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

WILLS TRUST AND ESTATES

SIEGEL 2014

CHAPTER 1: FREEDOM OF DISPOSITION

A. Terms of Art

a. Testate: With will

b. Intestate/Intestacy: Without will

c. Heir: those who can inherit through intestacy. It depends on what jurisdiction you’re in

d. Succession: passing of property at death

e. Escheat: CL. Property of a person who dies w/o heirs goes to the state

f. Devise: A person dying testate devises real property to a devisee

g. Bequest: A person dying testate bequeaths personal property to legatees

h. Joint tenancy: joint tenants with rights of survivorships

i. Descendants: Relationships by consanguinity (by blood). It never includes spouse

j. Heirs: No heirs to the living, only to dead. May include affinity (by marriage)

k. Collateral relative: Neither ascendants or descendants but whom are related by blood to a common ancestors. Ex: Siblings.

power to transmit property at death

A. Shapira v. Union Bank

a. Facts: Father gave estate to son under condition that he is married to Jewish girl whose parents are Jewish. Son said that this is unconstitutional because bequest should be free of restriction.

b. Holding: That is not unconstitutional because he has plenty of choices. It is not infringing on the 14th amendment- right to marry.

c. Rule: If the condition is unconstitutional, then it is not valid. Partial restraints are valid so long as they are reasonable.

B. Incentive Trusts are traditional gifts.

a. Three categories

i. Conditions that encourage beneficiaries to get an education

ii. Moral incentives: incentives that reflect settlor’s moral or religious outlooks

iii. Conditions that encourage beneficiaries to have a productive career

b. Rule: As long as they do not violate public policy, courts will typically enforce them.

C. Hodel v. Irving

a. Facts: Fed. Gov’t fractioned property. Encumbered ability to sell b/c you can’t sell 1/26th without permission from the other 25. It abolished devise and descent, which is a takings violation. Protected right to transmit, but not to receive.

b. Rule: 5th amendment curtails gov’t power to limit right to convey property at death.

D. Posthumously Acquired Property Rights

a. Shaw Family Archives v. CMG Worldwide

i. Facts: Shaw Family Archives had pictures of Monroe and posthumously right to publicity in Monroe’s property was created. Monroe’s estate said that it passed through residual clause.

ii. Holding: Court said that it did not pass because she did not have right to publicity at the time she passed.

iii. Rule: you can’t transfer something you don’t own.

mechanics of succession

A. Probate v. Nonprobate Property

a. Probate: property that passes through probate under the decedent’s will or by intestacy.

i. Rule: Absence of a will doesn’t exclude possibility that it could be probated.

ii. Applies: if will controls disposition of property.

b. Nonprobate property: property that passes outside of probate by the way of the will substitute.

i. Requirements: File death certificate and beneficiary not identified by will

ii. Modes of transfers

1. Joint tenancy w/ right of survivorship

2. Life insurance

3. Contracts with payable on death provisions

4. Inter vivos trust

B. Probate Terminology

a. Personal representative: oversee winding up of decedent’s affairs. They are a fiduciary who collects and inventories the property of the decedent, manages and protects the property, processes claims and files federal and state tax returns.

b. Executor: person who is to carry terms of will.

c. Administrator: personal representative who carries terms of will if will does not name executor.

d. Lineal descendent: down the tree: children, grandchildren

e. Lineal ascendants: up the tree: parents

f. Collateral Relationship: Siblings, common ancestor

g. Consanguinity: blood

h. Affinity: marriage

i. Intestacy scheme: governs property distributed by estate without a will.

C. Functions of Probate Process

a. Evidence of transfer of title to new owner

i. Goal: distribute property to beneficiaries. If distributed incorrectlyàbreach of fiduciary duty

b. Protects creditors by providing a procedure for payment of death

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

D. Formal and Informal Probate

a. Formal probate: ct. supervises personal representatives actions in administrating the estate

i. Disadvantage: Potentially costly and time consuming

b. Informal Probate: Limited ct. supervision. Personal representatives administers estate without Ct supervision unless an interested party asks for ct. review.

E. Barring Creditors

a. Nonclaim statutes: requires creditors to file claims within a specified time period or are barred.

F. Page 50- Aaron Green Problem

a. Facts: Died testate “To my wife, Martha, if she survives me; otherwise to my children in equal shares.

i. Property: Car $15K, Furniture 20K, Mutual Fund $10 K, Joint Checking 3K, Life Insurance (nonprobate) 50 K, Pension benefits, no real property

ii. Debt: Utility $80, Visa $600, Dept Store $250, Funeral $8K, cemetery lot $600

b. Must it be offered for probate? Admin cost, must be in state domiciled at death within 3 years.

i. Must there be an administration of the estate? Yes

1. Title-clearing? Car. In TX, may be able to transfer title by affidavit into Martha’s name to avoid probate

2. Debts? M

PROFESSIONAL RESPONSIBILITY

A. Historical Rule: Required privity of contract between attorney and client. There is no recourse for bad will when the client is dead.

B. Modern Exception: Duty of reasonable care runs from drafting attorney to intended 3P beneficiary

C. Majority: Doesn’t require privity of contract between attorney and client

D. TX Minority:

a. Rule: Requires privity of contract. Lack of privity btw drafter and intended beneficiary prevents a malpractice action. TX will allow executor to represent.

E. Jurisdiction

a. Validity & Construction of a will àProbate court

b. Tort or K claim à Ct or General jurisdiction

chapter 2- Intestacy: AN ESTATE plan by default

estate by default

A. Purpose of Intestacy Statutes

a. Distribution of probate property of such a person is governed by the applicable statute of descent and distribution—that is, the intestacy statute.

B. Basic Scheme

a. Testate: Dies with a will that provides for disposition of property at death

b. Intestate: dies without will. Law of intestacy governs distribution of a decedent’s probate property

i. Reasons not to have a will: fear death, cost

c. Policy of Law of Intestate

i. Carry out probable intent (average decedent standard)

ii. Protect family

d. Disposition

i. Personal propertyà Deceent’s domicile at death

ii. Real propertyà Where it’s located

iii. Probate propertyà States § of decedent and distribution

e. Heirship and expectancy of Heir Apparent

i. No living person has heirs.

ii. Heirs apparent: persons who would inherit property of A, a living person.

Basic Structure of intestate succession

A. Surviving spouse

a. Majority: gets ½ of Share

b. UPC: If all decedent’s are also decendants of SS, and they have no other descendantsà Takes everything

c. UPC and ½ states: No descendantsà SS shares with descendant parents (if alive)

d. What it was an informal or invalid marriage?

e. Ex: H + W have 2 kids. W has 1 from a previous marriage. He has $500 K

i. If H dies intestate, what is wife’s share under UPC §2-102?

1. The 1st $225 K and ½ balance of the estate