Estates and Trusts – Prof. Dawson
I. The Living and the Dead: Whose Money is it?
A. Restraints on alienation will be upheld so long as they are reasonable and do not violate public policy.
1. Shapira v. Union National Bank—Father wrote a will providing that his son could inherit only if he married a Jewish girl of Jewish descent no longer than 7 years after father’s death. The court held that this restriction was reasonable because 7 years are a long time and there are a lot of Jews.
2. A gift effective on condition of divorce is invalid because it violates public policy.
3. A gift enjoining the marriage of non-Jew would be invalid under the equal protection clause of the fourteenth amendment.
B. Slayer’s rule
1. A person who kills another may not inherit if killing is felonious and intentional. (note negligent homicide)
2. If the killer is insane, then intent is negated.
3. FL—Section 732.802—even if there is an acquittal, an interested party can petition for a determination of guilt. Determine by the greater weight of evidence.
4. If the killer did kill, property passes as if the killer predeceased the decedent.
5. A joint tenant who unlawfully and intentionally kills another joint tenant affects a severance of the interest so that the share of the decedent passes as the decedent’s property and the killer has no rights by survivorship.
6. A named beneficiary of a bond, life insurance policy, or other contractual arrangement who unlawfully and intentionally kills the principal is not entitled to any benefit.
7. This section does not affect the rights of any person who, before rights have been adjudicated, purchases from the killer for value property that the killer would have been entitled to.
C. Fiduciary Responsibility
1. A lawyer does not owe a fiduciary duty to intended beneficiaries of a will.
2. 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.
a. Hotz v. Minyard—Father drafted will and included daughter in the will. Then, the father drafted a will without the daughter. Lawyer misrepresented to daughter that she was in the second will. Lawyer also represented daughter in business law matters. Held that lawyer had a fiduciary relationship with daughter.
3. MR 1.6
a. A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation.
4. MR 1.7
a. A lawyer shall not represent a client if the representation of that client will be directly adverse to another client
i. the lawyer reasonably believes the representation will not be adversely affect the relationship with the other client; and
ii. each client consents after consultation
b. A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person or by the lawyer’s own interests unless
i. the lawyer reasonably believes the representation will not be adversely affected; and
ii. the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.
5. Any legal causes of action against a lawyer become part of the decedent’s estate.
II. Probate and non-probate transfers
A. Inter vivos Gift:
1. intent on the part of the donee to make a transfer
2. delivery
a. actual
b. constructive—put an instrument in the hands of another
3. acceptance
a. Gruen v. Gruen—Father wrote two letters to his son on his 21st b-day telling him that he was giving the son a painting as a gift, but would retain possession of the painting during his life. There was a gift as the letters were evidence of intent, constructive delivery, and acceptance.
b. An inter vivos gift requires that the donor intend to make an irrevocable present transfer of ownership.
B. Gifts causa mortis
1. Gift made in contemplation of death.
2. Donor must fear that death is impending and imminent.
C. Donative intent
1. Evidence of a lack of donative intent must relate back to the time of the creation of the joint tenancy. Decision of the donor made subsequent to the creation of the joint tenancy is insufficient to sever it.
2. Franklin v. Anna National Bank—Decedent put Cora Goddard’s name on account to help him take out money because he was losing his vision. Goddard never withdrew money of her own accord, but insisted that his was a joint tenancy. Court held that Goddard was made a signatory for convenience and not with an intent to effect a gift.
D. Joint Tenancy
1. Courts have typically treated joint accounts as giving each party a right to withdraw money deposited.
2. However, a party can’t withdraw more than it deposited.
3. FL 655.79
a. A deposit account in the name of two or more persons shall be presumed to have been intended by such person to provide that upon death the other gets the remaining interests.
b. The presumption may be overcome only by proof of fraud, undue influence, or clear and convincing proof of contrary intent. (Franklin v. Anna National Bank)
c. All interests vest in the survivor notwithstanding absence of proof of donative intent, delivery, and acceptance.
4. FL 689.15
a. A devise shall create a tenancy in common, unless the instrument creating the estate shall expressly provide for right of survivorship.
