Matter of Maliszewski

Edward Maliszewski’s will stated that if his estate vested absolute ownership of property in any person under age 25, then Edward’s fiduciary was to hold the property so vested in a separate fund for that person’s benefit. The fiduciary was authorized to invest the property and directed to distribute net income or principal as needed for the person’s care, support, and education until the person reached 25. Income referred to money earned by the trust’s assets, and principal referred to the assets themselves. When the person reached 25, the fiduciary was to distribute all accumulated income and remaining principal to the person. At the time of Edward’s death, his will bequeathed stocks to certain persons (legatees) who were then under 25. Robert Maliszewski and others (plaintiffs) initiated a proceeding in surrogate court for the construction of Edward’s will. They argued that Edward’s will created trusts for each of the legatees. The surrogate court disagreed, holding that the will did not create trusts because there was no delivery of the assets, namely the stocks, to the trustee with the intent to vest legal title in the trustee. The surrogate court’s decision was based on the will’s “vested absolute ownership” language, which the court perceived as making an absolute gift of the stocks to the legatees, precluding a finding that legal title was intended to be delivered to the trustee. Robert and the others appealed.