Decedent’s Estates Outline

 
Vars_Decedents Estates_Fall_2015
I.                   Introduction to Transfer of Wealth at Death: Chapter 1
a.       Freedom of Disposition
b.      Possible dispositions
                                                              i.      Government (estate taxes—de-incentivise large accumulations of wealth; promotes equity,equality, charity, etc.)
                                                            ii.      Closest Relatives (1/3 automatically goes to spouse)
                                                          iii.      Honor wishes or intent of T(will and will substitutes)
                                                          iv.      Other public policy considerations (creditors paid first, etc.)
c.       Hodel v. Irving:
                                                              i.      Indians given land by gov’t, but there are many owners to each track, who each own a very small amount which is causing problems.
                                                            ii.      Government’s solution is to take away the indian’s right to devise.  Instead when they died, the land would escheat back to the tribe.
                                                          iii.      UNCONSTITUIONAL.  The court is looking at the right to devise as one of the BUNDLE OF STICKS of property rights; therefore, taking it away would be an unconstitutional taking.
                                                          iv.      You can regulate, but “no total abrogation”
1.      Ex. 100% estate tax would be wrong, but where do you draw the line?
d.      Shapira:
                                                              i.      Condition in the will that son will only get money if he marries a Jewish girl within 7 years.
                                                            ii.      2 arguments:
1.      Constitutional: There is no state action here and there is no constitutional right to inherit (see Hodel). Different from Shelly v. Kraemer bc that was (a) hot topic at the time and (b) talking about an injunction, “you can’t liver here”..this is just about inheriting.
2.      Public policy: Partial restraint on marriage that puts only reasonable restrictions is valid and not against public policy.
a.       Other policy considerations:
                                                                                                                                      i.      Can’t have conditions that incentivize divorce, not getting married, committing illegal or tortious acts, etc.
e.       Right to Destroy: while you are alive you have the right to destroy your property; however, after you die, you can’t put in your will that you want your property destroyed (courts won’t enforce).
f.       Mechanics of Succession: Probate
                                                              i.      Purposes of Probate
1.      Provide evidences of transfer
2.      Protect creditors
3.      Distribute estate
4.      Promote finality
                                                            ii.      Avoiding probate
1.      Small personal items are usually divided up by loved ones in private, as long as they get along.
2.      Statutes allow small amounts of property to avoid probate by a summary administration.  UPC small=$25,000
3.      Statutes allow collections of small bank accounts, wage claims, or transfer of car title by filling out forms.
g.      Duties to Intended Beneficiaries:
                                                              i.      Simpson v. Calivas:
1.      Man dies testate; will says “homestead” which is an ambiguity.
2.      Usually a third-party beneficiary cannot sue due to a lack of privity, but the court says there are exceptions:
a.       Foreseeable third-party beneficiaries.
3.      Alabama still has privity defense…
4.      Extrinsic evidence:
a.       You may always look to the surrounding circumstances, and extrinsic evidence may be introduced where there is an ambiguity as long as it does not contradict the language of the will.  (Direct statements of intent will never be admitted).
b.      Incentivizes people to be clear in their wills
c.       Many probate judges are not lawyers, so this a reason why certain evidence is not allowed (not versed in the rules)
                                                            ii.      Robinson:
1.      Woman has will made, then tells her lawyer to destroy the will, but he DOES NOT.
2.      Son is suing because he would get more through intestacy than testacy.
3.      AL court says no privity, no standing to sue (remember this is not the norm).
4.      You can sue if the lawyer writes will as a “gratuitous offer.”
h.      Conflicts of Interest:
                                                              i.      A v. B:
1.      Law firm is representing husband and wife in will preparation, while also unknowingly representing husband’s baby momma (which effects the wills).
2.      Firm has to weigh duty of confidentiality (husband)  vs. duty to reveal material facts to client (wife)
3.      They get around it bc (a)husband is committing a fraudulent act, under which the firm can brake the confidentiality; (b)this wasn’t confidential information, they found it out on their own; (c)Restatement gives discretion where risk is outweighed by not disclosing info.
4.      This should have all been avoided by an engagement letter, which says that where husband and wife sign up together, the lawyer will disclose everything to both of them.
II.                Intestacy: An Estate Plan by Default: Chapter 2
a.       Purpose: to figure out the probable intent of an intestate decedent. (also ease of administration and textual simplicity).
                                                              i.      Problem-we have to base this on “social norms” which can change over time.
b.      Intestacy Statute:
                                                              i.      In general: Spouses first; then to descendants (issue) of blood relation (including adopted) at the exclusion of ancestors and collaterals
                                                            ii.      Supplements Ala. Code §43-8-40 through -44
1.      Forced Spousal Share/what goes to descendants when they are not related to surviving spouse, etc.
                                                          iii.      UPC: helpful graphic on page 69- (see p.22 emanuel)
c