DECISION AND ORDER This proceeding is brought pursuant to SCPA §2701(2) by the Administrator of the above captioned estate. In his Petition, the Administrator seeks direction from the Court as to the distribution of certain assets of the decedent claimed by several interested parties. Counsel for the parties have stipulated to the underlying facts, which the Court accepts. For ease of reading, reference to the paragraph numbers of that stipulation will be omitted and the stipulated facts will be set forth in narrative form. THE PARTIES AND FACTUAL BACKGROUND Between February and April 2010, the decedent, Susanne Lerch, transferred three existing IRAs into three new IRAs owned by her and invested in a variable annuity product issued by Prudential Annuities Life Assurance Corporation (hereinafter collectively referred to as the “Prudential IRAs”). The total amount invested in the Prudential IRAs, including additional funds added by decedent in 2011, was approximately $1.3 million. To effectuate these transfers, decedent signed a number of documents. As pertinent to this action, on each of the Prudential IRAs, decedent designated the 100 percent primary beneficiary as “Elmsford Animal Shelter”, with an address of 100 Warehouse Lane S., Elmsford, New York 10523. In connection with the “Beneficiary Information” section on the third Prudential IRA, the taxpayer identification number (“TIN”) for Central Westchester Humane Society, Inc. (“CWHS”) was written in the space for the “Social Security/Tax I.D. Number” of the Beneficiary. No beneficiary Social Security/TIN appears on the first two Prudential IRAs. There were no contingent beneficiaries designated on any of the Prudential IRA accounts. On or about June 28, 2016, decedent opened a fourth IRA account with Bruderman Asset Management, LLC (“Bruderman IRA”). She invested $334,600 in this IRA, which was separate from, and in addition to the funds invested in the Prudential IRAs. The Bruderman IRA designated “Central Westchester Humane Soc.” as it’s 100 percent beneficiary and listed the CWHS TIN in the space for “Social Security/Taxpayer ID Number” of the beneficiary. Decedent died intestate, a resident of Brewster, New York, on November 24, 2016, at the age of 63. This Court appointed William J. Carlin, Putnam County Commissioner of Finance, as Administrator of decedent’s estate. Mr. Carlin determined, in the separate estate proceedings, that decedent’s distributes are four siblings, each residing and domiciled in Switzerland (hereinafter collectively referred to as the “siblings”). In that proceeding, Mr. Carlin also prepared an inventory of assets, including real property owned by the decedent, as well as a draft preliminary accounting of decedent’s estate. The death benefits in the Prudential and Bruderman IRAs became payable in accordance with their terms and the beneficiary designations upon decedent’s death. On or about September 15, 2017, Carlin, as Administrator, commenced this proceeding by filing a petition seeking relief with respect to the three Prudential IRA accounts. In or about January 2018, the funds in the Bruderman IRA account were paid by Bruderman to CWHS pursuant to the beneficiary designation made by decedent. Prior to these funds being disbursed, counsel for the siblings and Carlin were notified and no objection was raised to Bruderman doing so. Pursuant to a stipulation entered in this Court on October 22, 2018, Prudential was granted “interpleader relief” and will continue to hold the funds in the three Prudential IRA accounts until such time as this Court issues an order directing payment. As of January 15, 2019, the total amount of the death benefit for these IRAs was $2,036,761. CWHS was formed in 1931 as a not-for-profit corporation with the mission of promoting animal welfare in central Westchester County, New York. Since its formation, it has remained, and continues to remain in existence as a not-for-profit corporation. At some point after its formation, CWHS opened the “Elmsford Animal Shelter” (“EAS”) in Elmsford, New York. By no later than the early-1980s, EAS had adopted a “no-kill” policy, meaning that, unlike virtually all other shelters in the region at the time, it would not euthanize healthy cats or dogs. In 1985, Westchester County transferred ownership of a five-acre parcel on Warehouse Lane South in Elmsford (hereinafter the Warehouse Lane Property) to the Town of Greenburgh, at no cost to the Town, with the understanding that the land would be transferred to CWHS, also at no cost, when it was able to