Decedents’ estates and Trusts
Restatement (Third) of Property: Wills and Other Donative Transfers § 10.1 cmt. C (2003)
The organizing principle of the American law of donative transfers is freedom of disposition. Property owners have the nearly unrestricted right to dispose of their property as they please.
American law does not grant courts any general authority to question the wisdom, fairness, or reasonableness of the donor’s decisions. The main function of the law in this field is to facilitate rather than regulate. The law serves this function by establishing rules under which sufficiently reliable determinations can be made regarding the content of the donor’s intention.
Irving Trust Co. v. Day, 314 U.S. 556 (1942)
Right of succession to the property of a deceased, whether by will or by intestacy, are of statutory creation, and the dead hand rules succession only by sufferance. Nothing in the Federal Constitution forbids the legislature of a state to limit, condition, or even abolish the power of testamentary disposition over property within its jurisdiction.
Hodel v. Irving, 481 U.S. 704 (1987)
A view in terms of protecting private property through the Takings Clause of the Fifth Amendment. U.S. Const. amend. V. (“nor shall private property be taken for public use, without just compensation.”). Total abrogation of the right to pass property is unprecedented and likely unconstitutional. A total abrogation of the rights of descent and devise cannot be upheld.
Mechanics of Succession
· Probate Property
· Nonprobate Property
o Inter Vivos Trust
§ Property held in a testamentary trust created under the decedent’s will passes through probate, but property put in an inter vivos trust during the decedent’s life passes according to the terms of the trust, avoiding probate administration.
o Life Insurance
§ Pays upon receipt of a death certificate of the insured. POD contract.
o POD and TOD Contracts
§ Bank, brokerage, pension, and retirement account
§ Through POD and TOD beneficiary designation
§ Beneficiary only needs to file a death certificate with the account custodian.
o Joint Tenancy
§ The decedent’s interest vanishes at death. The survivor takes the whole. No interest passes to the survivor at the decedent’s death. To perfect title, the survivor only needs to file a death certificate with the local registrar of deeds.
Probate Terminology (p. 43)
· Personal representative: fiduciary who oversees the winding up of the decedent’s affairs.
o Executor: A decedent dies testate. Named in the decedent’s will to execute the will and administer the probate estate.
o Administrator: When the will does not name an executor, the named executor is unable or unwilling to serve, or the decedent dies intestate, the court will name a personal representative. Selected from a statutory list of persons who are given preference, typically in the following order: surviving spouse, children, parents, siblings, and creditors.
· Probate court: various names by state to state
· A person dying testate devises real property to devisees.
· A person dying testate bequeaths personal property to legatees.
· Heir (=next-of-kin): a person designated by the applicable statute to take a decedent’s intestate property. No living person has heirs. Identified only by reference to the applicable statute at the decedent’s death.
· Heirs Apparent: The person who would inherit the property of A, a living person, if A died within the next hour. Only have an expectancy that is both contingent on his surviving A and defeasible by A’s contrary disposition by will, will substitute, or lifetime gift.
· Letters testamentary (to an executor) or letters of administration (to an administrator): state authorization of the person to act on behalf of the estate
Functions of Probate
· Provide evidence of transfer of title to the new owners
· Protect creditors by providing a procedure for payment of debts; and
· Distribute the decedent’s property to those intended after the decedent’s creditors are paid
· Choice of Law
o Personal Property: where the decedent was domiciled at death
o Real Property: where property is located
o Primary or domiciliary jurisdiction: where the decedent was domiciled at death
o Ancillary probate: for real property that is located in another jurisdiction
· Common form probate (informal probate, UPC § 3-301): ex parte proceeding. No notice or process to any person. Due execution of the will is proved by the oath of the executor or other witnesses. Within 30 days, personal representative must mail notice to every interested party, including heir apparently disinherited by the will. UPC § 3-705. Any such party may file a petition for formal probate under UPC § 3-402.
· Solemn form probate (formal probate, UPC § 3-401): An interested party files a caveat, compelling probate of the will in solemn form. Notice to interested parties given by citation. Due execution of the will proved by the testimony of the attesting witnesses, involving greater court participation.
· Supervised and unsupervised administration:
o Under supervised administration, personal representative cannot make a distribution to the beneficiaries without approval from the court. Under unsupervised administration, he can without approval from the court. Under UPC, unsupervised administration is the norm, but an interested party can petition for supervised administration at any time. UPC § 3-502.
· Nonclaim statute, UPC § 3-803: Creditors need to file claims within a specified time period
o Barring claims not filed within 2 to 6 months upon commencement of the probate proceeding (4 months under UPC).
§ Publication in a newspaper only.
o Barring claims not filed within 1 to 5 years upon the decedent’s death (1 year under UPC).
§ Self-executing. Time runs whether or not probate proceedings are ever commenced.
· Closing the estate: In a supervised administration, personal representative remains liable until approved by the court. Also, not discharged from fiduciary responsibility until the court grants discharge. In an unsupervised administration, by filing a sworn statement that he has published notice to creditors, administered the estate, paid all claims, and sent a statement and accounting to al known distributes.
Summary of the UPC Intestacy Provisions
1990 UPC § 2-101 to 2-106 (rev. 2008)
S; no D; no P
All to S
All to S only if all D are also S’s and S’s only kids
$225K + ½ to S if D are also S’s but S has others; rest D
$150K + ½ to S if one or more D is not S’s; rest D
S; no D; P
$300K + ¾ to S; rest P
no S; D
All to D (per capita at each generation)
no S; no D; P
All to P
no S; no D; no P; B or S
B or S (per capita at each generation)
no S; no D; no P; no B or S; G or GD
½ paternal G or GD and ½ maternal G or GD (all to G or, if none, per capita at each GD generation); or
all to maternal or paternal G or GD if no survivors on the other side (all to G or, if none, per capita at each GD generation)
o (d) [Individual Adopted after Death of Both Genetic Parents.] A parent-child relationship exists between both genetic parents and an individual who is adopted after the death of both genetic parents, but only for the purpose of the right of the adoptee or a descendant of the adoptee to inherit through either genetic parent.
· Applying UPC to Hall: The four children, adopted by Jim, would have inherited from William Jr.
Minary v. Citizens Fidelity Bank, 419 S.W.2d 340 (Ky. 1967).
· Facts: Amelia died testate. Her will devised her residuary estate in trust to pay the income to her husband and three sons, James, Thomas, and Alfred, for their respective lives. The trust was to terminate upon the death of the last surviving beneficiary. After termination, the remaining estate shall be distributed to Amelia’s then surviving heirs according to Kentucky laws then in force, and if none, then to the church. Amelia’s husband died, then James died without descendants, then Thomas died leaving two children. Alfred married Myra in 1934, but adopted her as his child in 1959. Alfred died in 1963. Does Myra inherit from Amelia?
· Holding: No. Adoption of an adult for the purpose of bringing that person under the provisions of a preexisting testamentary instrument when he clearly was not intended to be so covered should not be permitted.
· UPC § 2-705 (2008)
o (e) [Transferor Not Genetic Parent.] In construing a dispositive provision of a transferor who is not the genetic parent, a child of a genetic parent is not considered the child of the genetic parent unless the genetic parent, a relative of the genetic parent, or the spouse or surviving spouse of the genetic parent or of a relative of the genetic parent functioned as a parent of the child before the child reached 18 years of age
o (f) [Transferor Not Adoptive Parent.] In construing a dispositive provision of a transferor who is not the adoptive parent, an adoptee is not considered the child of the adoptive parent unless:
§ (1) the adoption took place before the adoptee reached 18 years of age;
§ (2) the adoptive parent was the adoptee’s stepparent or foster parent; or
§ (3) the adoptive parent functioned as a parent of the adoptee before the adoptee reached 18 years of age.
Uniform Parentage Act § 204 (2000, rev. 2002) establishes a rebuttable presumption that a child born to a woman within 300 days after the death of her husband is a child of that husband. Section 707 (2000, rev. 2002) recognizes inheritance rights for a posthumously conceived child if the parent consented to posthumous conception in writing.
Trimble v. Gordon, 430 U.S. 762 (1977) struck down an Illinois statute denying a nonmarital child inheritance rights from the father as a denial of equal protection. Lalli v. Lalli, 439 U.S. 259 (1978) upheld a New York statute permitting inheritance by a nonmarital child from the child’s father only if the father had married the mother or had been formally adjudicated the father by a court during a father’s lifetime.
Reproductive Technology and New Forms of Parentage
Posthumously Conceived Genetic Childeren
Woodward v. Commissioner of Social Security, 760 N.E.2d 257 (Mass. 2002).