A New York court allows reformation of a testamentary trust in order to create a special needs trust (SNT), finding that the decedent's intent had been to supplement, rather than supplant, government benefits for her child with special needs. Matter of Hyman (N.Y. Surr. Ct., No. 235680, Feb. 16, 2007). Unpublished.
Goldie Hyman established a testamentary trust for the benefit of her son, Burton, who suffers from chronic physical disabilities. After Ms. Hyman's death, her sister, Eila Bender, and niece, Bonnie Linzer, served as co-trustees. They were both remainder beneficiaries of the trust and per the trust terms, they lacked discretion to pay income or principal from the trust, to determine whether a beneficiary was disabled, to terminate any trust or life estate, or to allocate receipts or expenses between principal and income. Later, Roger Blane, who is not a remainderman, was also appointed to serve as a co-trustee with Ms. Bender and Ms. Linzer.
Ms. Bender petitioned the court to reform the trust out of concern that its language could frustrate Ms. Hyman's intent to provide funds for the duration of Burton's life. She sought to explicitly incorporate language into the trust provisions to ensure that it would qualify as an SNT. The petition was unopposed and supported by an affidavit of Roger Blane.
The New York Surrogate's Court grants the petition to reform the testamentary trust, finding that the will evidences Ms. Hyman's intent to provide for her son to the extent his needs are not met by government assistance. Relying on case law and a state statute that essentially implements the case law, the court recognizes judicial willingness to reform wills to obtain the benefits of an SNT and notes that New York has a state policy of encouraging the creation of SNTs.
To download the full text of this decision in PDF format, go to: https://decisions.courts.state.ny.us/fcas/fcas_docs/2007feb/2902356802007130surr.pdf.
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