Matter of Rappaport

Rose Rappaport had four adult children: Irwin Rappaport (plaintiff), Karen Brecher, Joel Rappaport, and Susan Rappaport. Susan had chronic disabilities that required specialized care. At Rose’s death, her will created a testamentary trust to provide for Susan. Specifically, the will stated that approximately $2 million was to be held in trust for Susan’s benefit, with the net income from the trust to be distributed to Susan in no fewer than four installments each year for life. Additionally, the provision authorized the trustees to distribute trust principal to Susan as deemed necessary for Susan’s health, support, and maintenance. Upon Susan’s death, the trust’s remaining principal and income was to be distributed equally among Irwin, Karen, and Joel, who were also the trustees. Rose’s stated goal was to provide Susan with the same lifestyle she enjoyed during Rose’s lifetime. A separate will provision stated that the trust was not to jeopardize Susan’s current or future eligibility for government benefits. Although Susan was not receiving any benefits when Rose died, there was concern that the trust might preclude her from receiving benefits in the future. Consequently, Irwin filed a petition asking a court to reform the will so that it created a supplemental-needs trust, which would allow Susan to receive income from the trust without jeopardizing her benefits eligibility. The guardian ad litem appointed to represent Susan’s interests submitted a report that supported reforming the will. However, the New York State Department of Health (defendant) opposed reformation, arguing that reforming the will would be improper because the mandatory income payments to Susan showed that Rose did not merely intend for the trust to supplement government benefits Susan might receive. The New York Surrogate Court considered the parties’ arguments.