DECISION/ORDER This is a decision on a petition seeking to terminate a testamentary trust (the “Trust”) under EPTL 7-1.19 on the grounds that its continuation is economically impracticable or to reform or permit equitable deviation from its express terms. The Trust was created under the terms of Article THIRD of the Last Will and Testament (the “Will”) of Gabriel Aguilar dated August 9, 2011, which was admitted to probate by this Court’s decree dated December 23, 2014. Article THIRD of the Will directs the trustee to hold testator’s residuary estate in trust, collecting and receiving the income therefrom and managing, investing and reinvesting the same, and making distributions as follows: A. $25,000 annually to testator’s sister, Celia Celimendia (“Celia”)1 during her lifetime; B. Upon the death of Celia, $10,000 annually to Celia’s daughter, Veronica Lizarrara (“Veronica”)2 during her lifetime; and C. Upon the death of Veronica, the principal and accumulated income to the children of Veronica in equal shares per stirpes. Letters of trusteeship were issued to respondent Mitchell L. Jaiven, Esq. (“Trustee”) on December 23, 2014. He reports that the present balance of the trust is approximately $3,700,000. Celia, who is now 74 years of age, has received her annual payments without interruption since letters testamentary and letters of trusteeship were issued to respondent. Celia’s daughter, Veronica, who will succeed her as the recipient of annual Trust payments, is now 53 years of age and has no children or issue thereof. Petitioners are Celia, Veronica and her siblings Yacqueline Lorena Lizarraga Aguilar (“Yacqueline”) and Gabriel Armando Lizarraga Aguilar (“Gabriel”), and Yacqueline’s daughter, Jasmine Catherine Duchen Lizarraga. Petitioners contend that creating a remainder interest in the Will for the issue of Veronica was a “material mistake,” resulting in the circumvention of the testator’s intent. At age 53, Veronica contends she is unlikely to bear or adopt children. Indisputably, if Veronica dies without issue, distribution of the remainder of the Trust will be guided by the laws of intestacy. Petitioners note that if Veronica lives to her mid-80′s, as actuarial tables would indicate, testator’s distributees will have to wait 30 years to receive their shares3. The petitioners seek an order reforming the Trust or a finding that it is terminable as uneconomic under EPTL 7-1.19 so that, in either event, the Trust may be terminated and a distribution of its proceeds made to the current income beneficiary, Celia. Respondent Trustee4 seeks an order dismissing the petition under CPLR 404(a) upon its objections in point of law that the testator’s Will created testamentary annuities which are incapable of being invaded or, alternatively, that petitioners have failed to state a cause of action.5 In this proceeding on Trustee’s motion to dismiss under CPLR 3211(a)(7), evidence is “viewed in the light most favorable to the nonmoving party, who is afforded the benefit of every reasonable inference” (Hall v. Queensbury Union Free Sch. Dist., 147 AD3d 1249, 1250 [3d Dept 2017]). The Court is charged with determining only whether the facts as alleged “fit within any cognizable legal theory’” (Brown v. University of Rochester, 216 AD3d 1328 [3d Dept 2023], citing Leon v. Martinez, 84 NY2d 83, 87-88 [1994]). If, from the four corners of the pleadings, “factual allegations are discerned which taken together manifest any cause of action cognizable at law,” a motion to dismiss under CPLR 3211(a)(7) will be denied (Pomerance v. McGrath, 2011 N.Y. Misc. LEXIS 7126, *12-13 [Sup Ct NY Cty], quoting Richbell Info. Servs. v. Jupiter Partners, LP., 309 AD2d 288, 289, 765 N.Y.S.2d 575 [1st Dept 2003]). There is no dispute that if Veronica succeeds her mother as beneficiary and then dies without issue, the laws of intestacy will control and the remainder of the Trust will pass to testator’s distributees (as that class was determined at the time of his death). At his death, testator was survived by his spouse, Marianne Salerno, who is a respondent herein. Salerno claimed her $2,515,498.50 elective share under EPTL 5-1.1(A) in 2016. If Salerno does not claim to be entitled to further estate funds on termination of the Trust — or if a court determines that she is not entitled to further funds — then decedent’s presumptive distributees would be Celia’s issue. BACKGROUND. The facts underlying this proceeding are not