children and stepchildren are to share equally in his estate, the will, in effect, directs that should any portion of his estate pass by intestacy it should not pass exclusively to his issue under EPTL 4-1.1 and, instead, should be distributed in a manner to include his stepchildren as if they were his issue. Accordingly, should it be concluded that the conflicting provisions in the will with respect to the disposition of the trust corpus upon the death of the testator's wife render it impossible, without conjecture, to ascertain the testator's intent, thereby resulting in an intestate distribution of the trust corpus, the estate passes as proposed by the petitioner pursuant to EPTL 4-1.1(a)(3), as modified by Article 9.3(b) of the will.

The above result could also be reached by finding that it would be an appropriate exercise of the trustee's discretion to distribute the entire estate to the present income beneficiaries based upon the trustee's power of invasion of principal and that it is economically impractical to have a prolonged administration of trusts valued at less than $80,000 (see EPTL 7-1.19; Matter of Miller, NYLJ, Sep. 4, 2007, at 35, col. 2 and cases cited therein).

Accordingly, the petitioner's application is granted and the estate assets are to be distributed as requested.

Settle decree.

SURROGATE