Surrogate Holds Non-Apportionement of Estate Tax Clause Void as to Attesting Witness

In Matter of Wu, 2009 NY Slip Op 29188 (Sur. Ct. New York Co.), in a matter of first impression, Surrogate Glen held that a clause directing that all estate taxes , imposed on all items included in the computation of the estate tax, "whether passing under this Will or otherwise" are to be paid from the general estate, was void as to an attesting witness (decedent's brother) who was a beneficiary of two life insurance policies with a $3,314,215 death benefit.

The Surrogate reasoned that "The policy animating the invalidation of a legacy to a person whose testimony is required for probate is equally applicable to a benefit conferred by a tax clause."

The Court pointed out that for purposes of determining forfeiture, the witness' interest is measured as of the time of execution of the will and that forfeiture is not be required where the witness is designated as a beneficiary of non-probate assets after the execution of the will.

Accordingly, the Court directed that estate taxes are to be apportioned against the life insurance proceeds in the manner provided in EPTL 2-1.8.