WILLS, TRUSTS & ESTATES OUTLINE
1-15-02
I. Introduction to Estate Planning
Uniform Probate Code (“UPC”) is a statute that is in effect in 10 jurisdictions all in the middle of the country, NY ignores the UPC.
In NYS Trust & Estate is governed by statute: Estate Powers & Trusts Law (“EPTL”).
Estate Tax began in 1916, before then all monies could be passed to successors w/o tax. The Estate Tax took up to 70% of the estate. The justification for the estate tax was that elite families had too much monetary power that was transferring into economic power; a “permanent aristocracy” should be avoided. The estate tax has decreased that fear, but the theory of the Estate Tax is the prevention of money from generating political power that could upset the democratic process. Money produces an oligarchy, a plutocracy in society, so financial inheritance must be decreased.
The advantages of abolishing Inheritance:
Rich get richer creating a lack of mobility in society
Lack of incentive or creativity
More government tax dollars
This may increase productivity
The disadvantages of abolishing Inheritance:
Today there is less of a leisure class
Less of an incentive to save and work
Increases wasteful spending
Increases changes in lifestyles
Increases inter vivos gifts so this too must be abolished, otherwise the family of the person who in an auto acc would be greatly disadvantaged over the family of the person who died of a long illness, it does not make sense to discriminate against families where there is sudden and unexpected death.
Increase of political instability
Upon death in a world of no Inheritance there may be no funerals
Private Property: the government has an interest in our property only to the extent that it is necessary for it to exist, property is created by private individuals and that property belongs to private individuals. Private individuals have a right to control their own property absent a serious emergency or serious government need. Abolishing inheritance goes against notions of private property & private enterprise.
Definitions
Intestacy: The state of dying w/o a will. The state or condition of a person having died w/o a valid will.
Testacy: The fact or condition of leaving a valid will at one’s death.
Intestate: The person who dies w/o a will. Of or relating to a person who has died w/o a valid will.
Testator: The male who dies w/a will. A person who has made a will; esp. a person who dies leaving a will.
Testatrix: The female who dies w/a will. A female testator, in modern usage, a person who leaves a will is called testator, regardless of sex.
Beneficiary: The person who benefits under
ce, rights, responsibilities, or place of another; one who replaces or follows another.
Letters
Testamentary: Refers to the authorization to act in the decedents name under the will. When there is no will the probate court appoints an administrator. The instrument by which a probate court approves the appointment of an executor under a will & authorizes the executor to administer the estate.
Probate: Before the probate court grants letters testamentary the will has to be “Proved Probate.” To probate an estate means that the existence and validity of a will is proved. Once the will is proved the will names an Executor and the probate court will grant letters testamentary to the Executor. Thus before the letters of Testamentary are granted, usu. the named Executor will go to probate court and will submit the will to the court, in which that person will be named Executor (if female Executrix) and then letters testamentary will be issued. Probate: The judicial procedure by which a testamentary document is established to be a valid will; the proving of a will to the satisfaction of the court.
