On April 27, 2009, a New York court held that a necessary witness to a will was an interested witness and was denied benefit under the will, even though his benefit under the will was unknown.
The respondent in the case, Henry Wu, was the beneficiary of two life insurance policies. Decedent's will provided that all taxes resulting from decedent's death, including those arising outside the will, were to be paid by the estate and were not to be apportioned among the beneficiaries. Wu argued that this provision freed him from responsibility for the taxes on the approximately $3.3 million he received from the life insurance policies. The court would have agreed had Wu not been a necessary witness to the will. New York law provides that a witness to a will cannot benefit from a disposition in the will. The court reasoned that the non-apportionment clause operated as a benefit in favor of Wu because he would be relieved from his portion of applicable taxes. Therefore, the court ordered Wu to pay his portion of the taxes on the life insurance proceeds.
The court recognized that the decision may seem harsh. While the interested-witness statute was designed to prevent a witness from using fraud or coercion to benefit under the will, Wu was not named in the will, and he claimed that he was unaware of his benefit at the time of witnessing. Nevertheless, the court deemed Wu an interested witness, even though it seems it was unlikely he used fraud or coercion to benefit under the will. The court concluded that "[i]t behooves any drafter using [a non-apportionment clause] to be fully informed of the testator's non-probate assets to avoid unintended consequences, some of which may have even greater potential for frustrating the testator's intent." In re Estate of Wu, 2009 NY Slip Op 29188 (Sur Ct, New York County 2009).
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