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Trusts and Estates
UMKC School of Law
Hanna, Francis M.

 
 
Estates & Trusts
 
Chapter 1
Introduction to Estate Planning
 
Probate is the most expensive and time-consuming way to deal with property
 
Joint tenancy – property titled in such a way that the remaining person gets all the property – unless they both die at the same time or the wrong person dies first
§    It is inflexible and you have to have the right person die first
§    Person has an interest in the property right away
 
Tenancy by the Entirety – can only involve the spouses – it is not severable by one without the consent of the other during the lifetime of the owners
§    It is not subject to probate upon the death of the 1st party
§    It is subject to probate upon the death of the 2nd party
 
Pay on Death – contracts with a pay on death provision
§    Allows property to go to someone other than the spouse
§    It is a testamentary act
§    Person you are transferring to has no interest until the person dies
 
Transfers on Death – same as POD
 
Administration of Probate Estate
Personal representative – the person who administers the will
 
Limited Functions of Probate
§    Collect, manage, receive and pay, and distribute quickly
 
Some states call their courts by different names
§    Surrogate – NY
§    Orphans
§    Chancery
 
To probate an estate means to have one of the above courts administer an estate
 
Devise – refers to the giving of real property
Devisee – a person receiving real property
Bequeath – refers to the giving of personal property
Legatee – a person receiving personal property
Bond – automatically required insurance against the default of the PR mistake or failure.  This is often waived within the will .  The premiums are assessed by the amount of $ in the will and the net worth of the PR.  It is intended to protect the beneficiary
 
 
 
Hodel v. Irving p.3
§    § 207 of the Indian Consolidation Act
§    Transfer of property at death is a constitutional right, limit on government to take or limit right without due process
§    Was this a taking?   Yes
§    Was this constitutional?  No b/c
·  Total abrogation of a substantial property right – not due process
·  The ends didn’t justify the means
·  Least restrictive alternative was not used
·  Cannot be a taking in the context of the dead without due process of law
 
Halbach Article (p.13)
§    What justifications are there for prohibiting the private transaction of wealth?
·  Historically this country formed after a revolution based on taxation without representation.
·  The founding fathers believed in certain inalienable rights i.e. property
·  This leads to the question of what rights does the government to take the fruits of your labor?
·  Later in the history of the US the same type of revolt occurred with taxation with representation.  (Whiskey Rebellion)
·  The real problem is taxes in general
§    Does the government have the right to control disposition of property on death?  Yes, restricted.
 
Capitalism v. Socialism
§    The USSR tried to abolish inheritance but failed.  This occurred because of corruption in the system as well as the fact that where no incentive to work exists people will not work.  Where one cannot keep there wealth they are more apt not to work. 
 
Shapira v. Union Nat’l Bank (p.24)
§    Ok to put restrictions on the right to inherent b/c:
§  The right to receive property upon inheritance is not absolute.  No relative (except spouses and dependants) have an absolute right to receive an inheritance.
·  Children have no entitlement to inheritance
§  Once a person decides to include someone in their will they then must work within the restrictions set forth.  The will is not carte blanche “blank check” or without restrictions.
·  Constitutional requirements
·  Public policy
·  No unreasonable restraints
§  This case demonstrates the possibility of malpractice in probate if such restrictions are overlooked
§  Must only put reasonable restrictions on property – otherwise free to do what want
§    Will attacked on three grounds:
§  Unconstitutional
§  Against Public Policy
§  Unreasonable restraint
§    Result
§  The court said that the restrictions were fine – man had right to leave property as he saw fit
·  Man wanted to see a continuation of his religion, wanted tradition, not against public policy
§  Despite a somewhat valid substantive argument the court found that he was still free to marry whomever he wanted, but if he wanted the money he would have to follow the restrictions of the will
§  MO agrees with rule that there are no restraints on leaving property
§    Terms
§  Public policy – what is in the best interest of society, those rules and principles of an ordered society found in statutes, ordinances and court decisions that make for public order and are publicly available, body of statues and regulations and law that tells what the public reasoning or rationale is
§  Freedom of testation – right to my property, right to give to child or who desire, when living or dead
§  Devise – occurs in a will, property left by a will
§  Inheritance – occurs when someone dies without a will, given intestate
§  Heirs – people who receive property when there is no will
§  Ambiguous – no clear meaning, susceptible to two different meanings
§  Estate:
·  Is ambiguous
·  Can mean all my property
·  Can mean probate estate – only property that will pass though probate
o       Not all property passes through probate
§  Joint tenancy property, POD accounts, pass outside of probate
·  Can mean property under federal estate tax
o       Decedents property including life insurance, powers of appointment, joint tenancy property, property he gave away in the past but retained power in, revocable trusts, etc.
§  Personal Representative – person responsible for administering estate, executor (if guy died with a will that named representative) or administrat

         The 6 month non-claim SOL runs from the 1st publication
 
In MO you cannot contest a will more than a 1 year after the date of death
In MO no will can be admitted to probate more than a 1 year after the date of death
 
Notice is jurisdictional  — bad notice undermines the probate court’s jurisdiction
 
 
Will Contests – § 473.083
§    Must be filed within 6 month period (beginning on 1st date of publication), provided the person got notice, or it is forever barred
§    All interested parties must be given notice of the contest within 90 days from the date of filing of will contest
§    The contest will not be allowed at all if brought after 1 year from the DOD
§    Contestant only has to make a prima facia case
§    The proponent has the burden of proof to defend the will
·         It is now in solemn form probate
§    The burden of proof is always on the proponent of the will
§    If the proponent sufficiently answers the contestants case the proponent wins
·         If not then under some circumstances goes to jury
§    MO RULE – if contestant can prove 3 things he can get a jury trial
confidential relationship between person accused of undue influence and decedent
alleged influencer participated in procuring the will (loose term)
the alleged influencer benefited from the will
 
Mo Rule 55.03 = FRCP 11
§    that paper is backed by your own investigation and that it has basis in law
§    good faith investigation – as to your accusations
§    made a diligent search of the facts
§    made a correct statement of the law
 
Non-claim Statute – § 473.360 (360 degrees in a circle)
§    all claims not filed within 6 months of 1st publication are barred unless a claimant who was reasonably ascertainable by due diligence was not given personal notice
·         if not given notice within the first 4 months the party has 2 months from the date of notice to file the claim
§         send a copy of publication to all the parties
 
Boswurth v. Sewell, 918 SW2d 773
§    90 year old man with no children
§    attorney only sent out notice to 3 people
§    he has to have at least 20 people
§    people without notice are not barred by the 6 month SOL
§    housekeeper had man imprisoned in his house and made him leave it all to her
 
Definitions of the Probate Code – § 472
Administration of the Estate – § 473