Wills, Trusts and Estates – Professor Weisbord
I. Three areas of focus in the course
a. Testamentary disposition
ii. Absence of a will
iii. Elements of a valid will
iv. Dispute resolution posthumously
v. Will substitutes
vi. Limitation on powers of testation
i. Preserve and dispose of property
ii. Elements for a valid trust
iii. Who is entitled to a trust distribution
iv. Modification of donor restrictions
v. Fiduciary obligations on trustees
vi. Power of appointment rules
c. Public policy
i. Elements for a charitable trust
ii. Restrictions on charitable gifts
iii. Federal death tax
iv. Grieving family member protection
v. Should terminally ill get to enjoy life insurance before death
II. Summary of Important Info
a. Things to Consider
i. Due Diligence – questions to ask your client
1. What property do you have to give away?
2. What family do you have? / Who do you want to give it to?
3. How are your children with money?
4. How do you feel about your children-in-law?
5. (If young kids) What do you want to give your kids if you die now?
6. (If teen kids) Do you want to designate money for education?
7. (If married kids) Do you want some $ to go only to kid and not spouse?
8. What about your grandchildren?
ii. Other documents
1. Power of Attorney – Appoints agent to handle your finances.
2. Durable Power of Atty – Appoints someone to make healthcare decisions
3. Living Will – statement of what you want if you’re incapacitated (feeding tube)
b. Ethical issues
i. Representing husband and wife together
1. All the money husband gives to wife is money he isn’t giving to someone else
2. COIs (i.e. don’t tell my wife)
ii. Doing something you’re uncomfortable with
1. E.g. Write a child out only if he is gay; leave lots of money to a charity you hate
2. Can refuse to represent client, but only if you don’t leave them in a worse position than when they began
i. Testamentary freedom
iii. Ascher, Kristol and Blum excerpts ‐ Confiscation of inheritance?
1. Conflict between testators intent and inequality. People come in to the world with advantages and others with none. Why is that fair? Some argue that we should do away with inheritance to even the playing field. That raises a number of issues. Would people give more to charity, spend it all while they’re alive, etc.
III. Introduction to Mortality: Determination of Death
a. NJ Stat. 26.6A-2: Based on cardio-respiratory (blood flow and breathing) criteria
b. NJ Stat. 26.6A-3: Based on neurological (brain activity) criteria
c. NJ Stat. 38.27-1a: Death of a resident or nonresident presumed after 5 years absence or exposure to specific catastrophic event
i. Can bring an action in court to administer the estate
d. Disposition of human remains
i. Prohibition of certain whimsical preferences
ii. Are preferences enforceable? Yes, to a point.
IV. Power to Transmit Property at Death and Dead Hand Control
i. What is the power? – Ability to change a legal relationship to property by acting or not acting. Can control who it goes to and under what conditions.
1. Can disinherit anyone you want except for surviving spouse and sometimes minor children
2. Can give property to anyone you want
3. Can put conditions on gift ($ to kids as long as they finish school)
ii. Where does it come from?
b. Dead Hand: person can influence events even after they’ve died
i. Jefferson doesn’t like dead hand control because you can’t predict the future
ii. Blackstone says it is not a natural right to transport wealth at death
iii. Locke says children have the right to receive
c. Freedom of Testation: Functionally the right to disinherit your family, to determine the post- death disposition of your property instead of having it pass by universal default rules.
d. Disinheriting: Generally, it is ok to disinherit children, even minor children
i. Forced heirs: Some states don’t allow you to disinherit children under a certain age.
1. Louisiana: can’t disinherit children 23 yrs old or younger – must give at least ¼ of your wealth if you have one child, or ½ if you have two or more children who are forced heirs.
e. Restatement (Third) of Property §10.1‐ Honoring donor intent.
i. Donor’s intent determines the meaning of a donative document and is given effect to the maximum extent allowed by the law.
ii. Restrictions on donative intent: Won’t look at wisdom and substance of the gift, but will look at terms of the gift when the condition is offensive (i.e. illegal or unconstitutional or against public policy)
f. Restraints on Marriage:
a. Restatement (Second) of Property: Donative Transfers §6.2- Pg. 34- a “restraint unreasonably limits transferee’s opportunity to marry if a marriage permitted by the restraint is not likely to occur. The likelihood of marriage is a factual question, to be answered from the circumstances of the particular case.
b. Rest. (Third) of Trusts §29(c)- invalidates trusts if “contrary to public policy”: General dislike of restraints on beneficiary behavior including: restraints on marriage or religious freedom, disruption of family relations, choice of careers
c. Partial Restraints on Marriage: Upheld if:
i. Clear (i.e. what is a member in good standing); and
1. Appoint 3d party to determine standing, and this saves clarity always.
ii. Reasonable: not really a total restraint masquerading as a partial one.
1. I.e. marry a Mormon if only 10 Mormons not OK.
g. Religious Restraints (In General – EX: so long as he remains
y property – can’t separately convey interests
v. Only recognized by about half of states
vi. NJ: The interest of the debtor spouse in the estate may be sold or levied for his or her separate debts, subject to the other spouse’s contingent right of survivorship. Ex. If the husband dies with debt, the debtors can’t attack the wife’s interest, but if she dies first, they can attach to the husband’s interest. Creditor would have a defeasible interest.
b. (2) Joint tenancy with right of survivorship;
i. Four “unities” essential to joint tenancy
1. Time: Interests must be conveyed or acquired at the same time
2. Title: Must acquire title by the same instrument or by joint adverse possession
3. Interest: Equal undivided shares
4. Possession: Right to possession of the whole
ii. If one unity is severed, it becomes a tenancy in common
iii. An estate in joint tenancy can be severed by destroying one or more of the necessary unities, either by operation of law, by death, by voluntary or certain involuntary acts of the joint tenants, or by certain acts or omissions of one joint tenant w/o consent of the other.
1. Conveyance in fee simple absolute – Joint tenants have indisputable right to convey without giving notice
2. A life estate? (arguments go both ways)
v. No severance:
c. (3) Tenancy in Common [must be specific identifying language on document/deed for it not to be tenancy in common (this is a Probate Interest)] i. Separate but undivided interests. There is no survivorship. (i.e. when someone dies, that interest goes to the devisee or through intestate)
ii. Favored by the courts:
1. So that heir’s interests can be protected
2. They want joint tenancy to be explicitly stated (i.e. to A and B as joint tenants with the right of survivorship)
2. Probate property: passes under a will or through intestacy (trust created in a will is under probate)
a. Testacy: anything devised (real property) or bequeathed (personal property) through a will