Hillowitz was a member of an
investment club. When he died, the club paid the widow $2.8k (his
interest in the partnership).
This is known as a payable-upon-death
contract.
Hillowitz's estate claimed
that the $2.8k was part of Hillowitz's estate and should be probated
according to his will.
Hillowitz's widow claimed
that she was a third party beneficiary of a valid non-probate contract, and the money was never owned by Hillowitz
and shouldn't be considered part of his estate.
The Probate Court found that
the money was not part of Hillowitz's estate. The executor appealed.
The Appellate Court reversed
and found that the agreement was invalid as an attempted testamentary
deposition. Hillowitz's widow appealed.
The New York Supreme Court
reversed the Appellate Court and said the money rightfully belonged to the
widow.
The way the partnership was
structured, Hillowitz owned an interest while he survived. However, that
interest dissolved upon his death. The $2.8k was never owned by
Hillowitz and therefore was never part of his estate.
The Uniform Probate Code
§ 6-101 specifically says that non-probate
contracts such as this one are not considered to be
testamentary. It further says that:
These contracts are revocable
through such events as a divorce.
Anti-lapse Statutes should apply if the beneficiary
predeceases the decedent.
The beneficiary must survive
by more than 5 days past the decedent (simultaneous death)
