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Keegan v. Estate of Edward J. Keegan

Decided: February 17, 1978.

THOMAS F. KEEGAN, ADMINISTRATOR C.T.A. OF THE ESTATE OF EDWARD J. KEEGAN, DECEASED, AND ADMINISTRATOR OF THE ESTATE OF BARBARA ANN KEEGAN, DECEASED, PLAINTIFF,
v.
THE ESTATE OF EDWARD J. KEEGAN, THE ESTATE OF BARBARA ANN KEEGAN, THOMAS F. KEEGAN; EDWARD J. KEEGAN, JR.; THOMAS F. KEEGAN, GUARDIAN OF BARBARA ANN KEEGAN; THOMAS F. KEEGAN, GUARDIAN OF MARY BETH KEEGAN; THOMAS F. KEEGAN, GUARDIAN OF MARK E. KEEGAN; THOMAS F. KEEGAN, GUARDIAN OF DAVID E. KEEGAN; THOMAS F. KEEGAN, ADMINISTRATOR OF THE ESTATE OF ROBERT EDWARD KEEGAN, ALSO KNOWN AS ROBERT E. KEEGAN; THOMAS F. KEEGAN ACTING UNDER THE STATUTE N.J.S.A. 3A:6-6 FOR THE ESTATE OF MICHAEL KEEGAN, ALSO KNOWN AS MICHAEL EDWARD KEEGAN, JOSEPH EDWARD KEEGAN, DECEASED, JAMES EDWARD KEEGAN, DECEASED; STATE BANK OF MANVILLE; COMMUNITY STATE BANK AND TRUST COMPANY; PAUL KEITH; MIDATLANTIC NATIONAL BANK; MICHAEL PALAZZOLO; WALTERS NURSERY INC.; BRADEN'S FLYING SERVICE; ROSE BEDELL; CARDINAL AIRWAYS; ANTHONY CONSTANZO; H.J. OPDYKE LUMBER CO., INC.; ALVICE M. CRUZ; CENTRAL HOME TRUST COMPANY; AGWAY PETROLEUM CORPORATION; CITY NATIONAL BANK OF NEW JERSEY, DEFENDANTS



Morton I. Greenberg, J.s.c.

Greenberg

On June 1, 1976 all six persons on board an airplane were killed in a crash. They were the presumed pilot, Edward J. Keegan, and Barbara Ann Keegan, his wife, and four of their ten children, Robert Edward Keegan, Michael E. Keegan, Joseph Edward Keegan and James Edward Keegan. There is no evidence of the order of death. Edward J. Keegan died testate, his will having been executed March 6, 1974. Barbara Ann Keegan died intestate with no indication that she had ever had a will. On September 8, 1976 a surviving child, Thomas F. Keegan, his father's executor having renounced, qualified as administrator with the will annexed of his father's estate and as general administrator of his mother's estate and of the estate of his brother Robert Edward Keegan. He has also filed affidavits in lieu of administration for his three other deceased brothers. See N.J.S.A. 3A:6-6. These proceedings were taken before the Hunterdon County Surrogate.

The financial affairs of the senior Keegans, particularly Edward J. Keegan, were tangled, as evidenced by claims and judgments. Both estates have, by stipulation in this action, been declared insolvent. The problems of Edward J. Keegan seem to be derived mainly from his activities as an officer of the State Bank of Manville.