in dispute. Just before he left for his annual family visit to Bolivia, Gabriel Aguilar met with his attorney, Mitchell Jaiven, Esq., in August 2011 to draft a will for him. Jaiven reports that the testator regarded this will as a “stopgap” to insure he had a testamentary plan in place in the event of his death during his trip. Aguilar returned from that trip safely, but despite his subsequent remarriage and his attorney’s repeated urgings, he did not take steps to replace or amend his Will. In 2014, he returned to Bolivia to visit family. He died unexpectedly shortly after his arrival there. The Will was accepted for probate without objection on December 2, 2014. By way of support for their motion, petitioners offered several affidavits attesting to decedent’s close relationships with his sister and her children and his practice of supporting them financially. Petitioner’s attorney also relates that on his deathbed, decedent told Celia that he wished her to have his entire estate. While testator’s practice of gifting to family members might have some relevance in an inquiry into his intent, Celia’s testimony about his alleged deathbed statements would be barred under CPLR 4519. In any event, the testator’s history of generosity is not inconsistent with his testamentary plan as expressed in his Will, even if testator intended that the Will be short-lived. Relief Sought by Petitioners: Reformation, Equitable Deviation and Termination under EPTL 7-1.19. Petitioners cite EPTL 7-1.19 (Application for Termination of Uneconomic Trust), as well as principals of equitable deviation and reformation, in support of their application. Relief can be obtained through reformation only when the modification sought to be made would better conform the instrument to the parties’ meeting of the minds. It is to be exercised sparingly (Estate of Woiler, 2018 NYLJ LEXIS 2492, *6 [Sur Ct Bx Cty]). When a testamentary instrument is sought to be reformed, the petitioner must show that (1) the modification sought will better effectuate the testator’s intent (see Matter of Snide, 52 NY2d 193 [1981]) or (2) a mistake in the terms of the instrument is apparent from its face (Proceeding for Reformation of Trust, 2018 NYLJ LEXIS 1592 [Sur Ct NY Cty]). Where courts have granted reformation, it is often because changed circumstances threaten to undermine a testator’s presumed intent to maximize available tax benefits or available public benefits. In these limited circumstances, courts may permit extrinsic evidence to demonstrate that, due to a drafting error, the words appearing in the instrument do not effectuate the intent of the creator at the time of execution (see e.g. Matter of Scheib, 14 Misc 3d 1222[A] [Sur Ct Nassau Cty 2007] [drafting error would have defeated grantor's Medicaid planning objectives); and Matter of Gottfried, NYLJ, Apr. 11, 1997, at 46, col 4 [Sur Ct NY Cty](drafting error that would have resulted in unintended tax consequences). The general reluctance to avoid reformation under other circumstances is explained by the First Department in Matter of Dickinson (273 AD2d 89, 90 [1st Dept 2000]): [w]hen the purpose of the testator is reasonably clear by reading his words in their natural and common sense, the courts have not the right to annul or pervert that purpose upon the ground that a consequence of it might not have been thought of or intended by him Here, as in Matter of Dickinson, the language of the Will is clear and unambiguous. Petitioners have offered no evidence that the testamentary plan established in the Will is defective by reason of a “mutual mistake.” The Court finds no basis in the proffered facts to believe that the testator’s “true intentions” are not found in the unambiguous terms of the Will (Stache Invs. Corp. v. Ciolek, 174 AD3d at 1394). The Trustee (who was the Will’s attorney-draftsperson and testator’s long-time attorney) has indicated he spoke to testator about revising the Will on many occasions, but there’s no indication that either of them regarded the Will’s terms as the product of a mistake, even if revisions were contemplated. Moreover, given the Trustee’s reputation in the community as a learned and meticulous trusts and estate attorney, it is unlikely that he would have failed to detail for testator the consequences of Veronica’s death without issue. She was 31 years old and had no children when the Will was drafted. Petitioners having failed to offer evidence