Matter of Keough
2021 NY Slip Op 03948
| N.Y. App. Div. | 2021Background
- William F. Keough (a 1979–1981 Iranian hostage) died in 1985; his wife Katherine Keough died testate in 2004.
- Katherine's will devised the residuary estate to her stepson, Steven Keough; her sole intestate distributee was her brother, Fred Schwarz.
- The 2015 Justice for United States Victims of State Sponsored Terrorism Act authorized statutory payments to former hostages and certain relatives, payable to a decedent's personal representative if the payee was deceased.
- Payments under the Act were made to Katherine's estate after her death, leading to a dispute whether those funds were disposed of by her will or passed by intestacy.
- Petitioner (administrator of Fred Schwarz's estate) sought a declaration that the payments are after-acquired assets that pass by intestacy to Fred's estate; Surrogate's Court dismissed the petition, and the Appellate Division reversed.
Issues
| Issue | Plaintiff's Argument (Beamer) | Defendant's Argument (Stewart) | Held |
|---|---|---|---|
| Whether assets that become part of a decedent's estate after the decedent's death are disposed of by the decedent's will or pass by intestacy | Payments were not Katherine's property at her death, so she lacked capacity to devise them; they are after-acquired assets that pass by intestacy to Fred's estate | The payments fall into the residuary clause of Katherine's will and thus pass to residuary beneficiary Steven Keough | Reversed Surrogate's Court; held the payments are after-acquired assets not subject to the will and must be distributed by intestacy to Fred's estate |
Key Cases Cited
- Shaw Family Archives Ltd. v. CMG Worldwide, Inc., 486 F. Supp. 2d 309 (S.D.N.Y. 2007) (New York law does not permit a testator to dispose by will of property not owned at death)
- Nordwind v. Rowland, 584 F.3d 420 (2d Cir. 2009) (cites Shaw and supports that property not owned at death is not subject to will)
- Marcus v. Haaker, [citation="481 F. App'x 19"] (2d Cir. 2012) (upheld deference on international-comity grounds to a foreign fund's distribution; did not resolve distribution under New York law)
- Matter of Kumstar, 66 N.Y.2d 691 (N.Y. 1985) (sets factors for testamentary capacity)
- Lynes v. Townsend, 33 N.Y. 558 (N.Y. 1865) (historic common-law rule on timing of devise; discussed as background to statutory changes)