S7463A-2011 - NY Senate Open Legislation - Provides that the disposition of a future estate not subject to a condition precedent vests per stirpes

Provides that the disposition of a future estate not subject to a condition precedent vests per stirpes.

Sponsor: BONACIC / Committee: RULES
Law Section: Estates, Powers and Trusts Law / Law: Amd S3-3.3, EPT L

S7463A-2011 Actions

Jun 21, 2012: COMMITTED TO RULES
Jun 11, 2012: ADVANCED TO THIRD READING
Jun 6, 2012: 2ND REPORT CAL.
Jun 5, 2012: 1ST REPORT CAL.1049
May 24, 2012: PRINT NUMBER 7463A
May 24, 2012: AMEND AND RECOMMIT TO JUDICIARY
May 22, 2012: REFERRED TO JUDICIARY

S7463A-2011 Meetings

Judiciary: Jun 5, 2012

S7463A-2011 Calendars

Floor Calendar: Jun 6, 2012 , Floor Calendar: Jun 11, 2012 , Floor Calendar: Jun 12, 2012 , Floor Calendar: Jun 13, 2012 , Floor Calendar: Jun 14, 2012 , Floor Calendar: Jun 18, 2012 , Floor Calendar: Jun 19, 2012 , Floor Calendar: Jun 20, 2012 , Floor Calendar: Jun 21, 2012

S7463A-2011 Votes

VOTE: COMMITTEE VOTE: - Judiciary - Jun 5, 2012

Ayes (21): Bonacic, DeFrancisco, Flanagan, Fuschillo, Lanza, LaValle, Little, Nozzolio, O'Mara, Ranzenhofer, Saland, Zeldin, Hassell-Thompson, Breslin, Dilan, Espaillat, Gianaris, Krueger, Serrano, Squadron, Stavisky
Ayes W/R (2): Adams, Perkins

S7463A-2011 Memo

BILL NUMBER:S7463A

TITLE OF BILL:
An act
to amend
the estates, powers and trusts law, in relation to the disposition to
issue or brothers or sisters of testator not to lapse and the
application to class dispositions

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 resolve a conflict between EPTL 3-3.3, the
anti-lapse statute, and EPTL 2-1.2, which requires that a disposition
to "issue" is to be distributed to them by "representation" as that
term is defined in EPTL 1-2.16.

The conflict involves a gift to the testator's "issue": viz., "I give
the residue of my estate to my issue." Under EPTL 2-1.2 the issue
must take "by representation", which is defined in EPTL 1-2.16 to be
what is usually called "per capita in each generation": viz., the
initial division of the property is made at the eldest generation in
which someone is living and every person entitled to take in each
subsequent generation takes an equal share. Assume that at the time
the will is executed the testator has living issue: two children,
Band C; each of whom have two children (GC 2, 3, 4 and 5) and a child
of child A who is dead (GC 1). The first problem arises because of
the language in EPTL 3-3.3 which excludes from the operation of the
statute surviving issue of an ancestor who died before execution
of the will. It could be argued, albeit unfairly, that GC 1 should
receive nothing if he or she survives the testator because A was dead
at the time the will was executed. The second problem arises when B
has another child (GC 6), B dies before the testator and B's three
children (GC 4, 5 and 6) survive the testator. Do these three
children of B divide among themselves B's share of the residuary
estate by operation of EPTL 3-3.3 or do they take in their own right
as issue of the testator? If the former (and assuming that C survives
the testator, as does GC 1 who is entitled to take), they each take
1/9 of the residuary estate (1/3 x 1/3); if the latter, they take 1/6
each; that is, they divide the 1/3 that is set aside for A's
descendants and the 1/3 set aside for B' s descendants equally (1/4 x
2/3 = 2/12=1/6).

These questions arise because EPTL 3-3.3(a)(3) makes the anti-lapse
statute applicable to a gift to the testator's issue "as a class."
This application makes sense if the class is a single generation class
("I give $100,000 to my brothers and sisters" or I devise Blackacre
to my children") but not if the class is a multi-generational class
to which distribution is made by representation under EPTL 2-1.2.
This measure addresses the problem by eliminating from the operation

of the anti-lapse statute any gift to a multi-generational class, which
of course carries with it the implied condition that a class member
must survive to the time of distribution of the property involved. In
fact, there is an argument that the implied requirement of survival
should be sufficient to override the anti-lapse statute as an
indication that the will "provides otherwise," and the proposal
insures that result by statute for all decedents dying on or after
the effective date without regard to when the decedent's will was
executed.

