Relates to probate proceedings involving wills which contain a provision that disposition is conditioned upon the beneficiary not contesting the will; clarifies scope of disclosure authorized where a will contains "no contest" clause.
TITLE OF BILL: An act to amend the estates, powers and trusts law and the surrogate's court procedure act, in relation to examinations before trial where the will contains a provision conditioning a disposition on the beneficiary of the disposition not contesting the will
This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Surrogate's Court Advisory Committee.
This measure would clarify the scope of disclosure authorized where a will contains a no contest clause. While the Court of Appeals in Matter of Singer, 13 NY3d 447 (2009), made clear that the governing statutes are not exclusive, subsequent decisions indicate a necessity to clarify the law for practitioners.
The Court's decision in Matter of Singer has greatly altered the law of no contest clauses. The decedent's will contained two no contest clauses, one applicable to all beneficiaries and one directed expressly to the decedent's son. The first clause provided "If any beneficiary shall, in any manner, directly or indirectly, contest, object to or oppose, or attempt to contest, object to or oppose, the probate of or validity of this Will or the revocable trust agreement created by me, or any part of my estate plan or any gifts made by me, or any of the provisions of this Will or of the revocable trust agreement created by me, in any court or commence or prosecute any legal proceeding of any kind in any court to set aside this Will or the revocable trust agreement created by me or any part of my estate plan or any gifts made by me."
The second clause directed that the son "not contest, object to or oppose this Will or The Joseph Singer Revocable Trust Agreement, or any part of my estate plan or any gifts made by me, and I specifically direct that my son not take my daughter, Vivian S. Singer, to a Bet Din (religious court) or to any other court for any reason whatsoever; and I specifically direct that if my son takes any such action or brings on any such proceeding, neither my son nor any of his issue shall receive any share of my estate."
After the will was offered for probate the son's attorney deposed not only those persons whose examination would not violate a no contest clause under EPTL 33.5(b)(3)(D) (the "safe harbor") and whose examination is allowed by SCPA 1404(4) but also the lawyer who drafted the decedent's prior will. The son did not file objections and the will was duly admitted to probate.
The executor then began a construction proceeding asking the surrogate to declare that her brother had indeed violated the no contest clause. The Surrogate determined that the examination of the testator's prior attorney, an examination outside of the safe harbor of EPTL 3-3.5(b)(3)(D), did indeed violate the no contest clause. On appeal the Appellate Division affirmed, finding the no contest clause prohibited contesting the will "in any manner" and that the
examination of the testator's prior attorney was outside of the statutory safe harbor. The Court of Appeals granted leave to appeal and reversed. The Court held that the statutory safe harbor was not exclusive: "[C]ircumstances may exist such that it is permissible to depose persons outside the statutory parameters without suffering forfeiture." The Court went on to find that the son's action did not violate the testator's intent. The key is the court's conclusion that the two no contest clauses "can reasonably be interpreted to express testator's wish that [the son] not commence court proceedings of any type against the estate plan." In addition, and in complete harmony with well established law, a no contest clause must be construed narrowly. Taking all of this together, the examination of the testator's former attorney "did not amount to an attempt to contest, object to or oppose the validity of the estate plan."
It can be fairly said that the holding of Matter of Singer is that the safe harbor is not exclusive, but whether or not venturing beyond the harbor will result in being torpedoed depends on the "circumstances." However, the relationship is not clear between the "circumstances" that make it permissible "to depose persons outside the statutory parameters without suffering forfeiture" and language of the particular no contest clause (or clauses) in the document. More precisely, it is not clear how the surrogate can decide that the testator's intent embodied in the no contest clause without construing the clause; and how a will can be construed before it is a will, that is, before it is admitted to probate. This is exactly the problem that arose in Matter of Baugher, 29 Misc.3d 700 (2010), in which Surrogate Riordan was faced with a request for orders allowing the examination of the nominated successor executor of the instrument offered for probate as well as that of the drafter of an instrument purporting to be the decedent's prior will. The court read Singer to mean that the Court [of Appeals] would permit in the first instance the deposition of any person with information of "potential value or relevance" and leave it to the Surrogates to determine on a case-by-case basis whether conduct of such a deposition results in the forfeiture of a legacy of the person conducting that deposition, based on the Surrogate's determination of whether such a holding would be "in keeping with the testator's intent."
