Trusts and Estates
a) Inheritance and Testation – Limitations
(1) T. Jefferson – “The earth belongs in usufruct to the living; the dead have neither power no rights over it.”
(2) 2 W. Blackstone, Commentaries – “The permanent right of property vested in the ancestor himself, was not a natural, but merely a civil right. Wills . . . and rights of inheritance . . . are all creatures of civil or municipal laws.”
(3) Supreme Court in 1942 – in Irving Trust Co. v. Day, the Supreme Court held that rights of succession to the property of a deceased are entirely a statutory creation. Nothing in the Constitution forbids a legislature from limiting or even abolishing the power of testamentary disposition over property.
ii) Absolute Restraint on Right to Transmit is Prohibited
(1) Taking Property Without Just Compensation – Hodel v. Irving (1987, J. O’Connor)
(a) Facts – A provision required that no undivided fractional interest in any tract of trust or restricted land will descend by intestacy if the land represents less than 2% of the total acreage or earned its owner less than $100 in the prior year, but will escheat to the tribe.
(b) Issue – whether the escheat provision, which required that land worth less than a certain amount escheat to the tribe, was a constitutional taking?
(c) Holding – the escheat provision was unconstitutional. Ignores the Irving Trust Co. holding that rights of succession are entirely a statutory creation.
(i) Three prong taking analysis:
1. Determine the economic impact of the statute/regulation.
a. There is a substantial right to have property.
b. The value of the land was lost to the heirs. (The value of the land is not lost to the decedent. He had the right to sell it during his life).
2. Investment backed expectations – there were no investment backed expectations for the heirs/devisees.
3. Character of governmental action – the government should not be interfering in situations like this.
(ii) The statute could gave limited the intestacy to allow for no further infractionation, but it should not be able to legislate for those persons who have a will.
(iii) The will is a very important aspect in Anglo-American law and should not be invalidated by certain statutes.
(iv) General Rule – Congress cannot completely abrogate the right to transmit property except in very limited circumstances.
(2) Ways we can limit the right to bequeath and devise property:
(b) Spouse cannot be disinherited unless they agree (therefore, the can statutorily take).
iii) Restrictions are permitted as long as they are reasonable
(1) Mortmain statutes – statutes that restrict corporations, charities, etc. from obtaining property from a decedent if the decedent dies within a certain period after writing the will and devises property to charities, etc. instead of descendants.
(2) Statutory Restriction of Charitable Gifts – Shriners Hospitals for Crippled Children v. Zrillic
(a) General Rule – Regulations on devises are permitted by statute as long as they are reasonably related to furthering a state goal.
(b) Facts – Mother left her estate to the Shriner’s Hospital. She only left a few trinkets to her daughter. A Florida statute allowed lineal descendants to contest the devise if the decedent died within six months of executing the will. The mother died within the statutory period so the daughter contested the will.
(c) Issue – was the mortmain statute unconstitutional?
(d) Holding – the statute was unconstitutional.
(i) Statute has to be reasonably related to promoting the general welfare.
1. The Florida statute was designed to protect needy family members.
2. The statute also protects against fraud, duress, mistake, and undue influence.
3. However, the statute is unconstitutional because it doesn’t protect against windfalls.
(ii) Constitutional Analysis
1. Violates the Equal Protection Clause – the statute creates a limited class of beneficiaries and doesn’t protect decedents from being taken advantage of by lawyers, nurses, doctor
ry is constitutional, the court is not asked to enforce any restriction upon P’s constitutional right to marriage, the court is asked to enforce the testator’s restriction upon his son’s inheritance.
(b) The partial restraint on marriage does not violate public policy because it is not a complete restraint.
(c) The restriction is valid because it is attempts to promote the continuation of the Jewish tradition in the family.
(d) If there are no Jewish girls in Youngstown, OH, the son should move elsewhere.
b) The Probate Process
i) General Steps in Probate Process
(1) Opening the estate by offering the will for probate
(2) Validating the will:
(a) Interviewing attesting witnesses
(b) Authenticating the will
(c) Proving that the will was validly executed.
(d) Proving that the testator had mental capacity and was not unduly influenced.
(3) Collecting decedent’s assets
(4) Paying any family allowance and setting aside homestead and exempt personal property.
(5) Pay lawyer’s fees.
(6) Paying creditor’s claims and tax bills
(7) Distributing the assets of the estate upon the probate court entering a decree of distribution
(1) Administrator – person originally appointed when the decedent dies intestate.
(2) Executor – the personal representative named in the will.
(3) Succession – the process of becoming beneficially entitled to the property of the decedent.
(4) Intestate succession – occurs when the decedent leaves no valid will, so that his property passes to those of his relatives named in a state statute.
Statute of descent – the intestate law which apples only to real property.