Wills and Trusts Outline

 
Intestacy and Trusts Outline Shepherd Fall  2014
I.                   The Power to Transmit Property at Death: Justifications and Limitations
a.       The Right to inherit and the Right to Convey
                                                              i.      Jefferson – “the earth belongs in usufruct to the living; the dead have neither powers nor rights over it.  The portion occupied by an individual ceases to be his when he himself ceases to be, and reverts to society.
                                                            ii.      Blackstone – inheritance isn’t nature, it is a man made institution b/c historically the family members were the ones at the dying’s bedside and therefore the first to be in the decedents house/property and therefore claimed it as their own.
                                                          iii.      Locke – pretty much the opposite, natural to take parents property when they die.
                                                          iv.      Hodel v. Irving – Indian’s lands were given to the Indians and each family were initially given several hundred acres that were to be passed down to the children and after several decades that lands were all owned by dozens of people and were a greater hassle bookkeeping then they were generating in rent.  Government wanted to say that the lands no longer passed to the children but would escheat to the tribe from now on (making everything much easier)
1.      Supreme Court said that this was a taking – taking the future interest of the land that could be handed down to the children and giving it to a third party (state)
2.      Takings require just compensation – 5th Amendment
3.      Thought the rights here and in question may be de minimis this right itself is not de minimis and therefore cannot be just abandoned
b.      Once you accept that private property should exist, have to accept that people will die, what happens with their stuff? 
                                                              i.      You can have the government decide to whom the property is distributed (fee tail, estate tax, escheat)
                                                            ii.      You can have the decedent decide to whom the property is distributed (wills and trusts)
                                                          iii.      Burn it and get lit
c.       Two theories exist to explain the existence of this right:
                                                              i.      natural right inherent to being a member of humanity OR
d.      a right granted by the state. (since states do have the right to take away this right or to regulate it)
e.       Qualifications on the Right to Inherit
                                                              i.      Must be Alive (at the time of the intestate decedent’s death)
                                                            ii.      Example: Jane and John were high school sweethearts and recently got married, after unsuccessful previous marriages with other people. Jane was six months pregnant and they were both looking forward to the birth of their child. John has a daughter, Cindy from his first marriage. Jane has a son, Joe, from her first marriage. John drowns in a boating accident three weeks before his son, Bob, is born. If John and Jane live in a jurisdiction that allows both the surviving spouse and descendents to inherit from the estate, Cindy would be entitled to a one-third or one-half share of the estate. Joe and Bob would be entitled to the balance of the estate. Bob would be included as a beneficiary because he was conceived before John’s death. As such, he inherits as if he had been born in John’s lifetime.
                                                          iii.      Cannot have Intentionally Killed the Decedent
II.                Intestacy
a.       When a person dies without a will or other instrument of succession
b.      What is the purpose of intestacy?
                                                              i.      Provides default rules for property that is not defeased in some other instrument (i.e. not disposed of by the decedant before death)
c.        On what bases might intestacy rules be devised?  What are the purported benefits and unintended consequences of each? 
                                                              i.      Try to get into the mind of the decedant –> WWDD?  i.e. the average decedent –> what would they want if they had thought about what they wanted to happen to the property? –> this is the nearly universal approach to constructing these rules
                                                            ii.      OR legislators and judges could have decided that they were going to choose what they thought would be the most beneficial to public policy (except for the forced share)
1.      Why would the legislators NOT choose this?
a.       The only estates to which this would apply would be those that people couldn't afford a good lawyer/doesn't know the rules, etc.
2.      The good news is: it's pretty easy to determine
d.       Why does anybody die intestate? 
                                                              i.      Lack of assets
                                                            ii.      Poor planning
                                                          iii.      Fear of death
                                                          iv.      Expense of preparing will/ trust
                                                            v.      For some dying intestate works as well as a will
1.      Little assets
2.      Small family
e.       Key terms for Intestacy
                                                              i.      Intestate: When a person dies without a will, she is said to die “intestate.” Conversely, a person who dies leaving a valid will is said to die “testate.”
                                                            ii.      Domicile:A person’s legal home. That place considered his fixed and permanent home, and to which whenever he is absent, he has the intention of returning.
                                                          iii.      Descent: Term used for real property distribution. Property is said to pass by “descent.”
                                                          iv.      Distribution: When personal property passes, the person receiving it is generally called the “distributee.”
                                                            v.      Descendents: Those persons who are in the blood line of the ancestor, such as mother, child, grandchild.
                                                          vi.      Next of kin: A person’s next of kin are all those living persons standing at the same closest degree of consanguinity (blood relationship) to the person.
                                                        vii.      Decedent: A deceased person.
                                                      viii.      Consanguinity: Consanguinity represents a blood relationship between two people.
                                                          ix.      Lineal consanguinity: The blood relationship that exists between persons who are related in a direct line from one another, as between daughter, mother, grandmother and great-grandmother—ascending line; or son, grandson, great-grandson—descending line.
                                                            x.      Collateral consanguinity: The blood relationship that exists between persons who are related by the same ancestors, but who do not descend (or ascend) one from the other. For example, uncle and nephew are related collaterally, as opposed to father and son, who are related lineally.
                                                          xi.      Escheat: A reversion of property to the state when a decedent has no heirs who can inherit.
                                                        xii.      Dower: Dower was the provision the law made for a widow from the husband’s property. Upon the husband’s death, the widow was entitled to a life estate in an undivided one-third of the real property owned by the husband before marriage or acquired during the marriage.
                                                      xiii.      Curtesy: Upon a wife’s death, her husband’s curtesy right gave him a life estate in all (and not just one-third of) real property owned by the wife during marriage. However, a husband’s curtesy estate arose only if issue were born to the marriage.
III.             Basic Intestacy scheme(s)
a.       Intestate succe