Miller_Estates&Trusts_Spring2010
Chapter 1: Introduction
1) The probate system and the wealth transmission process
a) Intestate
i) A person who dies without a will
ii) If there are no intestate successors, the estate goes to the state by escheat
b) Testator
i) A person who makes a will
c) A will remains ambulatory during the testator’s life, meaning that it does not take effect until the testator’s death. Moreover, a will is not self-executing, but must be admitted to probate in order to operate in favor of the testator’s beneficiaries.
d) Administration of a decedent’s estate generally involves three basic functions:
i) Collecting assets of the estate
ii) Paying expenses, creditor’s claims, taxes, and other charges
iii) Distributing the remaining assets to the decedent’s successors
e) For purposes of probate administration, the estate comprises all property owned by the decedent at death which is capable of being transferred at will
Chapter 2: Intestate Succession
1) Introduction
a) Statutes
i) F.S. 732.101(intestate estate)
ii) F.S. 732.102(spouse’s share of intestate estate)
iii) F.S. 732.103(share of other heirs)
iv) F.S. 732.104(inheritance per stirpes)
v) F.S. 731.201(9)
b) In general, American intestacy laws identify members of the decedent’s family as intestate successors, with first priority accorded to the decedent’s surviving spouse and issue, if any, in absence of spouse or an issue, other relatives shares in the estate based on their relationship to the decedent. If no takers are found within the circle of eligible family members, the decedent’s property escheats to the state.
c) Systems of succession: p. 52 – 55
d) Priority of succession may be determined either by lines of descent (a “parentelic” system) or by degrees of consaguinity (a “gradual” system).
i) In a parentelic system, priority is given to nearer ancestors and without regard to degrees of consaguinity. In such a system, which shaped the descent of real property at common law, the decedent’s own issue take first priority, followed by decedent’s parents and their other issue
ii) By contrast, in a gradual system, priority is given to relatives who are nearest in degree of consaguinity – the decedent’s next of kin
2) Intestacy statutes
a) See p. 55 – 58
i) Representation
(1) The principle of representation, where applicable, permits the living descendants of a predeceased relative to “represent” (i.e., take the place of) their ancestor for purposes of inheritance.
(a) For example, consider a decedent whose only surviving relatives are an aunt and two first cousins. If the cousins, children of the decedent’s predeceased uncle, are permitted to represent him, they will take the one-half share of the estate that would have passed to the uncle had he survived, and the other half will pass to the aunt.
b) Simultaneous death
i) See F.S. 732.6005 and 732.601
ii) A transfer by intestate succession occurs at death, and only persons then in existence can participate in the decedent’s estate. It is therefore axiomatic that no rights of inheritance can be claimed by or on behalf of any person who predeceased the intestate.
iii) If H and W die in circumstances such that the order of deaths cannot be determined, H’s property passes as if he survived W, and W’s property passes as if she survived H.
c) Representation among descendants
i) Modern intestacy statutes invariably provide that, after the surviving spouse’s share has been set aside, the balance of the estate passes to the decedent’s surviving descendants, if any, excluding all other blood relatives.
ii) In a strict per stirpes system, the estate is divided into equal shares, with one share allocated to each living child of the decedent and one to each predeceased child who has descendants living at the decedent’s death. Each predeceased child’s share is then redivided among the child’s descendants in the same manner until the entire share has been allocated to living takers.
iii) By contrast, in a traditional per capita system (also known as per capita with representation), the initial division into equal shares occurs at the nearest generation of descendants which has a member living at the decedent’s death. One share is allocated to each living member of the generation, and one to each predeceased member who has living descendants. Each predeceased member’s share is then distributed among his or her living descendants by representation (i.e., per stirpes).
d) Domicile
i) Governs the disposition of intangible property
e) Ancestors and collateral
i) Standing to contest a will – p. 74 note 2
(1) Intestate statutes have ramifications beyond the distribution of intestate estates. The persons designated by statute as intestate successors are entitled to notice of probate proceedings and have standing to contest the decedent’s will.
ii) Half-blood relatives – p. 75 note 6
(1) A half-blood collateral is one who has one, but not two ancestors in common with the decedent. Half-blood relationships can occur only through collaterals, never between ancestors and defendants.
(2) The Florida Supreme Court has previously ruled that the half-blood rule established by F.S. 732.105 only takes effect if the half-blood heirs are on the same side of the family (maternal or paternal) as the full-blood heirs.
(a) As a result of this ruling, in problem 2 of the Problem on Inheritance by Half-Blood Relatives in Florida problem set, the Uncle should take ½ of $100,000, and winds up getting $50,000, despite the fact that he is only a half-blood uncle. In this case, A and B are on the paternal side, while the Uncle is on the maternal side. As a result, the half-blood rule from 732.105 does not come into effect here, and the Uncle gets a full ½ of the $100,000 estate.
f) Children
i) Adopted children
(1) See F.S. 732.108(1)
(2) In the overwhelming majority of states, for purposes of intestate succession, an adopted child is generally treated as a child of the adopting parents and not of the natural parents.
(3) In Re Estates of Donnelly – p. 78
(a) I: May an adopted child inherit from her natural grandparents?
(b) H: No
(c) R: “A lawfully adopted child shall not be considered an heir of his natural parents for purposes of this title … It is clear that (1) the adopted child cannot take from his natural parent because he is no longer and heir and (2) the adopted child enjoys complete inheritance rights from the adoptive parent, as if he were the natural child of the adoptive parent … We believe it clearly follows that the legislature intended to remove an adopted child from his natural bloodline for purposes of intestate succession … If the adopted child cannot take from her natural father, she should not represent him and take from his father … The chain of inheritance was broken by respondent’s adoption.”
(4) Equitable adoption – p. 85
(a) When adoption is made through an informal agreement without any official adoption procedures, there are certain requirements for this to still count as an “adoption” for purposes of intestate succession – see p. 85 for requirements list
(5) Adoption of adult
(a) Most jurisdictions also authorize the adoption of one adult by another
(6) Testamentary gifts
(a) The prevailing modern rule under construction presumes that a class gift includes not only the testator’s own adopted children, but also children adopted by other persons, at least where the child lived with the adopting parents during minority.
ii) Non-marital children
(1) See F.S. 732.108(2)
(2) Proving paternity
(a) If a child is born to a married woman, the common law presumes that the woman’s husband is the child’s father. The presumption can be rebutted by showing that the husband was sterile, impotent, or physically absent duri
en executed trust agreements that made an inter vivos gift of all his property to other trusts. After he did this, Strauss effectively owned nothing, so therefore his wife would inherit nothing. Strauss did this so that all his money would pass to other beneficiaries, and not his wife. However, under NY state law, no matter what Strauss said in his will, his surviving spouse had the right to ignore the will and instead elect to take a straight 1/3 of the augmented estate (which includes everything in the will, plus everything that transfers through non-probate means). Three days later Strauss died. Strauss’ wife challenged the validity of the transfer of all his estate to trusts. The trial court found that the inter vivos gift to the trust was not valid.
(2) H: Affirmed
(3) R: Law does not restrict property transfers while the person is alive, so, if the property transfer was valid, Strauss died with no estate and his wife gets 1/3 of nothing. However, if the transfer was only “illusory” and Strauss still retained the property in some form, then the transfer is not valid. Court finds that the transfer was illusory, because Strauss retained not only the income for life and the power to revoke the trust, but also the right to control the trustees.
(4) Rule: Basically, if you reserve the power to revoke and modify the trust, and also the power to control the trustee in the administration of the trust, then the trust remains part of your augmented estate, and can be taken as an elective share by the surviving spouse.
d) Augmented estate
i) Introduction
(1) In general, the augmented estate may be viewed as a pool of assets comprising the decedent’s net probate estate, certain property transferred by the decedent outside probate, and certain property owned or transferred by the decedent’s surviving spouse
ii) Sex distinct mortality tables
(1) Supreme Court held that Title VII of the Civil Rights Act of 1964 prohibited a municipal employer from requiring that female employees make larger contributions than male employees to a pension fund
4) The elusive distinction between life and death transfers
a) Butler v. Sherwood – p. 458
i) F: Ella Sherwood, about to undergo an operation for cancer, made and executed in writing a quitclaim deed of all her real estate and personal property to her husband. Her brother, and only heir at law, brought this action to set aside the instrument, on the ground that it was procured by undue influence, and that there was never any transfer of the property under the instrument. Trial court found that the instrument relied upon by the defendant was of a testamentary character, and did not comply with the statutory requirements of a will, and was therefore void.
ii) H: Affirmed.
R: “If the instrument had ended here, and had been executed and delivered, it would of course have operated to divest Ella Sherwood of her property and to have vested it with [her husband]. But this would not have accomplished the purpose which she had in mind; she wanted to hold the ownership and possession of her property until her death, and then to vest it in her husband … No right
