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Estates and Trusts
University of Kansas School of Law
DeLaTorre, Phillip E.

Estates and Trusts
De La Torre

I. Introduction
a. Probate
i. Definition
1. Process by which court decides either:
a. Particular will is the will of decedent, or
b. Decedent died intestate
2. Also determines claims against the estate.
a. Especially claims by creditors
b. Probate either bars or pays claims.
ii. 3 functions of probate
1. Provide final documentation of transfer of title to new owner. Particularly stock or land which involve certificate of titles.
2. Creditors (pay them off or bar their claim if not brought within the proper amount of time.
a. Triggers time limitation for creditors to bring claims.
b. Protects creditors by ensuring payment of debt if proper steps are followed.
3. Distribute assets to right people
a. Officially, tangibly distribute those assets.
iii. Types of property
1. Probate property – Property disposed of by testator’s will or intestate succession.
2. Non-probate property
a. Property passing by an intervivos transaction. Also called will substitutes or non-probate transfers.
b. Types of will substitutes
i. Joint tenancy property
-decedent’s interest vanishes at death & survivor takes the whole
ii. Life insurance
-goes to beneficiary b/c of what K says before he/she dies
iii. Contracts with payable upon death clauses:
1. IRA’s
2. Pension plans
3. Bank accounts
iv. Intervivos trust arrangements
-known as a living trust; passed to living person when decedent dies
v. Life estate with remainder interests
-get the asset b/c you’re the remainder, but not because of probate
iv. Probate process (applies only to probate property)
1. Typically initiated by filing a petition for probate if there is a will, if no will file a petition for administration. People must have notice of hearing to argue rights.
2. Once petition is filed a personal representative (PR) is appointed by the probate court.
a. If a will, called an executor
b. If not a will, called an administrator
c. Authorization given to PR is letters testamentary if a will and letters of administration if not a will.
d. Duties of PR
i. Inventory and collect assets of the decedent (gathering process).
ii. Manage assets during administration process
iii. Review and pay claims of creditors
iv. Tangibly distribute remaining assets to those who are entitled to it.
e. Probate court makes decisions throughout the process for which there must be notice (through a hearing)

Common Law:

Will

No Will

Comments

Decedent Called:

Testator (Testatrix=Fe)

Intestate

Succession Called:

Devise (land)
Bequest (Personal)
Legacy ($)

Descent or Inheritance
Distrib or Inheritance
Distrib or Inheritance

Reason for land/nonland distinction was separate statutes of succession

Recipient:

Devisee (land)
Legatee (Personal)
Legatee ($)

Heir
Distributee
Distributee

UPC:

Will

No Will

Comments

Decedent Called:

Testator

Intestate

Succession Called:

Devise

Intestate Succession

Recipient:

Devisee

Heir

• UPC simplifies everything
• Doesn’t draw distinction b/w land, personal, and $
3. Type of probate
a. Formal probate
i. Process may be initiated by any interested party who files the right petition.
-person must have a tangible interest
ii. Interested party – devisee, creditor, heir, executor.
iii. KSA 59-2219 – Petitioner for administration must include intestate heir and probable value and character of assets, name and address of decedent.
iv. KSA 59-2220 – If a will, petition must include devisees, and legatees, executor and scrivener of the will (but remember, it must be an interested party).
v. Most steps taken by the PR must be approved by the probate court, at a hearing and all parties must have notice of hearing, such as payment to creditors or distributions.
vi. To wrap up, PR must file a petition of final settlement of all accounts. PR basically says “Here’s what I think should be done w/ the assets.”
vii. Assets are then distributed
b. Simplified administration – KSA 59-3201 to 3206
i. PR is authorized at initial hearing to pay creditors, sell property, and make distribution without court supervision.
ii. Have a final judicial accounting with hearing and proper notice and final decree.
iii. Key advantage is don’t have court supervision as in a formal proceeding. Therefore, don’t have to keep running to ct
iv. Less formal than formal probate
c. Informal administration – KSA 59-3301 to 3306
i. Less formal than simplified, less ct involvement
ii. Starts out again by filing a petition. Petition must lay out certain pieces of information such as distributions
iii. Key – When petition is filed it is generally the first, last, and only time the probate court is involved. Therefore, it’s the only shot to go to ct.
iv. Lot quicker, less expensive
d. Both simplified and informal
i. Decedent estate not necessarily entitled to
ii. Can petition for, up to court to allow
iii. Factors in courts decision
1. Any contested matter to be resolved
2. Size of the estate
3. Solvency of the estate
4. Degree of kinship of heirs
5. Likely cost of formal administration
e. Statute of limitations
i. Most states specify when a petitioner for administration or probate can be filed. If don’t file with in time limit, barred from filing.
ii. KSA 59-617 – Petition must be filed within 6 months of death if a will.
iii. UPC 3-108 – 3 years
iv. Non-claim statute
1. Time in which creditor can assert claim or be forever barred.
2. KSA 59-2239
a. Creditor must file within 4 months
b. Statute triggered by notice being given to creditors
4. Contesting of the will
a. Attempt to prevent will from being executed in probate on basis (1) will is revoked, (2)superseded by later will, or (3) will was not properly executed
b. To contest must have a direct pecuniary interest in the estate. If too late, then barred forever.
c. KSA 59-2225
i. Contest must be done during administration process, before decree of final settlement.
ii. KSA 59-2226 – A competing will may be admitted to probate even if another will is already admitted. Must do within 6 months of death – KSA 59-617 (SOL).
v. Is probate necessary (remember: people don’t like it–expensive, slow, publicity)
1. When can you dispense with it.
a. Put assets in will substitutes
b. But client is surrendering some control by doing so.
2. Probate necessary when assets need documents of title to be formal, recognized, and filed, such as title to a house or car, certificate of stock.
3. Small bank accounts, wages and estates can do without probate in some states based on statute.
vi. Terminology
1. See handout #1
2. Difference in terminology for realty and personalty at common law was because interests were treated differently. Today treat the interest the same.
II. Intestate Succession
-based on statute.
-state by state differences
a. Types and definition
i. Definition – distribution of property of someone who died without a will.
ii. Types
1. Total intestacy – no will whatsoever
2. Partial intestacy – dies with a will which disposes of some assets, but not all where you then use statute to distribute assets.
3. Will or trust has intestate succession provision only.
-i.e. will or trust says, “These assets should only go to my intestator.”
iii. Probate estate
1. Property disposed of by testator’s will or intestate succession statute.
2. Distinguished from non-probate property such as life insurance or joint tenancy property
-Known as will substitutes.