establishing a mistake or other grounds for reformation by clear and convincing evidence, the Court finds that the proffered facts do not “fit” within the legal theories offered by petitioners. The branch of Trustee’s motion seeking dismissal of petitioners’ claim for reformation of the Will under CPLR 3211(a)(7) is therefore granted. Nor does the Court find in these facts support for the “equitable deviation” relief sought by petitioners. EPTL 8-1.1 (c) embodies “New York’s statutory articulation of…equitable deviation” (Board of Trustees of Museum of Am. Indian, Heye Found. v. Board of Trustees of Huntington Free Lib. & Reading Room, 197 AD2d 64, 75 [1994], Iv denied 86 NY2d 702 [1995]). Equitable deviation permits altering or amending an administrative provision, (see Matter of Uris, 27 Misc 3d 1205(A) [Sur Ct Nassau County 2010]). Equitable deviation has been applied to modify administrative provisions of an instrument, such as investment restrictions (Matter of Aberlin, 264 AD2d 775 [3d Dept 1999]); income tax avoidance (Estate of Lewis, 144 Misc2d 618 [Sur Ct Bx Cty 1989]); unitrust planning (Matter of Barker, 82 Misc2d 974 [Sur Ct NY Cty 1975]); addition of a second fiduciary (Estate of Freedman, 2003 NYLJ LEXIS 1066 [Sur Ct Nassau Cty]); or specific conditions to distributions (Estate of Woiler, 2018 NYLJ LEXIS 2492). In all such cases, the movant must also establish the existence of an “unforeseen change in circumstances” which, if unaddressed, would frustrate the testator’s main objectives (Estate of Woiler, 2018 NYLJ LEXIS 2492 *7). Petitioners have offered no change in circumstances to support a deviation from testator’s plan: the Trust corpus generates ample income to pay expenses of its administration and to fund the fixed payments to Celia, who continues to receive the funds nine (9) years after the Will was accepted for probate. Celia’s successor, Veronica, is in a position to begin receiving her distribution upon her mother’s death. Moreover, overhauling the trust to convert testator’s “dominant plan of distribution” from an income stream to a final distribution of the trust corpus is not a mere administrative change and would undoubtedly frustrate the testator’s clear goal of creating a long-term source of income for his sister and niece (Matter of Knapp, 41 Misc3d 1202(A)[Sur Ct NY Cty 2013]). Having failed to establish that termination of the Trust is a mere administrative change brought on by a change of circumstances, petitioners have not made out a factual basis for equitable deviation from the Will. The Court therefore grants Trustee’s motion under CPLR 3211(a)(7) seeking dismissal of the branch of petitioners’ motion seeking relief by equitable deviation from the terms of the Will. Turning to EPTL 7-1.19(a)(1), termination of a trust is permitted on the grounds that the expenses of its administration are uneconomical if petitioners can prove under EPTL 7-1.19(2) that: 1. it is economically impracticable to continue the administration of the trust; and 2. the terms of the trust do not prohibit its early termination; and 3. the termination does not defeat the purposes for which the trust was created; and 4. the termination serves the best interests of the beneficiaries. In order to prevail in this proceeding, the petitioners must prove each of the four factors. The petitioners are Celia and her three children (Veronica, Yacqueline and Gabriel) and Yacqueline’s daughter, Jasmine. They argue that as the Trust now stands, if Veronica dies without issue, the laws of intestacy would dictate the distribution of the Trust monies to “unknowns.” Such a result, they contend, would circumvent what they believe was testator’s unstated intention, which was to benefit Celia. The prospect that the balance of the Trust would pass by intestacy is not, in and of itself, grounds to reform or terminate the Trust (In re Estate of Kronen, 67 NY2d 587, 589 [1986]). Either Marianne Salerno (or her issue) or Celia’s issue will be determined to be testator’s distributees (as that class was defined at his death), so they are hardly “unknown.” A distribution of the Trust remainder to Celia’s issue — rather than to her daughter Veronica’s issue — is not a result which would run contrary to testator’s intent as petitioners themselves characterize it. As disappointing to petitioners as such a result might be, it was a very real possibility which Trustee likely discussed with his client when the Will was