In re the Estate of Murray
84 A.D.3d 106, 921 N.Y.S.2d 161 (2011)
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Rule of Law:
A party to a binding and irrevocable joint will cannot defeat its terms by transferring an asset into a trust while retaining a testamentary power of appointment, as such power constitutes a 'power of disposal' that subjects the asset to the will's provisions. A subsequent will that violates such a prior contractual agreement must still be admitted to probate if otherwise validly executed, though its dispositive terms may be unenforceable.
Facts:
- On December 20, 1993, Sandra Murray and her husband, Jerome Murray, executed a binding, irrevocable joint will.
- The joint will provided that the entire estate of the first to die, including all property over which that person had 'power of disposal,' would go to the survivor.
- In December 2000, amid divorce proceedings after 50 years of marriage, Sandra and Jerome executed a Marital Settlement Agreement that reaffirmed the validity of the joint will.
- As part of the settlement, Sandra received sole title to the couple's Roslyn condominium.
- On June 2, 2006, Sandra transferred the Roslyn condominium into an irrevocable trust she created.
- The trust instrument granted Sandra a 'power of appointment,' allowing her to designate via a will who would receive the condominium upon her death.
- On September 5, 2007, Sandra executed a new will exercising this power of appointment to direct that, upon her death, the trust convey the condominium in equal shares to her four children.
- Sandra Murray died on June 14, 2008.
Procedural Posture:
- Following Sandra Murray's death, her ex-husband, Jerome Murray, petitioned the Surrogate's Court to probate their 1993 joint will.
- Jerome, as preliminary executor, then commenced a turnover proceeding against his daughter, Karen Kline, and son-in-law, Ivan Kline, to compel them to transfer the Roslyn condominium to the estate.
- Ivan Kline filed a separate petition to probate Sandra Murray's 2007 will.
- The Klines filed objections to Jerome's petition, and Jerome filed objections to the Klines' petition.
- Both parties filed cross-motions for summary judgment in the Surrogate's Court.
- The Surrogate's Court granted summary judgment for Jerome, ordering the condominium turned over to the estate, admitting the joint will to probate, and denying probate of the 2007 will.
- The Klines appealed the Surrogate Court's order and decree to the Appellate Division of the Supreme Court.
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Issue:
Does a party to an irrevocable joint will, which bequeaths to the survivor all property over which the deceased has a 'power of disposal,' violate that will by transferring an asset into a trust and then exercising a retained testamentary power of appointment to direct that asset to third parties upon her death?
Opinions:
Majority - Belen, J.
Yes. A party violates the terms of a binding joint will by using a trust and a subsequent will to dispose of an asset contrary to the joint will's provisions, because retaining a testamentary power of appointment over the asset constitutes a 'power of disposal.' The court's primary duty is to effectuate the testator's intent as expressed in the joint will. The joint will bequeathed to the survivor not only the decedent's 'estate' but also all property over which she had 'power of disposal.' While Sandra was free to make inter vivos gifts that would remove assets from her probate estate, her transfer of the condominium to a trust was not an outright gift because she retained testamentary control through the power of appointment. This retained power fell squarely within the 'power of disposal' clause of the joint will, contractually obligating her to leave the property to Jerome. The court also held that a will that is duly executed must be admitted to probate even if its terms violate a prior contract; the remedy for the breach is not to deny probate but to enforce the contract against the estate, as was done here through the turnover proceeding.
Analysis:
This decision reinforces the contractual nature of irrevocable joint wills, establishing that courts will look to the substance of a transaction, not just its form, to prevent circumvention. It clarifies that retaining testamentary control over an asset, even after transferring legal title to a trust, keeps the asset within the reach of a prior joint will's 'power of disposal' clause. Furthermore, the case highlights the critical distinction between a will's validity for probate, which depends on statutory formalities, and the enforceability of its dispositive provisions, which can be limited by prior contractual obligations. This precedent limits a testator's ability to alter an agreed-upon estate plan through subsequent, unilateral estate planning devices like trusts with retained powers.
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