construct a new shelter on the property. CWHS eventually constructed a shelter on the Warehouse Lane Property. In 1995, the Town of Greenburgh conveyed title to the Warehouse Lane Property to CWHS, and the Elmsford Animal Shelter was relocated to that site, with an address of 100 Warehouse Lane South, Elmsford, NY 10523. It continued to operate a “no-kill” shelter at that location. In 1999, CWHS filed a “Certificate of Assumed Name” pursuant to N.Y. General Business Law §130, listing “Elmsford Animal Shelter” as the name under which it was doing business. In 2010, CWHS and Pets Alive, Inc. (“Pets Alive”), a not-for-profit entity with a facility in Orange County, New York, entered into an agreement, pursuant to which the directors of CWHS resigned and were replaced by the directors of Pets Alive. CWHS remained in existence as a not-for-profit corporation, continued to own the Warehouse Lane Property, and continued to operate the no-kill shelter, while sharing a common Board of Directors with Pets Alive. During the period in which the Elmsford shelter shared a common Board of Directors with Pets Alive, it continued to be known and commonly referred to in the community as the “Elmsford Animal Shelter”. On July 18, 2015, Pets Alive/CWHS announced that the Elmsford shelter would be closed, due to the extensive repairs needed at the Elmsford building. Pets Alive would continue to operate its separate facility in Orange County. In September 2015, the animals remaining at the Elmsford facility were relocated to the Pets Alive facility and the Elmsford shelter was closed. At this time, CWHS did not file a plan of dissolution with the New York State Attorney General’s Office, did not change or amend its d/b/a, and remained in existence as a not-for-profit corporation. It continued to own the Warehouse Lane Property. Between September 2015 and her death on November 24, 2016, decedent made no changes to the beneficiary designations for the Prudential IRA accounts. Following the July 18, 2015 announcement that the Elmsford shelter would be closed, Jennifer Angelucci, the Elmsford shelter manager at that time, worked with others to form a new not-for-profit entity, Paws Crossed Animal Rescue Inc. (“Paws Crossed”), with the stated goal of obtaining ownership of the Warehouse Lane Property and reopening the shelter at that location. Their efforts were supported by officials in the Town of Greenburgh interested in continuing the decades-long existence of the Elmsford Animal Shelter as a “no-kill” shelter serving the central-Westchester area. Paws Crossed was registered as a New York not-for-profit corporation on August 4, 2015 and soon thereafter obtained tax-exempt status under Internal Revenue Code §501(c)(3). At the time of its creation, none of the directors of Paws Crossed was also a director of CWHS or Pets Alive. In March 2016, Donation Agreements were entered into between CWHS, the Town of Greenburgh and Paws Crossed, pursuant to which, respectively, CWHS agreed to donate the Warehouse Lane Property to the Town, who, upon receiving title from CWHS, would in turn donate it to Paws Crossed. On June 2, 2016, title to the property was transferred pursuant to those Donation Agreements. The following day, June 3, 2016, the Town of Greenburgh issued a news release with the title: “PAWS CROSSED, NO KILL ANIMAL SHELTER IS NOW OWNER OF ELMSFORD ANIMAL SHELTER — CLOSING TOOK PLACE!” In August 2016, Paws Crossed reopened the shelter on the Warehouse Lane Property and on September 17, 2016, it held a public event to mark the re-opening with a prominently displayed banner that announced: “Paws Crossed Animal Rescue Is Reopening The Elmsford Animal Shelter!” Since August 2016, the shelter has remained open and continues the no-kill operation of the Elmsford Animal Shelter, rescuing over 1,500 cats and dogs. During the time period in which Paws Crossed owned and operated the Elmsford shelter, it continued to be commonly referred to in the community as the “Elmsford Animal Shelter” and continues to carry out the same mission engaged in by CWHS when it owned the facility. Many volunteers at the facility have been helping there for years. In January 2017, Paws Crossed, CWHS and Pets Alive entered into a “Transfer Agreement” whereby the animals CWHS transferred to Pets Alive when it closed its Elmsford shelter at the Warehouse Lane Property (known as “Legacy Animals”) would be transferred back to that location which is now being operated by Paws Crossed. This agreement obviously did not exist when the Elmsford shelter was