WILLS AND TRUSTS COURSE OUTLINE
Will – A document that is a lawful, voluntary disposition of assets upon death.
Codicil – A writtten supplement or amendment to a will.
Testator (male), Testatrix (female) (aka transferor) One who makes a will
Devise – A gift of real property
Bequest – A gift of personal property
Legacy – A gift of money
Heir – Persons designated by statute as being next in line to inherit.
Beneficiary (transferee) – Persons designated by a will to inherit.
Issue – Lineal descendants of the decedent
Probate, Surrogate, Orphans Court – Court having jurisdiction to hear matters related to decedents’ estates.
Intestate – Dying without a will.
Testate – Dying with a will.
First question after death of a person – What is the state of residency?
Second question…Was the decendent married?
Yes – Surviving spouse; Are there any children?
Yes – natural born, legally adopted, or equitably adopted, or stepchildren?
Third question…What assets were left behind
Community property or…
Community property – Property acquired during the marriage from the wages earned from the spouses.
Separate property – Property acquired before the marriage or acquired by each spouse during marriage by gift or inheritance.
Exceptions to Intestate Rules
Look-Back Rule (If no spouse or issue)
R/P inherited from predeceased spouse within 15 years, then R/P goes to estate of predeceased spouse. Remarriage or a will cuts off look-back rule.
P/P titled (bank accounts, stocks & bonds) and 10K or more within 5 years, then P/P titled goes to estate of predeceased spouse.
Failure to Survive
For intestate distribution purposes CA requires a potential taker to have survived a deceased by 120 hours by clear and convincing evidence.
Levels of Proof
Beyond a reasonable doubt
Clear and convincing
Slight or circumstantial evidence sufficient to raise a presumption
Parent/Child Relationship _PC 6450
Traditionally, the child must be born within 9 months of husband’s death.
Presumption of Legitimacy – There is a presumption in CA that the husband is the father of a child born to a married couple.
Burden case – A child born out of wedlock can be proven by sufficient evidence to be the child of the deceased father.
The parent-child relationship in CA is established by the relationship between the parent and the child, not marital status.
Legally Adopted -PC 6451(c)
Legal adoption – A court proceeding that ended with a legal adoption
Inheritance Rights to and from Natural Parents – After Adoption
A legally adopted child may not inherit from an intestate deceased natural parent. Hall v. Vallandingham
A natural parent may not inherit through a legally adopted deceased child.
Adult adoptions do not preclude childhood status for intestate inheritance purposes.
CA Exception to Prohibition against Dual Intestacy Inheritance – One of child’s natural parent dies, surviving natural parent remarries, and new spouse (step parent) adopts the child.
Equitably (Virtually) Adopted – PC 6454
Parent-child relationship exists, but there is no legal adoption.
An equitably adopted child may inherit from an intestate deceased adopted parent if 1. the relationship started when the child was a minor, and 2. their relationship and a legal barrier that prevented a legal adoption from occurring continued throughout the lifetime of the parent.
he issue(s) of the predeceased unless there is a writing to the contrary.
Lifetime gifts are not advancements
Expected inheritance rights may be assigned. The right to inherit is a mere expectancy until the intestate person dies.
Inheritancy rights may be declined, or refused by disclaiming them. Disclaimers are valid and shield the declined assets the disclaimer’s creditors except IRS tax liens existing at the time of the disclaimer. CA- 9 months to disclaim an inheritance, and are irreversible. Disclaimers can be total or partial.
Gaughan case – A disclaimer is not a fraudulent transaction under bankruptcy law, only IRS tax liens. (9th Circuit)
Vested Interest v. Expectancy
Offset – Debt Owed to Decedent
Decedent loans of portion of inheritance to person with inheritance rights offsets the inheritance share. The recipient can owe, or be owed the difference between the loan and the inheritance share balance, depending on the size of the inheritance share balance and the size of the loan. Add the debt amount back into estate to calculate inheritance shares.
Threshold Considerations for Basic Testamentary Capacity
1. 18 yoa or > except GA (14), LA (16), IN (17 if military), IA (16 if married)
2. Of sound mind
CA presumption of testamentary capacity. Rebuttable by a preponderance
1. 18 yoa
2. Valid on face