Surrogate Nora Anderson
In a contested construction proceeding involving disposition of remainders of two grantor retained annuity trusts (GRAT) by decedent/grantor Fisher, upon expiration of each trust, the remainders were to be distributed under mostly similar provisions. Decedent died before either trust terminated triggering application of subparagraph (C)(2) and the calculation of the "fractional share" to determine how the trust remainders should be distributed. Under decedent’s will and codicil, any property distributable to grantor’s estate from either GRAT under (C)(2)(a) passed as part of the residuary estate, which the will divided among decedent’s three children, the daughters receiving 45 percent each and the son 10 percent. If the GRAT passed under (C)(2)(b) the remainder was distributed equally among the children. The court stated contrary to petitioner Nancy’s, a trustee and decedent’s child, contention, the "fractional share" was not incalculable absent a construction referencing the 2010 Tax Act. It stated grantor established an unambiguous distribution scheme in which her children would share equally in the remainder of her GRATs unless her estate was subject to federal estate tax. The court ruled the assets remaining in the GRATs were to be distributed under (C)(2)(b).