Wills & Trusts
Prof. Lois Schwartz
a. The Power to Transmit Property at Death
i. Hodel v. Irving: (1987): as a consequence of 19th c. land acts, which held Indian lands in trust and required passage to the owners’ heirs upon their death in order to prevent disposition to white settlers, Indian lands became severely fragmented. To remedy this problem, Congress passed in Indian Land Consolidation Act of 1983, which provided that holdings that represented less than 2% of a given tract of land had earned its owner less than $100 in the preceding year would escheat to the tribe upon the owner’s death. Petitioners are heirs who were not compensated when the tracts they were designated to inherit instead escheated to the tribe. Action is for taking of property without just compensation – a violation of the Fifth Amendment. SCOTUS recognized the strong public interest in avoiding fractionated lands, but held that it did not justify a complete abrogation of the rights to descent and devise of property. Theme: there is a right to devise property in a will, but there is no concomitant right to receive property under a will.
ii. Shapira v. Union National Bank (1974): court held that an inheritance conditioned on the son marrying a Jewish woman with Jewish parents within 7 years of the fathers death was neither an unconstitutional restraint on the son’s fundamental right to marry(enforcement of a will is not state action, so doesnt implicate 14th Amendment equal protection or due process), nor violative of public policy (promotion of marriage).
iii. conditional gifts are generally made as incentive trusts, with the conditions falling into three general categories: educational incentives, moral incentives, and professional incentives. conditioned wills are problematic because heirs often dont know about conditions until the will is read.
1. conditions that will fail
a. complete restraint on marriage (requiring marriage has a better chance)
b. encourages divorce or strife
c. directs destruction of property
d. illegal conduct
2. question re the right of a testator to order property destroyed upon death — it is arguably the would-be heirs who suffer the loss in the form of waste, not the decedent, but a contrary provision might encourage the testator to destroy the property during life instead
iv. CPC 21105: “Except as otherwise provided in Sections 641 and 642, a will passes all property the testator owns at death, including property acquired after execution of the will.”
i. UPC 2-602: “Will May Pass All Property and After-Acquired Property”
b. Summary of Probate Procedure
i. Opening probate
1. Seek letters of administration from domiciliary jx
2. Actual procedure governed by jx-specific rules
ii. Formal vs. informal probate
1. Formal: litigated judicial determination after notice to interested parties. Court supervises administrator. Judgment final if not appealed.
2. Informal: after appointment, personal representative administers estate without going back into court.
iii. Barring creditors of the decedent
1. Nonclaim statutes require creditors to file claims within a specified time period or else forfeit them
a. Either short period after probate begins
b. Or longer period after decedent dies
2. Known or reasonably ascertainable creditors must have actual notice
iv. Closing the estate
1. Pay creditors, clear titles, pay taxes, sell property.
i. Generally: jx for personal property is decedent’s domicile, jx for real property is location of real property
ii. Policy: carry out intent of decedent
b. Shares of Spouses and Domestic Partners
i. Janus v. Taresewicz: simultaneous death case. H and W both took Tylenol that had been laced with cyanide. H DOA, W on life support for two days. Both H’s parents and W’s parents claimed inheritance of H’s life insurance policy, on which W was primary beneficiary. Old rule: sufficient evidence test – if there is not sufficient evidence that the beneficiary survived the testator, the testator’s property will be distributed as if the beneficiary had predeceased the testator. New rule: 120-hour rule (UPC 2-104 and 2-702) – the beneficiary must outlive the decedent by 120 hours (5 days), otherwise the gift does not pass to the beneficiary.
1. 6400: “Property subject to intestacy provisions” – “Any property not effectively disposed of by will passes to the decedent’s heirs as prescribed in this part.”
2. 6402: follows 6401 (“Intestate share of surviving spouse or surviving domestic partner”) and describes passage of non-surviving spouse estate to issue.
3. 6402.5: “Portion of decedent’s estate that passes to issue of decedent’s predeceased spouse”
4. 6404: directs to 6800 if there are no takers
5. 220: “Requirement of proof of survival by clear and convincing evidence”
. Court held that in order for a posthumously conceived child to inherit under intestacy statutes, child would have to show that
a. 1) the decedent is the biological father
b. 2) that the decedent clearly and unequivocally consented to posthumous reproduction and support of any resulting child.
c. [3) the action must be brought within the applicable limitations period, if any] iii. In re Martin B. (2008): whether the terms “issue” and “descendants” used in trust instruments should include children conceived using the grantor’s son’s sperm more than three years after his death. Holding: the controlling factor is the grantor’s intent. Where an instrument is silent w/r/t posthumous children, as long as the deceased biological parent consented to the birth of the child, they have the same inheritance rights as all children conceived before death.
1. 240: “Basic method of intestate distribution of shares”
2. 245: “Distribution of shares if instrument fails to specify”
3. 247: “Distribution of shares if instrument specifies division ‘per capita at each generation’”
4. 249.5 (not in code book)
5. 6406: “Intestate share of half-blood relatives”
6. 6407: “Posthumous relatives of decedent”
7. 6450: “Conditions for existence of ‘parent-child relationship’”
8. 6451: “Effect of adoption: severance of biological parent-child relationship and exceptions.”
9. 6452: “Parent’s right to inherit ‘from or through’ nonmarital child”
10. 6453: “’Natural parent’ defined”
11. 6454: “Foster parent or stepparent”
12. 6455: “Judicial doctrine of equitable adoption is not affected by this chapter”
v. FC (provisions not in book)
1. 2-106: “Representation”
2. 2-107: “Kindred of Half Blood”
3. 2-108: [Reserved] 4. 2-113: “Individuals Related to Decedent Through Two Lines”
5. 2-114: “Parent Barred from Inheriting in Certain Circumstances”
6. 2-709: “Representation; Per Capita at Each Generation; Per Stirpes”