•  
  •  
 

Abstract

Testator created a testamentary trust of several parcels of real property improved with apartment houses, authorizing the trustees to pay the net annual income therefrom to his sons in equal shares. The trust was to terminate when the youngest son attained the age of twenty-one, or, if he died before majority, when the second youngest son attained the age of thirty-seven, or sooner died. Remainder was to the testator's sons living at the termination date or their issue, per stirpes. Testator, while living, had maintained accounting records for the properties in such manner as to reflect an annual charge for depreciation on the buildings, thereby creating a reserve for depreciation. The special guardian for infant contingent remaindermen objected to the failure of the trustees to create and maintain a reserve for depreciation after the death of the testator, while the special guardian for the testator's youngest son, who was an income beneficiary of the trust, maintained that any direction, express or implied, authorizing the setting aside of income as a reserve for depreciation would be invalid under the New York statute restricting accumulations of income. Held, in the absence of a definite direction to the contrary, the trustees not only had a right, but also were under a duty to establish a depreciation reserve, and such a practice would not amount to accumulation of income. In re Kaplan's Will, 195 Misc. 132, 88 N.Y.S. (2d) 851 (1949).

Share

COinS