I. INTRO TO ESTATE PLANNING
i. ESTATE PLANNING
· Area is regulated b/c it deals with money
· High Fiduciary obligation btwn estate lawyer & client—b/c when lawyer is drafting a will there is no negotiation, and no one to catch your mistake.
o Important to have someone else review it before it’s executed.
ii. INTESTACY—EPTL §4.1.1
· NY statute is poorly drafted & unclear
· DEFINED—person dies w/out will—estate will be distrib pursuant to default rules in statute.
o Note—most people die w/out wills
· Capacity & Contest
o Who can make a will
o What are the grounds for contesting a will
· How do we execute a will?
o Note—many mistakes in this area of law
· Revocation of will
iv. WILL SUBS
· Has a lot to do with property
v. PLANNING FOR INCAPACITY
vi. CONSTRUCTION OF WILLS
· Will drafting
· What to do when will is ambiguous
vii. ELECTIVE SHARE
· What are the rights of the surviving spouse
· Preventing someone from disinheriting a surviving spouse legally
o GA only state that doesn’t have elective share provisions—only state that allows you to disinherit your spouse.
· Powers of Appointment
· Review RAP
ix. INTRO CHARITABLE TRUSTS & FIDUCIARY POWERS
A. The Power to Transmit Property at Death
a. ISSUE 1—Why Should/Shouldn’t there be inheritance?—Limitations?
© TAX on Inheritance (on lifetime & death giving)
© Reasons the WHOLE ESTATE isn’t confiscated at death:
o Incentive for people to save;
o Encourage people to take care of others
o Donor Satisfaction & Freedom of Testator—to give his/her prop to whomever he/she wants. Helps people b/c there is satisfaction in giving.
© DISADVANTAGES to UNRESTRICTED Inheritance:
o Estate taxes provide small amt of revenue;
o Promotes Wealth Concentration—by allowing people who did not earn it to inherit large amts of money—creates disparities in the wealth;
o Unfair—it doesn’t reward merit—it gives them something for nothing.
© Constitutional Right—Hodel case—J. O’Conner held for 1st time—that the right to leave your prop is a const. right—it’s one of the sticks in the bundle of prop rights.
B. Transfer of the Decedent’s Estate—EPTL Art. I and II
i. Intestacy—person who dies w/out will
ii. Intestate—what person who dies w/out will is called
iii. Estate—differs depending on the issue:
1. Testate Estate—where there is a will, prop passed through this estate or the intestate estate.
2. Intestate Estate—prop that decedent owned in his own name @ death and did not dispose of in any way during life.
3. Transfers—certain transfers (will subs)—e.g., JTWRS—where there is a transfer @ death, but there has also been a lifetime disposition—that takes precedent (made before death), will takes effect @ death and that’s when the transfer occurs.
4. Estate Tax—what is the estate for tax purposes—interest of govt. is in $$.
5. Elective Share Estate—in *NY*–estate for ES purposes is very similar to estate for Estate Tax purposes.
© Why?—b/c if the estate was limited to the intestate estate—spouse who wanted to disinherit surviving spouse would simply make will subs.
6. Creditor Estate—the extent to which creditors can reach probate/intestate property.
iv. Testate—person who drafts the will.
b. How is probate/testate estate DISTRIBUTED?
i. Willàit’s submitted and approved/not (probated/not). A finding that the will is probated (valid)—tells us who the testator wants to have the prop & appoints Executoràsomeone to gather up the assets & distribute them. Executor is the fiduciary person appointed to take care of all of this.
ii. Intestateàthere is an Administrator (older cases administratrix for F)—statutory list designating who gets to be the administrator.
iii. Administration of the Estateàdone by executor/administrator:
1. They gather assets;
2. Given a certificate by Surrogate CourtàLetters Testamentary—for each acct the executor needs to have this so that bank can see person is authentic.
3. Change all accts from decedent’s name into the estate of decedent—so that all accts become estate account.
4. Estate is
ut of the estate.
© Appointing an Executor:
o Someone responsible
o And name an alternative—in case appointed executor dies, doesn’t want to be bothered or becomes incompetent during the admin of the estate.
§ Frequently spouses are primary executor and children are secondary executor.
o Usually want to give executor BROAD POWERS.
o Executor has a fiduciary duty—and powers to act as trustee.
§ *NY* statute—changed from the “Prudent Man Rule”—which was more restrictive. Still today, the executor should not put all of the estate into an investment.
© Should look to concerns in any particular case when DRAFTING:
o Family situations & problems that might arise (e.g., Step Children)—should ask client what they want to do w/regards to step children (where there is no adoption)—what would happen if they leave everything to spouse and the spouse doesn’t give anything to the surviving children.
o SET UP TRUST—if you want to ensure children ultimately receive prop—give a LE to spouse remainder to children—this will guarantee that they receive it.
© Determine GUARDIANSHIP
o Guardian—terminates at 18 (custodian terminates at 21)
o Name person and alternative person
o A lot of Propàshould set up a trust, not just a guardian b/c it will last longer & not as expensive.
o Need clause (like one appointing executor) appointing the guardian.
C. Professional Responsibility & Estate Planning
p MALPRACTICE—b/c lawyer told wife that she was going to have a LE in the prop, but only puts “homestead” in the will. Dispute btwn 2nd wife and children from prior marriage as to whether the homestead included ALL prop or just the home.