Proceeding to Confirm Arbitration Award Triggers Forfeiture Clause in Will

In Matter of Kalikow, 23 Misc 3d 1107(A), 2009 NY Slip Op 50624(U) (Sur. Ct. Nassau Co.), the will provided:

"In the event that any of my descendants shall, directly or indirectly, under any pretense or for any cause or reason whatever, in any jurisdiction, oppose the probate of my Will, or institute, abet, take, or share, directly or indirectly, in any action or proceeding against my estate to impeach, impair, set aside or invalidate any of the provisions of my Will, or make any agreement, direct or indirect, in connection with any of the foregoing, with any person instituting, abetting, taking or sharing in such action or proceeding, directly or indirectly, I do hereby revoke any and all dispositions, devises, bequests, trusts or other provisions, including the option provided in Article TENTH hereof, to or for the benefit of any such descendant, and I direct that any such dispositions, devises, bequests, trust or other provisions, to or for the benefit of any such descendant, shall become part of my residuary estate."

An issue in the estate was the decedent's right to bequeath certain partnership interest, without the consents required under the partnership agreement.

The respondent-beneficiaries demanded arbitration of the dispute and the arbitrator determined that the agreement precluded a transfer of a partnership interest by testamentary instrument. The beneficiaries then brought a proceeding to confirm the arbitration award.

The Surrogate held that the commencement of the proceeding to confirm the award, not the demand for arbitration, triggered the forfeiture clause:

"A forfeiture could not occur prior to a determination of petitioners' rights under the partnership agreement. In 2006, petitioner served a demand to arbitrate. By decision dated October 13, 2006, the court determined that the dispute was subject to arbitration. An arbitration hearing was conducted on April 9, 2008 followed by an award which concluded that the agreement prohibited a bequest by a partner without the consent of the other partners. At that point, petitioners were apprised of their standing to contest the bequest under Article "NINTH."

Thereafter, petitioners made a motion to confirm the award. They opposed a motion to vacate the award. These actions demonstrated petitioners' intention to enforce their rights under the partnership agreement which precluded a partner from conveying or transferring his or her partnership interest without the consent of the other partners. Their decision to enforce their rights under the partnership agreement did "impeach, impair, set aside or invalidate [one of the] provisions of [decedent's] will" in contravention of the terms of Article "EIGHTEENTH" of the will, thereby triggering the in terrorem clause. "