Chapter 1: Introduction to Estate Planning
I. The Power To Transmit Property At Death
A. If the right to transmit property at death is taken away, compensation must be paid. The protected right is that of the testator, not of the recipient. Hodel (holding that a state law that prohibited devise and distribution of small portions of land for Indians was unconst.)
B. Conditional Wills: There is nothing invalid by having a condition in a will (e.g. marry a Jewish girl) that must be satisfied in order to inherit. The Court has a duty to honor the testator’s intentions. Shapira.
1. Condition Must Be Expressed In Will: Parole evidence is not admissible to show that a will was intended to be conditional, but may be admitted to show that the instrument was a sham.
2. Condition vs. Motive: When a will makes a condition, such as “if anything happens to me when I go on this trip, then I want my property disposed of as such . . .,” then the issue is whether this was a will to be effective only upon the condition happening or a motive that testator wanted a will, in such case, the will in ineffective.
(a) Intestacy Avoided: If the facts indicated the testator executed a will, then no intestacy.
(b) Preservation of Will: If testator preserved the document after returning from trip, then indication that will was operational.
II. Transfer of the Decedent’s Estate
A. Probate and Nonprobate property
1. Probate Property: passes under the decedent’s will or by intestacy
2. Nonprobate property: passing under an instrument other than a will which became effective before death.
(a) Joint tenancy property
(b) Life insurance
(c) Contracts with payable-on-death provisions (includes IRA’s)
(d) Interests in trust: If the decedent has a testamentary power of appointment over assets in the trust, the decedent’s will must be admitted to probate, but the trust assets are distributed directly by the trustee to the beneficiaries named in the will and do not go through probate.
B. Administration of Probate Estates
1. Appointment of a personal rep. to oversee the winding up of the decedent’s affairs.
(a) Duties of pers. rep:
(i) Inventory and collect the assets of the decedent; keep separate from own.
(ii) Mange the assets during administration
(iii) Receive and pay the claims of creditors and tax collectors
(iv) Distribute the remaining assets to those
(d) Time for contest: Must be done within the later of (1) 3 mos. after the date of first publication of the notice of administration or (2) 30 days after the date of service of the notice.
(i) Same rule applies for creditors to file a claim.
D. Is Probate Necessary
1. Avoiding probate: Can be done if the property owner during life transfers all his or her property into a joint tenancy or a revocable or irrevocable trust or, executes a contract providing for distribution of contract assets to named beneficiaries on the owner’s death
(a) Note: Not all property can be devised in via joint tenancy or through a trust.
2. What are the exceptions:
(a) Homestead, 732.4015,
(b) Exemptions 732.402 (spouse or children can go in and collect property ($10,000 of pers. prop, Automobiles).
Family Allowance: Out of the probate estate, you can take up to $18,000 to give to certain dependents to allow them to live while the estate is being probated.