## Facts

- Peter Gilbert died in 1989, leaving an estate exceeding $40 million and survived by his wife and four children.
- The will created an elective share trust for the widow with a life-income interest and, after her death, a remainder to be added equally to the children’s residuary trusts.
- The will also created four discretionary trusts funded with GST-exempt property and four discretionary residuary trusts, each primarily associated with one child.
- Lester Gilbert, a son, was a discretionary income beneficiary of two testamentary trusts, one of which would be increased upon the widow’s death.
- The class of discretionary beneficiaries for Lester’s trusts included Lester, his siblings, nieces and nephews, and any future issue of Lester.
- Lester served a written notice renouncing his “dispositive share” in the estate.
- The executor, supported by a guardian ad litem for minor beneficiaries, sought a determination that the renunciation was null and void, arguing Lester had no present property interest to disclaim and that renunciation would contradict the testator’s intent.
- The guardian ad litem further argued that, even if the renunciation were valid, remainder interests should not be accelerated in a way that could impair potential interests of any future children of Lester.

## Issues

1. Whether a beneficiary’s interest in a wholly discretionary testamentary trust is a present property interest that may be renounced under New York law.
2. Whether Lester’s written notice renouncing his “dispositive share” was statutorily effective.
3. If the renunciation was effective, how the disclaimed interests should pass under the will and whether remainder interests should be accelerated notwithstanding potential future issue of Lester.

## Decision

- The court upheld the renunciation as valid and effective.
- The court held that, although enjoyment depended on trustee discretion, Lester held a present beneficial interest as an authorized object of the trustees’ discretion and therefore had an interest capable of renunciation.
- The court found the notice complied with the applicable statutory requirements for renunciation.
- The renunciation was given its statutory effect: the disclaimed interest passed under the will as if Lester had predeceased the decedent with respect to the disclaimed property, subject to the will’s dispositive scheme.

## Legal Principles

- An interest in a wholly discretionary testamentary trust may constitute a present property interest (not a mere expectancy) when the beneficiary is within the class the trustee is authorized to benefit.
- New York’s renunciation statute permits a beneficiary to disclaim a recognizable property interest arising at death, including an interest held through a trust, if the disclaimer satisfies statutory requirements for notice and timeliness.
- A testator’s intent to benefit a particular person does not prevent that person from rejecting the gift through a valid statutory renunciation.
- A valid renunciation generally causes the disclaimed interest to pass as though the disclaimant predeceased the testator, so distribution follows the governing instrument’s terms as applied under the disclaimer statute.

## Conclusion

The Surrogate’s Court ruled that a discretionary beneficiary of testamentary trusts holds a renounceable property interest and that a timely statutory renunciation is effective, causing the disclaimed interest to pass under the will as if the disclaimant had predeceased the decedent as to that interest.


In re Estate of Gilbert, 592 N.Y.S.2d 224 (Sur. Ct. N.Y. Cnty. 1992)