closed in September 2015. CWHS submitted a proposed plan of dissolution dated March 6, 2018 to the New York State Attorney General’s Office in accordance with the Not-For-Profit Corporation Law. The plan designates Paws Crossed as the successor to CWHS for all purposes and all assets, except for the funds paid to CWHS as beneficiary of the Bruderman IRA account. This dissolution plan also did not exist when the Elmsford shelter was closed in September 2015. ARGUMENTS OF THE RESPECTIVE PARTIES The Administrator’s petition avers that the proceeds of the Prudential IRAs should be payable to the estate, there being no contingent beneficiary (EPTL 4-1.1). This is the position now adopted by the siblings. Their essential argument is that the IRAs are contracts, not testamentary documents such as wills or trusts. Being contracts, each IRA must be construed according to the plain meaning of its terms. Any interpretation should be controlled by applicable contract law, not estate law. Pursuant to the IRA terms, in the absence of a living primary or contingent beneficiary, the proceeds are payable to the surviving spouse, or, if none, then to the estate. The siblings contend that since the IRAs are not testamentary documents, the cy pres doctrine, as codified in EPTL 8-1.1, does not apply in this case. Moreover, they argue that the statute only applies where the intent of the person making the gift is of a general, not specific nature. The siblings argue that since the decedent here specified the Elmsford Animal Shelter (EAS) as the beneficiary, this indicates the gift, if any, was of a specific nature, i.e., specific to EAS. They point to the fact that the Bruderman IRA named CWHS as the beneficiary, thus indicating, conclusively they argue, that decedent viewed EAS and CWHS as two distinct entities. They contend that, as EAS was no longer in existence at the time of decedent’s death, in effect predeceasing decedent when it closed, cy pres cannot be applied to reform the gift and apply it to a charity of a similar nature, that being CWHS. Finally, the siblings argue that Paws Crossed is not entitled to the IRA proceeds as it is not the successor in interest to EAS. They contend that when EAS closed, the remaining animals were transferred to a third party, Pets Alive, who is making no claim to the proceeds. Additionally, no articles of dissolution were filed by CWHS when the Elmsford shelter was closed. The Office of the New York State Attorney General (OAG), appearing on behalf of the ultimate charitable beneficiaries (CWHS and/or Paws Crossed) opposes the petition. OAG argues that decedent’s intention to make a charitable gift of the IRA proceeds was made clear by identifying a beneficiary — EAS — by using the TIN for CWHS on the last of the three Prudential IRAs. The first two IRAs left the TIN blank. There is no question as per the stipulated facts that CWHS filed a d/b/a under the name “Elmsford Animal Shelter” in 1999, over 20 years before decedent opened the Prudential IRAs. OAG contends that, since all three IRAs were opened within six weeks of each other, decedent clearly understood that EAS and CWHS were the same entity and viewed them as interchangeable. Moreover, OAG points out that the three Prudential IRAs designated the beneficiaries as a “charity”. Since charities do not “die” as the siblings contend, OAG posits that the clear intent of decedent was for the funds to go to charity, not her siblings. The result, according to OAG, is that the cy pres doctrine need not be applied to this case since the decedent names an identifiable charitable beneficiary. Notably, CWHS was in existence at the time of decedent’s death and is still in existence today. Although it has filed a plan of dissolution, naming Paws Crossed as its successor entity, as of the time of the submissions before the court, that dissolution had not taken place. This makes Paws Crossed an interested entity in these proceedings and, as noted, it has been granted interpleader status. Paws Crossed, in a separate filing, also opposes the Petition. Initially, Paws Crossed points out that it was the owner/operator of the same no-kill shelter facility at the Warehouse Lane Property, commonly referred to as the “Elmsford Animal Shelter”, at the time of decedent’s death on November 24, 2016. It also points out that at no time was there any specific attempt by decedent to leave anything to her siblings. Paws Crossed argues that, contrary to the petition, even if the EAS beneficiary designation is not construed as referencing the specified