Monday, November 11, 2013

In re Matter of Heller case brief

In re Matter of Heller case brief summary
849 N.E.2d 262 (2007)

Appellant daughter moved to annul appellee trustees' unitrust election and revoke their letters of trusteeship, and sought a finding that the election could not be retroactive. The trial court voided the retroactive election, but declined to annul it. The Appellate Division (New York) affirmed the refusal to annul the election but reversed annulment of the election's retroactivity. It certified a question as to whether its decision was proper.


  • The trustees chose to apply unitrust treatment to the trust, under N.Y. Est. Powers & Trusts Law § 11-2.4(e)(1)(B)(I), and sought to apply unitrust treatment retroactively to the effective date of N.Y. Est. Powers & Trusts Law § 11-2.4. 
  • As a result, the trust's income beneficiary's income was reduced.
  • The court of appeals held the trustees had fiduciary obligations not only to the income beneficiary, but also to other remainder beneficiaries. 
  • That these beneficiaries' interests aligned with the trustees' did not relieve them of this duty. 
  • It could not be found the trustees were prohibited from electing unitrust treatment as a matter of common law principle, due to being trust beneficiaries, and N.Y. Est. Powers & Trusts Law art. 11-A allowed it. 
  • The trustees could also elect to apply this unitrust treatment retroactively to the effective date of N.Y. Est. Powers & Trusts Law § 11-2.4 because the legislature structured § 11-2.4 to be applied retroactively. 
  • N.Y. Est. Powers & Trusts Law § 11-2.4(d)(1) provided that a trustee who elected unitrust status could specify the date on which the interest of a beneficiary began.

The order of the lower court was affirmed, and the question it certified was answered in the affirmative.

Suggested Study Aids For Wills, Trusts & Estate Law

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