E. POD
1. This does not transfer any interest to the beneficiary during the depositor’s lifetime.
2. Therefore, a POD is treated as a will. It must be executed in accordance with the formalities of a will or it is invalid.
3. FL 655.82
a. A beneficiary has no right to sums on deposit during the lifetime of any party.
b. On death of one of two parties, the remaining sums belong to surviving party.
c. On the death of the sole party or the last of the survivor of the two or more parties, sums on deposit belong to the surviving beneficiary or beneficiaries. (This means that creditors can only get to the funds during the life of a party, but not afterwards.)
d. If two or more beneficiaries survive, sums on deposit belong to them in equal sums and unless provided in a depository agreement written between December 21, 1994 and July 1, 2001, there is no right of survivorship in the event of the death of a beneficiary.
e. If no beneficiary survives, sums on deposit belong to the estate of the last SURVIVING PARTY (not beneficiary). *Funds go through intestacy scheme if beneficiary is dead.
F. Convenience Accounts—goes through intestate succession—FL 655.80
1. Agent has the right to make deposits and withdraw funds. Only principal may designate agents.
2. All rights, interests, and claims to the deposits are those of the principal only.
III. Life Insurance
A. Term life insurance is a pure death benefit only while whole life insurance has a death benefit component.
B. Who gets the insurance money?
1. Whether a trust was created depends upon the intention of the parties manifested by their words and conduct. Trust provisions may be incorporated by reference.
2. Equitable life Insurance Society v. Proter-Englehart—Manfred designated his first wife, Merle, as trustee for children under will. Manfred married Sandra, and the will was revoked under the law. Manfred got insurance which gave 70 percent of the proceeds to the trustee in will and 30 percent to Sandra. Sandra sued for the other 70 percent. Held for Merle. Will was executed prior to insurance and provides evidence of trust.
3. FL 222.13
a. Insurance goes to the person designated in the policy and is exempt from the claims of creditors unless the insurance policy provides a valid assignment.
IV. Intestate Succession
A. Modes of distribution
1. strict per stirpes
a. start with the generation closest to the decedent
b. FL 732.104—FL uses strict per stirpes
2. modern per stirpes
a. start with the generation with someone alive closest to the decedent
b. if one person is alive in the older generation and other older people are dead, the younger generation’s share is based on the older as in per stirpes
3. how to analyze problem:
a. surviving spouse
b. lineal descendants
c. if none, check parents and descendants
d. then check grandparents
4. policy concerns
a. usually, intestate process applies to poorer people who could not afford a lawyer
b. statute should effect what a person would have done if they had a will
c. however, we really don’t know what a person would have done and they didn’t get a will in the first place
5. A formal divorce decree is necessary to disqualify a surviving spouse from intestate succession.
6. A party has no standing where there is no personal stake in the outcome of the controversy.
7. A surviving spouse has priority for appointment as PR over other heirs.
a. Estate of Goick—Prior to divorce decree being issued, H died and W became PR for estate. H’s kids sued for estate, but had no right to estate under statute so they had no standing to sue.
B. Lineal descendants
1. FL 732.101
a. Any part of the estate of a decedent not effectively disposed of by will passes to the decedent’s heirs.
b. The decedent’s death is the event that vests the heirs’ rights to intestate property.
2. FL 732.102—share of spouse
a. The intestate share of the surviving spouse is:
i. If there is NO SURVIVING lineal descendant of the decedent, the ENTIRE intestate estate.
ii. If there are surviving lineal descendants of the decedent, ALL of whom are also lineal descendants of the SURVIVING SPOUSE, the first $60,000 of the intestate estate, plus one-half of the balance of the intestate share.
iii. If there are surviving lineal descendants, one or more of whom are NOT lineal descendants of the SURVIVING SPOUSE, one-half of the intestate estate.
