Trusts and Estates Outline
INTRODUCTION
a. Sources of law
i. Probate Code (UPC and FL)
ii. Restatement
b. Terms
i. Intestacy
ii. Probate Property
1. Property that passes through a will or intestacy
2. You must own property for it to go through probate
3. With modern estate planning, there is little probatable property
a. Why?
i. Costly and lengthy process
ii. When you die, your assets are frozen, do how is your spouse or children going to live?
iii. Non-probate property
1. Property that passes through any other instrument other than a will or through intestacy. Examples:
a. Joint tenancy property
b. Life insurance
i. benefits paid to beneficiary named in the insurance contract
c. Contracts with payable on death provisions
d. Interests in Trust
e. Retirement Benefits
f. P.O.D. accounts
g. Designated Survivors
i. i.e. Decedent had a life estate, remainder designated to go to a specific person upon decedents death
iv. “Going through probate”
1. FL: circuit court; venue is county in which decedent was domiciled
2. To make sure that property really does pass to person, you want to go through probate
3. Policy reasons
a. Satisfy creditors and clear titles
b. Inventory: collect and manage the assets of decedent
c. Notify beneficiaries
d. Resolve conflicts among beneficiaries
e. Distribute what is left to the appropriate person(s) or institution(s)
v. “Proving a Will”
1. Go to probate to do this, to show that it is valid; probate IS this process
vi. Personal Representativ
and Trusts are ENTITIES
i. Estates are very temporary, with the goal to distribute property as quickly as possible
ii. Trusts are not temporary: their role is to administer property; investment function
ETHICAL CONSIDERATIONS
d. Malpractice – Privity
i. Beneficiaries bear the loss if the will turns out to be void
1. Recourse if a malpractice suit
a. Contract theory (modern includes intended beneficiaries, CL did not) and/or tort theory (duty of care owed to beneficiaries if injury was reasonably foreseeable; at CL only to client)
i. See Simpson v. Calivas (find that the drafting attorney owed a duty of care to a 3rd-party beneficiary; finding that in order to have standing, must show that you were harmed and there was a breach of privity of contract)
ii. Some states, like FL, require that privity be on the face of the will
b. Effect
i. Lawyers more careful? Insurance companies may require certain steps to avoid liability
ii. Get rid of incompetent lawyers
iii. Change law on extrinsic evidence
c. Public Policy Arguments
i. concern for loyalty to client because now the lawyer is worried about getting sued when he is drafting the will and may not do what the client wants.
ii. protects attorney-client privilege
iii. if privity abolished then it opens up the flood gates; unlimited exposure of attorney to beneficiaries
