NY EPTL,  Article 2 RULES GOVERNING DISPOSITIONS SUBJECT TO THIS LAW

PART 1. SUBSTANTIVE RULES
GOVERNING DISPOSITIONS

Section 2-1.1 Heirs at law and next of kin defined.

2-1.2 Issue to take per capita, per stirpes or by representation.
2-1.3 Adopted children and posthumous children as members of a class.
2-1.4 Words of inheritance unnecessary.
2-1.5 Advancements and their adjustment.
2-1.6 Disposition of property where there is no sufficient evidence that persons have died otherwise than simultaneously.
2-1.7 Presumption of death from absence; effect of exposure to specific peril.
2-1.8 Apportionment of federal and state estate or other death taxes; fiduciary to collect taxes from property taxed and transferees thereof.
2-1.9 Distributions in kind by executors and trustees.
2-1.10 Provisions relating to infants and minors.
2-1.11 Renunciation of property interests.
2-1.12 Credit shelter formula bequests
2-1.13 Right to recover state estate and gift taxes where decedent retained interest
2-1.14 Consequences of partly ineffective dispositions of trust principal to two or more beneficiaries

PART 1. SUBSTANTIVE RULES GOVERNING DISPOSITIONS

S 2-1.1 Heirs at law and next of kin defined Whenever used in a statute or instrument, unless a contrary intention is expressed therein, the term “heirs”, “heirs at law”, “next of kin” or any term of like import means the distributees, as defined in 1-2.5. 

S 2-1.2 Issue to take per capita, per stirpes or by representation

(a) Instruments executed prior to September first, nineteen hundred ninety-two. Whenever a disposition of property is made to “issue”, such issue, if in equal degree of consanguinity to their common ancestor, take per capita, but if in unequal degree, per stirpes, unless a contrary intention is expressed. (b) Instruments executed on or after September first, nineteen hundred ninety-two. Whenever a disposition of property is made to “issue”, such issue take by representation as defined in 1-2.16, unless a contrary intention is expressed.

S 2-1.3 Adopted children and posthumous children as members of a class
(a) Unless the creator expresses a contrary intention, a disposition of property to persons described in any instrument as the issue, children, descendants, heirs, heirs at law, next of kin, distributees (or by any term of like import) of the creator or of another, includes:

   (1) Adopted children and their issue in their adoptive relationship. The rights of adopted children and their issue to receive a disposition under wills and lifetime instruments as a member of such class of persons based upon their natural relationship shall be governed by the provisions of subdivision two of section one hundred seventeen of the domestic relations law.
   (2) Children conceived before, but born alive after such disposition becomes effective.
   (3) Non marital children. For the purposes of this paragraph, a nonmarital child is the child of a mother and is the child of a father if the child is entitled to inherit from such father under section 4-1.2 of this chapter. The provisions of this paragraph shall apply to the wills of persons dying on and after September first, nineteen hundred ninety-one, to lifetime instruments theretofore executed which on said date are subject to the grantor`s power to revoke or amend, and to all lifetime instruments executed on or after such date. S 2-1.4 Words of inheritance unnecessary
The word “heirs” or words of inheritance of like import are not necessary to create or dispose of a fee.

S 2-1.5 Advancements and their adjustment
(a) An advancement is an irrevocable gift intended by the donor as an anticipatory distribution in complete or partial satisfaction of the interest of the donee in the donor`s estate, either as distributee in intestacy or as beneficiary under an existing will of the donor.

(b) No advancement shall affect the distribution of the estate of the donor unless proved by a writing contemporaneous therewith signed by the donor evidencing his intention that the gift be treated as an advancement, or by the donee acknowledging that such was the intention.

(c) When so proved, the advancement is part of the estate of the donor for the purpose of distribution. If such advancement is equal to or greater than the interest of the donee, whether in intestacy or under the will, such donee or his successor in interest may not share in the distribution of the estate; but if less than such intestate share or testamentary interest, the donee or his successor in interest may take his intestate share or testamentary interest reduced by the amount of the advancement.

(d) Unless otherwise provided in a writing contemporaneous with the advancement and signed by the donor: (1) An advancement, made as provided in this section, may be adjusted out of the property of the donor in such manner as may be equitable. (2) The advancement shall have the value at which it is appraised for estate tax purposes, or, if not included in the gross taxable estate of the donor, the value at which it would have been appraised if included therein. (e) Nothing in this section shall increase or decrease the elective share of a surviving spouse under either 5-1.1 or 5-1.1-A except to the extent authorized by paragraph (b) of those sections.

