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Wills, Trusts & Future Interests
University of Cincinnati School of Law
Eisele, Thomas D.

WILLS
 
I.       INTRODUCTION OF ESTATE PLANNING
Section A. The Power to Transmit Property at Death
1.      The Right to Inherit and the Right to Convey
a.    Hodel v. Irving [1987; USSC; p. 3]: personal rights of people to dispose and of devisees & heir to receive property trump the Gov’t’s right to regulate
(1)  The escheatable interests are not de minimus nor does the availability of inter vivos transfer obviate the need for descent and devise, a total abrogation of these rights cannot be upheld
i. If § 207 slightly modified the rights, then it would be perhaps acceptable, but this is a total abrogation; a complete abrogation constitutes a taking and requires just compensation
(2)  § 207 doesn’t even consider if the descent is going to consolidate property [later amended, see Babbitt below] (3)  Eisele: believes that it is critical in this case that the Gov’t was giving the property to an entity outside the family of the deceased
b.  Babbitt v. Youpee [1997; USSC; p. 10]: Congress changed § 207 to allow transfer of affected property if it worked a consolidation of property
(1)  § 207 is still unconstitutional;
(2)  Eisele [interpretation coupled w/ Hodel]:this is not a question of consolidation or fractionalization; the statute still limits the devisability of the property to only people that own a portion of the tract of land at issue—this group of people most likely does not include lineal descendents of the deceased person
c.    Eisele—Hodel & Babbitt combined: the Gov’t’s right to regulate is not absolute; these cases exemplify the tension between the three fundamental rights
2.      The Policy of Passing Wealth at Death
3.      An Introduction to the Problem of the Dead Hand
a.    Shapiro v. Union Nat’l Bank [1974; Ohio; p. 21]: sons get bequest conditioned on them marrying Jewish women w/ Jewish parents; if condition not met, bequests go to Israel
(1)  Constitutionality: 
i. the court may not enforce a restriction on a person’s constitutional right [right to marry]; This is not a restriction on right to marry—the son can still choose to marry a non-Jewish woman and not get the bequest; this court is being asked to enforce the testator’s restriction upon his son’s inheritance—this is allowed
ii. Ohio allows for a testator to disinherit his children; this seems to demonstrate that a testator may restrict a child’s inheritance
·         Eisele note: LA is the only state where children cannot be entirely written out a will
(2)  Public Policy:
i. This is not an absolute restriction, but is only partial [Eisele: this contradicts constitutionality argument];
ii. The great weight of authority in the US is that gifts conditioned upon the beneficiary’s marrying w/in a particular religious class or faith are reasonable
·         there are many Jewish women out there to choose from—especially w/ modern technology and transportation means—and you’ve plenty of time [7 yrs] iii. There is no terrorizing of the son—it’s a simple choice left by the father for the son to make
(3)  Eisele: Father’s right to dispose trumps son’s right to receive
i. This is pre-Hodel—would not be upheld today
b.  Notes:
(1)  Rest. (2d) of Property: a restraint to marry w/in a religious faith is valid as long as it does not unreasonably limit the transferee’s opportunity to marry
(2)  A will or trust provision is ordinarily invalid if it is intended or tends to encourage disruption of a family relationship
Section B.  Transfer of the Decedent’s Estate [p. 30] 1.      Probate and Nonprobate Property [p. 30] a.    Definitions
(1)  Probate property: that which passes by will
(2)  Nonprobate Property: that which passes by an instrument other than a will [how to avoid probate] i.  Joint tenancy [JT] & tenancy by entirety [TbE] property, both real & personal, w/ rights of survivorship
·         Tenancy in common [TiC] does not avoid probate b/c there is no right of survivorship
ii. Life insurance
·         Don’t make your estate the beneficiary b/c then it will got through probate
iii. Contracts w/ payable-on-death [POD] provisions
·         More popular in the 20th Century
·         Pension plans—ERISA requires it go to the surviving spouse if there is one
·         Bank accounts
iv. Interests in trust
Interest in Trust
Avoid Probate Estate
Avoid Taxable Estate [p. 868-70] 1. Irrevocable Inter vivos trust
Yes
Yes
2. Revocable Inter vivos trust
Yes
No
3. Testamentary Trust
No
No
 
