78 Misc. 2d 122 | N.Y. Sur. Ct. | 1974
The fiduciary asks the court to construe articles fourth and sixth of decedent’s will to the effect that decedent created two residuary trusts rather than a single residuary trust. Article fourth disposes of the entire residuary estate in trust during the lifetime of an aunt. The trustee is directed to hold the residuary estate “asa unitrust ”. Upon the death of the life beneficiary the principal balance of the trust is to be paid in equal shares to four remaindermen, two
It appears that the Internal Revenue Service has heretofore made a determination that while the unitrust created by the decedent otherwise qualified for a charitable deduction under section 2055 of the code, the fact that the entire corpus did not pass to charity would disqualify the estate from tax deduction.
A reading of the entire will discloses the purpose of the decedent to create a charitable remainder trust which would qualify for an estate tax deduction. The language employed in articles fourth and sixth indicates an overriding intention to comply with the Federal law. The testator knew what a unitrust was and he disclosed an effort to comply with all the requirements of the Federal statute. He carefully provided for the annual payments in the manner required by law. In article sixth of his will he said: “ D. The unitrust created hereunder is intended to qualify as a charitable remainder unitrust as defined in Section 664 (a) and, notwithstanding any provision of this Will, shall be administered in such manner as provided for a charitable remainder unitrust under said section.” (Emphasis supplied.) In the same article he directed that notwithstanding the additional powers conferred upon his fiduciary, no fiduciary could engage in any act, make any expenditure, retain any asset or make any investment so as to incur tax liability under Internal Revenue Code sections 4941, 4942, 4943 (subd. [c]), or 4945 (subd. [d]), and he added: “ The purpose of this paragraph is to comply with the provisions of Section 508 (e) to the extent such provisions are applicable to the unitrust.”
Inasmuch as the regulations as finally adopted were not available to him at the time his testamentary scheme was formulated, it is understandable that the directions which would accord precisely with the regulations were not, and could not, be given.
While it is true that the will does not expressly provide that the residuary estate be divided into two separate trusts, the intention to preserve the charitable unitrust remainder does