Trusts and Estates Outline
I. Introduction to Estate Planning
A. The Power to Transmit Property at Death: Its Justification and Limitations
1. The right to inherit and the Right to Convey
a. Historical perspective
-scope of one’s power to transfer at death is generally considered to be a matter of civil law as opposed to natural right
b. State variations
-while all states recognize the power to transfer one’s property at death, the details of what constitutes a valid will, and to whom the property will pass if there is no valid will, vary greatly from state to state
c. Right v. Privilege
i. government power to regulate
-In Irving Trust Co. v. Day (1942), US S.Ct. said “nothing in the Federal Constitution forbids the legislature of a state to limit, condition or even abolish the power of testamentary disposition over property within its jurisdiction
ii. Hodel v. Irving (US S.Ct., 1987)
-Court reversed itself
-Ct. found the echeat provision of the Indian Land Consolidation Act of 1983 constituted an unconstitutional taking of decedent’s property without just compensation
-while the statute permitted the owners of land to convey the land at time of death through nonprobate arrangements (inter vivos trusts), the Court was bothered that the statute virtually abrogated an important right (the power to transfer at death) and that the statute was not well drafted to achieve its stated goals
iii. Right to transfer v. right to receive
-to the extent constitutional protections apply to property transfers at death, the protections arguably apply only to the decedent’s power to dispose of his or her property at death, not necessarily to a particular heir’s or beneficiary’s right to receive property from a decedent
d. Public Policy Arguments
i. Pro: a person should have the power to transfer his or her property at death because such a policy is consistent with a system of private property; encourages and rewards a life of hard work; is consistent with and promotes family ties; encourages individuals to accumulate wealth for old age and to give to family; and encourage family members to love, serve and protect their elders
ii. Con: a person should not have the power to transfer his or her property at death because such a policy perpetuates economic disparity and discrimination and constitutes an unearned windfall to those who happen to have wealt
marriage: gifts conditioned on the beneficiary not marrying anyone at least as to first marriages – generally are considered to violated the fundamental right to marry and are void
(a) exception – partial restraints: partial restraints on marriage that impose only reasonable restrictions generally are not contrary to public policy and are valid. What constitutes a “reasonable” restriction is very fact sensitive. The courts pay particular attention to the age of the intended beneficiary and the time frame of the intended restriction or condition. Overall factors is good faith intent of testator, number of options still out there for the beneficiary (including ease of reaching those options and the like), reasonableness of time limits, etc.
(b) exception – temporal/religion requirement: gifts requiring a beneficiary to marry within a reasonable time period, even to someone of a particular religious background, have been held valid. Such gifts arguably do