Warehouse Lane facility, there is still an ascertainable beneficiary at the time of decedent’s death: CWHS, the non-profit entity that owned the Warehouse Lane Property and operated the EAS at the time the IRAs were established. Paws Crossed contends that the beneficiary designation and in particular, decedent’s decision not to name a contingent beneficiary, plainly shows a general charitable intent to support animal welfare so as to invoke cy pres. Notably, when decedent made the designation of EAS in 2010, she filled in the address of the Warehouse Lane Property, although the form did not require an address. This, Paws Crossed contends, evinced a plain intent to benefit animal welfare by supporting a no-kill facility at that address. At the time of her death, although Paws Crossed owned and operated the facility, it was still commonly known in the community as the Elmsford Animal Shelter at that same Warehouse Lane address. Even assuming decedent contemplated a specific entity rather than a specific shelter location, Paws Crossed contends it is entitled to the proceeds as the successor to CWHS under the Not-For-Profit-Corporation Law. As noted, the Elmsford shelter was owned and operated under the name Elmsford Animal Shelter by CWHS at the time decedent opened the Prudential IRAs. On the last of the three IRAs, decedent put the TIN of CWHS. If the Court finds any ambiguity in the beneficiary of the IRAs, then Paws Crossed argues that cy pres should be invoked to give decedent’s charitable intent effect. GENERAL PRINCIPLES OF LAW The Court’s analysis begins, as it must, with the basic proposition that in estate matters, “the court’s foremost objective is ascertainment of decedent’s intent” and, once ascertained, fulling that intent (Matter of Carmer, 71 NY2d 781, 785 [1988]; see also, Matter of Perlman, 150 AD3d 1012, 1014 [2d Dept 2017]). This principle applies to accounts with beneficiary designations, including IRAs (Matter of Sukenik, 162 AD3d 564 [1st Dept 2018] [IRA conformed to be consistent with decedent's intent, as evidenced by other donative instruments]; Matter of Proceeding of Biondo, 11 Misc3d 1065[A] [Surr. Ct. Nassau Cnty. 2006]; Matter of Payton, 2002 NYLJ LEXIS 2357 *1,*3 [Surr. Ct. Nassau Cnty. 2002] ["Evidence of the decedent's intent regarding the distribution of the IRA would control"]). Moreover, it is a well-established principle that charitable gifts are favored under New York law and will be upheld wherever possible (Matter of Wilson, 59 NY2d 461,471-472 [1983]). Indeed, where “a definite charitable purpose may be found within the limits of a [decedent's] language…the court will give it effect if it is possible to do so by the application of the most liberal rules of construction that the law will permit” (Matter of Clayton, 245 NY 469,474 [1927]; Matter of Estate of Carper, 57 AD2d 333,336 [4th Dept 1979], affd, 50 NY2d 974 [1980]). “Courts of equity go to the length of their judicial power in sustaining them. Thus, in order to sustain and give effect to a charitable trust or gift, every reasonable intendment, consistent with the terms and purpose of the gift, will be made, and every presumption, consistent with the language used, will be indulged. Of two possible constructions, the court will adopt the one which operates to sustain the trust or gift” (In re Price’s Will, 264 App. Div. 29, 32 [3d Dept 1942], affd 289 NY 751 [1942]). These basic principles will now be applied to the facts of this case. ANALYSIS The facts of each case determine which, and to what extent, the general principles outlined above apply in that case. To that end, determining the decedent’s intent must be the starting point of our analysis. Here, the initial query is whether the decedent intended to make a gift of the IRAs. There does not appear to be, nor based on the record in this case could there be a serious dispute as to decedent’s intent to make a charitable gift of the IRAs in question at the time they were opened in 2010. The beneficiary designation on each states “Charity”, clearing intending that these assets pass outside her estate. It is not speculative, as the siblings contend, that decedent’s linkage of the name “Elmsford Animal Shelter” with CWHS by using the TIN of CWHS on the last of the three IRAs, leaving the TIN of the other two blank, meant that she viewed them as a single entity. This will be discussed in greater detail below. There is no dispute that some 20 years earlier, CWHS filed a d/b/a as “Elmsford Animal Shelter” and is still in existence using that