In Matter Of Petition Of Goodman

790 N.Y.S.2d 837 (Surr. Ct. 2005)

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Nature of the Case

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Facts

Goodman (“Goodman”) and Maxine Sadoff (“Sadoff”) (Ps) are the executors of the estate of Michael Sharff, the decedent's son, and the trustees of the residuary trust established in his will for the decedent, Anna Druck, his mother. Sydney Kandel (“Kandel”) (D), is the executor of the estate of Anna Druck. Druck lived with her son, Sharff. Sharff was devoted to his mother. She was unable to handle her own affairs. He supervised her medical care. He managed her financial affairs and made sure that she paid her bills timely. Sharff died on August 25, 2000. At his death, he was sixty-four and Druck was almost ninety-six. Sharff had executed a will, dated May 23, 1996. In his will, he left his residuary estate in trust for the benefit of his mother. He named Ps as executors of his will and trustees of the residuary trust. Under the terms of the trust, the trustees were to pay the net income to Druck, quarter-annually. In addition, the trustees were authorized to invade principal for the benefit of the mother: I authorize my Trustees to pay to my mother, at any time and from time to time, so much of the principal of the trust as my Trustees may in their absolute and unreviewable discretion deem advisable for my mother's health, support, and maintenance. Upon the death of Druck, the trust terminates. From the principal then remaining, he left $180,000.00 to Sadoff; $15,000.00 each to Sharon Coghlan, Stephanie Goodman, Arthur Leiby, Jeffrey Ostroff, Adam Tyson, Rose Kandel, Rebecca Sharff, Jeremy Sharff, Carrie Gurawitz, and Lyn Gurawitz; $15,000.00 in equal shares to Sue Greenbaum and Cy Greenbaum; $15,000.00 in equal shares to Pepi Diamond and Harry Diamond; and the balance of the trust principal to Maxine Sadoff. Sharff's will was admitted to probate on May 2, 2001, and letters testamentary and letters of trusteeship were issued to the trustees. After Sharff's death, Druck's mental and emotional condition deteriorated and she was unable to manage her financial and personal affairs. While she had substantial personal assets, exceeding $1,000,000, she was incapable of paying the bills for her living and health care expenses. The executors of Michael's estate, paid these bills. In so doing, they expended funds in excess of the net income of the trust. The trust had not been funded at the time of Druck's death. Nonetheless, the trust was created when the decedent died. On January 4, 2002, Ps applied for appointment as Druck's co-guardians pursuant to Article 81 of the Mental Hygiene Law. The transcript of the court proceedings shows that the court intended to appointed them as guardians of the person and property of Druck in Jun 2002. Druck became ill in September 2002. The court appointed Goodman as temporary guardian of Druck's person. Shortly thereafter, on October 8, 2002, Druck died, terminating the guardianship proceeding. Under Druck's will executed the same day as her son's will, she left $20,000 to a sister and the residuary to be divided between Hadassah and charities selected by her executor. By the time Druck died, Ps had expended $241,120.13 from the residuary trust on Druck's behalf. In addition, the trustees spent $2,075.00 of their own money for her care, for a total expenditure of $243,195.13. The net income of the trust for this period was only $6,776.26. The trustees served D with a notice of claim for the difference, $236,418.87. D rejected the claim and demanded payment of the net income of the residuary trust. Ps then brought the instant proceeding to determine the validity of their claim. D opposed the claim, claiming that the funds were paid pursuant to petitioner’s duties under the trust. D moved for summary judgment dismissing the claim. Ps opposed the motion on the ground that they required additional discovery. Druck's assets at her death were approximately $1,000,000.00, and Sharff's assets were approximately $1,600,000.00. During oral argument, the parties disagreed whether the trustees ever expressed an intention to be repaid for the principal advanced. D alleged that no requests were made until 26 months after the distributions had been made.