Estates and Trusts Outline

Estates and Trusts
Professor English

Introduction

I) Overview of Probate Process
A) RSMo: §473.780
B) Phone call saying mom or dad just died. Initial questions:
1) What type of assets did decedent own?
2) Did decedent have a will?
3) What does the will provide?
4) Who takes if no will?
5) Who will handle things?
C) Terminology →
1) Probate Transfers → If the certificate of title has the decedents name alone, then the item is probate (doesn’t tell where it is supposed to go).
(a) Real Estate
(i) Decedent owns property in fee simple (only has X’s name on the deed)
(ii) Tenants in common (1/2 of an undivided interest)
(b) Personal Property
(i) Absolute ownership → IE: a bank account in X’s name only; X’s estates and trusts book; etc.
(c) A will only controls items that are probate!!!!!!!!!
2) Nonprobate transfers → If the document of title tells you who gets the property when the decedent dies, this is a nonprobate asset.
(a) Real Property
(i) Property held in Joint Tenancy (upon death of one joint tenant the survivor(s) own the property). The deed itself tells us who gets it at one of the owner’s death.
(ii) Property held in Tenancy by the entireties (deed to a married couple creates a tenancy by the entireties. Survivor takes all.). Again, the deed tells us who gets the property after the decedent dies.
(iii) How do you clear the title on jointly held property?
(a) Nothing really happens until the survivor tries to sell the land
(b) If A & B own property in Joint Tenancy and A dies and B wants to sell the land, the title company will need some proof the B is sole owner of the property now.
(c) You clear the title to the property by bringing in a certified death certificate to the bank.
(b) Joint Bank accounts: One of the attributes of a joint bank account is that the survivor takes all. (contract)
(i) You clear title to a joint bank account by bringing a certified death certificate to the bank.
(ii) Once you do this, the title is cleared and the joint account owner has title of the bank.
(c) Beneficiary designation Assets
(i) Life Insurance
(a) A contract w/ 3 parties:
i. Insured signs contract with
ii. Insurance Company for money consideration agrees to pay policy proceeds to
iii. Beneficiary (can enforce contract against insurance company)
(b) Again, this is a situation where the document (contract) tells you who gets the money/benefit
(c) Again, transferring and clearing title requires showing a certified death certificate
(ii) Retirement Plans sometimes allow the employee to designate a beneficiary to keep receiving benefits of retirement plan after the employee’s death. (Again, a certified death certificate is needed)
(d) Trusts (will be studied in more detail later)
3) Will → Tells who will receive the individual’s probate assets
(a) Will isn’t valid until approved by a court; Court doesn’t have jurisdiction until individual is deceased.
(a) Gifts made under a will →
(i) Devise(s) → person who receives gift is known as a devisee
(ii) Legacy → person who receives gift is known as a legatee
(iii) Bequest
4) Testate → Person who dies with a will dies testate
5) Testator → person who made the will
6) Intestate → Person who dies without a will dies intestate
7) Probate→
8) Intestate succession
9) Succession Statute → tells you who the heirs are and how much they take.
10) Heirs→
11) Next-of-kin→
12) Personal Representative (PR) → Manager of the estate; administrating/settling the estate (term remains the same regardless of whether or not there is a will)
(a) Older Terms:
(i) Executor→ Person named in will and who accepts job of settling the estate
(ii) Administrator→ no will; an individual (usually someone related) is named administrator
II) Process of Will Administration:
A) Personal Representative appointed:
1) If there is a will, first choice for a personal representative is named in the will as “executor”
(a) If person named in will is dead at time of T’s death, Court will appoint someone else
(b) Person does not become an executor unless takes on job
2) If no will, state statute will provide a hierarchy from which to choose an “administrator”
B) Appropriate level of judicial supervision determined:
1) Supervised → where court involvement is most intense
2) Independent → where court involvement is less intense
(a) Under MO law 473.780 this can happen in 3 situations:
(i) Will authorizes independent administration
(ii) If will is silent on the matter, it can be authorized if the devisees consent (easier to say than do; what if one of the devisees is a minor and can’t consent, or is incapacitated. Have to have unanimity for this to work)
(iii) If court approves (usually if will doesn’t authorize it and devisees don’t consent, court won’t grant it.)
C) Probate and Nonprobate Assets:
1) Non-probate assets
(a) Not uncommon to have all assets in non-probate form.
(b) Will must be filed even if there area only non-probate assts
(c) If nonprobate asset, you will need certified death certificates to clear the title for the bulk of items (this is not the case with Trusts) [This is true regardless of whether or not there is a will] 2) Probate assets→
(a) Petition the court requesting:
(i) Order admitting the will to probate (Will must be approved by the Ct)
(ii) Order appointing a PR
(b) Will will get a hearing date.
(c) Lawyer will send out notice of hearing, send to devisees and heirs.→ Heirs must be given notification b/c it is a violation of due process not to do so, since w/o notice the heirs may lose their right to contest the w