d/b/a. Notably, the Bruderman IRA, designating CWHS as its beneficiary, was opened in June 2016, over eight months after CWHS had ceased operating the Elmsford shelter, and more than 6 years after the last Prudential IRA was opened. This demonstrates decedent’s ongoing charitable intent to provide for animal welfare. CWHS existed at the time of decedent’s death and, as of the time of these submissions, still exists. Moreover, decedent did not make an alternate beneficiary-designation in favor of her siblings, her estate, or anyone else, further indicating her intent was for these proceeds to be used for charitable purposes. The siblings’ argument that EAS did not survive decedent misses the mark. Decedent named a charitable corporation as a beneficiary. It does not appear from this record that it was ever dissolved. Nor, for that matter, was CWHS, which used “Elmsford Animal Shelter” as its d/b/a ever dissolved. If the siblings mean the facility at the Warehouse Lane Property did not survive, that too misses the mark. The facility at that location was, in fact, operating at the time of decedent’s death and performing the same mission as a no-kill shelter, albeit under different ownership. There is no support for the siblings’ contention that, since EAS did not survive decedent, distribution is therefore controlled by contract law pursuant to the terms of EPTL §13-3.2. That statute protects the rights of persons named as beneficiaries in contracts, not the rights of distributees of an estate who clearly, in this case, were not parties to the contract. Nor do the cases cited require a different result. For example, Matter of Praczkajlo (143 Misc2d 667 [Surr. Ct. Erie Cnty. 1989]) involves an individual as a predeceased beneficiary, not a charitable corporation as here. McCarthy v. Aetna Life Ins. Co. (92 NY2d 436 [1998]) and Freedman v. Freedman (116 F. Supp.2d 379 [EDNY 2000]) both involved the question of whether a will could change the beneficiary provisions of insurance policies (McCarthy) and IRAs (Freedman). Decedent died intestate, making those cases inapplicable to the instant matter. As noted above, the public policy of this State has historically favored charitable gifts. Although the siblings argue that the contractual provisions of the IRA with respect to beneficiaries are controlling here, the Court notes that “contractual provisions which violate public policy are unenforceable” (Matter of Hummel, 30 AD3d 802, 805 [3d Dept 2006], citing Szerdahelyi v. Harris, 67 NY2d 42, 48 [1986]). Indeed, “[p]ublic policy will not permit parties to circumvent the donor’s intent, evade the court’s cy pres powers and determine among themselves who will receive charitable gifts which cannot be distributed as specified” (id.) [citations omitted]). The siblings argue that decedent viewed EAS and CWHS as two separate entities and thus, the proceeds of the IRAs in question must be distributed as part of the estate. The facts do not bear out this contention. As noted above, decedent’s use of CWHS’s TIN in the last Prudential IRA is an indication that she viewed them as one and the same entity, or at the very least, used EAS and CWHS interchangeably. “Elmsford Animal Shelter” was the name used for years in the community to reference the facility located at the Warehouse Lane Property. When the facility reopened under the auspices of Paws Crossed, the public announcements referred to the reopening of the “Elmsford Animal Shelter”, even though a new entity, Paws Crossed, was running the facility. Significantly, the Warehouse Lane property where the facility was located was owned by CWHS at the time of decedent’s death. “A corporation may be designated by its corporate name, by the name by which it is usually known or popularly called, or by any name by which it can be distinguished from every other corporation. This rule applies to a gift to a charitable institution. A gift will pass as intended even though an institute was named by its popular or other unofficial name or was otherwise misnamed, provided the particular institution can be a ascertained. Moreover, it is not necessary that a corporation be designated by its corporate name to entitle it to take as legatee. It is sufficient if it is so described that its identity can be established, i.e., that it may be distinguished from any other…it is the intention of the testator that prevails.” 