drafted and signed. Continued administration of a trust has been found to be impracticable for purposes of EPTL 7-1.19 when annual expenses of administration approach or exceed the trust’s annual income (In re Frank, 2013 NYLJ LEXIS 4712 [Sur Ct NY Cty]) or when the size of the trust fund was insufficient to generate income to an income beneficiary (Matter of Kistner, 2006 NY Misc LEXIS 8887 [Sur Ct Suffolk Cty]). In those cases where early termination has been permitted, the size of the trust has been relatively modest (see Matter of Bouchter, NYLJ, Apr. 3, 2009, at 40, col 3 [Sur Ct Bronx Cty 2009] terminating trust valued at $24,000; and Matter of Miller, 2007 NY Misc LEXIS 6464 Sept. 4, 2007, at 35, col 2 [Sur Ct Bronx Cty] terminating trust valued at $71,000). In contrast, where application is made to terminate a trust valued at $300,000, the court in Matter of Dauman, 12 Misc3d 1173(A) [Sur Ct Nassau Cty 2006] denied the application, finding that the trust’s administration expenses “are not so burdensome, nor are the trust assets so minimal as to render the continuation of the trust economically impracticable” (see, also Matter of DeMarco, NYLJ, Nov. 1, 2006, 21, col 3 [Sur Ct Kings Cty], denying application to terminate trust as uneconomical where trust was valued at $173,000). It is without question that the Trust funds here, valued at approximately $3,700,000, are more than sufficient to fund the annual payments to Celia and then Veronica. Although petitioners allege that “significant” trustee commissions and income taxes accruing during Celia and Veronica’s lifetimes will render continuation of the Trust uneconomic, no calculations have been offered to show how the expenses of administration are so great as to thwart the fulfillment of the Trust’s principal purpose. In proceedings before this Court, the intent of the testator is paramount. Testator’s intent was to provide income to his sister and his niece. There is no reason to believe that a final distribution to Celia’s issue, which would result if Veronica dies without issue,6 is a significant departure from the distribution intended by testator. That Celia’s issue must await the death of Veronica before receiving their distribution is itself a result well within the testator’s plan as revealed by the terms of his Will. As in Matter of Zara, 2014 NY Misc LEXIS 1554, *3 [Sur Ct NY Cty]), the testator “clearly intended that the trust corpus would be distributed outright only upon [the death of the income beneficiaries]. Such an intent should be respected by the court, even where all the interested parties are willing to ignore it.” The Court finds that the facts offered by petitioners do not fit within any of the legal theories they offer as a basis for relief (Brown v. University of Rochester, 216 AD3d 1328 [3d Dept 2023], citing Leon v. Martinez, 84 NY2d 83, 87-88 [1994]). Petitioners have not offered grounds to find the mutual mistake they contend would support reformation, nor do they seek the administrative modifications permitted under a theory of equitable deviation. Finally, the facts do not establish that continued administration of the Trust is economically impracticable or that its termination would further support the purposes for which the Trust was created for purposes of EPTL 7-1.19. The Trustee’s motion to dismiss the petition on the grounds that petitioners have not stated a cause of action is therefore granted. It is, therefore, ORDERED and DECIDED, that the petition of Selimendia Nicomedia Aguilar Loza, Sandra Veronica, Lizarraga de Lavayen, Yacqueline Lorena Lizarraga Aguilar, Gabriel Armando Lizarraga Aguilar and Jasmine Catherine Duchen Lizarraga is dismissed under CPLR 3211(a)(7) for failure to state a cause of action. This constitutes the decision/order of the Court. All papers, including this Decision/Order, are hereby entered and filed with the Clerk of the Surrogate’s Court. Counsel is not relieved from the applicable provisions of CPLR Section 2220 relating to service and notice of entry. Documents reviewed: 1. Petition filed January 11, 2023. 2. Affidavits in Support of Petition (2) filed January 11, 2023. 3. Attorney Affirmation in Support of Petition filed January 11, 2023. 4. Notice of Motion/Objections in Point of Law filed March 13, 2023. 5. Affirmation in Support of Motion filed March 13, 2023. 6. Affirmation in Opposition to Motion, with Exhibit A, filed May 9, 2023. Dated: September 21, 2023
