NY Trusts, Wills & Estates Flashcards

Under New York EPTL 7-1.17, what are the requirements for a valid revocable (living) trust?

Answer: A written instrument executed and acknowledged by the settlor (or signed in the presence of two witnesses) that identifies the trustee, trust property, purposes and beneficiaries

Under EPTL 7-1.17(a), every lifetime trust must be in writing and executed and acknowledged by the person establishing it (in the manner required to record a deed), or executed in the presence of two witnesses who sign the instrument.

Under New York fiduciary law (including the Prudent Investor Act, EPTL 11-2.3), what are a fiduciary's (executor/administrator/trustee) primary duties?

Answer: Duty of loyalty, duty of prudent administration, duty to account, and duty to act impartially among beneficiaries

Fiduciaries owe duties of loyalty (acting in beneficiaries' interests), prudent administration (managing assets reasonably), accounting (reporting to beneficiaries and the court), and impartiality among beneficiaries.

Under New York law, on what grounds may a will be contested?

Answer: Lack of testamentary capacity, undue influence, fraud, improper execution, or revocation

A will may be contested on grounds including lack of testamentary capacity, undue influence, fraud, duress, improper execution (failure to comply with EPTL 3-2.1), and prior revocation.

Under the New York Prudent Investor Act (EPTL 11-2.3), what investment standard applies to trustees?

Answer: A trustee must invest as a prudent investor would, considering the purposes, terms, and circumstances of the trust, with emphasis on total portfolio risk and return

EPTL 11-2.3 requires trustees to invest and manage trust assets as a prudent investor would, considering the trust's purposes and circumstances, with the overall portfolio evaluated for risk and return.

Under SCPA 2307, how are fiduciary commissions (compensation) calculated in New York?

Answer: On a statutory sliding scale based on the value of the estate: 5% on the first $100,000, 4% on the next $200,000, 3% on the next $700,000, 2.5% on the next $4,000,000, and 2% on amounts over $5,000,000

SCPA 2307 provides a statutory commission schedule on a declining percentage basis tied to the value of property received and distributed.

Under New York EPTL 3-3.5, what is the 'in terrorem' (no-contest) clause and what is its effect?

Answer: A will provision that disinherits any beneficiary who contests the will; it is generally enforceable in New York with limited exceptions

EPTL 3-3.5 (in terrorem clauses) provides that a provision penalizing a beneficiary for contesting the will is enforceable, but certain safe harbors protect contestants in specified circumstances.