C. Share of other heirs—FL 732.103
1. The part of the intestate estate not passing to the surviving spouse under s. 732.102, or the entire estate if there is no surviving spouse, descends as follows:
a. To the lineal descendants of the decedent
b. If there is none of the foregoing, to the decedent’s brothers and sisters and the descendants of the deceased brothers and sisters.
c. If there is none of the foregoing, the estate shall be divided, one-half of which shall go to the decedent’s paternal, and the other half to the decedent’s maternal, kindred in the following order;
i. to the grandfather and grandmother equally, or to the survivor of them
ii. If there is no grandfather or grandmother, to uncles and aunts and descendants of deceased uncles and aunts of the decedent.
iii. If there is no paternal kindred or if there is no maternal kindred, the estate shall go to such of the kindred as shall survive in the order aforesaid.
tween the child and the families of the deceased natural parents.
i. brother, sister, grandparent, aunt, uncle
2. For the purpose of intestate succession in cases not covered by subsection (1), a person born out of wedlock is a lineal descendant of his or her mother and is one of the natural kindred of all members of the mother’s family. The person is also a lineal descendant of his or her father and is one of the natural kindred of all members of the father’s family if:
a. the natural parents participated in a marriage ceremony before or after the birth of the person born out of wedlock, even though the attempted marriage is void
b. the paternity of the father is established by an adjudication before or after the death of the father
c. the paternity of the father is acknowledged in writing by the father.
3. Estate of Brittin—An individual adopted as an adult is a lineal descendant of the adoptive parent and so are his kids.
a. Ellen married Sam and had a child named Mark. Sam died. Ellen later adopted William when William was an adult. William shares in the intestate succession process.
4. Example: Margaret is married to William. During the marriage, John is born via an affair with Robert. John dies. May Robert inherit from John?
a. it would be inequitable under 732.108 to allow Robert to inherit from John
b. the child was never born out of wedlock because Margaret was married at the same so 732.108 does not even apply. There is a presumption that John is the child of Margaret and William.
c. The adoptive relationship goes down and through the child but not back up.
H. Equitable adoption
1. When a caretaker takes a child into her home, she impliedly agrees with the child’s natural parents that she will adopt the child.
2. If the parties rely on the agreement, the child is entitled to benefits as caretaker’s child.
3. The parties to the contract had to have the authority to contract.
4. Should the child be permitted to inherit from the parent’s family members?
I. 732.6005—Statutory provision that applies in case of will
1. The intention of the testator as expressed in the will controls the legal effect of the testator’s disposition. The rules of construction expressed in this part shall apply unless a contrary intention is indicated by the will.
2. Subject to the foregoing, a will is construed to pass all property which the testator owns at death, including property acquired after the execution of the will.
J. Simultaneous death statute—732.601
1. When title to property or its devolution depends on priority of death and there is insufficient evidence that the persons have died otherwise than simultaneously, the property of each person shall be disposed of as if that person had survived.
a. A and B are married and die in a plane crash. A’s estate goes to her heirs and B’s estate goes to his heirs.
b. Suppose A died in a car crash and B died in the ambulance on the way to the hospital. A’s estate is $100,000 and B’s is $200,000. Each have 4 children from another marriage. B gets $50,000 of A’s estate and the $250,000 is distributed among B’s children.
2. When two or more beneficiaries are designed to take successively by reason of survivorship under another’s person’s disposition of property and there is insufficient evidence that the beneficiaries died otherwise than simultaneously, the property thus disposed of shall be DIVIDED into as many equal parts as there are SUCCESSIVE beneficiaries and the parts shall be distributed to those who would have taken as if each designated beneficiary had survived.
3. When there is insufficient evidence that two joint tenants or tenants by the entirety died otherwise than simultaneously, the property so held shall be distributed one-half as if one had survived and one-half as if the other had survived. If there are more than two joint tenants and all of them so died, the property thus distributed shall be in proportion that one bears to the number of joint tenants.
4. When the insured and the beneficiary in a policy of life or accident insurance have died and there is insufficient evidence that they died otherwise than simultaneously, the proceeds of the policy shall be distributed as if the INSURED HAD SURVIVED THE BENEFICIARY.
K. Advancement—733.806
1. If a person dies intestate, property that the decedent gave during lifetime to an heir is treated as advancement against the heir’s share of the estate only if declared in a contemporaneous WRITING by the DECEDENT or acknowledged in writing by the HEIR.
2. The property advanced shall be valued at the time the heir came into possession or enjoyment of the property or at the time of the death of the decedent, whichever comes first.