iv. Policy to adopt intestate succession statute.
1. Legislative (statutory) wills to take care of you if you have forgotten to make a will.
2. Goal should be to approximate what the average person would want done. Legislature steps in and does that for you.
b. Common Features
i. Provide for surviving spouse.
1. Will get all if no issue (children)
2. Issue – direct lineal descendants; children, grandchildren, great-grandchildren, etc. (not collaterals such as aunts, uncles, cousins)
3. If surviving spouse & no surviving issues – spouse receives all.
4. If have surviving issue, surviving spouse typically receives a percentage of total estate such as 1/3 or ½, and it may depend on number of issue(s).
ii. UPC 2-102 – Share of surviving spouse
1. 2-102(1): Envisions all surviving descendants of decedent are same as surviving spouse. Surviving spouse gets all of the estate if no surviving descendants or parents. Basically, all of her kids are survivor’s descendants, and vice versa.
2. 2-102(2): Parents of decedent get ¼ of estate after the first [$200,000]goes to spouse if no surviving descendants.
3. 2-102(3): If surviving spouse has descendants not of decedent, surviving spouse gets $150,000 plus ½ of the remaining balance.
-Why? Because most people would not want their money to go to issues that are not of the decedents.
4. 2-102(4): If decedent has surviving descendants not descendants of the surviving spouse, then spouse gets 100,000 plus ½ of the remaining balance.
-Why? Average person would want to set aside assets for issues of a previous marriage.
5. KS rules 59-504 to 508
a. Surviving spouse gets ½ and surviving issue get ½.
b. Only have a surviving spouse – then spouse gets all.
c. Only surviving issue – get all.
iii. Share of descendants (direct lineal descendents)
1. 2 methods
a. Per capita – Applying at a given generational level, every one at that level take equally and ignore what prior generations took.
b. Per stirpes – Applying at a given generational level, each person at that level steps into shoes of the immediate ancestor and takes at that level.
c. Key is the formula
i. Number of survivors at that level, plus number of non-survivors who leave surviving issue.
ii. Key: To count as a share in the formula must survive the decedent or leave surviving issue.
iii. Stop-gap: If have a survivor who receive an interest and survivor has descendants still alive, the interest stops at the survivor and descendants of survivor receive nothing.
2. 3 main systems of distribution
a. 2 issues each system addresses
i. At what generational level do you apply the formula
ii. Which generational level takes per capita and which takes per stirpes.
b. The 3 systems
i. English per stirpes (strict per stirpes)
1. Apply formula at child level, even if no surviving children.
2. Only survivors at child level take per capita, all others take per stirpes.
-very prior generation conscious
ii. Modern (American) per stirpes – KS and the majority approach.
1. Apply formula at 1st generational level that has a survivor.
2. Survivors at 1st generational level that has a survivor take per capita. Thereafter each generation takes per stirpes.
3. English and American system will have same results if there is at least one survivor at the child level.
-serves as a hybrid in terms of generation consciousness
iii. UPC 2-106: Per capita at each generational level.
1. Apply formula at 1st level with a survivor.
2. Thereafter each generational level takes per capita without regard to family size or prior ancestors.
-not at all generation conscious
.
3. Ancestors and Collaterals
a. Definitions
i. Ancestors – Those who come before person in direct vertical line: parents, grandparents, great grandparents. Does not include aunts and uncles.
ii. Collateral – Someone related to person because they have an ancestor in common, example – brother and sister have parents in common.
b. Preferences
i. Strong preference for issues (vertical heirs; descendents) over ancestors and collateral heirs.
ii. If have any issue or lineal descendants, then they preclude collateral heirs from receiving a share. Any issue will stop-gap ancestors and collateral.
c. Prioritize collateral heirs
i. Degree of relationship test – Count steps to determine rank – the lower number wins.
ii. See chart on page 79
iii. Higher ranked collateral doesn’t always lose to the lower ranked. This is in jurisdictions that adhere to per stirpes.
d. Adjustments to formula
i. Apply at 1st generat