S 2-1.6 Disposition of property where there is no sufficient evidence that persons have died otherwise than simultaneously

(a) Where the title to property or the devolution thereof depends upon priority of death and there is no sufficient evidence that the persons have died otherwise than simultaneously, the property of each person shall be disposed of as if he had survived, except as otherwise provided in this section.

(b) Where a testamentary disposition of property depends upon the time of death of two or more beneficiaries designated to take alternatively by reason of survivorship and there is no sufficient evidence that such beneficiaries have died otherwise than simultaneously the property thus disposed of shall be divided into as many equal portions as there are alternative beneficiaries and such portions shall be distributed respectively to those who would have taken the whole property in the event that the designated beneficiary through whom they take had survived.

(c) Where there is no sufficient evidence that two joint tenants or tenants by the entirety have died otherwise than simultaneously the property so held shall be distributed one-half as if one had survived and one-half as if the other had survived. If there are more than two joint tenants and all of them have so died the property thus distributed shall be in the proportion that one bears to the whole number of joint tenants.

(d) Where the insured and the beneficiary in a policy of life or accident insurance have died and there is no sufficient evidence that they have died otherwise than simultaneously the proceeds of the policy shall be distributed as if the insured had survived the beneficiary.

(e) This section shall not apply in the case of wills, lifetime trusts, deeds or contracts of insurance wherein a provision other than that prescribed by this section has been made for the disposition of property.

S 2-1.7 Presumption of death from absence; effect of exposure to specific peril

(a) A person who is absent for a continuous period of three years, during which, after diligent search, he or she has not been seen or heard of or from, and whose absence is not satisfactorily explained shall be presumed, in any action or proceeding involving any property of such person, contractual or property rights contingent upon his or her death or the administration of his or her estate, to have died three years after the date such unexplained absence commenced, or on such earlier date as clear and convincing evidence establishes is the most probable date of death.

(b) The fact that such person was exposed to a specific peril of death may be a sufficient basis for determining at any time after such exposure that he or she died less than three years after the date his or her absence commenced.

(c) The three-year period provided herein shall not apply in any case in which a different period has been prescribed by statute.

S 2-1.8 Apportionment of federal and state estate or other death taxes; fiduciary to collect taxes from property taxed and transferees thereof

(a) Whenever it appears in any appropriate action or proceeding that a fiduciary has paid or may be required to pay an estate or other death tax, under the law of this state or of any other jurisdiction, with respect to any property required to be included in the gross tax estate of a decedent under the provisions of any such law (hereinafter called “the tax”), the amount of the tax, except in a case where a testator otherwise directs in his will, and except where by any instrument other than a will (hereinafter called a “non-testamentary instrument”) direction is given for apportionment within the fund of taxes assessed upon the specific fund dealt with in such non-testamentary instrument, shall be equitably apportioned among the persons interested in the gross tax estate, whether residents or non-residents of this state, to whom such property is disposed of or to whom any benefit therein accrues (hereinafter called “the persons benefited”) in accordance with the rules of apportionment herein set forth, and the persons benefited shall contribute the amounts apportioned against them.

(b) Unless otherwise provided, when a disposition is made by which any person is given an interest in income or an estate for years or for life or other temporary interest in any property or fund, the tax apportionable against such temporary interest and the remainder limited thereon is chargeable against and payable out of the principal of such property or fund without apportionment between such temporary interest and remainder. The provisions of this paragraph apply although the holder of the temporary interest has rights in the principal, but do not apply to a common law annuity.

(c) Unless otherwise provided in the will or non-testamentary instrument, and subject to paragraph (d-1) of this section:

(1) The tax shall be apportioned among the persons benefited in the proportion that the value of the property or interest received by each such person benefited bears to the total value of the property and interest received by all persons benefited, the values as finally determined in the respective tax proceedings being the values to be used as the basis for apportionment of the respective taxes.
(2) Any exemption or deduction allowed under the law imposing the tax by reason of the relationship of any person to the decedent, the fact that the property consists of life insurance proceeds or the charitable purposes of the gift shall inure to the benefit of the person bearing such relationship or receiving such insurance proceeds or charitable gift, as the case may be.
(3) Any deduction for property previously taxed and any credit for gift taxes paid by the decedent shall inure to the benefit of all persons benefited and the tax to be apportioned shall be the tax after allowance of such deduction or credit.
(4) Any interest resulting from the late payment of the tax shall be apportioned in the same manner as the tax and shall be charged wholly to principal.

