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Wills and Trusts
St. Thomas University, Florida School of Law
Ronner, Amy D.

Wills and Trusts
Outline
 
v The power to transmit property at death: Its justification and Limitations
 
Ø Inheritance by children and heirs of the deceased arose much earlier than the right of devising by testament. 
Ø Jefferson believed that inheritance was not a natural right and that upon a decedent’s death, the property he owned would revert back to society.
Ø Blackstone believes that the right of inheritance is a statutory creation. Property continues only in life, when it became inheritable, the inheritance was long indefeasible, and the children or heirs at law were incapable of exclusion by will. So strict of a rule caused the heirs to become disobedient and headstrong, defrauded creditors of their just debts, and prevented many provident fathers from dividing or charging their estates as the exigencies of their families required. 
Ø Locke believes that inheritance is somewhat a natural right and arose from the desire of man to perpetuate the well being of his offspring. 
Ø The right of inheritance arose when a man’s children are usually about him on his death-bed, and are the earliest witnesses of his decease. They become, therefore, generally the next immediate occupants, till at length, in the process of time, this frequent usage ripened into general law. Blackstone. 
Ø Testament: written or oral instructions properly witnessed and authenticated, according to the pleasure of the deceased, which we, therefore, emphatically style his will. 
Ø Intestate: death without a will or a will substitute.
Ø Probate:  Court proceedings that distributes property at death. Will substitutes are used primarily today. This is both time consuming and expensive. 
Ø Wills testaments and right of inheritance are all creatures of the civil or municipal laws. 
Ø Escheat: is a common law doctrine that operates to ensure that property is not left in limbo and ownerless. 
Ø Amended §207 was also held unconstitutional in Babbitt v. Youpee. 
 
v Policy of Passing Wealth at Death
 
v Why do we allow the passing of property at death? It is a way of disposing property in the most efficient way possible. 
§ Property could be destroyed.
§ Could be buried along with the decedent.
§ Property could be treated as if it was unowned.
§ Property could be confiscated by the government.
§ Property could be disposed of as the descedent wished. 
Ø Favored approaches are confiscation or private succession.
Ø Destruction is wasteful, and treating property as if it were unowned would encourage individuals to hover over dying individuals in order to collect their property.  
Ø Inheritance may be the least objectionable arrangement for dealing with property on the owner’s death, because society is based on private property.
Ø It encourages the reinforcement of family ties. 
Ø Society is based on private property and therefore, inheritance might be the least objectionable approach for handling its disposition. 
Ø Inheritance reinforces family ties. 
Ø It has been thought to bring forth creativity, hard work, initiative and productivity.
Ø Inheritance encourages saving as opposed to rapid consumption. 
 
v Arguments against passing wealth at Death
 
v The most powerful argument against permitting transmission of wealth is that the transfer of great fortunes perpetuates wide disparities in the distribution of wealth, concentrates inherited economic power in the hands of a few, and denies equality of opportunity to the poor. 
v Propsals Crystal: proposes that there should be a million dollar limit on inheritance (capping on receipt). 
v Proposals: Ascher
Ø General premise: all property owned at death, after payment of debts and administration expenses, should be sold and the proceeds paid to the United States government. 
§ Exceptions:
·         A marital exemption, factors to be considered are the length of the marriage. This is known as first forced shares and applies to women and men equally one does not have the ability to disinherit their spouse. This theory is based on the partnership concept and married couples are presumed to work together to accumulate their family’s wealth. The concept is tied with the concept of the stay at home spouse. 
·         Dependent lineal descendents, dependent on age, dependent on age. For example, a six year old loses his mother, he should be allowed to inherit in order to survive.
·         Inheritance by lineal ascendants. This is the ability to transfer wealth upwards. However, the statutes are skeptical concerning this matter.
·         Charity (fixed amount).
·         Disabled lineal descendants of any age.
·         Moderate exemption to pass property to decedent’s choice. This is the universal exemption and a person has the ability to pass wealth to anyone of their choice not to exceed $450k. 
Ø Restricting inheritance would contribute to the equality of opportunity offered to children.
 
v Hypo
 
v The legislature proposes a bill that abolishes inheritance all together.
Ø There could be exceptions such as those provided for by Ascher.
Ø This proposal would affect the middle classes severely because sometimes the inheritance is minimal but would still be very helpful.
Ø One would easily be able to circumvent the process and give intervivos. Lawyers would make a tremendous amount of money.
Ø Ascher proposed to eliminate inheritance by healthy adult children and made exceptions.
Ø Bill Gates, and other owners of large profitable companies, contribute to society by making donations that would otherwise not be made.
Ø Inheritance encourages family bonds.
Ø Caps on charity also seem to discourage the continuance of our cultural inheritance.
v What if Florida decided to abolish inheritance?
Ø Residents would move out of the state.
Ø There would be a considerable amount of intervivos gifting. The government would not have the capacity to police this particular area because it is very time consuming and expensive.
Ø There are too many ways to circumvent a statute abolishing inheritance. 
 