(3)  How do you know which the property falls w/in: Text p. 121 n. 19—how title to the property is held at death
2.      Administration of Probate Estates [p. 31] a.    History & Terminology [p. 31] (1)  Personal representative: person appointed to oversee winding up of the decedent’s affairs
i. Executor: personal representative named in will
·         If an individual and not a corporate fiduciary, executor must give bond [bond waiver may be provided for in will] ii. Administrator: personal rep not named in will, assigned & controlled by probate court
(2)  Probate court: county-level court that an estate must be administered through
i. Two vocabularies: real property and personal property
·         Testator’s action [now may substituted for give] (i)     Real property: devises to devisees
(ii)   Pers. property: bequeaths to legatees
·         Upon execution of will
(i)     Real property: descends to heirs
(ii)   Pers. property: distributed to next-of-kin
b.  Summary of Probate Procedure
(1)  Advantages of Probate—probate performs three functions:
i. Provides evidence of transfer of title to the new owners by a probated will or decree of intestate succession
ii. Protects creditors by requiring payment of debts
·         Note: Barring creditors of the decedent
(i)     States have statute requiring creditors to file claims w/in a specified time period; claims filed thereafter are barred—nonclaim statutes
(ii)   USSC has ruled that the Due Process Clause requires that known or reasonably ascertainable creditors receive actual notice b/f they are barred by a short-term statute running from the commencement of probate proceedings
iii. Distributes the decedent’s property to those intended after the creditors are paid
·         Protects beneficiaries; allows for contention of will
·         More important in earlier days b/c law preferred giving to blood relatives which didn’t include surviving spouses [applies to any non-blood heirs
(2)  Disadvantages of Probate
i. Costs
·         Cost of executor or administrator
·         Cost of attorney for counsel to executor or administrator [an exec/admin that is attorney may charge two separate fees] ·         Costs to probate court [esp. if there are primary and ancillary jxns (may also require two executors/administrators)] ii. Delays [1 yr is fast] iii. Publicity
·         A will is a public document
(3)  Opening Probate—Jurisdiction—will must be probated in
i. Primary or domiciliary jxn: where decedent was domiciled at time of death
ii. Ancillary jxn: where deceased’s real property is located
(4)  Letters of testamentary [in case of executor]/administration [in case of administrator]—depends state to state:
i. Some states–English system: probating a will in common form or in solemn form
·         Common [ex parte] form: ex parte procedure proceeding in which no notice or process was issued to any person, however, w/in a period of yrs any interested party can file a caveat, compelling probate in solemn form
·         Solemn [notice] form: notice is given to interested parties by citation, due execution of will was proved by testimony of at

sition of the estate [partial intestacy], is governed by the statute of descent and distribution of each state
(1)  Law of the state the decedent was domiciled in governs personal probate property
(2)  Law of the state where real probate property is located govern such property
d.  UPC Provisions [1990] [p. 60-62; this will be available on the exam] (1)  § 2-101 Intestate Estate—portion of property not disposed of by will
(2)  § 2-102 Share of Spouse
(3)  § 2-103 Share of heirs other than Surviving Spouse
i. (1): to the decedent’s descendants by representation [see distribution methods at 3b. below] ii. Provisions prevent “laughing heirs”—cuts it off at grand-parent line
(4)  § 2-105 No takers—escheat to the state
e.    Meaning of Heirs and the Transfer of an Expectancy
(1)  No living person has heirs, they have heirs apparent
i. They merely have an expectancy, destructible by decedent’s deed or will, which is not a legal interest
·         An expectancy cannot be transferred at law, however, a transfer may be recognized by some courts if adequate consideration is given for it under contract law
(2)  Eisele—it takes two things to be an heir [rights to intestacy (right to receive) are defined by statute through the State’s right to regulate] i. Status: there must be a relationship w/ the decedent
·         See Table of Consanguinity [text p. 79] ·         Common Law: spouse not recognized as an heir; the priority was protecting blood relatives—family
·         Modern Law: recognizes spouse as heir; in all but KY & VT, spouse gets at least ½
·         Common Law: adopted children are not considered descendents
·         Modern Law: adopted children are considered descendents
ii. Survival: must survive the decedent
2.      Share of Surviving Spouse
a.    Policies in framing an intestacy statute
(1)  Primary: to carry out the probable intent of the average intestate decedent
i. Empirical studies unanimously conclude that statutory shares for spouses are too small
ii. Small estates generally go entirely to the surviving spouse
·         Generally, the richer the decedent, the greater the desire that children and collaterals share w/ the spouse in the estate
iii. Under current law, the surviving spouse usually receives at least ½ share of the estate
(2)  Secondary: family protection—preserving the economic health of the family after death
b.  Note: Domestic Partners and Intestate Succession
(1)  The chief policies that underpin the spousal intestate share—giving effect to the probable intent of the decedent and protecting those whom the decedent treated as family—seem also to apply to domestic partners
(2)  The law of domestic partners is in flux, which is related to the current uncertainty that surrounds the status of same-sex marriage
c.    Simultaneous death
(1)  Uniform Simultaneous Death Act [USDA] [1940]: if “there is no sufficient evidence” of the order of deaths, assume that they died simultaneously and property will be distributed as if the beneficiary is deemed to have predeceased the donor