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Wills and Trusts
University of Dayton School of Law
Sherrets, Carl D.

Wills & Trusts
Spring 2015
Carl Sherrets
·         Wills & Trusts Generally
o    Methods of transferring property at death
§  Will (Probate Assets)
§  Intestate Succession (no will)
§  State law (affects non-probate assets)
§  Trusts
o    Probate Assets:
§  Assets that are controlled by the Probate Process and passed pursuant to will
·         House, Care, Bank Account, Property held as Tenants in Common
o    Non-Probate Assets:
§  Assets that are not controlled and passed pursuant to person’s will, but rather are transferred in accordance with the law (trump any wording in will that passes this property)
·         Property held as JTWROS (passes automatically to survivor with joint ownership)
·         Accounts that JTWROS (trumps the will)
·         Life Insurance Policies (pass to beneficiary, not through will)
·         Retirement Plans (pass to beneficiary: IRA, 401(k), Profit Sharing Plans)
o    Trusts
§  Non-Probate way to pass property upon death, acts as will substitute
§  Components
·         Grantor (creates and funds the trust)
·         Trustee (controls the trust) can also be the Grantor
·         Beneficiary (person who receives the benefits of the trust) can also be the Grantor
§  Process
·         Grantor creates Trust (may or may not fund trust while alive)
o    Upon death, can have pour-over-will, fund the trust
·         Grantor picks Trustee to run the Trust
·         Grantor tells Trustee what to do with the Trust Assets upon Grantor’s death
o    Usually designated to beneficiary over time, etc.
o    General Process of Estate Administration
§  1) Person dies
§  2) Create Estate (Probate Estate)
§  3) Estate Administration (date of death à date of distribution)
·         a) Appoint personal administrator (if no will) / executor (if will)
o    Will can appoint/designate the executor
o    If not appointed, state has rules of picking personal administrator or executor
o    Someone can volunteer (so long as there are no successful challenges)
·         b) Establishment of assets and value of estate
·         c) Payment of debts and taxes and attorneys
·         d1) If Will:
o    Apportionment of probate assets by will provisions
o    Apportionment of non-probate assets iaw (in accordance with) asset (if no beneficiary à probate asset)
·         d2) If no Will
o    Apportionment of probate assets iaw state rules of intestate succession (default of will)
o    Apportionment of non-probate assets iaw asset (if no beneficiary à probate asset)
·         e) Submission of paperwork to Probate Court for verification
·         Role of the Lawyer
o    Introduction
§  Purpose is to represent client and effectuate their intent upon their death
§  Four Major Documents of Estate Planning
·         1) Will
o    Must consider the assets that will be affected as well as what assets are non-probate
o    Who owns what and at what level of ownership interest
·         2) General Durable Power of Attorney
o    Purpose: if person incompetent (mentally or physically), it appoints someone w/ all of the powers of the original person
§  Can be abused by holder of POA
§  First Choice Agent is Attorney-in-Fact
o    If no POA, then court has to appoint legal guardian to make decisions
·         3) Health Care Power of Attorney
o    Purpose: give someone the legal authority to make medical decisions for another
o    Without HCPOA
§  Rules of Probate Court dictate what will happen for incompetent people
§  Must remain on life support for one year, then family may petition PC for right to pull the plug
·         4) Living Will Declaration
o    Purpose: give hospital direction about what to do if you are permanently unconscious state and at least 2 physicians agree that there is no hope for you
o    Direct hospital to remove life support if conditions are met
o    Options
§  Direct hospital what to do
§  Allow holder of HCPOA to make the decision
§  Tell them to let you live as long as possible
o    Lawyer’s Professional Responsibility
§  Introduction
·         Issues come up when a lawyer represents a client (decedent) but also may have a duty to either another person (spouse, child, etc) or a duty to an intended beneficiary (anyone in will)
§  Conflicts of Interest (Fiduciary Duty to Another Client)
·         Defined
o    Conflict of interest arises when attorney or firm owes a fiduciary duty to the client (decedent) but also owes a fiduciary duty to another party that raises a conflict
·         General Rule on Conflict of Interest (ABA)
o    Lawyer should not represent a client if the representation of that client will be directly adverse to another client unless;