 
v Inheritance in the erstwhile Soviet Union
 
Ø In 1918, the Soviets, carrying out the teaching of Marx and Engels, abolished inheritance. 
Ø The property became property of the Soviet Union. 
Ø Within four years inheritance was reestablished. 
§ It was decided that inheritance was an institution encouraging savings and an incentive to work. 
§ It was also viewed as an institution providing for dependents of the deceased, therefore, relieving the state of this responsibility. 
 
v Chapter 1 Vocabulary
 
Ø Probate
§ Is property that passes under the decedent’s will or by intestacy.
Ø Nonprobate
§ Is property passing under an instrument other than a will. However, one will want to have a will in addition to will substitutes otherwise the legislature will draft your will for you. 
·         Examples:
¨       Joint tenancy property (real and personal)
¨       Life insurance
¨       Contracts with payable on death provisions.
¨       Interests in trust.
¨       Revocable intervivos trust.
Ø Executor
§ When the decedent dies testate and in the will names the person who is to execute the will and administer the probate estate, such personal representative is the executor.
Ø Administrator
§ When the person in charge of administering the estate is not named in the will, the personal representative is an administrator. 
 
v Cases
 
1)      Irving v. Day
a)      Holding: Rights of succession are statutory creations and therefore, are not protected under the Constitution. The state has the power to both give and take away. 
2)      Penn Central
a)      Holding: Test regarding whether something constitutes a taking or not.
i)        Economic impact of the particular regulation.
ii)       Character of governmental action.
iii)     Investment backed expectations.
3)      Hodel v. Irving
a)      Statement of Case: Appellees filed suit in the United States District Court of South Dakota, claiming that §207 resulted in a taking of property without just compensation in violation of the Fifth Amendment.
b)      Procedure: The District Court held the appellees had no vested interest in the decedent’s property, and that Congress had plenary authority to abolish the power of testamentary disposition of Indian Property and t

scendable. 
v)      Residue: meaning whatever is left over of the estate after assets have been distributed. 
vi)     The issue in this case is whether or not there is a postmortem right of publicity. At this time there was not. 
vii)   There is also an issue of intent within the case. In order to find that a decedent intended to dispose of property in a certain manner that intent must have been expressed clearly and unequivocally.
 
5)      Shapira v. Union National Banks
a)      Statement of Case: Son challenges father’s will indicating that the provisions are unconstitutional, contrary to public policy and unenforceable because of its unreasonableness.
b)      Procedure: The trial court ruled against the Plaintiff.
c)       Facts:    This was an action for declaratory judgment and the construction of a will by David Shapira. The contested clause is Item VIII which conditioned the decedent’s son’s inheritance. The deceased stipulated that his son’s inheritance shall not vest unless his son married a Jewish woman of Jewish parentage. Danial Shapira challenged this provision as being unconstitutional and against public policy. Regarding the Constitutionality of the claim the plaintiff urged the court to accept that this violates constitutional safeguards based on the right to marry that is protected as a fundamental right under the 14th amendment. The argument was rejected as this particular condition operated as a partial restraint. A partial restraint of marriage which imposes only reasonable restrictions is valid, and not contrary to public policy. In particular, the court was not being asked to enforce any restriction upon Shapira’s constitutional right to marry but rather the court was being asked to enforce the testator’s restriction upon his son’s inheritance.
d)      Issue: Whether or not a testator’s restriction regarding inheritance as related to marriage is unconstitutional and against public policy?
e)      Procedural Result: Trial court ruled against the Plaintiff.
f)       Holding: No. This restriction is not unconstitutional and is not against public policy. The right to receive property by will is a creature of the law, and is not a natural right or one guaranteed or protected by either the Ohio or the United States Constitution. The marriage restriction operates as a partial restraint and does not completely ban the Plaintiff’s ability to marry a non-Jewish woman. The restraint is not general or total. A partial restraint of marriage which imposes only reasonable restrictions is valid, and not contrary to public policy.   
g)      4 MAIN ARGUMENTS:
Constitutionality: the courts are being asked to restrict the plaintiff’s right to marry which implicates the Fourteenth amendment. This is not accurate because the court is only being asked to enforce the testator’s restriction upon inheritance. This implicates Loving and Shelly both dealt with state action in a racial context. Enforcement of the statute or private covenants was contrary to the public policy. Enforcing these types of agreements were unreasonable. The court indicated in this particular situation that while marriage is a fundamental right the right to inherit is a statutory creation and not an absolute right. However, the marriage provision could be argued as being overly broad and vague