Matter of Rosenzweig, 19 N.Y.2d 92 (1967)

When a surviving spouse exercises an absolute right of election to take against a will, renouncing benefits conferred by the will, the elective share is satisfied by prorata contributions from all beneficiaries, not first from the renounced bequest.

Summary

This case addresses how to satisfy a widow’s elective share when she renounces a bequest in a will and elects to take her intestate share outright. The will created a trust for the widow, terminable upon remarriage, which gave her the right to elect against the will. The court held that because the widow exercised her absolute right of election, her share should be satisfied by prorata contributions from all beneficiaries, including a brother who was to receive the widow’s trust income if she remarried or died. The Court of Appeals reasoned that the widow’s renunciation divested her of any interest in the trust, and therefore the general rule of first applying the bequest to satisfy the elective share did not apply.

Facts

Samuel Rosenzweig’s will bequeathed personal effects to his widow, Aranka, $10,000 to his brother, Emanuel, and the balance to a residuary trust for his daughter, Erica. The trust income was to be distributed: 15% (but not less than $300/month) to Aranka, terminable upon remarriage or death, with Emanuel to succeed to that interest; and 70% (but not less than $300/month) to Erica. The will allowed invasion of the principal if the income was insufficient. Aranka was named executrix and cotrustee.

Procedural History

Aranka elected to take against the will because the trust benefit was not “for life.” She petitioned for construction of the will to determine the disposition of the income intended for her. The Surrogate held that Emanuel should succeed to Aranka’s interest and the Appellate Division affirmed. Later, in an accounting proceeding, the Surrogate held Aranka’s elective share should be satisfied by prorata apportionment between Emanuel’s legacy and the residuary trust. The Appellate Division reversed, holding Aranka’s interest under the will should first be applied to satisfy her elective share. Emanuel appealed to the Court of Appeals.

Issue(s)

1. Whether, when a surviving spouse exercises an absolute right of election and renounces a bequest under the will, the elective share is satisfied first from the renounced bequest or by prorata contributions from all beneficiaries.

Holding

1. Yes, the elective share should be satisfied by prorata contributions from all beneficiaries because when the right of election is absolute, the spouse loses any benefits of the will and all legatees contribute ratably to her share.

Court’s Reasoning

The Court of Appeals reversed the Appellate Division, reasoning that the prior construction proceeding conclusively determined that the testator intended for Emanuel to succeed to Aranka’s interest if she exercised her right of election. Therefore, Aranka was divested of any interest in the trust, and her intestate share should be satisfied by prorata contributions from each of the legacies.

The court distinguished between an absolute right of election (where the spouse receives nothing or an illusory trust) and a limited right of election (where the spouse receives a benefit less than the intestate share). In the former case, the elective share is satisfied prorata; in the latter, the bequest is first applied, with the difference made up prorata. The court noted the will’s terms should, as far as possible, remain effective. Since the trust was not for Aranka’s life, evaluating her interest as if it were a life estate was illogical. The court quoted the Third Report of the Temporary State Commission on Modernization, Revision and Simplification of Law of Estates, stating that the rule should be that where the right of election is absolute, the spouse loses any benefits of the will and all legatees contribute ratably to her share.

The court further explained, “if the trust benefits had been conferred upon the spouse, subject to termination only by her death, and a right of election arose by virtue of the fact that the capital value of the trust was not equal to what would have been her intestate share, each legatee would have been required to contribute pro rata to make up the difference between the capital value of the corpus and the intestate share. The remainder of her elective right would then have been satisfied by the life benefits given her under the terms of the trust (Decedent Estate Law, § 18, subd. [f]).”