What’s In the Probate Estate?
Lifetime Transfers (i.e., painting)
If you make a gift it must be irrevocable. There must be intention, delivery, and acceptance. The most difficult is intention.
Gruen v. Gruen – son received two letters. The first said that the son could have the painting but the father was going to keep it. The second just said you could have it (the lawyers were trying to avoid estate taxes on it). Didn’t matter though because the IRS can imply a life estate and tax it anyway. The other party is arguing that it was just an ill-advised attempt to transfer the painting at death. Rule: you can make an irrevocable transfer of a future interest, as long as you have a present interest in doing so, and you do not retain the power to revoke it.
This case shows that there must be donative intent to make a present transfer. So you need to ask if there was a present intention to transfer a future interest. If the transfer is going to take place at death you WILL need a will to do that.
Basically this is looked at as a contract. It will not be in the probate estate and will therefore pass according to the beneficiary designation.
McCarthy v. Aetna Life Insurance – Rule: a general testamentary provision in a will does NOT revoke the policy. The insured should follow the provisions in the insurance contract for changing the beneficiary. The court leaves open the question whether a specific provision in the will changes the beneficiary (substantial compliance)??
Lincoln Life v. Caswell – As a corollary of the above rule, it has long been recognized that, unless an insurance policy permits the beneficiary to be designated or changed by will, even a specific testamentary bequest of the policy proceeds generally will not override a prior beneficiary designation made in accordance with the terms of the policy. SeeFink v. Fink.
Tenancy by the Entirety
If it’s a tenancy by the entirety it will pass to the surviving spouse. If it were a joint tenancy it will pass to the survivor (unless unilaterally severed during life). If it were a tenancy in common then you could will your half and the devisee could exercise the right of partition and half the other tenant in common sell so you could collect your half.
Bank Account in Own Name
This is the essence of what is in the probate estate and it will definitely be governed by the will (or intestacy should there be no will).
EXCEPT for EPTL § 5-3.1 which exempts property from becoming part of the probate estate. This is to protect the family from the decedent’s creditors. This section also takes away decedent’s ability to govern this property by will. (4) and (5) are the automobile and cash sections and are the most important.
Joint Checking Account
§ 675(a) of the Banking Law – when there is a deposit of cash in the name of the depositor and another to be paid to either or the survivor, the funds are to become the property of such persons as JT’s. § 675(b) says that a JT being created is only prime facie. There is a rebuttable presumption and if it is rebutted then the whole account will go into the probate. If you can show that it was a convenience account then it will go into the probate. Dead Man’s Statute – interested person cannot testify with respect to conversations with decedent; however, an uninterested person can testify.
Brezinski v. Brezinski – Initially the burden of the rebutting the presumption is on the person challenging the JT claiming that it is a convenience account. The burden can be rebutted by “direct proof or substantial circumstantial proof, clear and convincing and sufficient to support an inference that the joint account had been opened in that form as a matter of convenience (show that person is mad old, sick, etc.). When this presumption is successfully rebutted, the burden of proof shifts to the claimant to show that the depositor understood the implications of the transaction and intended to make a gift of the funds.
Lang – Here the respondent took more than her moiety (her portion of the JT). Court said that she had to return the portion that wasn’t hers and that it was no longer subject to the right of survivorship and would therefore be part of the probate estate. “that the withdrawn funds upon being removed from the account without the consent of the JT were no longer subject to the right of survivorship that existed in the account.”
Rule: if you don’t take out more than your moiety, you are entitled to keep it, and right of survivorship follows with whatever is left in the account.
Richichi – Will, which was executed shortly after the JT bank account was opened, said that it was for convenience and that all 4 children were to take. This was clear and convincing evidence that it was a convenience account. This comes dangerously close to allowing a person to sever a joint tenancy after death.
Totten Trust Bank Account
A totten trust is a testamentary substitute that permits the depositor to retain full control of the money during his lifetime and to pass it, outside of probate, to the named beneficiary at death. Basically, the person putting the money in is the trustee; he can do whatever the fuck he wants with the money, and the beneficiary cannot do shit. There are only 3 ways to revoke a totten trust under EPTL 7-5.2: withdrawal of funds, an express direction in a will, and a qualifying writing (must be notarized) filed with the bank. ONLY NON-PROBATE ASSET GOVERNABLE BY WILL!!!
Eredics – confirms that 7-5.2 governs the way a trustee can revoke a totten trust. Furthermore, it adopts the premise from Maruccia that beneficiary rights to a totten trust can be waived by an explicit, voluntary and good faith waiver. A general provision in a separation agreement will not suffice.
Silber v. Silber – very similar facts but it dealt with pen
Must argue that the will should be read as a whole, and the provisions are inseparable. This ties into the principle of infectious invalidity. This will prevent Bad George from trying to claim that he gets the money but cannot throw it into the river.
Public Policy violations do not have to be written into a statute; they can be common law public policy violations (i.e., get $ if you divorce your wife; there are no statutes against divorcing wife, but its against public policy). See Walker.
Regarding Cy Pres, you can argue that the will says that the “only way” to educate people is to throw the jewels into the river.
Now argue that the will reads: should this not be possible I want Hilda to have my money.
Bad George Arguments:
The will says that everything goes to George, period. The next few sentences should be thrown out if against public policy, and George should keep.
Good George Arguments:
Try and argue that if courts could continuously throw out wills then what is the point of even drafting them.
Beck – old lady wanted her house torn down. Court upheld her wishes. There was a lot of factors that played into this, but one factor was definitely how bad of shape it was in and the burden on the beneficiary of upkeep with the limited resources that went along with the disposition.
If court finds that throwing the jewels in the river is against public policy then try and argue Cy Pres.
Argue that Harry wanted to protest military policy, and there are other ways to do that. Argue that Harry wanted to shock people, educate them about the use of the military, so we can argue that giving the money to some charitable organization for these principles should be done.
Cy Pres – if you can get the court to see that there is a general charitable intent – i.e., educational, religious, medical – and if it’s not illegal, not practical, or whatever, then the court can fashion another specific way to accomplish the same thing intended.
Adoption; Non-Marital Children; Wrongful Death
Domestic Relations Law § 117
§ 117(1) – Intestacy:
(a) + (b) – after the adoption the biological parents are out of the line of the child and the child is out of the line of the parents
(c) – deals with the adopted-in family. This provision puts the adopted child in their line and them in his inheritance line.