In re Matter of Heller

Jacob Heller's trust paid income to his wife Bertha Heller, with the remainder eventually going to his children; Jacob named his brother Frank as trustee and his sons Herbert and Alan as successor trustees. After Jacob and later Frank died, Herbert and Alan became trustees, and in 2003 they elected under EPTL 11-2.4(e) to retroactively apply the unitrust provision of New York's Uniform Principal and Income Act (UPAIA), which recalculates trust income using a fixed formula tied to the assets' market value rather than actual yield. That election dropped Bertha's annual trust income from $190,000 to $70,000. Bertha's daughter Sandra Davis (plaintiff), acting as Bertha's attorney-in-fact, sued to annul the election and remove Herbert and Alan as trustees, arguing that as remainder beneficiaries themselves, they weren't entitled to make the election, and that it couldn't be applied retroactively anyway. The Surrogate's Court denied her summary judgment motion, the Appellate Division affirmed, and the case reached the Court of Appeals on a certified question.