Wills & Trusts * Wendel * Fall 2013
v Probate v. Nonprobate property
Ø Nonprobate: property passes outside of probate under an instrument other than a will
§ Joint tenancy à dead joint tenant’s shares extinguished, others’ shares recalculated
§ Inter vivos trust à artificial legal entity that holds/manages property placed in trust
§ Life insurance à insurance proceeds distributed directly to beneficiaries
§ Legal life estates & remainders à original grantor determines possession
Ø Probate: property passes through probate under the decedent’s will or by intestacy
§ Testate: Properly executed will
§ Intestate: IF NO will (or if will doesn’t dispose of all property), then property passes via intestacy to heirs
v No contest clause: clause used in a will such that if a beneficiary contests the will and loses, he will not take (UNLESS person suing is not a beneficiary).
Ø Enforceability: no contest clause is unenforceable UNLESS there is probable cause to support the will contest, whatever the nature of the contest
v Standing: must be able to show probate court that if you’re successful you will financially benefit.
California Intestate Scheme
v IF UNMARRIED:
Ø Issue (or issue thereof) equally >
Ø Parent(s) equally >
Ø Issue of parent(s) equally >
Ø Grandparents or issue of grandparents >
Ø Next of kin >
§ Degree of relationship with parentelic tiebreaker
Ø Escheats to state
v IF MARRIED:
Ø Community Property: All property acquired during marriage while domiciled in California that is not separate property goes to surviving spouse…
§ After 1st spouse’s death, community property is immediately divided: 50% to surviving spouse, 50% to deceased spouse.
§ Deceased spouse may devise his 50% as he wishes BUT if deceased dies intestate, typically his 50% goes to surviving spouse
Ø Separate: Property acquired by gift, devise, or inheritance during marriage OR by either spouse before marriage is separate property. Surviving spouse takes from separate property…
· 100% if no surviving issue, parents, issue of parents, or issue of deceased siblings
· 50% if 1 child/ issue of 1 deceased child OR no child but parents/issue of parents
· 33% if > 1 child (OR 1 child + 1 or more issue of predeceased child OR 2+ issue of predeceased child)
§ Separate Property Not Passing to Surviving Spouse Goes To…
· Issue (of same degree of kinship) equally >
· Parent(s) equally >
· Issue of parent(s) equally >
· Grandparents (or else, issue of grandparents) equally >
· Issue of predeceased spouse equally (of same degree of kinship) >
· Next of kin >
o Degree of relationship with parentelic tiebreaker
· Parents of predeceased spouse (or if deceased, issue thereof) >
· Escheats to state
§ Migrating couples: personal property is characterized at time of acquisition as separate or community property based on the laws of the spouses’ domicile at time of acquisition, and “at time of death” spousal protection a surviving spouse depends on the spouses’ domicile at the time of death of the first spouse.
Ø Quasi-community property: All property that would have been community property if the couple had been domiciled in California when the spouse acquired the property.
§ Upon Death: quasi-community property is treated like community property for distribution purposes. The surviving spouse immediately receives a ½ interest in the quasi-community property. The deceased spouse can devise only half of the quasi-community property.
§ Order of deaths: Quasi-community property applies only to property owned at death by deceased spouse, but not the surviving spouse. E.g. decedent could not bequeath surviving spouses share.
Ø Recapture: If decedent’s predeceased spouse died before decedent and no surviving spouse or issue,
§ Real Property: If predeceased spouse died < 15 years prior, qualifying real property portion received by decedent from predecease spouse death: § Personal Property: If predeceased spouse died < 5 years prior, qualifying personal property received by decedent from predeceased spouse (must be written title and >$10k)
§ Qualifying property: predeceased’s half of community property, portion community property with right survivorship, separate property of predeceased that vested in decedent with right of survivorship
§ Distribution Scheme
· Issue of predeceased spouse >
· Parent(s) of predeceased spouse >
· Issue of parents of predeceased spouse >
· Next of Kin
v What is a surviving spouse? Couple must have gone through a valid marriage ceremony.
Ø Putative spouse: qualify as spouse where at least one of the parties believes in good faith that the marriage is valid, but for some reason the marriage is void or voidable.
Ø Same-sex marriage: Qualify as spouses in CA, CT, IA, MA, NH, VT & DC
Ø Registered domestic partners qualify as spouses (CPC 297)
Ø Divorced spouse: Parties remain le
statements showing decedent intended the claimant to be a legally adopted child, AND
· (2) Relationship: formed close/enduring relationship with claimant that persists up to decedent death.
o Limitation: Child can take from BUT NOT through equitably adoptive parents because more of breach of contract claim than an equitable doctrine.
§ Posthumously Born Child: where child was conceived before death but born after death the child has a parent-child relationship with parent for purposes of inheritance if:
· Born to previously married couple within 300 days of death, divorce, etc.
§ Posthumously Conceived Child: where use of decedents sperm to artificially inseminate woman after death of decedent, for inheritance rights child, must prove with clear and convincing evidence:
· (1) Writing: Decedent specified in intent in writing—signed and dated;
· (2) Revocable or amendable if in writing;
· (3) Individual designated to control writing who provides notice to estate w/I 2 months of death; AND
· (4) Two Years: Child is in utero within 2 years of death.
v How do issue take?
Ø Taking equally: Where all of the decedent’s children survive the decedent, decedent’s property should be divided equally among his or her children.
Ø By Representation: surviving issue of the predeceased child take “by representation” – they step up and represent the predeceased relative.
Ø If a person takes, his or her issue do not
Ø Absent adoption, only blood relatives qualifies as heirs: spouses of predeceased issue, sons-in-law, daughters-in-law, and stepchildren do not qualify as eligible takers under the intestate distribution scheme.
Ø Half-bloods = relatives that share only 1 common parent
§ CA treats half-bloods the same as whole-bloods (CPC 6406)
Ø Single Share If Relation Through Two Lines: if related through two lines to decedent (e.g. grandson and adopted child) then only entitled to a single share and not a larger share.
Ø If unequal degree: