Wills Trusts Estates
Festa Fall 2015
Introduction to Estate Planning
The Power to Transmit Property at Death: Its Justification and Limitations
What happens with your property:
Intestate: no will
Testate: by will
Succession: social process and institution and their legal echoes which governs the way property moves.
The Right to Inherit and the Right to Convey
– “The earth belongs in usufruct (temporary right to enjoy something that really owned by someone else) to the living; the dead have neither powers nor rights over it. The portion occupied by any individual ceases to be his when he himself ceases to be, an reverts to society.” – Thomas Jefferson
Pre-1540: no wills allowed, “forced heirs”, primogeniture (first son gets all)
1540-Statute of Wills: freedom to direct disposition of property at death
Present: the right to transmit property at death is valuable and protect property right.
Right to RECEIVE property = MERE EXPECTANCY (no one is required to leave something to another)
Focus: On the DONOR’S FREEDOM OF DISPOSITION
Shapria Case: Old man says you can have the money if you marry a Catholic.
Not a TOTAL restriction on marriage (factual question)
There is only a protected right to PASS property, not to receive property
Can’t doubt the “depths” of a testators conventions
Courts don’t want to overturn testamentary freedom.
If found unreasonable restraint would have struck down and awarded him bequest outright
The Policy of Passing Wealth at Death
Freedom of disposition
Is freedom of disposition a right?
The permanent right of property, was no natural, but merely a civil right
No natural or constitutional right to inherit property. Inheritance rights are statutory.
Is the right to receive or the right to transmit property that is important?
Third Restatement of Property:
Property owners have nearly unrestricted right to dispose of their property as they please
Does NOT grant courts the general authority to question the wisdom, fairness, or reasonableness of the donor’s decisions.
Main function of the law is to facilitate rather than regulate.
Unreasonable Restraints on marriage or alienation
Provisions promoting separation or divorce
Impermissible racial or other discrimination
Promoting illegal acts
CARDINAL RULE: Court gives effect to testator’s intent, regardless of whether it agrees with him
Should give this the effect of law
Can’t doubt the depths of the testator’s decisions
Main Rule of Law: must look at the four corners of the document
What arguments can you make that show they didn’t intend that or we shouldn’t allow it.
Courts are more hesitant to enforce things that disrupt living families (“unreasonable”)
Government CANNOT unduly LIMIT the right to convey property at death
THERE IS A RIGHT TO CONVEY PROPERTY AT DEATH
Right to pass through will or intestacy
Cannot intend to pass something that doesn’t exist at the time of your death or that you don’t own at the time of death(Shaw – right of publicity)
Pros and Cons to allowing people to dispose of their own property:
Fairness, doing what is right
Importance of family ties to society
Incentive for creativity
Ties up wealth
Denies equal opportunity to poor
he Mechanics of Succession
Probate and Nonprobate Property
Probate: Passes under will or by intestacy
Non-Probate: Passes by some other instrument
Joint Tenancy Property (both real and personal property)
Contracts with death-payment provisions
Interests in trusts
Majority of Property is passed outside of probate
If decedent did not arrange his affairs during life so that ALL of his property passes nonprobate. Then will have to use probate for the rest of the left over property to fill in the gaps.
Passes by Will (Testate)
Passes by Statute, no will (Intestate)
Personal Representative (FIDUCIARY) :
Collect and manage assets
Appointed by court; responsible for administering estate
Executor: named in the will
Administrator: if not named
Statutory list: SS, children, parents, siblings, creditors
Will (and testament, not necessary): instrument under which T devises his property upon death
Real property: devised to devisees
Personal Property: bequeathed (to legatees)
Texas Estate Code 22.008 – devise personal property too
Or you could just say GIVE.
Intestacy (to heirs):
Real Property: descends to heirs
Personal Property: distributed to next-of-kin
Heirs and next of kin used interchangeably by majority of courts