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

Wills and Trusts Sherrets Fall 2016
 
Introduction
Net Estateà means that family allowance has already been taken out!
Gross Estateà figure out family allowance
àSTATUTORY EXCEPTION, TAKE CARS OUT, DO NOT INCLUDE IN CALCULATION, BECOMES A NON-PROBATE ASSET!!!! (if TOD, trumps stat exception, or will, takes precedence over election right)
 
Wills & Trusts Generally
Methods of transferring property at death
Will (Probate Assets)
Intestate Succession (no will)
State law (affects non-probate assets)
Trusts
Key Terminology
Decedent: Dead Person
Executor: Person who is responsible for implementing the will in a probate estate
Probate: Process of figuring out the will and transferring the probate assets
Instate Succession: when someone dies w/o a will
Instate Succession Statute: statute that determines who gets the intestate estate of decedent
Pour Over Will:  will that leaves everything to a trust
Codicil:  Amendment to a will
 
Assets
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
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 are Joint w/ Rights of Survivorship (trumps the will)
Life Insurance Policies (pass to beneficiary, not through will)
Retirement Plans (pass to beneficiary: IRA, 401(k), Profit Sharing Plans)
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)
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
Usually designated to beneficiary over time, etc.
Property held by one person for the benefit of another.
Testamentary – Trust in a will; active upon death
Inter-vivos – living trust; effective during lifetime of grantor.
Estate
What one person owns at death. 
Identify both Assets and corresponding beneficiaries.
6 ways to avoid Probate
P.O.D.
Payable on Death – Accounts at financial institutions
Take precedent over will
§ 2131.10 Ohio Statute on POD’s
T.O.D.
Transfer on Death – Real Estate, Securities, Vehicles
Securities, Title 1709
Auto’s § 2131.13
Real Estate § 5302.22
JTWROS
Joint Tenant with Right of Survivorship
§ 2105.31 – .39
Contract
Insurance, Retirement
Beneficiaries written in
Living Trust
Must be funded, i.e. must have assets in trust before death
Statutory
2106.18- exception
up to 2 vehicles excluded from probate if one spouse dies, up to 40k, surviving spouse gets two cars without probate
statutory exception for probate
 
RULE= Restatement 3rd on Property- Section 10.1 Comment C- Impermissible
Donor has freedom of disposition, as long as it does not interfere with the following
Spousal rights
Creditor’s rights
Unreasonable restraints on alienation and marriage
Inducing of divorce
Impermissible racial or categorical restrictions
Permissions to engage in illegal activity
Rule against perpetuity
 
Slayer Statute-
restricts inheritance even from civil suits too, e.g O.J Simpson, intentional and felonious
à prohibits anyone from benefitting from a death they caused- applies to non-probate stuff, contracts, life insurance
In every state, Statute of Wills permits a decedent to write a will disposing of his property at death.
A decedent who writes a will= a testator
Cannot devise a will or trust about something that’s illegal, or vague, or something against public policy- e.g marriage courts don’t favor disruption of marriage
But can add something like “for my son only if he marries a woman whos parents are jewish” simply a criteria
Courts are more prone to allow restrictions for religious preferences rather than marriage preferences
E.g trying to promote faith= the argument
Estate of Feinberg case
Public policy arguments not often allowed
 
Ford v. Ford
Must prove felonious and intentional in cases like this
In Ohio- bc slayer statute exists, you cannot benefit
Look at statutes, intestacy, wills who does it go to?
Slayer statute- applies to POD, TOD, anything, insurance
Rule
Murder must have been felonious and intentional for slayer’s rule to be invoked
Slayer’s rule is simply not applicable when killer was not criminally responsible at time committed the homicide
 
Precedent cases showed two views
no one shall be permitted to profit by fraud, acquire property by own crime, etc
some courts rely upon constitutional/statutory declarations to the effect that conviction of crime shall not work corruption of blood/forfeiture of estate.
 
Rule from Price case looked at
a murder or his heirs or representatives through him may not ordinarily profit by taking any portion of the estate of the one murdered.
Stated that this applies to intestacy cases, but also wills and life insurance policies
Under the Slyaer rule, she will be precluded from sharing in the estate of her victim, and was also deemed criminally insane
HOLDING-Slayer’s rule does not operate to preclude Pearl Ford from inheriting under the will of her victim (because If insane at time of killing, is not felonious, according to slayer’s rule)
 
Franklin County-1995- In re. Estate of Cotton 104- Ohio APP 368
*did not inherit bc of common law, We can rely on common law, don’t need to simply rely on slayer statutes. Intentionally causing death= not entitled to inherit by common law. If person feloniously and intentionally killed someone on the civil side, don’t inherit either
 
Cheatle v. Cheatle= gross recklessness causing death not enough, no intent, could still collect her inheritance, no disqualification, has to be intentional
 
Ohio Slayer Statute—felonious intent
2105.19 Persons prohibited from benefiting by the death of another.
 
A) if you are in violation of murder, aggravated murder, voluntary manslaughter, and are subsequently incompetent to stand trial, you cannot in any way benefit by death. (very broad)
Paladino case, NY (2008) stealing MIL’s jewelry, comes home, he kills her, doesn’t get caught immediately, goes to jail, then his wife dies, goes to Palladino, half a million dollars, family is outraged. Court ultimately said no, cant benefit from wrongdoing. (benefitted indirectly when he spent that money)
àsimilar outcome in Ohio, OH statute would apply here to a case like this
 
 
 
 
General Process of Estate Administration
1) Person dies
2) Create Estate (Probate Estate)
3) Estate Administration (date of death à date of

interests
Maintaining confidentiality w/ client vs. disclosure of information to other
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
Some states say firm is entitled to disclose, doesn’t have to
Some say you cannot disclose without consent of husband
Some say attorney cannot disclose at all, must withdraw
Ohio Law on Prenuptial Conflict of Interest
Require two separate attorneys for establishment of prenuptial agreement
Privity Requirement (Duty to Beneficiary)
Introduction
Apart from a duty to two clients (conflict of interest), focus now on duty to the intended beneficiary of the will
Example
Create Trust, have Pour-Over-Will, entire Trust benefits grandchildren, decedent dies, Trust invalid, no will, entire estate goes to estranged spouse intestate
Can the grandchildren file a suit against the attorney who botched the Trust
Maybe!
Privity Defined
Privity (from contract law) is a requirement that the only person who could sue a party to a contract is one who was in privity with the sued party
Meaning the plaintiff must have a legal connection to the defendant for defendant to owe a duty of care to the plaintiff
Can’t sue if there is no connection
Privity is the connection
Strict Privity: Attorney does not owe duty to beneficiary
Only person that hired lawyer can sue attorney for malpractice (strict privity)
Any intended beneficiary of the attorney’s duties may not sue for malpractice
Executor of estate may not sue attorney either
But can sue if Attorny acts with malice, fraud, bad faith, collusion
Ohio: Strict Privity jurisdiction- cannot come after you as an estate planning unless
Third party has to prove- factor test, only one to prove
Malice
Fraud
Bad faith
Collusion
attorneys have no duties to 3rd party unless commit fraudulent, or really serious breach to be found liable for malpractice. (Simon v. Zipperstein) OH case
 
 
GENERAL TERMS- court appoints fiduciary to represent
Personal representative- appointed
Executor- under will
Administrator- serves but not appointed under will
Court issues-“letters of administration” or ‘letters testamentary” to enable fiduciary to gather assets, to allow for transferring of assets
Letters of Authority- term of art in our class and in Ohio, sealed document-e.g bank account, sells vehicles