Decedents Estates Outline
Fall 2012
Davidson
Part 1—Intestate Succession
Intro, Terminology, Public Policy
3 Areas of Law
1. Estate planners (wills, revocable trusts)
2. Estate administration (probate—formal and informal)
3. Estate litigation
UPC 2-602
-A will may provide for the passage of all property the testator owns at death and all property acquired by the estate after the testator’s death
Shaw Family Archives v. CMG Worldwide
· Marilyn Monroe died in 1963. Left balance to Strasberg. He married Anna then died. Anna became administrix in 1982, close the estate and transferred assets to MMLLC.
· Shaw family archives, 3 children of late photographer who to canonical images of MM.
· Dispute arose from sale of printed photo of MM on target t-shirt
· Residuary clause
· MM didn’t have any post-mortem right of publicity under the law of any relevant state
The Dead Hand—control from the grave
Shapira v. Union National Bank
· Decedent wanted his son to marry a Jewish girl with Jewish parents in order to inherit
· If $ didn’t go to his sons, his money would go to the State of Israel
o Intent was clear (wanted to preserve the Jewish faith)
· Court said restriction was okay
· Maddox v. Maddox (reasonableness test)
o If the limitation has been that the son couldn’t marry a black girl—INVALID b/c limitation isn’t reasonable
o Unreasonable on its face>>>void for public policy
In Terroem Clauses—to frighten someone into doing something
Gift over—A property gift (especially by will) that takes effect after the expiration of a preceding estate in the property (such as a life estate or fee simple determinable)
Cy Pres—“as near as possible”
Review ?s: What restrictions should be imposed on inheritance? Should there be restrictions to protect family members?
Probate Process; Professional Responsibility
Probate property—property that passes through probate under the decedent’s will or intestacy
Non-probate property—property that passes outside of probate under an instrument other than a will.
Common modes of non-probate transfer
(a) Joint tenancy property, both real and personal
(b) Life insurance
(c) Contracts with payable-on-death (POD) provisions
(d) Interests in trust
(e) Revocable living trust (“intervivos”)—not subject to formal probate
3 Functions of Probate
1. Provides evidence of transfer of title
2. Protects creditors
3. Distributes the decedent’s property
Fiduciary—person who is acting in the best interests and for the benefit of the estate. May be an executor, personal representative, trustee, CTA (county administrator appointed to administer the estate when no one comes forward).
Summary of Probate Procedure
-NC Clerk of Court over Probate (sits as Judge)
I. Does the person have a will?
II. Where were they domiciled?
a. If there is a will
i. The executor or lawyer comes to the court.
ii. Takes will, death certificate, take oath and apply for application of letters
b. If there is not a will
i. The process is the same—personal representative
1. Surviving spouse
2. Any devisee of the testator
3. Any heir of the decedent
4. Disqualification §28A-4-2: under age 18, incompetent
III. Preliminary Inventor (after application of letters.) Then takes oath.
IV. If no will, BOND will need to be posted by personal representative, can waive requirement for bond if there is a will
a. Can apply for modification of bond
V. Then court issues testamentary letters
VI. Then estate needs tax ID number
VII. Then court notifies beneficiaries
a. If listed as executor of will, can renounce executorship
b. In all states, a certain amount can be taken of the top for minor children and spouses before creditors are paid—1 time annual allowance
VIII. Give notice to creditors
a. Give notice to newspaper of general circulation in the county where the decedent was domiciled at time of his death (once a week for 4 consecutive weeks)
b. OR can post notice at the county court house and 4 other locations in the county
c. Executor or PR must then give notice to any specific claims they know are out there
d. Executor of PR must then sign affidavit of notice to creditors
IX. By STATUTE; order of claims which must be paid § 28 A-19-6
X. At 90 days after qualified as PR, must submit to the court inventory of decedent’s estate (everything @ time of death)
a. Part III—claims for wrongful death (do NOT pass through a will, and pass through intestate succession)
XI. Can begin to distribute, must be signed and acknowledged (must indicate whether it is a partial or final distribution)
XII. Estate tax certification
a. @ end of year (hopefully) have final accounting (can have account annual rather than final)
b. cannot close estate until everything is accounted for
c. After final accounting, can be excused as executor, but can be liable
Spouses can petition for summary administration—assume liability (otherwise debts die w/ decedent)
Can forgo formal probate if under $20,000
-affidavit of collection disbursement, and
-application of letters of trusteeship
Review ?s: What is probate? Is it necessary? What are probate and non-probate assets? What particular professional responsibility issues arise in estate planning? What is a default rule? Who gets the property when someone dies without a will?
Intro to Intestate Succession—Share of the Surviving Spouse
Non-probate assets are not part of intestacy
Partial intestacy—will doesn’t dispose of entire estate
The probate property of a person who dies without a will is governed by the state’s statute of descent and distribution
UPC (Uniform Probate Code)
-many states will adopt portions of the UOC
-every state has an intestate distribution scheme—attempt to do what decedent would have done if the had taken the time to execute a will.
Every State: person dies w/o a will
-spouse and children take to the exclusion of anyone else
-difference is how its distributed
All jurisdictions:
-in-laws do NOT inherit from the decedent through intestate succession
Distribution—refers to personal property
Descent—refers to real property
· Living persons do not have heirs
· Beneficiaries inherit property through a will—not heirs
· Ancestors—ascending
·
irty thousand dollars ($30,000) plus one half of the balance of the personal property;
(2) If the intestate is survived by two or more children, or by one child and any lineal descendant of one or more deceased children, or by lineal descendants of two or more deceased children, and the net personal property does not exceed thirty thousand dollars ($30,000) in value, all of the personal property; if the net personal property exceeds thirty thousand dollars ($30,000) in value, the sum of thirty thousand dollars ($30,000) plus one third of the balance of the personal property;
(3) If the intestate is not survived by a child, children, or any lineal descendant of a deceased child or children, but is survived by one or more parents, and the net personal property does not exceed fifty thousand dollars ($50,000) in value, all of the personal property; if the net personal property exceeds fifty thousand dollars ($50,000) in value, the sum of fifty thousand dollars ($50,000) plus one half of the balance of the personal property;
(4) If the intestate is not survived by a child, children, or any lineal descendant of a deceased child or children, or by a parent, all of the personal property.
§ 29-30 Election of Surviving Spouse to take life interest in lieu of intestate share provided
N.C. § 39-13.6
Control of real property held in tenancy by the entirety
(a) A husband and wife have an equal right to control, use, possession, rents, income, and profits of real property held by the time tenancy by the entirety. Neither spouse may bargain, sell, lease, mortgage, transfer convey, or in any manner encumber any property so held without the written joinder of the other spouse.
(b) A conveyance of real property or any interest therein, to a husband and wife vests title in them as tenants by the entirety when the conveyance it to:
(1) A named man “and wife” or
(2) A named woman “and husband” or
(3) Two named persons, whether or not identified in the conveyance as husband and wife, if at the time of conveyance they are legally married.
Review ?s: What is intestate succession? Who is a spouse?
Shares of Descendants; Negative Disinheritance
NC does not recognized common law marriage.
NC does recognize CL marriage from another jurisdiction when they move to NC
When a child dies before a decedent, their children take what they would take (in all jurisdictions)
-Children whose parents are alive get nothing
Strict Per Stirpes = English per stirpes
-Vertically equality
E.g.: D and W had 2 children, B and C. B had a child, Q. C had 2 children, E and F. E had 2 children, G and H. F had one child, I. D died intestate, survived by Q, G, H, and I.
