208 Misc. 566 | N.Y. Sur. Ct. | 1955
In this construction proceeding the court must determine the manner of computing the residuary trust created for testator’s widow. The question is presented because of an option granted to testator’s son, Jerome, under paragraph “ Eighteenth ” of the will, to purchase testator’s interest in a closely held corporation at 25% of its book value. The widow contends that her trust must be set up without regard to the benefit conferred on the son and her trust computed on the full value of testator’s interest in the corporation.
The trust provision for the widow is contained in paragraph ‘ ‘ Eleventh ’ ’ of the will, under which testator gives and bequeaths to his trustees 50% of his residuary estate to bé held for the benefit of his widow with income thereof payable to her for her life, with provision for invasion of corpus for her benefit under certain conditions if the income is less than a stated sum. Paragraphs “ Twelfth ” and “ Fourteenth ” dispose of the remainder of the trust on the widow’s death or in the event she should predecease testator. Paragraph “ Thirteenth ” recites that the provisions in the will, which, in addition to the trust, consist of a legacy of all jewelry, household effects, silverware and automobile and a general leg’acy of $5,000, are in lieu of dower, election and statutory rights in the estate. The widow is also given a general power of appointment of the remainder of her trust by will.
The balance of the rest, residue and remainder of the estate is given under paragraph “ Fifteenth,” in equal shares, to testator’s five children or to their issue, should they predecease testator, or to their respective executors or administrators in default of issue. The will lacks any provision or indication from which the court may determine that it was the testator’s intention that the residuary trust for the widow was to be computed other than in the accepted manner. In the absence of such provision the court concludes that the trust of 50% of the residuary estate must be computed on the basis of the proceeds of the sale of testator’s interest in the corporation sold to testator’s son in accordance with the formula prescribed in paragraph “ Eighteenth ” of the will and not on the full book value thereof.
The court accordingly determines that the residuary trust for testator’s widow is to be computed on the proceeds of the sale of his interest in the corporation and not on the market or book value thereof. Settle decree on notice.