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Wills, Trusts, and Estates
South Texas College of Law Houston
Siegel, Mark R.

Siegel for Wills Trust & Estates Spring 2012

Terms

Descend – property passing by intestate

Real property descends to heirs (intestacy)

Personal property is distributed to next-of-kin (intestacy)

Ancestor – parents, grandparents, great-grandparents

Descendents – children, grandchildren, great-grandchildren

Lineal relationships – in the same family tree as parents, children, grandparents, (in a straight line)

Consanguinity – related by blood

Affinity – related by marriage

Collaterals – brothers, sisters, aunts, uncles, nieces, nephews, and people with a common ancestor who are not lined ascendants or descendants

1. The Right to Inherit and the Right to Convey

a. The Right to Inherit:

i. Irving Trust v. Day (SCOTUS 1942)

1) The right of succession is not a constitutionally protected right.

2) No constitutional right to receive property from a dead person.

a) Held: The right of succession, by will or intestacy are of statutory creation. Nothing in the constitution forbids a state from limiting, conditioning, or even abolishing the power of testamentary disposition of property.

· Blackstone positive law view

b. The Right to Transmit Property at Death:

i. Hodel v. Irving Trust (Indian Lands SCOTUS Case)

1) The Right to pass on property at death is a constitutionally protected right.

a) Held: The Fifth Amend restricts the powerof the gov’t to limit the right to convey property at death.

i. (Hodel did not protect right to receive)

· Lockean natural law view

2) Note: common thread b/w Hodel & Shaw cases was gov’t action by statute.

a) Statute in Hodel—took property

b) Statute in Shaw—created property right/interest

ii. Shaw v. CMG, (Marilyn Monroe Case)

1) Facts: Monroe died in 1962. CMG claimed rights to photos of the old whore belonged to them because CMG was the remainderman. Shaw, the photographer wins!

2) Held: No right to devise a property interest that extinguishes when you die. Cant devise what you don’t own.

3) Reasoning: Monroe could not have devised her name or likeness b/c the property right did not yet exist in that jurisdiction. Any right she had at C/law extinguished upon her death.

a) This case would have gone the other way in TX.

iii. Property Right in Name or Likeness: (postmortom right of publicity)

iv. Texas Property Right in Name or Likeness

1) Prop Code 26.002:

a) An individual has a property right in the use of the individual’s name, voice, signature, photograph, or likeness after the death of the individual.

2) 26.003:

a) For a property right in name or likeness to exist, the individual must have been:

i. alive on or after September 1, 1987, or

ii. died after January 1, 1937

b) Value in the name or likeness can have value at time of death or come to have value after death.

3) 26.004:

a) The property right is freely transferable, and

b) may be transferred before or after the individual’s death.

i. If failed to make inter vivos transfer or will â

4) Intestate Order of Succession for Name or Likeness: 26.005

5) If property was not transferred at or before death, it vests as follows:

a) Surviving Spouse / Surviving Cs or GCs

i. all to SS none

b) Surviving Spouse / Surviving Cs or GCs

i. Half to SS Half to Cs or GCs

c) Surviving Spouse / Surviving C or GCs

i. none All to Cs or GCs

d) Surviving Spouse / Surviving C or GCs

i. If surviving Parents, all to parent

e) §43 Per Stirpes by Representation governs the distribution of the interest to the decedent’s children and grandchildren.

f) If there is more than one child of a deceased child, the interest is only exercisable by a majority of the children of the deceased child.

g) If the prop is split b/w more than one person, those owning 51% or more in the aggregate may exercise the right on behalf of all.

2. Donor’s Intent:

a. Intent of the donor is controlling consideration in determining the meaning of a donative document.

b. Donor’s intention is given effect to the maximum extent allowed by law

c. The Dead Hand:

i. The donor’s attempt influence conduct of friends and family after their death?

d. Incentive Trusts:

i. Conditional gifts

1) Three conditions an incentive trust might impose:

a) pursue an education

b) moral incentives

c) productive career

ii. Boundaries of Conditions in a will:

1) if the condition or restriction on the receipt of property is prohibited by law or contrary public policy.

2) Unreasonable restraints on alienation may be invalid as against public policy.

3) Examples of law that prohibit or restrict freedom of disposition (alienation):

a) spousal rights; creditor’s rights; unreasonable restraints on alienation or marriage; provisions promoting divorce or separation; impermissible racial restrictions; provisions encouraging illegal activity; and R.A.P.

b) Cy Pres Doctrine:

i. Strike the clause that is void against public policy and keep the rest.

· except: where the Testator expressly rejects a power of judicial modification.

4) Shapira v. Union National Bank

5) Facts: The trust had a condition that in order for Sons to inherit their shares thhe must marry a Jewish girl with a Jewish parents within 7 years or Sons’ shares go to Sister. Sons argued that the condition on receipt of inheritance was unconstitutional, against public policy, and unreasonable.

6) The right to give is a natural right, the right to receive is a positive right

a) Hodel, protected right to transmit, not recieve

7) Held: Restriction valid. Not unconstitutional or contrary to PP.

8) Reasoning: The requirement that Son marry a Jewish Girl was not unconstitutional nor contrary to public policy.

9) No state action. Probati

ificate

4) Contracts w/ Payable-on-death (POD) provisions:

a) ex: Pension plans, IRA, 401k

5) Interests in Trust:

a) Inter vivos vs. Testimentary

nonprobate probate

b) Inter Vivos Trust

i. prop put in inter vivos trust during decedent’s life passes outside of probate

iv. Testimentary Trust:

i. prop held in trust created under decedent’s will passes thru probate

3. Administration of Probate Estates

i. The Functions of Probate

1) Performs 3 core functions:

a. Provides evidence of transfer of title to new owners

i. clears title, makes prop marketable

b. Protects creditors by providing a procedure for payment of debts; and

c. Distributes decedent’s property to those intended after decedent’s creditors are paid

ii. Probate Terminology:

a. TX §3(aa): personal representative includes executor, administrator, and independent administrator

2) Administrator vs. Executor

3) Administrator: – Intestate Death

4) appointed by court to oversee the winding up of the decedent’s affairs

a. Court will name personal representative, generally called an administrator, if:

i. Will doesn’t name executor;

ii. Named executor is unable or unwilling to serve;

iii. Decedent died intestate

iv. Administrators are usually picked from a statutory list given in order of preference given; must give a bond

v. TX §77: Order of person’s Qualified to Serve:

1. named executor

2. surviving spouse

3. principle divisee or legatee

4. any divisee or legatee

5. next of kin, nearest in order of discent

6. a creditor of deceased

7. any one of good character

8. any one not disqualified by §78

5) Executor – Testate death (aka Personal Representative)

6) will names the person who is to execute the will and administer the probate estate.

b. Hype: X is named executor in Y’s will. What are X’s duties?

i. Inventory (what did Y die owning) & Collect assets (where is it?);

ii. Manage & Protects property during administration;

iii. Processes claims of creditors/ receive and pay entitled party;

1. clear title to any assets

iv. Distribute remaining assets to proper/entitled party

1. (in the executor situation we are primarily concerned with maintaining the status quo.)