able as it is a mere expectancy.
b. Contract law steps in and enforces if there is consideration.
c. No consent by ancestor is needed to assign.
2. If ancestor dies and then descendant assigns, enforceable even if it is gratuitous. No longer a mere expectancy. Again no consent is needed. Enforceable by 3rd party.
3. Should assignment be binding on grandchild
a. Courts say GC should receive C’s share and 3rd party gets nothing. C can’t assign away GC’s rights by contract. Assumption is C assigned rights and then died before D.
b. If C released to D, then GC is bound by it.
c. Rationale
i. With release D was involved and allowed. Shows intent, whereas assignment is to X, and outside 3rd party.
ii. Money in release comes from D, for assignment it comes from the 3d party.
4. X’s risks
a. If assignor predeceases D, assignor or assignee does not have a right.
b. If D leaves a will excluding C then X will also be excluded.
g. Bars to succession
i. Homicide—In re Estate of Mahoney p 126àct uses option 3 if voluntary or worse
1. Premise to homicide
a. Ancestor with potential intestate successor
b. Means there is a contingency, heir must survive ancestor to receive share.
2. 3 possible approaches in absence of a special statute when heir murders ancestor.
a. Killer gets property like intestate succession statute says.
b. Legal title does not pass to heir and goes to other heirs.
c. Legal title goes to killer only nominally and killer holds constructive title for other heirs as a matter of equity.
3. Analysis of choices
a. Option 1 is bad: Do not want killer to benefit from evil deed. Also don’t want to encourage killing.
b. Option 2: Similar to posing an additional punishment on killer and would be a case of court tampering with intestate succession statute. Don’t want to interfere with legislature.
c. Option 3 is the best option.
i. Killer does not profit
ii. Not tampering with intestate succession statute.
iii. Killer is compelled to transfer share to other heirs.
4. Courts draw line at voluntary manslaughter and involuntary manslaughter to apply option 3. If voluntary or worse, apply Mahoney. If involuntary, heir gets the money. Matter of intent.
5. Miscellaneous
a. Benefit of being insane – lack requirement of intent.
b. Application of finding of guilt in criminal trial and civil trial
i. Majority rule – Prior conviction is conclusive in a later civil trial. UPC 2-803(a) agrees with the majority rule.
ii. If acquitted in a criminal case, not binding in a later civil case. 2-803(a) agrees. No collateral estoppel.
iii. Reason for rules is due to higher burden of proof in a criminal trial—beyond a reasonable doubt v. preponderance of the evidence.
c. Property held by killer and victim in joint tenancy
i. Majority rule – Joint tenancy property is severed and becomes tenancy in common and killer receives ½ and victim’s estate receives ½ of property.
ii. Policy cost – Killer can lose out on property if he does not survive the joint tenant, by killing joint tenant, removes the contingency and therefore rule encourages such conduct.
d. Killer who is holder of remainder kills person with the life estate.
i. Killer should not be rewarded for evil deeds.
ii. Vested remainder – Constructive trust for life tenant and then eventually vest remainder.
iii. Contingent remainder – Some courts say killer shouldn’t receive anything.
e. Killer kills ancestor and then commits suicide.
i. Some courts say require a conviction and therefore since will not have a conviction, property will pass to killer’s estate and the killer loses nothing.
ii. Other courts set up a constructive trust if it can be shown at the civil trial some evidence of murder. If so, the killer forfeits his share.
ii. Disclaimer
1. Assumptions
a. Ancestor dies and heir is set to receive intestate share.
b. However heir does not want to receive inheritance for tax purposes.
2. Traditional rule
a. Cannot effectively disclaim share and therefore are stuck with share.
b. Opposite of an intervivos gift – Can negate by simply refusing to accept. Devises can also be disclaimed. So intestate succession is the wrinkle.
c. Rationale – Legislature has dictated that heir shall receive inheritance and it is not up to the court to undermine state.
3. Today’s rule
a. Many states by special statute allow disclaimer.
4. Consequences of disclaiming
a. Treat as if disclaimer predeceased decedent.
b. Applies to joint tenancy as well. So if there is a special statute, you can disclaim survivorship rights. Then it would become a tenancy in common.
c. Cannot do anything to property that constitutes acceptance, such as moving into house.
5. Hypo
a. A and B are kids of O. A has 4 kids and B has 1. B has predeceased O. So intestate heirs are A and C. A wants to disclaim. Assume there is a statute that allows disclaimers.
b. Applying American method treat A as predeceasing O. Therefore A’s kids and B’s child split equally 5 ways.
c. If A does not disclaim, A gets 50% and B’s child (C) would get 50%.
d. 2-801(d)(1) tries to rectify by saying only the interest disclaimed by A would pass to A’s kids. So then C would get 50% and A’s kids would split the remaining 50% equally at 12.5%
e. If A predeceased O and B, and B then disclaims. C gets screwed the same as letter b above, unless 2-801(d)(1) applies.
6. Cases
a. Troy vs. Hart p136
i. Against public policy to allow someone to relinquish his ability to be self-reliant, even if only temporary, and still be eligible for benefits like Medicaid and Medicare.
ii. Therefore he has a duty to accept his intestate share
Disclaimer is effective; but sisters got to keep