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A06555 Summary:

BILL NO    A06555 

SAME AS    SAME AS S04852

SPONSOR    Lavine (MS)

COSPNSR    Weinstein, Hennessey, Titone, Weprin, Zebrowski

MLTSPNSR   

Amd S3-3.3, EPT L

Relates to the disposition to issue or brothers or sisters of testator not to
lapse and the application to class dispositions.
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A06555 Actions:

BILL NO    A06555 

04/09/2013 referred to judiciary
04/16/2013 reported 
04/18/2013 advanced to third reading cal.172
04/24/2013 passed assembly
04/24/2013 delivered to senate
04/24/2013 REFERRED TO JUDICIARY
06/11/2013 SUBSTITUTED FOR S4852
06/11/2013 3RD READING CAL.1020
06/11/2013 PASSED SENATE
06/11/2013 RETURNED TO ASSEMBLY
09/16/2013 delivered to governor
09/27/2013 signed chap.348
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A06555 Votes:

A06555 04/24/2013 138/0
AbbateYColtonYGarbariYKearnsYMillerYReilichERSteckY
AbinantYCookYGibsonYKellnerYMillmanYRiveraYStevensER
ArroyoYCorwinYGiglioYKimYMontesaYRobertsYStirpeY
AubryYCrespoYGjonajYKolbYMorelleYRobinsoYSweeneyY
BarclayYCrouchYGlickYLalorYMosleyYRodriguYTediscoY
BarrettYCurranYGoldfedYLavineYMoyaYRosaYTenneyY
BarronYCusickYGoodellYLentolYNojayYRosenthYThieleY
BenedetYCymbrowYGottfriYLiftonYNolanYRozicYTitoneER
BlankenERDenDekkYGrafYLope PDYOaksERRussellYTitusY
BorelliYDinowitYGuntherYLope VJERO'DonneYRyanYWalterY
BoylandYDiPietrYHawleyYLupardoYOrtizYSaladinYWeinsteY
BraunstYDupreyYHeastieYLupinacYOtisYSantabaYWeisenbY
BrennanYEnglebrYHennessYMageeYPalmesaYScarborYWeprinY
BrindisYEspinalYHevesiYMagnareYPaulinYSchimelYWrightY
BronsonYFahyYHikindERMaiselYPeoplesYSchimmiYZebrowsY
Brook-KYFarrellYHooperERMalliotERPerryYSepulveYMr SpkrY
BuchwalYFinchYJacobsYMarkeyYPretlowYSimanowY
ButlerYFitzpatYJaffeeYMayerYQuartYSimotasY
CahillYFriendYJohnsYMcDonalYRaYSkartadY
CamaraYGabryszYJordanYMcDonouYRabbittYSkoufisY
CerettoYGalefYKatzYMcKevitYRaiaYSolagesY
ClarkERGanttYKavanagYMcLaughYRamosYStecY

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A06555 Memo:

BILL NUMBER:A6555

TITLE OF BILL:  An act to amend the estates, powers and trusts laws,
in relation to the disposition to issue or brothers or sisters of
testator not to lapse and the application to class dispositions

This is one in a series of measures being introduced at the request of
the Chief Administrative Judge upon the recommendation of her
Surrogate's Court Advisory Committee.

This measure would clarify the application of EPTL 3-3.3, the
anti-lapse statute, to multi-generation class gifts which under EPTL
2-1.2 must be distributed by representation as defined in EPTL 2-1.16
and to clarify the application of statute to future interests created
in-testamentary trusts.

EPTL 3-3.3(a)(3) applies the concept of the anti-lapse statute to
class gifts by treating a class gift to issue of the testator or
brothers or sisters of the testator as a series of gifts to the
individual members of the class with one exception. In the words of
the statute, "no benefit shall be conferred hereunder upon the
surviving issue of an ancestor who died before the execution of the
will" in which the gift was made. The application of this provision to
single-generation classes is straightforward. Consider a disposition
in the testator's will that says "I give $100,000 to my brothers and
sisters." At the time of execution of the will one sibling is dead
with two children living at that time and two other siblings of the
testator are alive: By the time the testator dies one of the siblings
has died and two children of that sibling survive the testator. The
children of sibling dead when the will was executed receive nothing
and the children of the sibling who died after execution of the will
share their parent's share of the class gift (and they each receive
$25,000).

The ambiguity arises when the gift in the will is to the testator's
"issue." That is a class gift and literally subject to the rules of
3-3.3(a)(3). The resulting problems are illustrated by the following
family tree:

                           TESTATOR
  Child A                   Child B                  Child C
G/C 1   G/C 2          G/C 3 G/C 4 G/C 5                G/C 6

Example 1. The testator's will disposes of the residuary estate to "my
issue".  At  the time of the execution of the will Child A is deceased
and all other persons are alive. The disposition is to a class gift to
issue of the testator and a literal reading of EPTL 3-3.3(a)(3)  would
exclude  grandchild  1  from  sharing in the disposition at testator's
death because Grandchild  1's  ancestor,  Child  A,  died  before  the
execution  of  the  will. This result is contrary to the rules of EPTL
2-1.2 and 2-1.16 which say that gifts to issue must be distributed  by
representation and then define representation.

