Wills and Trusts
CHAPTER 1: INTRODUCTION TO WILLS, TRUSTS, AND ESTATES
I. THE POWER TO TRANSFER PROPETY AT DEATH
a. Right vs. Privilege
i. Governmental Power to Regulate: Irving Trust Co. v. Day, “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
ii. Government cannot abrogate completely: Hodel v. Irving, barring inheritance of Indian land allotments and providing for “escheat” to the tribe is considered a taking under the Takings Clause of the 5th amendment.
II. “DEAD HAND” CONTROL
a. Definition: Decedent conditions a gift to a beneficiary upon a beneficiary behaving in a certain way. (exercising control over beneficiary after death)
b. Valid unless:
i. Condition constitutes a complete restraint on marriage (partial restraint probably okay), requires a beneficiary to practice a certain religion, encourages divorce or family strife, or directs the destruction of property
c. Remedy: If condition violates public policy then:
i. Gift-over clause: a clause in the instrument that provides where the gift is to go if the condition or restriction is not satisfied
ii. No gift-over clause: permit beneficiary, who is subject to the condition, to take the property free and clear of any conditions
III. WHO TAKES DECEDENT’S PROPERTY
a. Probate Property:
i. Passes pursuant to the terms of the decedent’s will, otherwise through intestacy
b. Non-Probate Property:
i. Passes pursuant to the terms of the non-probate instrument
ii. Limited to:
1. Property held in JT
2. Life insurance contracts (modern trend expands this exception to include all contracts with payable-on-death clauses)
3. Legal life estates and remainders
4. Inter vivos trusts
IV. THE PROBATE PROCESS: AN OVERVIEW
a. Default:
i. Probate is the default. The decedent must take affirmative steps (execute a valid will or create a valid non-probate instrument) to avoid having the property pass through probate.
b. Process:
i. Opening Probate:
1. Primary Jurisdiction: The probate court in the county where the decedent was domiciled at time of death has primary jurisdiction.
a. Probate is opened by presenting the decedent’s death certificate. Depending on the situation, the probate court issues “letters testamentary” appointing executor or “letters of administration” appointing administrator.
b. Majority of jurisdiction require notice to interested parties before selection and appointment of the executor or administrator
2. Ancillary Jurisdiction: may be necessary if decedent owned real property located in a different jurisdiction from his or her domicile.
c. Personal Representative’s Powers:
i. Some courts require probate court supervision every step of the way, while other states permit unsupervised administration with one final accounting being filed with the probate court at the end.
d. Personal Representative’s Duties:
i. Inventory decedent’s assets
ii. Give notice to and pay creditors
iii. Distribute decedent’s probate property
e. Avoiding Probate:
i. Due to the costs and hassles inherent in probate, many people try to avoid it.
1. “Non-titled” probate assets: Probate can be avoided if all the decedent’s property is non-titled personal property. But if takers opt not to open probate, those who take the decedent’s property may take subject to creditors’ claims.
V. ESTATE PLANNING
a. Key Objectives: In advising a party about his or her estate plan, the key objectives that an estate planning attorney should keep in mind are (1) honoring the party’s intent (2) avoiding estate taxes, and (3) avoiding probate
b. Professional Responsibility:
i. Under the common law approach, the attorney owes no duty of care to and is not in privity of contract with, intended beneficiaries. Accordingly, intended beneficiaries have no standing to sue for malpractice.
ii. Under the modern trend, an attorney owes a duty of care to intended beneficiaries, and intended beneficiaries are third party beneficiaries with respect to the contract between the attorney and testator. Intended beneficiaries have standing to sue for malpractice.
CHAPTER 2: INTESTACY: THE DEFAULT DISTRIBUTION SCHEME
I. THE INTESTATE DISTRIBTUION SCHEME
a. Introduction: The default distribution scheme is intestate succession. If a decedent fails to dispose of all of his or her property through non-probate instrument or a valid will, the decedent’s property passes pursuant to the state’s descent and distribution statute to the decedent’s heirs.
i. Personal Property: distributed according to the statute of the state where the decedent is domiciled at the time of death
ii. Real Property: distributed according to the statute of the state where the real property is located
, the abandoning spouse may be disqualified from inheriting from the other spouse.
b. Survival Requirement: To be eligible to receive property from a decedent, a taker must survive the decedent. If claimant fails to meet the survival requirement, the claimant is treated as if he or she predeceased the decedent.
i. Common Law: Party had to prove by a preponderance of the evidence that he or she survived decedent by a millisecond
ii. Uniform Simultaneous Death Act: (– §§ 30-121 – 30-128 ) Where there is no sufficient evidence as to who survived whom; the party claiming the right to take is treated as having predeceased the decedent.
1.30-2304. Requirement that heir survive decedent for one hundred twenty hours. Any person who fails to survive the decedent by one hundred twenty hours is deemed to have predeceased the decedent for purposes of homestead allowance, exempt property and intestate succession, and the decedent’s heirs are determined accordingly. . . .
2.30-123. Simultaneous death of joint tenants. Where there is no sufficient evidence that two joint tenants have died otherwise than simultaneously the property so held shall be distributed one-half as if one had survived and one-half as if the other had survived. If there are more than two joint tenants and all of them have so died the property thus distributed shall be in the proportion that one bears to the whole number of joint tenants.
3. Example – Janus v. Tarasewicz – H died moments before W. Therefore H’s estate passed to W and then to W’s descendants or parents.
iii. UPC: requires that to qualify as a taker, must prove by clear and convincing evidence that he or she survived the decedent by 120 hours (5 days). 2-104 and 2-702
iv. Wills and Non-probate Instruments: Statutory survival requirement is a default rule that only applies if the written instrument does not have its own express survival requirement.
III. ISSUE: CALCULATING SHARES
a. Per stirpes:
