Opinion
June 16, 1944.
Louis A. Breier for executors.
Jacob Bromberg, special guardian for Isidore Neufeld and others, infants, respondents.
Schanzer, Radest Levine for Rose Horowitz, respondent.
The reservation by the accounting fiduciaries, out of the income of the real property embraced in the trust of the residuary estate, of a portion thereof, for the purpose of establishing a fund for depreciation and obsolescence of said premises is improper. It is contra to the established law of this State in the administration of a testamentary trust. ( Matter of Chapman, 32 Misc. 187, affd. 59 A.D. 624, affd. 167 N.Y. 619; Smith v. Keteltas, 62 A.D. 174; Matter of Adler, 164 Misc. 544; Matter of Edgar, 157 Misc. 10.) The respondent's objection thereto is accordingly sustained.
The court desires to indicate its individual agreement with the theories advanced by the fiduciaries. The setting aside of a portion of the income of real property for the creation of a depreciation fund is in accord with modern accounting practice. Professor Scott in his work on Trusts (Vol. 2, § 239.4) inclines to the view that the general rule in this respect should be relaxed. The remedy, however, is within the province of the Legislature, and not with the courts.
Submit decree, on notice, in accordance herewith.