Example  2.  The  second ambiguity can be illustrated by assuming that
Grandchild 1 is indeed excluded from sharing in  the  disposition  and
that  both Child B and Child C die after the execution of the will but
before Testator.  If  EPTL  3-3.3(a)(3)  applies  to  the  disposition


because  it  is  indeed a class gift, the issue of the beneficiary who
dies before the testator take their ancestor's share. Therefore, Child
B's children will each receive 1/6 of the  residuary  estate  (1/3  of
1/2)  and  Child  C's  children  will  receive  1/4 each (1/2 of 1/2).
Again, this is contrary to the provisions of  EPTL  2-1.2  which  says
that  a disposition to issue is to be distributed by representation as
defined in EPTL 2-1.16 under which provision each of  Grandchildren  2
through 6 receive 1/5 of the residuary estate.

The proposed amendment would clarify the application of the anti-lapse
statute  in  this  situation  by  first,  making  it  clear  that EPTL
3-3.3(a)(1) and (2) apply to dispositions to individuals  and  second,
that  3-3.3  (a)(3)  does not apply to a disposition to the testator's
issue or to a class described by words which are equivalent to  issue.
Under  the amendment, in Example 1, Grandchild 1 would take 1/3 of the
residuary estate and Child A and Child  B  would  each  take  1/3.  In
Example  2,  where all three of the children predeceased Testator, the
six grandchildren would each receive 1/6 of the residuary  estate.  In
both  cases  the  result  is  a  distribution by representation to the
Testator's issue who survive Testator and conforms to EPTL  2-1.2  and
2-1.16.

The second change makes clear that the anti-lapse statute applies to a
gift  of a future interest in a trust created by a will. For example,.
the testator's  will  creates  a  trust  to  pay  the  income  to  the
testator's  surviving  spouse  for  life,  remainder to the testator's
children, A, B and C. If A dies after execution of the will and before
the testator, there is a strong argument that the gift would fail  and
B  and C would be the only remainder beneficiaries of the trust. Under
the second proposed amendment, the  gift  to  the  children  would  be
treated  like  any  other testamentary disposition to a child, and A's
remainder interest would belong to A's issue by representation.

This measure, which would have no fiscal impact upon the State,  would
take  effect  immediately; provided, however, that it would apply only
to the estates of decedents who shall  have  died  on  or  after  such
effective date.

2012   Legislative   History:     S.7463-A  (Bonacic)(Rules)  A.9478-A
(Lavine)(passed Assembly);
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A06555 Text:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

                                         6555

                              2013-2014 Regular Sessions

                                 I N  A S S E M B L Y

                                     April 9, 2013
                                      ___________

       Introduced  by  M.  of  A. LAVINE, WEINSTEIN, HENNESSEY, TITONE, WEPRIN,
         ZEBROWSKI -- (at request of the Office  of  Court  Administration)  --
         read once and referred to the Committee on Judiciary

       AN  ACT to amend the estates, powers and trusts laws, in relation to the
         disposition to issue or brothers or sisters of testator not  to  lapse
         and the application to class dispositions

         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:

    1    Section 1. Paragraph (a) of section 3-3.3 of the estates,  powers  and
    2  trusts law, as amended by chapter 595 of the laws of 1992, is amended to
    3  read as follows:
    4    (a) Unless the will whenever executed provides otherwise:
    5    (1)  Instruments  executed  prior to September first, nineteen hundred
    6  ninety-two.  Whenever a testamentary disposition INCLUDING A DISPOSITION
    7  OF A FUTURE ESTATE OTHER THAN A FUTURE ESTATE  SUBJECT  TO  A  CONDITION
    8  PRECEDENT  OF  SURVIVING THE TESTATOR is made to [the] A BENEFICIARY WHO
    9  IS ONE OF THE TESTATOR'S issue or [to]  a  brother  or  sister  [of  the
   10  testator], and such beneficiary dies during the lifetime of the testator
   11  leaving  issue  surviving such testator, such disposition does not lapse
   12  but vests in such surviving issue, [per stirpes] BY REPRESENTATION.
   13    (2) Instruments executed on or after September first, nineteen hundred
   14  ninety-two. Whenever a testamentary disposition INCLUDING A  DISPOSITION
   15  OF  A  FUTURE  ESTATE  OTHER THAN A FUTURE ESTATE SUBJECT TO A CONDITION
   16  PRECEDENT OF SURVIVING THE TESTATOR is made to [the] A  BENEFICIARY  WHO
   17  IS  ONE  OF  THE  TESTATOR'S  issue  or [to] a brother or sister [of the
   18  testator], and such beneficiary dies during the lifetime of the testator
   19  leaving issue surviving such testator, such disposition does  not  lapse
   20  but vests in such surviving issue, by representation.
   21    (3)  The  provisions  of  subparagraphs  (1) and (2) OF THIS PARAGRAPH
   22  apply to a disposition made [to issue, brothers or sisters as  a  class]
   23  IN   THE   FORM   OF   A   CLASS   GIFT  OTHER  THAN  A  DISPOSITION  TO

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD09935-02-3
       A. 6555                             2

    1  "ISSUE,""DESCENDENTS," OR A  CLASS  DESCRIBED  BY  LANGUAGE  OF  SIMILAR
    2  IMPORT,  as  if  the disposition were made to the beneficiaries by their
    3  individual names, except that no benefit shall  be  conferred  hereunder
    4  upon the surviving issue of an ancestor who died before the execution of
    5  the will in which the disposition to the class was made.
    6    S  2.  This act shall take effect immediately; provided, however, that
    7  it shall apply only to the estates of decedents who shall have  died  on
    8  or after such effective date.
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