Trusts and Estates Orth Spring 2012
I. Intestate Succession
Section A. The Basic Scheme
_ Probate Property is property in the sole name of decedent at death
§ Inquiry: What is owned and how is it titled?
§ Joint ownership property is not probate property
§ I.e., do not count assets that belong to the decedent and to someone else (i.e., where title is shared)
§ Those assets pass by right of contract or death
_ Non probate transfers
§ Happen through Wills or Will substitutes
_ Intestacy When a person dies without a will (intestate) the state Statutes of descent & distribution govern their probate property
§ Remember Under intestate succession laws only probate property is considered
_ Partial Intestacy:
§ When any part of the probate estate is not disposed of by will passes – it will pass by intestacy
_ Heirs: Living people have no heirs – they only have heirs apparent or people with “expectancies”
§ Heirs are established upon a person’s’ death
§ expectancies can be destroyed by deed or will
_ Expectancies cannot be transferred – but a “purported transfer of an expectancy” may be enforced in equity as a contract if there was consideration and was fair under all circumstances
_ Descendants: Children of the deceased or those children’s children (i.e., grandkids)
KEEP IN MIND:
§ personal property is governed by the state where the decedent was domiciled at death
§ real property is governed by law of state where property was located
§ UPC = Uniform Probate Code does not govern anywhere only those portions that are adopted in each state
§ UPC § 2-201 Intestate Estate pg. 73 of book
§ (a) governs property passed by total intestacy and partial intestacy
§ (b) Allows negative disinheritance by will
· I.e., decedent can disinherit an individual or class (i.e., exclude or limit by will the right of an individual or class to share in his intestate estate)
· Negative Disinheritance – was not legal, where A stated John shall not take from me. The donor would have to devise his entire estate to others. Otherwise, the intestate share would go to that person.
· UPC § 2-101 above, changed this.
· Negative Wills are authorized – the barred heir is treated as though he predeceased the intestate.
· Whether or not the decedent’s will has excluded or limited the right of an individual is a question of construction.
o Example 1: A clear case where the decedent’s will expressly states that an individual is to receive none of the decedent’s estate. Testamentary language such as:
o “my brother, Hector, is not to receive any of my property” or “Brother Hector is disinherited.”
o Nominal Devise: A symbolic gift “I devise $50.00 to my brother but no more”
o Devising the entirety to the property to an entity or to another
· Subsection (b) also establishes the consequence of a disinheritance:
o the share of the intestate estate to which the disinherited individual would have succeeded passes as if that individual or class had disclaimed the intestate share.
2. Share of Surviving Spouse
Section 2-102. Share of Spouse.
The intestate share of a decedent’s surviving spouse is:
(1) the entire intestate estate if:
(i) (dead guy has no children or parent but his wife) no descendant or parent of the decedent survives the decedent; or
o Example: Problem 2 pg. 77 decedent leaves a wife and a brother but no surviving descendants (NO CHILDREN) and no surviving parent
The wife takes all! Brother takes nothing under UPC
Remember this can always be changed by statute i.e., a requirement that the wife and husband be married for a certain amt of time before giving all to wife
(ii) all of the decedent’s surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent;
§ Example: decedent leaves surviving descendants (CHILDREN) and a wife AND neither the decedent nor the surviving spouse have children from other marriages,
§ the surviving spouse is entitled to all of the decedent’s intestate estate.
PARENTAL PROVISIONS APPLY ONLY WHEN DECEDENT LEAVES NO CHILD –
Parents take Only when he leaves no children – this is true everywhere
(2) (when the dead guy has more than $300k to give but no children, and has a living parent the parent takes 1/4th of any estate left over after 300k has been given to the wife) the first [$300,000], plus three fourths of any balance of the intestate estate, if no descendant of the decedent survives the decedent, but a parent of the decedent survives the decedent;
WHERE decedent leaves no surviving descendants but does leave a surviving parent, the decedent’s surviving spouse receives the first $300,000 plus three-fourths of the balance of the intestate estate.
WHERE EITHER DECEDENT OR SPOUSE WAS PREVIOUSLY MARRIED AND HAS CHILDREN FROM THAT MARRIAGE
(3) the first [$225,000], plus one half of any balance of the intestate estate, if all of the decedent’s surviving descendants are also descendants of the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent;
WHERE SURVIVING SPOUSE HAS CHILDREN FROM THAT MARRIAGE – This is where dead guy leaves a wife and children with that wife, but the wife was previously married and had at least one child from a previous marriage
Note: The children of the surviving spouse are related through half blood ties
the decedent’s descendants are unlikely to be the exclusive beneficiaries of the surviving spouse’s estate, the surviving spouse receives the first $225,000 plus one-half of the balance of the intestate estate.
Here the wife gets 225k and half of the remaining estate – the other half would go to the dead guys children and then to his parents and so on??
(4) the first [$150,000], plus one half of
set aside – children and descendants take remainder
§ When child of A decedent has died before decedent
§ his children take, and divide shares among themselves (pg 87)
§ Note: Only the children of the deceased child (who predeceased the donor) will take their deceased mother’s share
§ A’s other grandchildren whose parents are alive at A’s death will not take, because their parents will take directly from A
§ In laws do not take under intestate succession – only descendants (i.e., the actual grandchildren or issue of the deceased)
§ Surviving spouses do not take
§ A’s legacy will be divided by the children only – in laws take nothing.
Division of Shares : Two options:
· Division at the generational level immediately below the decedent or
· Division at the closest generational level: that is the first level where we find a descendant of the decedent alive?
Problem: A has 2 children, B and C.
_ B predeceases A, leaving one child D.
_ C predeceases A, leaving 2 children, E and F.
_ A dies intestate, leaving no surviving spouse, survived by 3 grandchildren D, E, and F.
1st.English Per Stripes aka Strict per Stripes (1/3 of States): children of each deceased descendant represent their deceased parent and are moved into parent’s position at the first generation below the designated person
a. A’s property will be divided in two shares (number of A’s children)
b. Thus: D takes one half and E and F split the other half
2nd. Modern Per Stripes aka per capita per representation (1/2 the states) – the estate is divided at the level where someone is alive. Since there are no children of A left alive. The estate will be divided equally among the surviving grandchildren
a. If one of the grandchildren had predeceased A, leaving children– then his share (1/3 of total) would be divided equally among his survivors.
b. There is a variant on this one, see footnote on pg 88 for explanation
3rd. Per Capita at each generation (minority rule) – here division also takes place where there is an alive descendant (as above)
a. But, the shares of deceased descendants at that level will be combined and divided equally among those alive in the next generation. See diagram on pg. 89
b. Equally near, equally dear – each taker in a generation is treated equally w/regard to other takers in that generation