Estates & Trusts Outline
Probate v. Nonprobate Property
Probate Property: property that passes under the decedent’s will or by intestacy.
Nonprobate Property: property passing under an inter vivos transaction:
Joint tenancy property (under right of survivorship)
POD accounts (i.e., pension plans, IRAs, etc)
Interests in living trust
Life estate remainder
Functions of Probate
Provides evidence of transfer of title to the new owners
Protects creditors by requiring payment of debts
Distributes decedent’s property to those intended after the creditors are paid.
File Petition for Probate (if there is a will), or Petition for Administration (no will)
Who can file: an interested party (e.g. executor, devisee, creditor, intestate heir)
Personal Representative (PR) is appointed by the court:
Executor (if there is a will)
Administrator (no will)
Authorization of the PR from the Probate Court:
letters of testamentary (will)
letters of administration (no will)
authorized for various duties by the court, but
activities must be approved by probate court in a hearing
Inventory & gather assets of decedent
Manage assets during administration until final distribution
Pay creditors, including paying taxes
Distribute assets to devisees
Notice must be given to Heirs, Devisees and Creditors before a hearing
Closing the Estate:
Final decree made by the court; binding except for the usual appeals process
UPC SOL: No probate proceeding, formal or informal, may be initiated more than 3 years after the date of death. Common law permits a will to be probated at any time. [KS has 6 mos. SOL, KSA 59-617].
Contesting a will probate: claim by someone w/ direct interest that will was not properly executed, was revoked, or superceded by a later will.
Barring creditors of the decedent: Every state has one of two types of “nonclaim statutes:”
(1) bars claims not filed w/I short period after probate (2-6 mos.) [KSA 59-2239 gives 4 mos.], or
(2) bars claims not filed w/I longer period after death, whether or not probate begun (1-5 yrs.)
Types of Probate Procedures
Formal/Personal Probate Process
File petition for administration or intestacy containing [KSA 59-2219] Name and address of heirs, devisees
PR is appointed and begins responsibilities
PR actions must be approved at hearings after notice is given to all interested parties.
PR files a petition for Final Settlement & Approval of Accounts.
PR is discharged and the estate is closed out
File a petition containing: [KSA 59-3201] List of heirs, devisees
Inventory of assets
List of debts owed
Statement of a list of funds
Proposed final order
PR authorized generally w/o court approval and hearings requiring notice to:
Like formal probate
i. Final accounting
ii. Notice to all parties
iii. Chance for a party to make an objection
iv. Decree of final statement
File a petition containing: [KSA 59-3301] how assets should be distributed
Court has initial hearing to decide if informal probate is appropriate and family allowance; if allowed PR is on their own.
One is not necessarily entitled to informal probate, but must petition for it
What is considered:
i. size of estate
ii. solvency of estate
iii. cost of administration
Intestate Succession: distribution of assets of a person who dies without a will.
Surviving Spouse Share:
Typically surviving spouse gets 100% of assets if no other surviving issue
Typically, if there are surviving issue:
S: ½ I: ½ OR
UPC: If all decedent’s issue are spouse’s issue, spouse gets 100%
§2-102: Spouse’s take is lowered if living parents of the decedent, living issue of the spouse that are not issue of the decedent, or if there are surviving issue that are issue of the decedent but not issue of the spouse.
Shares of Descendants: Direct Lineal
· After spouses share is set aside children and issue of deceased children take the remainder of the property to the exclusion of everyone else.
Representation: child’s descendant represent dead child and divide the child’s share among themselves.
Two questions addressed by each system:
(1) To which generational level do we apply the formula?
(2) Which generational levels take per capita and which levels take per stirpes?
American Per Capita w/ representation: apply formula to 1st level w/ a survivor, that level takes per capita, survivors of deeper levels take per stirpes (representation).
English Strict Per Stirpes: apply formula to child level, and only child level take per capita, everyone else takes per stirpes (representation).
UPC § 2-106: apply formula to 1st level w/ a survivor, survivors at each generational level takes per capita.
These systems apply the same regardless of whether you are distributing the estate among issues or collaterals.
Rights of Ancestors and Collaterals:
· Ancestors: those before you in your
g by representation.
UPC 2-106: advancement is not binding on child’s issue nor put in hotchpot.
Release: apparent heir gives up future interests in consideration for receipt of something given to them in advance.
Evidenced by a written document.
If the person with the release has descendants, the descendants’ share is decided by whether the jurisdiction follows per stirpes or per capita.
Per stirpes, descendant is bound by release, b/c stepping into shoes.
Per capita then descendant is not bound by the release
Release v. Advancement: Release is a full satisfaction. Advancement is a part satisfaction. Whether it is an advancement or release is determined by intent.
Assignment/Transfer of Expectancy
Expectancy of inheritance is not a legal interest and cannot be transferred/assigned at law, b/c there is no interest to be conveyed. The transaction is treated as if it never occurred.
Exception: transaction is enforced as a contract if transferee gives adequate consideration for purported transfer of an expectancy. Knowledge/consent by the source of the expectancy (the decedent) is not needed.
Gifts/Assignments after death: after death there is no expectancy, assignment is valid.
X takes risks in entering an assignment w/ C.
(1) If C predeceases decedent then there is no inheritance for C to give to X.
(2) If decedent disinherits C then X gets nothing.
(3) Simple K law: if C has a child, GC, and then C predeceases decedent, X is entitled to nothing from C b/c C cannot bind GC to a contract w/o GC’s consent.
Bars to Succession
Homicide: statutes prevent killer from taking from estate of person he has killed.
3 different rules regarding succession after homicide
Legal title passed to slayer and may be retained by him in spite of his crime; just like intestate succession. (perhaps inequitable)
Legal title will not pass to slayer b/c no one should be allowed to profit from his own crime. (additional punishment/deviates from intestate succession)
§UPC 2-803(b): usual view is that killer is treated as having predeceased or disclaimed interest in the estate.
Legal title passes to slayer but equity holds him to be a constructive trustee for heirs of decedent. (