Wills Trusts and Estates- Neuman Fall 16
Regardless of whether the dies testate or intestate ALWAYS ASK who are the decedent’s heirs?
UPC GUIDING PRINCIPLES:
There should be uniformity between how probate and non-probate property passes
If we can reliably determine intent we ought to honor it
ESSENCE OF A WILL:
Transfers assets on death
Revocable until then
INTRODUCTION: FREEDOM OF DISPOSITION:
Property owners have the nearly unrestricted right to dispose of their property as they please.
Limitations:
Estate taxes
Doesn’t apply to wealth left to surviving spouse [special rules apply for a non-citizen surviving spouse].
Doesn’t apply if left to charity.
Creditors’ rights trump beneficiaries rights.
American law does not grant courts any general authority to question to the wisdom, fairness, or reasonableness of the donor’s decision about how to allocate his or her property.
The main function of the law in this field is to facilitate rather than regulate.
Partial restraint on marriage:
A partial restraint of marriage, which imposes only reasonable restrictions is valid, and not contrary to public policy.
A restraint unreasonably limits the transferee’s opportunity to marry if a marriage permitted by the restraint is not likely to occur.
Void as against public policy if it is a complete restraint, i.e. not marrying at all.
As long as widow, will receive money from the trust: this is most likely for support not the prevent marriage.
The RSTMT is inconsistent with the majority rule.
“If a provision is unnecessarily punitive or unreasonably intrusive into significant personal decisions or interests … the provision may be invalid” – does not believe this type of condition should be enforced.
NOW, conditional gifts such as in Shapira are more typically made in incentive trusts, however, implementing these can be difficult.
Contrary to public policy, includes conditions that disrupt or discourage familial relationships.
There was a trust provision requiring the trustee’s granddaughters and their husbands from using tobacco. The court held that this would disrupt marital harmony. It was upheld as to the granddaughters, but not the husbands.
Conditioning a gift on the completion of crime also violates public policy
The Mechanics of Succession:
Probate and nonprobate property
Probate property: property that passes probate under decedent’s will or by intestacy.
Property passes by will if there is one, and by intestacy if there is not.
Nonprobate property: property that passes outside of probate by way of a will substitute
Inter vivos trust or a living trust
Life insurance
Pay-on-death (typically a bank account) or transfer-on-death contracts (typically a deed)
Joint tenancy
terminology
: the judicial supervision of the administration of the estate.
: the person named in the will who is to execute the will and administer the probate estate.
Administrator: if the decedent dies intestate or the executor is unable to serve and there is no named successor, the court will name a personal representative.
NOTE: the UPC does not distinguish, it only uses the term “personal representative.”
BOTH ARE FIDUCIARIES
: real property
Devised to devisees
: personal property
Tangible items: car, clock, wedding ring
Intangible items: cash, stocks, bonds
A “legacy”
Personal property is bequeathed to legatees.
For intestate succession, real property was said to descend to heirs and personal property was said to be distributed to heirs.
: take property from a decedent who dies intestate.
Supervised administration: the personal representative to subject to the continuing authority of the probate court in administering the estate
Unsupervised administration: after appointment, the personal representative administers the estate without going back to the court.
Under the UPC this is the norm, but an interested party can petition for supervised administration at any time.
Three core functions of probate administration
It provides evidence of transfer of title to the new owners, making the property marketable again
It protects creditors by providing a procedure for payment of the decedent’s debts
It distributes the decedent’s property to those intended after the decedent’s creditors are paid
The law of the state where the decedent was domiciled at death governs the disposition of personal property, and the law of the state where the decedent’s real property is located governs the disposition of real property.
Domicle: where you intend to reside or your permanent residence.
Professional Responsibility
A duty of reasonable care runs from a drafting attorney to an intended beneficiary.
It is foreseeable that an intended beneficiary would be injured by a failure in the testamentary scheme. This failure could deprive the intended beneficiary of the intended bequests.
A handful of states still follow the old rule that the lack of privity between the drafter and an i
but the person has a good faith belief in the validity of the marriage.
There was a recent movement to provide an intestate share for committed partners (“share a common household in a marriage-like relationship), but it never caught on.
Four possibilities under the UPC:
THE ENTIRE ESTATE IF:
No descendant or parent of the decedent survives the decedent; or
All the decedent’s surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent.
THE FIRST 300,000, PLUS ¾ OF ANY BALANCE IN THE TESTATE ESTATE:
If no descendant of the decedent survives the decedent, but a parent of the decedent survives the decedent.
THE FIRST 250,000 PLUS ½ OF ANY BALANCE IN THE TESTATE ESTATE:
If all of the decedent’s surviving descendants are also descendants if the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent
THE FIRST 150,000 PLUS ½ OF ANY BALANCE IN THE TESTATE ESTATE:
If one or more of the decedent’s surviving descendants are not descendants of the surviving spouse.
POL: concerned about the surviving spouse not providing for the decedent’s descendants.
Disinheritance through non-probate means?
Nearly all non-community property states provide surviving spouses with a share.
Under the UPC, the elective share applies to non-probate and this is true across most the country.
Simultaneous Death – Survivorship
APPLIES TO INTESTACY, PROPERTY PASSING BY WILL, AND PROPERTY PASSING BY WILL SUSBSTITUTE
: brain dead
The Uniform Simultaneous Death Act:
The prospective recipient of property is treated as having predeceased the property owner if there is no sufficient evidence as to the order of their deaths.
The burden is on the recipient’s administrator to prove that there was sufficient evidence of survivorship. If it cannot be determined who died first, the recipient is treated as predeceased.
