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Trusts and Estates
St. Johns University School of Law
Turano, Margaret V.

SPRING 2011
Trusts and Estates
Professor Turano

intestate succession
I.              introduction
A.    testamentary & donative freedom
·         People should be allowed to do whatever they want with their money or property!  Testamentary freedom relates to wills; however, there are limitations on this freedom (i.e., cannot disinherit spouse, anything against public policy, lacking testamentary capacity, rule against perpetuities e.g., Deceased can't say that the property is for my son, then his son, then his son, etc…This violates the rule of perpetuities b/c it is as if the dead man is controlling the property.  There is a limitation to the time over which the dead man can control), taxes, you kill the deceased b/c you are the beneficiary, etc.)You need to hope that they pay voluntarily, or you have a problem!
B.    default provisions
·         Provides for certainty in disposition of property
·         Are in the statute to reduce the need for litigation.  If a person doesn’t have a will…their will becomes EPTL 4-1.1.  Person is deemed to have known what it was and will have adopted it.
C.    Rigid formalities to reduce fraud
·         NY has a formal law.  To make or revoke a will in NY, have to adhere to many FORMALITIES! 
·         POLICY JUSTIFICATION:  Want the best evidence of the testator’s intention because the person is dead and anyone can now say what they want.
D.    probate/non-probate distinction
1.     Probate Property
·         Property that passes under a will.  If no will, property passes under intestacy, 4-1.1.
2.     Non-Probate Property
·         Non-probate property is property that does NOT pass under a will.
·         Transfers are easy to make and difficult to discover and avoid.
·         Examples
o    Joint Tenancy (if one person dies, the other person automatically gets the property),  (e.g., Joint Checking account, If you are married and own a home it is a called a tenancy by entirety & if you are not married it is called joint tenancy w/ right of survivorship).
o    Life Insurance Proceeds (by operation of K, the beneficiary gets the money),
o    Remainder Interest (passes via trust – “pay all interest to X and remainder to Y”),
o    Totten Trust (“in trust for” – person deposits money in a bank account under their name and adds in trust for.  When that person died, under the terms of the bank account, the money goes to the person it is being held in trust for), THIS IS THE ONLY ONE THAT CAN BE TRUMPED BY A WILL
o    Revocable Living Trust (money is placed in a trust and person could get all the income from the trust and could revoke at any time.  BUT when that person dies, all the income will be paid to the beneficiary and when the beneficiary dies, income will be paid to remainder. à  GOOD because don’t need court approval.
E.    definitions
1.     “Estate” – § 1-2.6
·         Depending upon the context, “estate” may mean:
o    The interest which a person has in property.
o    The aggregate of property which a person has.
2.     “Will” – § 1-2.19
·         (a) A will is an oral declaration (only allowed in military context) or written instrument, made as prescribed by 3-2.1 or 3-2.2 to take effect upon death, whereby a person disposes of property or directs how it shall not be disposed of, disposes of his body or any part thereof, exercises a power, appoints a fiduciary or makes any other provision for the administration of his estate, and which is revocable during his lifetime.  (b) Unless the context otherwise requires, the term “will” includes a “codicil”.
3.     “Fiduciary” – § 1-2.7
·         A fiduciary is a person who meets the description, in this part, of a “personal representative” or who is designed by the creator or by the court to act as an assignee for the benefit of creditors, or a committee, conservator, curator, custodian, guardian, trustee or donee of a power during minority.
4.     “Distributee” – § 1-2.5
·         A distributee is a person entitled to take or share in the property of a decedent under the statutes governing “descent and distribution” (means intestacy).
5.     “Disposition” – § 1-2.4
·         A disposition is a transfer of property by a person during his lifetime or by will.
6.     “Testamentary Beneficiary (legacy, bequest, devise)” – § 1-2.18
·         A testamentary beneficiary is a person in whose favor a disposition of property is made by will.
7.     “Issue” –  § 1-2.10
·         (a) Unless a contrary intention is indicated: 
o    Issue are the descendents in any degree from a common ancestor (children, grandchildren etc.)
o    The terms “issue” and “descendants”, in subparagraph (1), include adopted children. 
8.     “Per Capita” – § 1-2.11
·         A disposition or distribution of property is per capita when it is made to persons, each of whom is to take in his own right an equal portion of such property.
9.     “Per Stirpes” – § 1-2.14
·         A per stirpes disposition or distribution of property is made to persons who take as issue of a deceased ancestor in the following manner:
o    The property so passing is divided into as many equal shares as there are
§  surviving issue in the generation nearest to the deceased ancestor which contains one or more surviving issue, and
§  deceased issue in the same generation who left surviving issue, if any.  Each surviving member in such nearest generation is allocated one share.  The share of a deceased issue in the nearest generation who left surviving issue shall be distributed in the same manner to such issue.
·         NOTE:  Before 1992, per stirpes is the default rule under rule 2-1.2 for trusts and wills.  However, after 1992, the default rule became by representation!  Thus, instruments executed after 1992, dispositions of property made to “issue” will take by representation, unless a contrary intention is expressed.
·         Per Stirpes = “through the stock.” – Each grandkid gets what their parent would have gotten (thus Stacy and I get more here & Terlizzi’s get screwed).


