Trustees Denied Permission to Sell Buildings

In Matter of Smathers, NYLJ, March 11, 2008, p. 27, col. 3, Westchester County Surrogate, Anthony A. Scarpino, Jr., denied an application for permission to sell the Smathers' trust's interest in 26 Broadway and 562 Fifth Avenue, finding the doctrine of equitable deviation inapplicable because the testator's intent that the property remain as part of the trust was clear and unambiguous -- "I direct that neither my Executors nor Trustees shall sell or dispose, unless required by law so to do, * * * . Notwithstanding language that appeared to be say what it meant and mean what it said, the trustees sought to sell the properties alleging that the longevity of the second measuring life (92), a possible lack of severability of 26 Broadway and the present able to sell, were all unforeseen circumstances when the trust was created. The Court found those arguments unconvincing noting that the words employed by the decedent were unequivocal and that there is no frustration of his purpose in creating the trust.

However, the Surrogate did grant so much of the application as sought to permit the transfer ofthe interests in the two building, at trust termination, to an LLC instead of a corporation as mandated by the trust, finding that this deviation would effectuate the decedent's intent by permitting limitation of liability and elimination of double taxation.