Trustee who is also a remainder beneficiary may make unitrust election

The decedent’s will created a trust to pay incometo his wife for life, remainder to his children. Two of his children becamesuccessor trustees on the death of their uncle. In March 2003, the trusteeselected to convert the trust to a unitrust under state law and sought to havethe unitrust election made retroactive to the effective date of the statute,which was January 1, 2002. As a result, the amount paid to the widow wasreduced by more than 50%. The court in Matterof Heller 6 N.Y.3d 649 (N.Y.2006), held that the trustees were not barred from making the election becausethey were also remainder beneficiaries and that the election could be maderetroactively. The court remanded to theSurrogate’s Court for a careful review of the fairness of the election and theapplication of all factors applicable to the making of the election, includingthose set forth in the statute.