"Since this court must, of course, follow the holdings of the Court of Appeals, the branches of the motion seeking the depositions of the nominated successor executor and the drafter of the decedent's prior will are granted. However, since this court is also constrained to follow the holdings of the Appellate Division, Second Department, there can be no determination by this court prior to the will's admission to probate whether the conducting of these examinations violates the in terrorem clause in the decedent's will (Matter of Martin, 17 AD3d 598 [2d Dept 2009]). Thus, while the motion to conduct the examinations is granted, the respondents conduct them at their own peril."
In short, the safe harbor is not exclusive, but whether or not the examination of someone not listed in the statute violates a no contest clause apparently can only be determined after the will is admitted to probate. Even if the party conducting the examination decides not to object to probate of the will, construction of the no
contest clause could result in a forfeiture. The statement by the Singer court that "circumstances" can justify the expansion of the safe harbor on a case by case basis coupled with the "no construction before admission" principle invites a statutory expansion of the safe harbor so that at least some actions can be taken without fear of violating a no contest clause, not matter what the no contest clause is subsequently construed to mean.
This measure therefore expands the safe harbor at the discretion of the Surrogate so long as special circumstances exist which indicate that the examination of a person not expressly included in the statutory safe harbor may produce information respecting the validity of the will that is of substantial importance or relevance to a decision to file objections. The new provision echoes Uniform Rule 207.27 (22 NYCRR 207.27), which limits examinations before trial in contested probate proceedings "[e]xcept upon the showing of special circumstances, . . . to a three-year period prior to the date of the propounded instrument and two years thereafter, or to the date of decedent's death, whichever is the shorter period." Both this measure and the existing regulation, therefore, entrust to the Surrogate the intelligent management of the discovery process.
This measure would have no fiscal impact on the State. It would take effect immediately and shall apply only to estates of decedents who die on and after such effective date.
2011 Legislative History: None. New proposal.
STATE OF NEW YORK ________________________________________________________________________ 4591--A 2011-2012 Regular Sessions IN SENATE April 13, 2011 ___________Introduced by Sen. BONACIC -- (at request of the Office of Court Admin- istration) -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the estates, powers and trusts law and the surrogate's court procedure act, in relation to examinations before trial where the will contains a provision conditioning a disposition on the bene- ficiary of the disposition not contesting the will THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Item (D) of subparagraph 3 of paragraph (b) of section 3-3.5 of the estates, powers and trusts law, as amended by chapter 514 of the laws of 1993, is amended to read as follows: (D) The preliminary examination, under SCPA 1404, of a proponent's witnesses, the person who prepared the will, the nominated executors and the proponents in a probate proceeding AND, UPON APPLICATION TO THE COURT BASED UPON SPECIAL CIRCUMSTANCES, ANY PERSON WHOSE EXAMINATION THE COURT DETERMINES MAY PROVIDE INFORMATION WITH RESPECT TO THE VALIDITY OF THE WILL THAT IS OF SUBSTANTIAL IMPORTANCE OR RELEVANCE TO A DECISION TO FILE OBJECTIONS TO THE WILL. S 2. Subdivision 4 of section 1404 of the surrogate's court procedure act, as amended by chapter 576 of the laws of 1996, is amended to read as follows: 4. In all cases the proofs must be reduced to writing. Any party to the proceeding, before or after filing objections to the probate of the will, may examine any or all of the attesting witnesses, the person who prepared the will, and if the will contains a provision designed to prevent a disposition or distribution from taking effect in case the will, or any part thereof, is contested, the nominated executors in the will and the proponents AND, UPON APPLICATION TO THE COURT BASED UPONEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09323-03-1 S. 4591--A 2
SPECIAL CIRCUMSTANCES, ANY PERSON WHOSE EXAMINATION THE COURT DETERMINES MAY PROVIDE INFORMATION WITH RESPECT TO THE VALIDITY OF THE WILL THAT IS OF SUBSTANTIAL IMPORTANCE OR RELEVANCE TO A DECISION TO FILE OBJECTIONS TO THE WILL. No person who has been examined as a witness under this section shall be examined in the same proceeding under any other provision of law except by direction of the court. The attesting witnesses, the person who prepared the will, the nominated executors in the will and the proponents may be examined as to all relevant matters which may be the basis of objections to the probate of the propounded instrument. There shall be made available to the party conducting such examination, all rights granted under article 31 of the civil practice law and rules with respect to document discovery. S 3. This act shall take effect immediately and shall apply only to estates of decedents who shall have died on and after such effective date.