Trusts and Wills Outline
I. The Right of Testation
a. Hodel v. Irving (3)
i. Facts:
1. Congress passed a statute providing that land owned by the Sioux would not pass by intestacy or devise, but instead would escheat to the Tribe.
ii. Rule – Decedents have a right to control disposition of their property at death.
1. The court finds 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.
iii. Devisee – The beneficiary of a gift of real property made by a will.
iv. Escheat – The reversion of property to the state or sovereign, as the ultimate proprietor of realty, by reason of the lack of anyone to inherit it, or by reason of a breach of condition.
v. Heir – One whom statutory law would appoint to inherit an estate should the ancestor die without a will.
vi. Inter Vivos – Transactions made while the parties are living, and not upon death or upon contemplation of death.
vii. Remainder Interest – That part of an estate in property which is left upon the termination of the immediately preceding estate and which is not a reversion to the original grantor or the grantor’s heirs.
viii. Vested Interest – A present right or title to a thing, which carries with it an existing right of alienation, even the right to possession or enjoyment may be postponed to some uncertain time in the future.
II. Public Policy
a. Shapira v. Union National Bank (24)
i. Facts:
1. A college student’s father died and conditioned his son’s inheritance upon his marrying a Jewish girl within seven years of the father’s death.
ii. Rule – Restrictions upon marriage as a condition of inheritance are constitutional, valid, and enforceable.
1. Partial restraints on marriage are valid. However, total restraints on marriage are invalid (right to marry is a fundamental right).
iii. Restatement 2nd of Property 6.2. (32)
1. Provides that a restraint to induce a person to marry within a religious faith is valid “if, and only if, under the circumstances, the restraint does not unreasonably limit the transferee’s opportunity to marry.”
2. An example of this would be if whether the son was already married. This would probably violate public policy because it would promote divorce.
b. As a matter of public policy, most courts will not allow you to have your property destroyed upon death because it is wasteful.
c. If an inheritance is conditioned on religious notions, it will most often be struck down (right of religion is a fundamental right).
III. Probate and Estate Planning
a. Probate Property – Property that passes under the decedent’s will or by intestacy.
b. Nonprobate Property – Property passing under an instrument other than a will which became effective before death. Examples:
i. Jo
lows you to give the money to who you choose.
5. Contracts w/ Payable-on-Death Provisions – A provision in a contract that stipulates where certain money should go after death.
a. Ex: Banks usually require a POD to filled out for an account.
6. California Rule – As in many other states, estates of about $100,000 or less do not have to go through probate.
v. Probate Procedure:
1. An interested party fills out a petition with a probate court to have a will probated.
2. Court then sets a hearing date and will notify all known beneficiaries.
3. If not contested after a certain period of time, the will is admitted to probate.
4. The court then appoints the executor (sometimes appointed in the will).
5. Executor will give notice to creditors to make any claims within 2-4 months. Once this period has passed, creditors are barred from making any claims.
vi. Where to Probate:
1. Depends on where the person is domiciled. However, if there is property owned in another state, the title to that property will be probated by a judge in that jurisdiction or state.
a. This is known as an ancillary probate.
vii. Creditors:
