TRUST AND ESTATES I
A. The Probate/ Nonprobate Distinction
1. Probate is the court-supervised process of determining whether a will is valid.
a. Probate serves three functions:
i. Making property owned at death marketable again through title clearing.
ii. Paying off the decedent’s debts.
iii. Implementing the decedents donative intent.
b. Probate property: Passes under decedent’s will or by intestacy
c. Non-probate property: Passes under instrument other than will, such as
i. Joint tenancy property (T’s estate vanishes; survivor takes whole)
ii. Life insurance
iii. Ks w/ payable-on-death provisions
iv. Interests in trust
2. Will Substitute: AKA nonprobate transfer. It is an arrangement respecting property or contract rights that is established during the donor’s life under which:
a. The right to possession or control of property shifts outside of probate to the donee at the donor’s death.
b. Substantial lifetime rights of dominion and control are retained by the donor.
3. Will substitutes differ from a will in three ways:
a. Most are asset specific (life insurance, bank balance, mutual funds).
b. Property that passes through a will substitute avoids probate.
c. Formal requirements of the Wills Act do not apply.
4. General steps in probate process (done by personal rep)
a. Open estate by offering will for probate (Ct in jxn. at time of death and also Ct
i. Primary/domiciliary jxn: where D was domiciled at time of death – open probate here
ii. If real property is located in another jxn., ancillary administration in this jxn. is req.
b. Collect decedent’s assets
c. Pay any family allowance and set aside homestead and exempt personal property
d. Pay creditors and taxes
e. Distribute assets when Ct enters decree of distribution
B. Donative Freedom
1. In Anglo-American law it is generally assumed that people should be free to do what they will with their property when they die.
a. There are some restrictions on this freedom like the rule in most states that you can’t disinherit your spouse and the rule against perpetuities.
2. Shapira v. Union National Bank:
a. Father left a will that was conditional upon his son marrying a Jewish girl within 7 years. If he did not, it would be given to the state of Israel. Son attacks it on a constitutional and public policy basis.
i. Partial restraint on marriage in will is not violation of right to marriage protected by 14th amendment (equal protection). Also, 14th amendment usu. applies only to state action, not to private wills.
ii. Also, if restraint imposes only reasonable restrictions, it is valid and not contrary to public policy
II. INTESTATE SUCCESSION
1. The rules of intestacy are default rules, not mandatory rules. They apply only where the decedent has not provided otherwise, as by writing a will.
a. They are designed to effectuate intention and do what we believe they would have done if they had left a will.
2. Requirement of Survival:
a. Only persons who survive the decedent are entitled to succeed to the decedent’s property by testate or intestate succession. What constitutes survival is different for each jxd.
i. Common law: Unless altered by statute, survival by only an instant is sufficient.
ii. UPC § 2-104: Must survive by 120 hours.
b. Uniform Simultaneous Death Act: Where there is no sufficient evidence of survivorship the property of each person will be disposed as if the other had survived them.
3. Relatives in Gestation:
a. Persons who are born after the decedent’s decease are typically not eligible to receive property.
B. General Patterns of Intestate Succession:
a. UPC §2-102
a) Intestate estate
(i) Anything not covered by will goes to heirs (see below)
(ii) Will may expressly exclude or limit what legal heirs would get
b) Share of surviving spouse
(i) Entire estate if…
(a) No descendant or parent of decedent survives OR
(b) All of D’s surviving descendants are also descendants of SS and no other descendant of SS survives D
(ii) First $200K + ¾ balance of estate if…
(a) No descendants BUT
(b) Surviving parent(s)
(iii) First $150K + ½ any balance if…
(a) Descendants are all descendants also of SS, and
(b) SS has surviving descendant(s) not related to D
(iv) First $100K + ½ balance if…
(a) One or more surviving descendants are not descendants of SS
c) Share of heirs other than SS §2-103
(i) Any share not going to SS passes in following order
(a) Descendants by representation
(b) Parents equally or surviving parent
(c) Descendants of D’s parents or representation
(d) If survived by one or more grandparents or descendants or grandparents
1. ½ to paternal GPs/descendants by representation
2. ½ to material GPs/descendants by representation
3. or it all goes to one side if the other side is all dead
d) No taker – escheats to state
c. GA Intestacy Laws:
e) Children – definitions
(i) After-born children: Count if conceived prior to D’s death, born w/in 10 months, and survive at least 120 hrs
(ii) Half-blood: considered equally w/ whole blood
f) If D dies w/o will, heirs –
(i) SS but no child or other descendants à SS is sole heir
(ii) SS and child/descen
ypes of guardianship:
aa. Guardianship of a person (minor)
bb. Guardianship of property.
ii. In GA a divorced parent cannot assign guardianship to another person in a will as long as the other parent is still alive and has not lost all of their rights.
3. Ancestors and Collaterals: UPC §2-103
a. Collaterals – related by blood but not descendants/ancestors
i. First-line collaterals: descendants of D’s parents (other than D and D’s issue)
ii. Second-line collaterals: descendants of D’s grandparents
b. If there are no first-line collaterals…
i. Parentelic system: GPs and their descendants; if none, GGPs and descendants, etc.
ii. Degree-of-relationship system: count degrees of kinship; estate to closest kin.
b. Parents and Their Descendents:
i. Parents: The decedents parents and their descendents inherit to the exclusion of more remote ancestors.
aa. UPC: Parents of decedents with large estates inherits ¼ of the estate if there is a surviving spouse and no descendents.
ii. Ancestral Property: At common law, ancestral property reverts to the branch of the family from which it was inherited.
iii. Descendents of Parents: If the parents don’t survive, their descendents inherit by representation.
iv. Half-Blood: Relatives of the half blood are treated the same as whole blood relatives.
aa. English law: CL courts excluded half-bloods
bb. American law
1. Most states: half-blood treated the same as full blood (UPC, GA)
2. Some states: half-blood gets half-share
3. Some states: half-blood takes only when no whole blood relatives of same degree
c. More Remote Ancestors and Collaterals:
i. The first parentela inherits first and then the second and so on. ii. Under the UPC the parentelic system is carried out only until the 3rd parentela.
iii. Degrees of kinship – D’s bros and sis (descendants of parents) are over D’saunts and uncles, who are descendants of D’s grandparents.
aa. Laughing Heir Statutes: preclude inheritance FAR TOO REMOTE from D, because this inheritance by relatives whose glee at their new found wealth is unmitigated by any grief over the death of the D.