In an effort to bring about orderly administration and to resolve controversies concerning property ownership, this litigation was brought on April 18, 1977 by Thomas F. Keegan as administrator of his parents' estates. The complaint sets forth that plaintiff's parents had owned as tenants by the entireties a valuable but mortgaged property in Milford, Hunterdon County, which at the time of the filing of the complaint was under foreclosure. Devolution of title to the real estate was, for reasons discussed herein, in doubt. [157 NJSuper Page 284] The complaint also states that execution could issue on judgments in other cases, and that entitlement to proceeds of substantial amounts of life insurance was in doubt. Plaintiff named as defendants the estates of his parents and the surviving children, including himself individually and in a representative capacity for the four children who were infants, as well as his parents' known creditors. This court, without objection of counsel, has determined that it should exercise jurisdiction and not transfer the complaint to the Hunterdon County Court even though ordinarily proceedings with regard to administration should be in the County Court in cases in which the letters of administration are taken out before the surrogate. See Rogozinski v. Rogozinski , 109 N.J. Super. 138 (Ch. Div. 1970). The court reasoned that even if ultimately it be determined that the authority of the Hunterdon County Court extended to all matters raised before this court, N.J.S.A. 3A:2-2, the unusual circumstances of this case justified the intervention of this court exercising its undeniable jurisdiction. N.J.S.A. 3A:2-1; R. 4:86-1. It was deemed imperative that interlocutory orders be made promptly without question of jurisdiction. For example, by order of this court of June 22, 1977, the real estate was sold pendente lite for $120,000 by a special master and the net proceeds after payment of mortgages deposited with the Clerk of the Superior Court. This sale resulted in preserving for the estates the net sale price of $21,533.12. It should also be noted that at the trial other matters were settled, leaving only the issues dealt with in this opinion to be determined by the court. Because of the conflicting position of Thomas F. Keegan as the representative of all the estates, the court appointed administrators ad litem for the estates of Edward J. Keegan and Barbara Ann Keegan. N.J.S.A. 3A:6-14; R. 4:80-9. The court also appointed a guardian ad litem for the minor surviving children. With respect to parties it should finally be noted that many creditors did not answer and their default has been entered. Other parties,

though not defaulting, have not actively engaged in this litigation.

The first task for the court is to determine who owned the proceeds of sale of the real estate. This raises a question under the Uniform Simultaneous Death Law, N.J.S.A. 3A:5-1 et seq. Research of the court and counsel indicates that the question has never been considered in any reported opinion even though the act has been adopted in almost every state. See table following N.J.S.A. 3A:5-1. The real estate had been acquired solely by Edward J. Keegan in 1970. By a deed dated January 2, 1972, Edward J. Keegan and Barbara Ann Keegan conveyed the property to themselves. Though the deed was not in evidence, the parties stipulated that it created a tenancy by the entireties and made no reference to survivorship rights upon simultaneous death. On March 6, 1974 Edward J. Keegan executed a trust agreement and will. They were prepared by an attorney in furtherance of a program of sophisticated estate planning. The trust agreement established an initial trust corpus of certain insurance policies issued by the Penn Mutual and National Service life insurance companies. In addition it provided that the settlor could add property to the trust during his life. He retained full control over property placed in the trust and reserved a power of revocation, although it was not used. Upon his death the trust corpus was to be divided into two parts designated "A" and "B". Part "A" was to "consist of an amount of the Trust Estate which, when added to all property received by the Settlor's wife, Barbara Keegan, whether passing under this trust agreement, the Settlor's last Will and Testament or otherwise, and included in the Settlor's gross estate for federal estate tax purposes, shall equal in value the sum needed to obtain the maximum marital deduction for federal estate tax purposes." Part "B" was to be the balance of the trust estate. The income from part "A" was payable to Barbara Ann Keegan during her lifetime. She was given a general power of appointment over the corpus, exercisable

by will. Part "B" was for the benefit of the family. The trust agreement further provided:

If the Settlor's wife, Barbara Keegan, in fact survives him, or if she and he die under such circumstances that there is no sufficient evidence that they have died otherwise than simultaneously, the Settlor's said wife shall be conclusively presumed to have survived him. Any beneficiary under this Agreement, with the exception of the Settlor's said wife, however, shall be conclusively presumed to have pre-deceased the Settlor if such beneficiary shall die within thirty days after his death.

The will, after disposing absolutely of items of personal use to Barbara Ann Keegan, devised and bequeathed the balance of the estate to the trustee to become a portion of the trust corpus. In language substantially the same as in the trust it provided that in the event of the death of testator and Barbara Keegan "under such circumstances that there is no sufficient evidence that we have died otherwise than simultaneously, my said wife shall be conclusively presumed to have survived me." Neither the will nor the trust made specific reference to the real estate.

This court, in order to allot properly between the two estates the proceeds of the sale, must determine whether the survivorship provisions of the will or the trust agreement can affect the passing of the property. N.J.S.A. 3A:5-3 provides:

Where there is no sufficient evidence that 2 joint tenants or tenants by the entirety have died otherwise than simultaneously, the property so held shall be distributed one-half as if one had survived and one-half as if the other had survived. If there are more than 2 joint tenants and all of them have so died, the property thus ...


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