We note that the Uniform Probate Code anti-lapse statute, which
requires an express gift over in case of the death of the "devisee"
to override the anti-lapse statute, excludes from its operation any
class gift to "issue," "descendants," "heirs of the
body," "heirs," "next of kin," "relatives," or "family" or a class
described by language of similar import" thus preserving for such
class gift the survival to time of distribution condition. (UPC
�2-603(b)(2)). A similar exclusion from EPTL 3-3.3 would eliminate
this particular conflict.

The second issue addressed by the proposal deals with the lapse of a
disposition of a future estate. Assume that the testator's residuary
clause creates a testamentary trust, income to the surviving spouse
for life, remainder "to my children." At the time the testator
executes the will there are three living children, A, B and C, and no
predeceased children. At the time of the testator's death one of the
children is dead and that child's two children (GC land GC 2),
survive the testator. At the surviving G spouse's death B, C, GC 1
and C 2 are all alive. Do the grandchildren take 1/3 of the trust
property or do B and C take 1/2 each under EPTL 2-1.15? This measure
makes clear that the grandchildren take what their parent would
have had, that is, the anti-lapse statute does indeed apply.

The measure does not apply to a future estate subject to a condition
precedent of surviving the testator just as with a gift of a present
estate, nor, under the provisions previously discussed, apply to a
remainder given to a multi-generational class.

This act shall take effect immediately; provided, however, that it
shall apply only to the estates of decedents who shall have died on
or after such effective date without regard to when the decedent's
will was executed.

2012 LEGISLATIVE HISTORY:
Senate 7463 (Bonacic) (Ref to Judiciary)
Assembly 9478 (M. of A. Lavine) (Reported)

S7463A-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 7463--A
 I N  SENATE
 May 22, 2012
 
 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, in relation to the
 disposition to issue or brothers or sisters of testator not  to  lapse
 and the application to class dispositions
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1.  Paragraph (a) of section 3-3.3 of the estates, powers  and
 trusts law, as amended by chapter 595 of the laws of 1992, is amended to
 read as follows:

 (a) Unless the will whenever executed provides otherwise:

 (1)  Instruments  executed  prior to September first, nineteen hundred
 ninety-two.  Whenever a testamentary disposition INCLUDING A DISPOSITION
 OF A FUTURE ESTATE OTHER THAN A FUTURE ESTATE  SUBJECT  TO  A  CONDITION
 PRECEDENT OF SURVIVING THE TESTATOR is made to [the issue or to a broth-
 er or sister of the testator] A BENEFICIARY WHO IS ONE OF THE TESTATOR'S
 ISSUE OR A BROTHER OR SISTER, and such beneficiary dies during the life
 time  of the testator leaving issue surviving such testator, such dispo
 sition does not lapse but vests in such surviving issue, per stirpes.
 (2) Instruments executed on or after September first, nineteen hundred
 ninety-two. Whenever a testamentary disposition INCLUDING A  DISPOSITION
 OF  A  FUTURE  ESTATE  OTHER THAN A FUTURE ESTATE SUBJECT TO A CONDITION
 PRECEDENT OF SURVIVING THE TESTATOR is made to [the] A  BENEFICIARY  WHO
 IS  ONE  OF  THE  TESTATOR'S  issue  or [to] a brother or sister [of the
 testator], and such beneficiary dies during the lifetime of the testator
 leaving issue surviving such testator, such disposition does  not  lapse
 but vests in such surviving issue, by representation.
 (3) The provisions of subparagraphs (1) and (2) apply to a disposition
 made  [to  issue, brothers or sisters as a class] IN THE FORM OF A CLASS
 GIFT OTHER THAN A DISPOSITION TO  "ISSUE,"  "DESCENDANTS,"  OR  A  CLASS
 DESCRIBED BY LANGUAGE OF SIMILAR IMPORT, as if the disposition were made
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD14025-02-2
        S. 7463--A                          2
 to  the  beneficiaries by their individual names, except that no benefit
 shall be conferred hereunder upon the surviving issue of an ancestor who
 died before the execution of the will in which the  disposition  to  the
 class was made.
 

S  2.  This act shall take effect immediately; provided, however, that
 it shall apply only to the estates of decedents who shall have  died  on
 or after such effective date.

S7463A-2011: Provides that the disposition of a future estate not subject to a condition precedent vests per stirpes