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Wills and Estates
Stetson University School of Law
Banta, Natalie M.

Wills, Trusts and Estates

Professor Banta

Fall 2014

Book: Wills, trusts, and Estates/ Dukeminier Sitkoff/ 9th Edition

The law of American succession

· probate (state’s system to transfer property) and nonprobate succession

· Half of Americans die without a will and their property will transfer through intestacy

· Unrestricted right to dispose of property as they see fit

Freedom of Disposition & Dead Hand Control

· Succession includes the law of wills, the law of intestacy, the law of trusts, the law of charitable foundations, the law concerning death taxes, and even the law of future interests

· American law strongly embraces the principle of freedom of disposition

o Freedom of disposition at death is subject only to wealth transfer taxation and a handful of policy limitations- some of these limitations are triggered by the donor’s lifetime conduct

· No constraint on freedom of disposition arises from the interest of an expectant beneficiary in receiving a future inheritance

o The donee’s interest in a future inheritance is a mere expectancy, one that is derivative of the donor’s right to dispose of his property as he pleases, and that is defeasible at the whim of the donor

· Limits: cannot disinherit a spouse or disenfranchise creditors, cannot be used to encourage a tortious action, damage familial relationships, the right to destroy, and unreasonable wasteness

Shapira v. United National Bank (1974)

· Dr. Shapira’s will conditioned the inheritance of property to his sons on the basis of them marrying a woman who was Jewish

· The right to marry is constitutionally protected from restrictive state legislative action

o The upholding and enforcement of the provisions of Dr. Shapira’s will conditioning the bequests to his sons upon their marrying Jewish girls does not offend the Constitution of Ohio or the U.S.

§ If you want your dad’s money, you have to follow his intent

· Not a total restraint

· A partial restraint of marriage which imposes only reasonable restrictions is valid, and not contrary to public policy; the great weight of authority in the U.S. is that gifts conditioned upon the beneficiary’s marrying within a particular religious class or faith are reasonable

o The son should not gain the advantage of the avoidance of the condition by the possibility of his own impropriety

o Whether this judgment, to have the will constructed this way, was wise is not for this court to determine

· Dr. Shapira wanted his money to further the Jewish religion, whether that was with his sons or to Israel

· A restraint unreasonably limits the transferee’s opportunity to marry if a marriage permitted by the restraint is not likely to occur. The likelihood of marriage is a factual question, to be answered from the circumstances of the particular case

· Incentive trusts = conditioned gifts

o 3 types of conditions: 1) conditions encouraging beneficiaries to pursue an education, 2) conditions that provide what might be termed moral incentives- incentives that reflect the settlor’s moral or religious outlook or promote a particular way of living, and 3) conditions designed to encourage the beneficiaries to have a productive career

§ Enforceable if they do not violate public policy

· Restatement (3rd of torts)- in reckoning what is contrary to public policy, courts should balance the donor’s freedom of disposition against other social values and effects of deadhand control on the subsequent conduct or personal freedoms of others. If a provision is unnecessarily punitive or unreasonably intrusive into significant personal decisions or interests, the provision may be invalid

· Rationales/justifications for testamentary freedom:

o Incentive to industry and saving

o Wealth enhancement and social services

o Testation is difficult to curtail

o Intelligent estate planning- taking account of the differing needs of family members

o Political preference

· Possibilities for succession:

o Forced succession- the decedent’s property could pass by simple rule of mandatory or forced succession, such as primogeniture or to the spouse, children, or other dependents, or if the decedent has no dependents, then the property would escheat to the state (Most countries outside of U.S.)

§ No natural right to bequeath, who owns the resources- society, so the property should revert, discourages working, and concentration of wealth

o Freedom of disposition- the decedent’s property could pass in accordance with the decedent’s declared wishes if they are reliably preserved, or if not, then in accordance with a default system of succession that tracks the probable intent of a typical decedent (American law generally)

§ Incentivising, freedom and right, difficult to curtail, intelligently plan your estate

o Confiscation by the state- the decedent’s property could be confiscated by the state on the theory that the decedent’s property rights terminate on death

· Most powerful argument against freedom of disposition is that it perpetuates inequalities in the distribution of wealth, concentrates economic power in the hands of a few which distorts politics and markets, and denies equal opportunity to the poor

Hodel v. Irving (1987)

· Congress passed legislation that divided communal reservations of Indian tribes into individual allotments for Indians and unallotted lands for non-Indian settlement- to speed the Indians’ assimilation into American society and to free new lands for white settlement; Indians became landlords and leased property cheaper than the costs/expenses, and created a nightmare from an inheritance perspective since the land was held in a trust- more land was becoming fractured over time because of leases; 3 appellees challenged for 41 fractional interests

· Congress enacted §207 as a means of ameliorating, over time, the problem of extreme fractionation of certain Indian lands- it provides for the escheat of sm

amed beneficiary

§ Joint tenancy-

ú Under the theory of joint tenancy, the decedent’s interest vanishes at death, and the survivor owns the whole property free of the decedent’s participation

o If a decedent did not arrange his affairs during life so that all of his property passes by nonprobate transfer and his family cannot divide up the property in private, probate administration fills the gap

· Once a decedent passes away:

o 1) Read the will to find the executor

o 2) Make sure the will has been executed properly

o 3) Find out where the decedent lived to understand where the property is (title; unfair for one state to clear title of another state; protect creditors in the state where the property is)

o 4) Which court to file in- domicile

o 5) Filing papers for probate: attach will, sign papers related to the executor, and request something from the court

o 6) Letters testamentary (if will) and letters administration (no will)

§ A will won’t work at the bank because they cannot determine the validity

§ Bond- can waive requirement

o 7) Formal probate and informal probate

§ Formal- litigate the validity of the will

§ Informal- no objection

ú An interested party can kick the proceeding to formal

o 8) Determine how intensely the court is going to supervise the estate

§ Supervised- goes to court; PR can’t distribute property without court approval

ú In FL, formal and supervised go together ($75k +)

§ Unsupervised- admin the estate without going to court


· When a person dies and probate is necessary, the first step is the appointment of a personal representative to oversee the winding up of the decedent’s affairs

o Personal rep is a fiduciary who collects and inventories the property of the decedent, manages and protects the property during the administration of the estate (secure property), notify creditors and then processes the claims of creditors (serve or publish notice), files federal and state tax returns, sell and distribute property to those entitled, close the estate

· If a person dies testate and in her will names the person who is to execute that person is the executor

o If no executor is named, or the named executor is unable or unwilling to serve, or the decedent dies intestate, the court will name an administrator (spouse, children, parents, siblings, and then creditors