Wills, Trusts, and Estates
January 8, 2015
Trust that is contained in a will
Often for minor children
Living (inter vivos)
Separate and apart from the will
Same reasons as a testamentary will, but the positive is you don’t have to go through the probate court
What property is owned at death? Where does it go? How does it get to the people that are entitled to it
Estate taxes are not as big a deal now as they used to be.
Probate v. Non Probate
Probate – anything that goes through a will or intestacy
Non Probate – ways to not go through the court
POD = Payable on Death
You put this on a bank account and creates a beneficiary when you die.
Very simple. No will, no hassle.
TOD = Transfer on Death
Securities, stocks, bonds, automobiles (§2113), real estate (§5322.02)
Puts a beneficiary on these assets to avoid probate.
Joint with Rights of Survivorship (JTWROS)
All of the above assets can be owned jointly
Gives other person a right to the assets immediately
Life insurance, retirement accounts, IRA, PO Plans
Things that have beneficiary designations
Living Trust (*Funded*)
Totally separate from the will
As soon as it is signed it comes into effect
Re-title the real estate in the name of the trust
You can re-title anything and put them in the name of the trust. This is a great plan.
Get into more detail when talking about rights of the surviving spouse
Up to two automobiles can pass to the surviving spouse provided that the total value of the two vehicles do not exceed $40,000.
PART I: ROLE OF LAWYER; PROBATE VS. NON-PROBATE TRANSFERS
January 13, 2015 to January 22, 2015
Can you just give money to anybody in your will?
Can you give Michael Vick $100,000 in your will to go to his dog fighting escapades?
No, probably not. You can’t leave money for illegal actions.
Can you leave your estate to your daughter as long as she marries a “nice guy?”
Too ambiguous. How do you define a nice guy?
Can you leave $100,000 to your son providing that he divorce his wife within 5 years?
In Illinois, that wouldn’t fly. You can’t interrupt the institution of marriage and encourage divorce.
Estate of Feinberg (Page 1)
Dead Hand Control
The right of a person to dispose of their property as they wish upon death
Rule:People may impose reasonable restrictions or conditions on others in succession, but not restrictions which are contrary to public policy.
Beneficiary Restriction Clause (in this case)
Any descendent who married outside the Jewish faith, or whose non-Jewish spouse did not convert to Judaism within one year of the marriage would be deemed deceased for all purposes of this instrument as of the date of such marriage.
Erla then changed it to take effect when she died. When Erla did die, all of the grandchildren had already married and been married for more than a year. Only one of the five grandchildren qualified for the money.
The Probate Act permits a spouse to renounce the testator’s will, “whether or not the will contains any provision for the benefit of the surviving spouse.”
The wishes of a surviving spouse can trump a testator’s intentions.
A child born to a testator after the making of a will is “entitled to receive the portion of the estate to which he would be entitled if the testator died intestate,” unless provision is made in the will for the child or the will reveals the testator’s intent to disinherit the child.
Public policy is split.
On one side, society does not like to prevent lawful marriages or bring about divorce (Ransdell, Winterland, Gerbing).
On the other side, a testator of free mind and will should be allowed to do what he wants in regard to the disposal of his property.
The Court does not like these cited cases and goes the other way.
They said that this case involves the decision to marry, NOT an incentive to divorce.
When Erla died, the condition was either met or it was not met. There was nothing that the grandchildren could have done to change it (they couldn’t get married or convert their husband/wife anymore).
Michele argues that the beneficiary restriction clause discourages lawful marriages and interferes with the fundamental right to marry.
The Court found no issue with the beneficiary restriction clause and that it did not violate public policy. The judgment was reversed and remanded.
What if the individual in the will is not aware of the divorce clause?
Then there is certainly no reason for the will not to hold up.
Shapira v. Union National Bank, 39 Ohio Misc. 28
Similar situation. A Father was trying to encourage his family to marry into the Jewish faith. Required his son to marry a Jewish girl who has Jewish parents.
The state of Ohio found that it was ok, and gave the son seven years (as was proscribed by the will) to find this sort of woman.
McCarthy v. Donnellon, (Hamilton) Ct. App. 83 L.W. 2368 (1983)
2/9 to Charles if he survives me and is unmarried at ti
tell Judy about this second will.
Judy, who was not at the first will meeting, becomes curious and asks
Dobson does not, however, show or tell her about will #2.
It is pretty likely that, because of will #2, will #1 was completely voided.
Mr. Minyard became ill and was deemed mentally incompetent. Then he eliminated Judy and her children from his will entirely (with a codicil).
A codicil is an amendment to the will.
The issue is whether Dobson breached his fiduciary duty to Judy by misrepresenting her father’s will in the first place.
A fiduciary relationship exists when one has a special confidence in another so that the latter, in equity and good conscience, is bound to act in good faith.
The Court believed that Dobson DID owe Judy a fiduciary duty.
Dobson did not have to tell Judy about the existence of the second will, but he did owe Judy the duty to deal with her in good faith and not actively misrepresent the first will.
The Court reversed the decision.
Rule 1.8 (c) on Conflicts of Interest
In regard to estate planning, a lawyer shall not solicit a gift from any client.
A lawyer shall not prepare a will for a client that leaves money, gifts to the lawyer. BUT, you can do it for family members.
For example, you can write your mothers will.
Problem 1 (Page 33)
Because L represented both H and W, L would have a duty to tell H what W wanted to do.
L warned H and W that they would have joint representation.
If W is just going to get another lawyer to do it, do you have a duty to tell H.
Problem 2 (Page 34)
Be clear that you are not representing William, you are representing Eva, and that William is responsible for whatever he signs.
Problem 3 (Page 34)
The Court said that the law firm may tell the wife that another child exists, but not the name of the child or other woman.
On trivial matters there is really no need to take action
If it is more than trivial, one thing to do is encourage the party to provide information to the other party.