Decisions of Interest

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Re-Adopted Child Entitled to Take from Now-Deceased First Adoptive Father

A child who was adopted by a couple, was listed as a beneficiary in the father's will and in trust instruments, but was adopted out by the mother eight years after the father's death, remains entitled to take through the will and trusts. Matter of Svenningsen, 2013 N.Y. App. Div. LEXIS 766 (2d Dept. 2/6/13) (Mastro, J.P., Chamber, Austin and Miller, JJ.).

The deceased adoptive father, John Svenningsen, was in the process of adopting a girl from China when he was diagnosed with cancer. The 1996 Chinese adoption agreement stipulated that the couple would treat the child as their biological offspring and would not abandon her or have her re-adopted by anyone else. The agreement also stated that the child was entitled to inherit the couple's estate.

Svenningsen set up two irrevocable inter vivos trusts, one in 1995 and the other in 1996. The 1995 trust named Svenningsen's four children, but also included as beneficiaries any other children later born to or adopted by him. The trust funds were to be distributed equally to all his children once the eldest reached the age of 30. The 1996 trust specifically named Svenningsen's now-adopted Chinese daughter, Emily, as well as his four other children. Svenningsen also executed a will that created a marital trust, the remainder of which would be distributed equally to the couple's “then living issue” upon the death of the Svenningsen's wife, Christine. The will defined “living issue” as including adopted children and those whose adoption process had been commenced, even if not finalized. It did not specifically name any children.

Svenningsen died in May 1997. In 2003, Christine placed the adopted child in a school for children with special needs and then offered her for adoption to others through the school. A school administrator and her husband formally adopted the girl in 2006. They had not been told of the Svenningsen trusts or the will, but did know that she had been provided for by her previous adoptive father in some way. When Christine tried to get them to settle the matter by accepting $850,000 on the child's behalf, the new adoptive parents sought an accounting of the estate's assets, which reportedly amount to about $250 million dollars. Christine, her biological children and the deceased's sister opposed, arguing that the child's interest in the estate was terminated upon her 2006 adoption.

The court agreed with Christine that the law in New York generally terminates inheritance rights when a child is adopted out by his or her birth parents. However, in this case, the intent of the testator in creating the class gift, as evidenced by the terms of the will and the trusts, must prevail, as Christine's unilateral decision to adopt the child out long after the testator's death could not have been foreseen by him. According to the trust documents and the will, the only condition Svenningsen had put on his adopted daughter's inclusion in the class gift was that she survive him. This the child had done, so her rights in the gifts are now fully vested. Therefore, the court ordered Christine to produce an accounting of the estate's assets.

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Family Law Attorney Suspended over Brother's Embezzlement

Long Island family law attorney Peter Galasso recently lost the appeal of his two-year suspension from practice after the Court of Appeals upheld an Appellate Division, Second Department, finding that Galasso's failure to properly supervise a firm employee harmed the firm's clients. Matter of Galasso, 2013-60.

Peter Galasso's suspension was prompted by his brother Anthony's embezzlement of millions of dollars from client funds held by the firm of Galasso, Langione, Catterson & LoFrumento. Although Peter Galasso was not involved in the crime, he was held responsible because he failed to detect the theft. Several local bar groups stood behind Galasso, arguing that his punishment was too severe, but the Second Department and, ultimately, the Court of Appeals, were not swayed. They found that Galasso had failed in his fiduciary duty to the firm's clients because he did not detect and put a stop to his brother's actions.

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Re-Adopted Child Entitled to Take from Now-Deceased First Adoptive Father

A child who was adopted by a couple, was listed as a beneficiary in the father's will and in trust instruments, but was adopted out by the mother eight years after the father's death, remains entitled to take through the will and trusts. Matter of Svenningsen, 2013 N.Y. App. Div. LEXIS 766 (2d Dept. 2/6/13) (Mastro, J.P., Chamber, Austin and Miller, JJ.).

The deceased adoptive father, John Svenningsen, was in the process of adopting a girl from China when he was diagnosed with cancer. The 1996 Chinese adoption agreement stipulated that the couple would treat the child as their biological offspring and would not abandon her or have her re-adopted by anyone else. The agreement also stated that the child was entitled to inherit the couple's estate.

Svenningsen set up two irrevocable inter vivos trusts, one in 1995 and the other in 1996. The 1995 trust named Svenningsen's four children, but also included as beneficiaries any other children later born to or adopted by him. The trust funds were to be distributed equally to all his children once the eldest reached the age of 30. The 1996 trust specifically named Svenningsen's now-adopted Chinese daughter, Emily, as well as his four other children. Svenningsen also executed a will that created a marital trust, the remainder of which would be distributed equally to the couple's “then living issue” upon the death of the Svenningsen's wife, Christine. The will defined “living issue” as including adopted children and those whose adoption process had been commenced, even if not finalized. It did not specifically name any children.

Svenningsen died in May 1997. In 2003, Christine placed the adopted child in a school for children with special needs and then offered her for adoption to others through the school. A school administrator and her husband formally adopted the girl in 2006. They had not been told of the Svenningsen trusts or the will, but did know that she had been provided for by her previous adoptive father in some way. When Christine tried to get them to settle the matter by accepting $850,000 on the child's behalf, the new adoptive parents sought an accounting of the estate's assets, which reportedly amount to about $250 million dollars. Christine, her biological children and the deceased's sister opposed, arguing that the child's interest in the estate was terminated upon her 2006 adoption.

The court agreed with Christine that the law in New York generally terminates inheritance rights when a child is adopted out by his or her birth parents. However, in this case, the intent of the testator in creating the class gift, as evidenced by the terms of the will and the trusts, must prevail, as Christine's unilateral decision to adopt the child out long after the testator's death could not have been foreseen by him. According to the trust documents and the will, the only condition Svenningsen had put on his adopted daughter's inclusion in the class gift was that she survive him. This the child had done, so her rights in the gifts are now fully vested. Therefore, the court ordered Christine to produce an accounting of the estate's assets.

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