NYLE Trusts, Wills & Estates 3 — Questions and Answers
Question 1: Under New York EPTL § 1-2.16, a 'supplemental needs trust' (SNT) is primarily designed to:
- Avoid estate taxes by removing assets from the taxable estate
- Provide for a disabled beneficiary without disqualifying them from government benefits (Correct answer)
- Allow a trustee to make discretionary distributions to multiple beneficiaries
- Consolidate testamentary and inter vivos assets into a single trust
Correct answer: Provide for a disabled beneficiary without disqualifying them from government benefits
A supplemental needs trust preserves a disabled beneficiary's eligibility for Medicaid and SSI by holding assets that supplement, rather than replace, government benefits.
Question 2: A testator's will was signed with two witnesses, but one witness was a beneficiary under the will. Under New York EPTL § 3-3.2, the result is:
- The will is entirely void
- The witness-beneficiary forfeits any bequest exceeding what they would have received as an intestate heir (Correct answer)
- The will is valid but the interested witness's testimony is inadmissible
- The bequest to the witness-beneficiary is void but the rest of the will stands without reduction
Correct answer: The witness-beneficiary forfeits any bequest exceeding what they would have received as an intestate heir
Under EPTL § 3-3.2, the will remains valid, but an interested witness may only take the lesser of the bequest or the intestate share they would have received.
Question 3: Under New York's intestacy statute (EPTL § 4-1.1), if a decedent is survived by a spouse and two children, what does the surviving spouse receive?
- The entire estate
- $50,000 plus one-half of the residue
- $50,000 plus one-third of the residue (Correct answer)
- One-half of the estate
Correct answer: $50,000 plus one-third of the residue
Under EPTL § 4-1.1, when the decedent leaves a spouse and children, the surviving spouse receives $50,000 plus one-third of the remaining estate.
Question 4: A trustee of a New York trust invests trust assets exclusively in highly speculative cryptocurrency, resulting in significant losses. Under the New York Estates, Powers and Trusts Law, the trustee has most likely violated:
- The duty of loyalty
- The prudent investor rule (Correct answer)
- The duty to inform beneficiaries
- The anti-alienation rule
Correct answer: The prudent investor rule
The prudent investor rule requires trustees to invest and manage assets as a prudent investor would, considering risk and return in relation to the trust's objectives; speculative single-asset concentration violates this standard.
Question 5: Under New York EPTL § 5-3.3, a bequest to a charity is subject to attack by certain surviving relatives if made within how many days of the testator's death?
- 30 days
- 60 days
- 90 days
- No such limitation exists in New York (Correct answer)
Correct answer: No such limitation exists in New York
New York repealed its Mortmain statute; there is no longer a time-based restriction on charitable bequests under current EPTL.
Question 6: A New York decedent dies leaving a will that does not mention his child born after the will was executed. Under EPTL § 5-3.2, this pretermitted child:
- Is entitled to an intestate share unless the omission was intentional (Correct answer)
- Receives nothing because the will controls
- Receives exactly the same share as any named child in the will
- May only challenge the will within 6 months of probate
Correct answer: Is entitled to an intestate share unless the omission was intentional
EPTL § 5-3.2 protects after-born children by giving them an intestate share unless the will shows the omission was intentional or the testator provided for the child outside the will.
Question 7: Under New York law, a 'Totten trust' (payable-on-death bank account) can be revoked by the depositor during their lifetime by:
- Filing a revocation notice with the Surrogate's Court
- Withdrawing the funds or executing a will that specifically revokes it (Correct answer)
- Sending written notice to the named beneficiary only
- Executing a new will that mentions the account
Correct answer: Withdrawing the funds or executing a will that specifically revokes it
A Totten trust is revocable during the depositor's lifetime by withdrawing the funds, closing the account, or by a specific testamentary revocation naming the account.
NYLE Trusts, Wills & Estates 3
Under New York EPTL § 1-2.16, a 'supplemental needs trust' (SNT) is primarily designed to: