SCHOOL: RUTGERS-NEWARK LAW
PROFESSOR: REID WEISBORD
CASEBOOK: TRUSTS & ESTATES, DUKEMINIER, 8TH EDITION
TRUSTS & ESTATES
I. The Power To Transmit Property at Death
A. The right to inherit and the right to convey: Dead Hand Control: The constitutional right to transmit property at death
1. Hodel v. Irving (US 1987)
a) Facts: Congress put all NA on reservation, each member of tribe was given an allotment of land. As the allotments were passed on from generation to generation- the lots would fractionalize. 207 Indian Land Consolidation Act was passedà which prohibited the descendance of small interests by intestacy.
b) QP: whether that statute which prohibits the conveyance of small fractionated interests is a taking under the fifth amendment.
(1) The government cannot take private property for public use w.o. just compensation
c) Held: this is a taking, violates the constitution- the fifth amendment curtails the power of the government to limit the right to convey property at death.
d) Analysis- Court seems to rely on the assumption that -The right to transmit property at death is a separate, identifiable stick in the bundle of rights called property, and, if this right is taken away, compensation must be paid. Hodel says that the constitution does not protect the power to inherit but the power to give at death. The right to transmit is protected by the constitution
2. Public policy for the right to transfer at death: Pro: encourages rewards a life of hard work, family ties, family protect elders etc, Cons: perpetuates economic disparity
3. Shaw Family Archives v. CMG Worldwide (2007)
a) Facts: Marilyn Monroe, during her lifetime was able to exploit her right of publicity. In her will to the extent that there is a post mortem right of publicity it would go to Lee. Lee left his estate to his wife.
b) Issue: After a decedent’s death can the government increase property rights that pass as part of the decedents estate? Held: No.
c) Analysis: First off, she did not own it at the time of her death – Only property actually owned by the testator at the time of her death can be devised in a will. Neither NY or CA at time of death recognized post mortem rights of publicity. Thus, Ms Monroe did not have the testamentary capacity to devise property rights she did not own at the time of her death. If you don’t own it at the time of your death it goes to ur intestate heirs.
d) Rule: If you don’t own something at the time of your death you have no capacity to give it under your will
B. The problem of the Dead Hand: To what extent should a person be able to use wealth to influence after death.
1. A decedent may condition a beneficiary’s gift on the beneficiary having behaved in a certain manner as long as the condition does not violate public policy
a) Dead hand control usually upheld unless the condition constitutes:
(1) Complete restraint on marriage, requires a beneficiary to practice a certain religion, encourages divorce or family strife, or directs destruction of property (because does not carry a meaningful economic cost to deter owners)
2. Restatement (Third) of Property: Wills and Other Donatives Transfers §10.1- favors freedom of disposition, and takes a very protective approach to donor’s intent
a) the controlling consideration in determining the meaning of donatives document is the donor’s intention. The donor’s intention is given effect to the maximum extent allowed by law
(1) rationale- freedom of disposition
(2) unless disallowed by law the donors intention not only determines the meaning but also the effect of a donatives document
(3) American law does not grant courts any general authority to question the wisdom, fairness, reasonableness, of the donor’s decisions about how to allocate his property. Instead the main function of the law is to facilitate rather than regulate. The law serves this function by establishing rules under which sufficiently reliable determinations can be made regarding the content of the donors intention .
3. Shapira v. Union National Bank 1974 – discriminatory inheritance
a) Facts: Guy dies, in will says son get bequest if married at the time to a jewish girl. He has seven years from time of death to get married if not married to a Jewish girl w/ both parents jewish. Otherwise, the share of estate goes to the state of isreal- Gift over provision
b) Issue: Is the conditioned upon inheritance, (1) unconstitutional, (2) contrary to public policy and unenforceable because of its unreasonableness?; Held : (1) no, (2) no
c) Analysis: (Inheritance is not a natural right*** remember) Public policy-want to encourage ppl to marry – What would violate the public policy would be inheritance upon divorce. This is a partial restriction upon marriage, and the court applies a test: “ a partial restriction on marriage that imposes only reasonable restrictions is valid, and not contrary to public policy.” The reasonable test the court considers the size of the pool and the duration he has to get married.
d) Also note that the gift over provision, demonstrated the depth of the testators conviction, his purpose was not merely a negative one designed to punish his son for not carrying out his wishes, his plan was that his possessions be used to encourage the preservation of the Jewish faith, hopefully through his son but if not, through the state of Israel.
(1) Duty of the court to honor the testators intention, and since it does not violate pub policy OK.
(2) Exploring the reasonableness test – it is too subjective could promote sham marriages, or work to perpetuate racism instead of promoting a religion or a race. (like gay man gets married, or cant marry a black woman)
II. Transfer of the Decedent’s Estate: Probate terminology and Procedure
a) What: Statutory default estate plan
b) Who: The decedent is called the intestate
c) When: if no will at all, or if there is a will if not all property devised at death
d) To whom: Heir, next of kin.
a) When: when a testator dies, can devise in will.
b) What: Can devise real property or land
(1) To whom: to a devisee
c) What: Can bequeath personal property money etc,
(1) To whom: to a legatee
a) Lineal Descendants, children, grandkids.
a) Older, parents and G parents.
5. Probate Process
a) Process through which property is disposed of by will or intestacy
b) Functions of probate: (1) provides evidence of transfer of title to new owner; (2) protects creditors by providing a procedure for the payment of debts; (3) it distributes the decedents property to those intended after the creditors are paid.
c) When will is probated that refers to the authentication of the document- ie ensure that it is the will and testament of the decedent, and also now refers to the disposal of the estate
(1) When will is probated that refers to the authentication of the document- the probate court has inspected the doc and has deemed the doc to be the will the testator
6. Avoiding probate
a) Non probate transfers: property that pass
of the lawyer was a matter of the court of general jurisdiction. – 2 different issues
(1) Probate courts role is a narrow one: to determine the intent of the testator as expressed in the language of the will. There is no requirement or guarantee that the probate court will construe the testators intent to match actual intent (thus not precluded from bringing that up in the later proceeding- the issues and the evidentiary rules for proving intent applied in the two proceedings are different).
B. Conflict of interest: Fiduciary Duty
1. A v. B (NJ 1999)
a) Facts: A and B make reciprocal wills, Attorney represents couple. They sign an engagement letter which acknowledge that information provided by one client could become available to the other. However these letter stop short of authorizing the firm to disclose one spouses confidential information to the other. Same firm later represents C for a paternity suit against B.
b) Issue: whether a law firm may disclose confidential information of one co client to another co client; Held: Yes
c) Analysis: problem because if he survives his wife he gets his wife’s property, and when he dies some of that property would go to his illigit child!
d) Duty of confidentiality – Anything you learn during course of representation you cant disclose, Duty to inform – know the consequences of representation.
e) Mandatory disclosure: If disclosure is necessary to prevent a crime or fraud which will result in substantial financial harm or death and bodily injury then they must disclose.
(1) Disclosure is not mandatory here because the fraud had already happened –also substantial financial injury is too attenuated.
f) Permissive disclosure: It is permissive if it rectifies consequences of fraud or crime, and if in furtherance of which the lawyers services have been used.
(1) If they had known -it would be aiding and abetting – if you help ur client perpetrate a fraud then you commit one
(2) there is a material consequence to the wife’s estate by withholding this fact- so were permitted to disclose.
2. What if retain lawyer for reciprocal wills. And later create an inter vivos trust for illegitimate child – could lawyer tell.
a) No because the intevivos trust would not materially affect the wife’s own estate plan or receipt of property.
3. What if same as above but inter vivos trust really depletes hubbys estate
a) lawyer must withdraw if not allowed to tell, and tell to the extent he deems appropriate.
4. Husband wife consult a lawyer – lawyer has had profess dealings w spouses- attny knows them and unlikely to run into conflicts of interest problem.
a) Can you accept that representation w o obtaining a waiver from the client?
b) Yes, but probably should get consent- clear letter of engagement and infor sharing