10.  “By Representation” – § 1-2.16
·         By representation means a disposition or distribution of property made in the following manner to persons who take as issue of a deceased ancestor:
o    The property so passing is divided into as many equal shares as there are
§  surviving issue in the generation nearest to the deceased ancestor which contains one or more surviving issue and
§  deceased issue in the same generation who left surviving is

sses to a surviving spouse is eligible for a marital deduction. If the estate taxes are taken off the top then the share to the surviving spouse would be less. The law favors the spouse.
·         Except that nothing contained herein relieves a distributee from contributing to all such taxes the amounts apportioned against him or her under § 2-1.8.
2.    

§ 1-2.5 Distributee
A distributee is a person entitled to take or share in the property of a decedent under the statutes governing descent and distribution.
Distribution: 4-1.1(a) If a decedent is survived by:

·         (1) Spouse and Issue
o    $50,000 + ½ of the residue to spouse
o   
§ 2-1.1 Heirs at law and next of kin defined
Whenever used in a statute or instrument, unless a contrary intention is expressed therein, the term “heirs”, “heirs at law”, “next of kin” or any term of like import means the distributees, as defined in 1-2.5.
Balance to issue, by representation.

·         (2) Spouse and No Issue
o    Whole to the spouse.
·         (3) Issue and No spouse
o    Whole to issue, by representation.
·         (4) One or Both Parents, and No Spouse and No Issue
o    Whole to the surviving parent or parents.
·         (5) Issue of Parents (i.e., Siblings), and No Spouse, Issue or Parent
o    Whole to the issue of the parents, by representation.
·         (6) One or More Grandparents OR the Issue of Grandparents (i.e., Aunt, Uncle, Cousins), AND No Spouse, Issue, Parent or Issue of Parents (Siblings)
o    1/2 to the surviving paternal grandparent or grandparents; and
§  OR if neither of them survives the decedent, to their issue, by representation
o    1/2 to the surviving maternal grandparent or grandparents
§  OR if neither of them survives the decedent, to their issue, by representation
o    Provided that if decedent not survived by grandparent(s) on one side or by issue of such grandparents
§  Whole to the surviving grandparent or grandparents on the other side
§  OR if neither of them survives the decedent, to their issue, by representation, in the same manner as the one-half.
o    For the purposes of this subparagraph, issue of grandparents shall not include issue more remote than grandchildren of such grandparents.
§  If you’re only survived by the grandparents and their issue, then we’ll stop at the grandchildren. First cousins once removed are not included. The rationale is that most families now are not as cohesive as previously. We also don’t go down that far because they’re hard to find! (“Laughing Heirs” – Never even heard of you but they get something.)