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Trusts and Estates
Temple University School of Law
Baron, Jane B.

 
Trust and Estates
Baron
Fall 2015
 
 
Shapiro
–        Dr. Shapiro’s will provides inheritance to be distributed if son marries a Jewish girl whose both parents are Jewish
–        Son argues that the will limits his rights to marry violating a Constitutional right
o   Does Shelly apply (enforce a violation of 14th amendment)
o   Court was not being asked to limit his right to marry but limit his right to inheritance
–        Son also argues that limiting him to marrying a Jewish girl violates public policy
o   Court will not uphold a total restriction on marriage
o   Court not really going to focus on determining ones eligibility (is she German, Irish or Catholic)
o   There is enough suitors for Daniel to choose from to inherit
 
·         If someone dies with a will they are determined to be testate; Dies without they are determined to be intestate
·         In order to probate a person’s estate they must:
1.      Collect Assets
2.      Pay Debts (executor or administrator)
3.      Distribute the estate
 
Mechanics of Succession
1.      Probate
a.       Property that passes through probate under the decedent’s will or intestacy
                                                              i.      Testamentary trust
b.      Real-Estate will likely trigger probate
c.       Called upon to resolve distribution of property where family may not agree
2.      Non-Probate
a.       Property that passes outside of probate
                                                              i.      Inter Vivos Trust
                                                            ii.      Life Insurance
                                                          iii.      Pay-on-death or Transfer-on-death
                                                          iv.      Joint Tenancy
Simpson
–        Father created a will to give his property to his son along with a life estate interest in his house the step mother.
–        Will stated wife was to receive the “homestead”
–        Probate court interpreted homestead to mean the entire property
–        Son sued alleging negligence
o   Court held that attorney had a duty to the son
o   Attorneys have a duty to the recipient of the will
–        Probate is intended to distribute the estate as intended by the decedent
 
A v. B
–        Married couple seeks to create a will with a specific firm
–        Firm later retained to represent a mother in a paternity suit against husband
o   Spelling error allowed the conflict of interest to proceed
–        Husband was the father of the child creating a conflict between his wife and him
o   Wife’s assets may end up in the hands of the illegitimate son
–        Court held that the Conflict of Interest waiver signed by both parties allowed the law firm to disclose information provided by one spouse to the other
o   However, nothing explicitly authorizing disclosure of confidential information discovered outside of the spouse
–        Attorneys should be explicit up front regarding disclosure of all confidential information
 
Intestacy
 
·         Intestacy is the situation that occurs when a decedent passes without a will
·         Intestacy governed by state intestacy law
o   Applied when the decedent has no will
o   Applied when a will or portions of it are not valid
·         Intestacy laws
o   establish a cut-off of when a recipient is too distant to receive a distribution
o   Eligible Takers (who can establish right to get some of the estate)
o   Representation
·         Intestacy Laws generally favor: 1) Spouse 2) descendants 3) then the parents
o   Many states eliminate distant relatives or laughing heirs from eligible inheritance
 
Representation
–        Distribution can occur per capita
o   Distributed evenly by the number of eligible takers
o   Less favor as there are un-equal distribution channels
–        Distribution can occur by stirpes
o   by the roots
§  May be Classic/Strict/English
·         Takes roots at child level and distributes accordingly
·         Does not matter if child alive/deceased
§  May be Modern Per Stirpes
·         Takes root with the nearest surviving heir and distributing according to the root
§  May be Per Capita
·         Counts the number of surviving kin at first level and deceased kin with descendants; allocates accordingly
·         Remainder combined and moved to next level of kin, repeating process
–        In-laws are typically excluded from taking as intestate successors in nearly every state
 
Unanticipated aspects of Adoption law
–        Adoption
o   Adoption may typically dissolve the parent child relationship
§  Child is adopted and is typically dissolves relationship with the biological parents
§  Extent to which adopted children may inherit depends on state statutes
 
Hall
§  Children of Earl where adopted by mother’s second husband
§  Maintained relationship with their dead father’s br

echnology receive same rights as other children
 
Gifts to Children
–        Advancement
o   Any lifetime gift given to children may be presumed to be an advancement on the child’s intestate share
o   Advancement is deducted from the child’s share at the death of parent
§  Hotchpot created to aggregate all advancements and remaining intestate $$, then redistributed to the children.
·         Advancements need not be given back
·         Excess take renders child share at zero
o   Not all states presume gifts to be advancements
§  Modern law often requires proof to show gift was an advancement
§  Effectively eliminates advancement as it no longer intestate
–        Disclaimer
o   Heir or devisee refuses to take the property (often for tax or creditor purposes)
§  Property usually treated as if the disclaimant had predeceased the giver and goes directly to his heir/issue
§  Avoids gift tax problems
o   May be subject to claims of federal government
 
Valid Will
A.    Mental Capacity
a.       If a testator lacks a mental capacity,  the takers under intestate law would receive
b.      Assessment looks at capability rather than actual knowledge
 
In Re Wright (Eccentricity does not invalidate will)
·         Decedant left property to daughter, grand-daughter and “friend” in a will executed one year prior to death. Left only dollar to sons
·         Daughter challenged testator’s capacity
o   Witnesses of the will and the non-lawyer draftee testified they thought he was of unsound mind
§  Said he was strange, queer, drank a lot and chased kids off property
·         Court held that his eccentricity was not enough to show he lacked the capacity at the time the will was drawn
·         Claimant had burden of showing the incapacity at the time the will was made
o   Is there a causal connection between the incapacity and the decision that was made
o   Rule is that the moment the testator communicates his wishes to the lawyer is the testing point