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Wills and Trusts
University of Dayton School of Law
Welbaum, Heather Duffey

Wills and Trusts Outline
Professor Welbaum
 
Terminology
–          Decedent – dead guy
–          Intestate Succession – If no will/trust has been set up… how estate will pass
o       Regulated according to state law and intestacy statutes.
§         Personal property – state where decedent was last living controls
§         Real property – state where real property is located governs.
–          Heirs – People who receive under intestate succession (for real property)
o       Next of kin for personal property
o       If no heir can be found property escheats to the state
–          Administrator/executor – do the same job… take care of estate and execute is as to intestacy statute for administrator (intestate succession)… or as to will for executor (testate succession).
–          Can distribute almost anyway you want as long as certain procedures are followed.
 
Wills
–          Beneficiary – receiver of stuff under will
–          Devisee – real property
–          Legitee – person property
–          Testator – person who makes will
–          Executor – carries out will
–          Codicil – brief change to will – i.e.
o       Change executor
o       Add a child
o       Only will maker has to sign it with witnesses
–          Need a will if you
o       Have kids
o       Don’t want to follow intestate succession.
 
Trust – a K b/w parties
o       Requires a grantor, a trustee, and a beneficiary (one person can be all 3)
–          Trust agreements – 2 kinds
o       Testamentary trust – written into will… but not the best kind of trust b/c they are governed by probate court and the trustee must prove to the court every year what they are doing with them and how they have invested the principle… great court supervision
o       Revocable trust – (inter vivos trust) – during client’s lifetime client can revoke/change/modify/add/subtract to or from the trust.
§         Person who makes trust = grantor
–          Trusts do not have to be probated b/c they become irrevocable at death
–          However person still needs a will b/c it is impractical to have everything in trust.
o       Will can pick up everything not in trust and put it into the trust to avoid probate.
–          Amendment – a change to a trust
 
Durable power of attorney
–          lets people make financial decisions for you
–          effective upon signature
–          very misused/abused
 
Health Care power of attorney
–          written to hospital/doc
–          forms that in certain states are set forth by statute
–          apply when in terminally ill condition
–          vegetative state
–          can’t talk for self
 
Right to transfer property at death –
–          right to transfer property at death is one of your natural bundle of rights that congress cannot take away.
–          Decedent has right to pass on property
o       Heir (child) does not have right to receive decedent’s property
–          Intent/motive of decedent is what is to be followed
o       Jewish case where decedent leaves all his money to his son if he marries a Jewish girl or otherwise all to the state of Israel
o       Does not violate freedom of religion etc b/c it is not a Gov’t actor.
§         Decedent’s intent is clear as wanting to preserve Jewish state (by giving $ to Isreal).
–          Decedent cannot leave instructions to Destroy property after their death b/c that is wasteful.
 
Probate vs. Non-probate property –
–          titling is critical
–          Probate – property must go through court to change the title from the decedent’s name to anyone else’s name.
o       Ex: car, personal checking acct., anything non-probate.
–          Non-probate – Passes immediately at death to heir/devisee
o       Majority these days is non-probate
o       Ex: insurance probability, real estate held in JTWROS or TIC, joint checking accounts, P.O.D. or T.O.D. (payable on death/transfer on death), trust, untitled personal property.
o       Good estate planners do not use P.O.D. or T.O.D. they put property in trust b/c then it is protected from creditors if it stays in trusts.
 
Executor responsibilities
–          Gathers up all your stuff that is only in your name (including debts)
–          Takes everything to attorney to calculate date of death balance (gross estate)
–          Manages stuff during will’s execution
–          Accept or reject creditor’s claims against estate.
–          Filing of inventory
o       Executor or administrator files what decedent has/had (an estimate of what decedent had).
o       Must serve to all beneficiaries
o       All heirs can object to inventory
–          Payment or final rejection of creditors
o       Do not have to give notice of decedent’s death to creditors.
o       Creditors have only 6 months to make claim or they LOSE their chance altogether
–          Clear titles
o       Pay mortgages
o       Pay off car loans
o       Make assets ready to be transferred
–          Distribute remaining assets
–          Once executor is approved s/he gets letter/certificate of authority gives him/her authority to do everything above.
–          Final accounting to court – what decedent had, what went where (debt, mortgage, attorney, executor, lawn guy, $ to heirs).
o       Heirs can object within a certain time period
–          Estate is CLOSED – 1 yr. after the closure executor is on the hook but may be able to share liability with other heirs.
 
Court/probate – heavily regulated by each state
–          file will or send notice to court to pick administrator where decedent was domiciled
–          Real property probated in estate it is located
–          Send notice to anyone you think is going to come after part of estate

     Brain death – no signs of life/no brain activity; cannot be brought back
§         Heart death – heart stops, flat line, CAN be brought back
o       Good drafters will include a time frame of how long heirs must survive in order to take under the will.
–          If wife’s will says: To H if he survives me…
o       H survives by 4 hours w/ clear and convincing evidence
o       The will is not silent to survivorship so he gets wife’s stuff.
o       If will speaks at all to survivorship (explicitly) survivorship statute does not apply.
 
Effects of Final Decree of adoption (3107.15)
–          Once a parent has adopted a child the relationship b/w child and former parent is terminated (except for mother who marries a new father who adopts or vice versa).
–          Adopted Child is considered like any other upon final decree of adoption.
–          1963 amendment to statute made dual inheritance (from biological parents and adoptive parents) impossible…
o       1696 amendment updated it more but still is not clear.
o       Ex: Hall v. Vanlandingham (pg 83)
–          Adult adoption – sometimes used by domestic partners b/c they can’t be married
o       In a majority of states people can adopt other adults but not a spouse.
o       Adults adopted (lineal descendents) are not included a will unless expressly stated as such
o       However if this is done solely to create/ensure another taker under a will it probably will not work b/c court will look to decedent’s intent.
§         H – will to wife then 3 children per stirpes
§         C1 (2 children), (C2) (1 child), C3 (no children adopts adult to be a taker if C3 dies before H.
 
Posthumous Children
–          normally mom and dad conceive a child and the father dies before the child’s birth
–          Now child can be conceived through artificial insemination after father’s death.
o       Woodward v. Commissioner of Soc. Security
§         Husband had leukemia and gets sperm saved in case he becomes sterile.
§         Husband dies and wife uses sperm to get pregnant.
§         Soc. Security will not give benefits to children b/c they were not “in being when father died.
§         Court decides:
·         Limited circumstances where posthumously conceived children may inherit:
o       State interests