§  Lawyer reasonably believes representation will not be adverse and
§  Both clients consent after consultation
o    Lawyer shall not represent a client if the representation of that client may be materially limited by lawyer’s responsibilities to another client or to a third person; unless
§  Lawyer reasonably believes representation will not be adversely affected; and
§  The Client consents after consultation
·         Example
o    Two clients of same firm decide to get married (male extremely rich)
o    Want attorney(s) from firm to represent each of them for prenuptial or will creation
o    Would be conflict of interest
§  Male interest à retain as much of his wealth as possible for his family
§  Female interest à gain as much of husband’s wealth as possible for her family
·         Representing Spouses
o    Many lawyers won’t represent both husband and wife when it comes to wills
o    Some lawyers will represent both
§  Require both to sign engagement letter (Show and Tell Letter)
§  There is no conflict now, I will represent both
·         But if conflict arises, I will withdraw
·         If we find information that is damaging to one or the other, we will disclose that information
·         If you tell us something, we will reveal it to the other
o    Competing interests
§  Maintaining confidentiality w/ client vs. disclosure of information to other
o    Example
§  Represent Husband & Wife in will making: learn Husband has illegitimate child
·         Learn from child’s mother (whore husband had fling with) about child
§  Options
·         Make Husband tell wife
·         Tell wife yourself
·         Abandon one of the parties (bad)
·         Abandon both parties (ethical)
·         Don’t say anything, continue with representation (bad)
§  General Rules
·         Can firm tell the wife of information? Yes
·         Does the firm have to tell the wife? No
·         Would it be different if husband told the firm of the child? Yes
·         Ohio Law on Prenuptial Conflict of Interest
o    Require two separate attorneys for establishment of prenuptial agr

a Joint Interests w/ Rights of Survivorship (JTWROS): Non-Probate Transfer
§  Defined
·         People own equal interests in asset and remainder passes automatically upon death of the other
·         Avoid the probate process b/c decedent’s interest terminates, remainder passes automatically
§  Applied
·         Generally applies to houses and real property
·         Not restricted to real property, though: Can be bank accounts, etc.
§  Reasons for JTWROS Assets
·         1) Elderly depositor creates account b/c they can’t do the banking, want someone to help, give that other person access to the account
·         2) Depositor wants to ensure account passes to joint account holder without having to go through probate, but doesn’t want joint account holder to have access to money until after death
·         3) Depositor wants to give joint account holder all of the rights associated with joint ownership
§  General Principles
·         JTWROS generally speak for themselves (non-probate transfer automatically upon death)
·         Challenger can overcome JTWROS status, prove intent was not present to create transfer
·         Depositor can also revoke survivorship provision during lifetime, remove the joint account holder
§  Intent of Creator is Key
·         Must consider the intent of the creator of the account
·         If intended to create asset that would pass directly (intent to avoid probate)
o    Court will treat as JTWROS and allow to pass automatically
·         If intended to give someone else access to accounts to help pay bills (usually elderly)
o    Court may allow a challenge to the automatic transfer, make account probate account
o    Transfers via POD and TOD Accounts: Non-Probate Transfer
§  Defined
·         Payable on Death (POD)
o    Apply to Bank Accounts
o    Creator names beneficiary as having remainder interest, but beneficiary has no rights or access to the account during lifetime of creator
o    Entire account passes to beneficiary upon death of creator, but not a probate asset
·         Transfer on Death (TOD)
o    Apply to Brokerage Accounts
o    Essentially a transfer securities as if they were an inter-vivos gift, but passes upon death
§  How they Work
·         Account created by creator
·         Creator names an individual as “beneficiary” to account upon death of creator
·         Beneficiary does not have access to the account during lifetime of creator
·         When creator dies, the beneficiary automatically takes ownership of the account (show death cert.)
§  Benefits
·         Simple, cheap, non-probate asset, no lawyer requirement, no need for will, direct/automatic transfer upon showing of death certificate, can’t contest the transfer