11 Warren’s Heaton on Surrogate’s Court Practice §191.03 [emphasis added]; see also Matter of Coverdale, 141 Misc 73, 74 [Sur Court Livingston County 1931]). Where it is apparent that a legacy was intended for a particular legatee, “it is well settled that in such case, a legacy will not be defeated by a misnomer” (Kernochon v. Farmer’s Loan & Trust Co., 187 App Div 668, 672 [1st Dept 1919], affd 227 NY 658 [1920]). With respect to a corporation, a devise or bequest to it need not state its corporate name (see, New-York Inst, for the Blind v. How’s Ex’rs, 10 NY 84, 88 [1854]). This is true in situations where the intent of the decedent can be determined “either from the will itself or evidence dehors the will” (Lefevre v. Lefevre, 59 NY 434, 440 [1875]. Here, the record clearly reflects that the no-kill animal shelter located at the Warehouse Lane Property was commonly known in the community, and still is known as the “Elmsford Animal Shelter”. The proceeds of the IRAs in question were intended to go to the charity located at that location. That charity was in operation at the time of decedent’s death, is still in operation at that location, and is still known in the community as the “Elmsford Animal Shelter”. Simply put, the facts of this case lead to the clear and inescapable conclusion that decedent intended for the IRA proceeds to be paid to charity and not pass through her estate. Her charitable intent is clearly established. With respect to the question of the distribution of the funds, we start with the principle that “[E]vidence of the decedent’s intent regarding the distribution of the IRA would control” (In re Payton, 2002 NYLJ LEXIS 2357 *3 [Surr. Ct. Nassau Cnty. 2002]). A court in equity has the power to reform an IRA to conform to the decedent’s intent. In Matter of Sukenik (162 AD3d 564, supra), the court reformed an IRA to be consistent with the decedent’s intent (in that case to minimize taxes), as evidenced by other donative instruments. There is no reason not to apply that rationale to this case. To summarize: the record clearly reflects that decedent had a charitable intent and wanted to donate the proceeds of the Prudential IRAs to a charity she named as “Elmsford Animal Shelter”. The decedent’s use of CWHS’ TIN on the last of the Prudential IRA is certainly good evidence that she viewed Elmsford Animal Shelter, the named beneficiary, and CWHS as either the same, or at the very least, interchangeable names for the entity operating the no-kill shelter at the Warehouse Lane property. EAS was the legally authorized operating name for CWHS. On this record, it appears that she did not, as the siblings contend, view EAS and CWHS as separate entities. There is no dispute that the named beneficiary for these IRAs is a charitable institution. As noted, decedent was not required to use the formal corporate name to designate the beneficiary under those IRAs. The charity that is the object of decedent’s bounty is, despite the use of both EAS and CWHS’ TIN, identifiable, which, as noted above, meets the requirements of Kernochon, How’s Ex’rs, Lefevre, and Coverdale. Charities do not “die” as the siblings contend. Although the siblings argue contract law should apply, they ask this Court to ignore the named beneficiary under the IRA contract, arguing the beneficiary is indefinite. Based on the foregoing, the beneficiary here in not indefinite but rather, is ascertainable. Accordingly, the Court holds that CWHS, operating under the d/b/a of the “Elmsford Animal Shelter” is the proper beneficiary of the Prudential IRAs and is entitled to payment of those proceeds. Although it has filed a plan of dissolution naming Paws Crossed as its successor, as of the submission of this motion, there is no indication that such dissolution has taken place. One final issue needs to be addressed. Since the holding of this decision finds that the beneficiary is ascertainable and is not indefinite, there is no need for the Court to apply the cy pres doctrine. Had that been necessary, the holding would remain the same. Decedent clearly expressed a charitable intent over a six-year period, to provide significant funds to be applied for animal welfare. The strong public policy in favor of such charitable gifts, along with extensive case law consistently holding reformation to accomplish the decedent’s intent to make charitable gifts could lead to no other conclusion. The Administrator’s application is therefore denied, and the Petition is dismissed, without costs. The IRA funds including interest is to be paid to CWHS within 30 days of the filing of this Decision and Order with Notice of Entry. The forgoing constitutes the Decision and Order of this Court. Dated: April 28, 2020
