Select Page

Trusts and Estates
University of Michigan School of Law
Waggoner, Lawrence W.

755 Trusts and Estates

Professor Waggoner

Fall 2003

I. INTRODUCTION TO FAMILY PROPERTY LAW

A. There are two reform organizations that are interested in Private Law Reform
1. American Law Institute (ALI)
2. Uniform Law Commission
B. Uniform Probate Code (UPC) (1969)
1. The code responded to the problem of the probate process which was expensive and slow.
2. 1969 code was met w/ a lot of resistance. Substantive reform was minimal, rather than procedural.
3. 1990 revisions were much better. Mich has passed 1990 revision.
C. Uniform Trusts Code (UTC)
1. Completed in 2000
2. Codification of trust law, coming mostly from case law
3. Law of trusts derived from equity
4. Lawyers are receptive to UTC b/c in many j-d’s not much case law on it.
D. Restatements
1. Volume 1 & 2 of Rd. 3rd of Property are published and done in coordination w/ Uniform Acts.

E. REFORM MOVEMENTS
1. Intent-Defeating Formalism (getting rid of this)
· The law in this area is rived w/ intent defeating formula.
· Statutory formalities for the execution of a valid will are the root cause of the intent – defeating formalism
· The cts strictly apply the statutory formalities
· In most strict formality states, you need to have 2 witnesses. All wit. Have to be together at the same time to sign.
· One of the objectives the reform movement has is breaking down strict statutory formality procedures
F. Probate/Non Probate Dichotomy
1. So much of wealth that is transferred at death is done by non-probate transfer
2. Non Probate Transfer (will substitutes): w/ these types of documents, there are virtually no formalities. But, they serve virtually the same objective
· The structure of the probate/non probate documents are the difference. If a mistake is made on a non-probate transfer, it can be corrected. We are treating the document as if there is a strong presumption that it is correct in probate transfers. But w/ non probate documents there are non-statutory formalities.
3. In probate/non probate area we have Rule of Construction, so that the language in wills can be interpreted the same way.
4. Probate property is property that you own in the full sense of the word at your death.
5. Non probate transfers aren’t owned at death b/c the ownership shifts to the beneficiary at death. Ex: G lives and dies. G had taken out a life insurance policy. G will designate primary and contingent beneficiaries of the policy – the person must be living at time of designation.
6. Most of the assets people have will be transferred during life (non-probate transfers).
G. Changing Demographics and Changes in the Family
1. Marriage/Divorce/Remarriage Phenomenon. Produces many more sets of children and step children
2. There is an increase prevalence of Unmarried Partners (homo and hetero). There are 3 states that grant intestacy rights to s-s partners who can not get married. There aren’t really any laws for hetero partners who don’t get married and want intestacy rights.
3. Life Expectancy: technically for women it is 79.5 for men, 74. There is a high degree of infant mortality. A lot of babies die in the first year. Infant mortality brings down the life expectancy. Implications of Increased Longevity:
· People are waiting longer to inherit money.
· Defined Contributions Plans (retirement): one where your employer and you contribute each paycheck to an account and what you have for your retirement depends on how the investment goes. Increased longevity will make corps. Shift over to defined contributions plans. If you have one, the worry is that you could outlive your $ unless you anuitize it,although the paychecks will be smaller.
· Post Widow Romanc

unts of $. Can be shares of stock
3. Residuary bequests: targets property that wasn’t specifically targeted into the first 2. Ex: all the rest of my property that isn’t n named will go to A.
· When a will doesn’t contain a residuary clause, it is usually a mistake by the atty’ who drafted it.
D. Partial Intestacy: There are situations when there are residuary clauses, but there is a gap in the coverage. Then you have a partial intestacy. Ex:
· Burnett v. First Commercial Trust Co
No provision in the will describing the distribution of personal property, but only the land. The personal property was worth much more than the land.
Ct: even if the atty made a mistake (he was supposed to add both personal and land in the will), the personal property passes by intestacy.
· Ex of Another problem with Partial Intestacy:
Income to A for life, remainder in corpus to B if B survives A. Atty forgot to put in will what happens if B doesn’t survive A. If B does predecease A, the T’s heirs received everything. The heirs of G are determined at G’s death and they have a fixed interest. We Say: G’s heirs took by intestacy.
· EX: G devises “To A for life (A’s interest at G’s death), then to A’s heirs (they have an expectancy).” A’s heirs apparent have a future interest (contingent interest- the heirs apparent have to survive G) in G’s property. Suppose A dies without a will. What happens?
A: the Trust fund still goes to A’s heirs
Q: A’s heirs have an expectancy in what property?