Chapter 1. Introduction to Estate Planning
· A person dying testate devises real property to devisees and bequeaths personal property to legatees
· With intestacy, real property descends to heirs, personal property is distributed to next of kin
· Statute of decent & distribution governs intestates
The Problem of the “Dead Hand”
· To what extent should a person be able to use wealth to influence behavior after death
· Donors intent is given effect to the maximum extent allowed by law
· Property owners unrestricted right to dispose of property as they please
· American clause does not question donor’s wisdom, fairness or reasonableness
· Certain restrictions on this freedom
· Restatements 2d. – void unless it not does not unreasonably limit opportunity to marry
· Invalid if it disrupts a family relationship
· Frown on: restarts on beneficiaries behavior, marriage, religious freedom, disrupts family or career choices
· Balance conflicting social values
· Shapira Case: Condition to inherit estate must be married to Jewish girl within 7 years if not estate goes to Israel; does not offend the Ohio or US constitutions; gifts conditioned upon marriage within a particular religious class / faith if reasonable, do not violate public policy
Transfer of the Decedent’s Estate
· Probate, Non-probate, Joint tenancy Property, Life Insurance, Payable-on-death Contracts, Interest in trust, Executor, Administrator, Probate Court, Giving Bond, Will: disposes of real property, Testament: disposes of personal property
· Probated in jurisdiction where decedent was domiciled at time of death
Professional Responsibility
1. Duties to intended beneficiaries: (a) must show a duty (b) breached (c) caused injury.
2. An attorney owes a duty of reasonable care to intended beneficiaries: emphasizes foreseeability
· Simpson v. Calivas: Will left all real estate to son, except for “our homestead” left to stepmom for life; What is homestead?; probate Court does not admit notes taken by attorney stating “house to wife”
Conflicts of Interest
· Hotz v. Minyard: Attorney prepared will for father, also did tax paper work for daughter; father changed will but didn’t want anyone to know; attorney showed Judy will #1, problems in family later on; Question: Did attorney breach fiduciary duty? Trial court said he was acting as Dad’s attorney not hers. He DID have a duty not to shower her will #2, but also he had a duty to deal in good faith with Judy. Rev’d in part.
· Matter of Doyle
o Attorney, a friend of brother (Jack) made will for Kathryn; made Jack/John power-of-attorney; attorney did not speak with Kathryn about this
o No notes of any meetings regarding the 1980 will; Estate plan and 1985 will – attorney had tax attorney do estate plan to minimize consequences to beneficiaries; Attorney did not visit Kathryn regarding this to see if she wanted to revise her will
o Attorney representation of both Kathryn and beneficiaries gave rise to presumption of undue influence; John retained new counsel and filed malpractice suit; Kathryn sold property to John & Loretta for $1 – they sold to attorney for $25,000, he re-sold for $110,000
· When representing husbands & wives, get written representation agreement including waivers of conflicts of interest
Chapter 2. Intestate Succession
· Intestate is without a valid will, this is the default rule
Statutes of Descent and Distribution
· Governs the distribution of probate property if person dies without a will
· Partial Intestacy: only part of the estate disposed of by the will
· Law of the state where the decedent’s real property is located governs the disposition of her real property
· No living person has heirs; heirs apparent, who have a mere expectancy
UPC (1990) §2-101 – Intestate Succession:
· (a) Any part of a decedents estate not effectively disposed of by will passes by intestate succession to the decedent’s heirs as prescribed in this Code, except as modified by the
hem if both are deceased, the descendants taking by representation; and the other ½ passes to the decedent’s maternal relatives in the same manner; but if there is no surviving grandparent or descendant of a grandparent on either the paternal or the maternal side, the entire estates passes to the decedent’s relatives on the other side in the same manner as the half.
UPC (1990) §2-105 – No Taker
· If there is no take under the provisions of this Article, the intestate estate passes to the state.
Share of Surviving Spouse
· Policy is to carry out the probably intent of the average intestate decedent
· 2nd policy – family protection – preserving the economic health of the family after a death
· UPC (1990) §2-102 (see above)
Domestic Partners and Intestate Succession
· Policies for spousal intestate share apply to domestic partners
Simultaneous Deaths
· A person succeeds to the property of a decedent only if the person survives the decedent for an instant of time.
· Uniform Simultaneous Death Act – if there is not sufficient evidence of the order of the deaths, the beneficiaries is deemed to have predeceased the donor. Neither inherits from the other.
· §2-204 & §2-702: an heir or devisee or life insurance beneficiary who fails to survive by 120 hours (5 days) is deemed to have pre-deceased the decedent
· Must establish survivorship by clear and convincing evidence
· Janus v. Tarasewicz: Trial court found Theresa (died 10/1/82) survived Stanley (died 9/29/82); Stanley’s life insurance paid to Theresa the beneficiary; Stanley’s mother sued; Judgment affirmed
