## Facts

- Edward J. Maliszewski died leaving a will that included specific bequests of stock to named legatees, some of whom were under age 25 at the time of his death.
- Paragraph four of the will addressed gifts to young beneficiaries. It stated, in substance, that if any part of the estate vested “absolute ownership” in a person under age 25, the decedent’s fiduciary was authorized to hold the property “so vested” in a separate fund for that person’s benefit.
- The fiduciary was authorized to invest and reinvest the fund and was directed to apply as much of the net income or principal as necessary for the beneficiary’s care, support, maintenance, and education until the beneficiary reached age 25.
- Upon the beneficiary reaching age 25, the will directed that accumulated income and any unexpended principal be paid to the beneficiary.
- Robert Maliszewski and others, acting as guardians for under-25 beneficiaries, commenced a Surrogate’s Court proceeding to construe paragraph four, contending that it created trusts for those beneficiaries’ stock bequests.
- Surrogate’s Court, Schenectady County, held that paragraph four did not create valid trusts, reasoning that the “vest in absolute ownership” language made outright gifts to the legatees and that there was no delivery of the assets with intent to vest legal title in a trustee.
- The guardians appealed to the Appellate Division, Third Department.

## Issues

1. Did paragraph four of the will create valid testamentary trusts for legatees who were under age 25 at the decedent’s death, notwithstanding the phrase “vest in absolute ownership”?

## Decision

- The Appellate Division, Third Department reversed the Surrogate’s Court’s construction.
- The court agreed with the guardians that the will’s stock bequests to under-25 legatees were to be held in trust until the legatees reached age 25.
- The court held that, even with the “so vested” and “absolute ownership” wording, the fiduciary obtained legal title to the assets for administration and therefore functioned as trustee until distribution at age 25.

## Legal Principles

- To create a valid express trust under New York law, there must be a designated beneficiary, a designated trustee, an identifiable res, and delivery with intent to vest legal title in the trustee (citing Matter of Marcus Trusts).
- A will is construed as a whole to carry out the decedent’s intent; isolated phrases are read in context with the entire provision.
- Language stating that property vests in “absolute ownership” does not bar a trust where the will also directs the fiduciary to segregate the property into a separate fund, invest and reinvest it, and make discretionary distributions of income or principal for the beneficiary until a stated age, followed by a final payout (citing Orentreich v Prudential Ins. Co. of Am.).

## Conclusion

Paragraph four reflected the decedent’s intent that property left to beneficiaries under age 25 be held, invested, and administered by the fiduciary for the beneficiaries’ benefit until they reached 25, at which point the remaining principal and accumulated income would be distributed; this structure satisfied New York’s trust requirements and placed legal title in the fiduciary as trustee despite “absolute ownership” language.


Matter of Maliszewski, 42 A.D.3d 737 (2007)