(5) Any discount allowed for prepayment of the tax shall be credited wholly to the principal of the funds contributing the moneys used for prepayment in proportion to the contribution made.

(d) Subject to subparagraphs (1), (2) and (3) of this paragraph, any direction as to apportionment or non-apportionment of the tax, whether contained in a will or a non-testamentary instrument, relates only to the property passing thereunder, unless such will or instrument provides otherwise.

(1) Any such direction in a will which is later in date than a prior non-testamentary instrument and which contains a contrary direction shall govern provided that the later will specifically refers to the direction in such prior instrument.
(2) Any such direction in a non-testamentary instrument which is later in date than a prior will or non-testamentary instrument and which contains a contrary direction shall govern provided that the later instrument specifically refers to the direction in such prior will or instrument.

(3) Any such direction provided in a non-testamentary instrument only relates to the payment of the tax from the property passing thereunder and such direction shall not serve to exonerate such non-testamentary property from the payment of its proportionate share of the tax, even if otherwise directed in that non-testamentary instrument. (d-1)(1)(A) If any part of the gross tax estate consists of property the value of which is includible in the gross tax estate by reason of S2044 of the Internal Revenue Code of 1986 as from time to time amended, the decedent`s estate shall be entitled to recover from the person receiving the property the amount by which the total tax under article twenty-six of the tax law which has been paid exceeds the total tax under such article which would have been payable if the value of such property had not been included in the gross tax estate.

(B) Clause (A) of this subparagraph shall not apply if the decedent specifically directs otherwise by will. (2) For the purposes of this paragraph, if there is more than one person receiving the property, the right of recovery shall be against each such person. (3) In the case of penalties and interest attributable to additional taxes described in subparagraph (1) of this paragraph, rules similar to subparagraphs (1) and (2) of this paragraph shall apply. (e) In all cases in which any property required to be included in the gross tax estate does not come into the possession of the fiduciary, he is authorized to, and shall recover from the persons benefited or from any person in possession of such property the ratable amounts of the tax and any interest payable by the persons benefited. The surrogate may direct the payment thereof to the fiduciary and may charge such payments against the interests of the persons benefited in any assets in the possession of the fiduciary or any other person. If the fiduciary cannot recover the amount of the tax and interest apportioned against a person benefited, such amount may be charged in such manner as the surrogate determines.

(f) No fiduciary is required to pay over or distribute to any person other than the fiduciary charged with the duty to collect and pay the tax any fund or property with respect to which the tax is or may be imposed until the amount of the tax apportioned or which may be apportioned against such fund or property and any interest due from the persons entitled thereto is paid or, where the tax has not been determined or apportionment made, unless and until adequate security for such payment is furnished to the fiduciary making such payment or distribution. (g) The surrogate shall make such preliminary, intermediate or final decrees or orders in the proceeding, as he shall deem advisable, tentatively or finally apportioning the tax and any interest, directing the fiduciary to collect the apportioned amounts from the property or interests in his possession of any persons against whom such apportionment has been made and directing all other persons against whom the tax and any interest are apportioned or from whom any part of the tax and any interest may be recovered to make payment of such apportioned amounts to such fiduciary; and if it is ascertained in such proceeding that the property in the possession of the fiduciary, otherwise payable to a person liable for any part of the tax and interest, is insufficient to discharge the liability of such person, the surrogate may direct that the balance of the apportioned amount due shall be paid to the fiduciary by such other person. If, in the course of the proceeding, it is ascertained that more than the ratable amount of the tax and interest due from any person has been paid by him or in his behalf the surrogate may direct an appropriate reimbursement of the overpayment.

(h) If the surrogate apportions any part of the tax against any person interested in non-testamentary property or apportions the tax among the respective interests created by any non-testamentary instrument, he may, in his discretion, assess against such property or interests, an equitable share of the expense in connection with the determination of the tax and the apportionment thereof. Whenever an attorney renders services to the estate or to its personal representative resulting in the exclusion from the gross taxable estate of any non-testamentary property or interests created by any non-testamentary instrument, the surrogate may, in his discretion, assess against such property or interests an equitable share of the compensation for such legal services rendered to the estate or to its personal representative in proportion to the benefit received by such property or interests from such services, unless the decedent`s will or the non-testamentary instrument contains a direction that no portion of the tax shall be apportioned against such non-testamentary property or against interests created by any non-testamentary instrument. The surrogate may retain jurisdiction of any proceeding until the purposes of this section have been accomplished.

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