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Trusts and Estates
University of North Carolina School of Law
Orth, John V.

Trusts and Estates

John Orth – Spring 2014

1. Intestate Succession

a. Generally

i. Applicable law:

1. Personal property: state where decedent was domiciled at death

2. Real property: law of state where that property is located

ii. UPC 2-101-5 (see chart on page 69)

iii. Spouse’s share: most people want everything to go to their spouse if they do not have children/parents still living

iv. Domestic Partners and Same-sex marriage: depends on the state (eventually a share will go to these people everywhere)

b. Systems of representation

i. Per Stirpes (purely bloodline): equity based on highest level possible

ii. Modern Per Stirpes (hybrid bloodline/generation); per capita by generation; equity based on the survivors of each bloodline

iii. Current Per Stirpes: equity based on survivors of each generation

c. Simultaneous Death

i. Janus v. Tarasewicz: sufficient evidence enough to show that one spouse survived the other

ii. 120 hour survivorship rule

1. UPC provides that heir, devisee, or life insurance beneficiary who fails to survive by 120 hours is deemed to have predeceased the decedent

d. Descendants

i. If spouse’s share is set aside, children and descendants of deceased children take remainder of decedent’s property to exclusion of everyone else

e. Ancestors, Collaterals, and Others

i. Parents (some states let them take part, others let it all go to spouse)

ii. Other ancestors and collaterals: if no spouse or parent, it goes to their siblings, etc. see table of consanguinity page 86

iii. “Laughing Heirs” à more than half of the states have abolished laughing heirs, drawing line at grandparents and their descendants like UPC 2-103

f. Step Children and In-Laws

i. 1/3 of states and UPC recognize stepchildren as potential heirs

ii. UPC 2-103(b): stepchildren take if there are no surviving grandparents or descendants of grandparents or more closely related kin

iii. California: intestate succession to stepchildren and certain in-laws

g. Half-bloods

i. Majority of states + UPC: a relative of half-blood is treated as the same as a relative of whole blood

ii. A few states: half-blood is given ½ share

iii. A few other states: half blood takes only when there are no whole-blood relatives

h. Escheat

i. If intestate decedent leaves no survivors under relevant intestacy statute, it goes to the state (UPC 2-105)

i. Disinheritance by Negative Will

i. UPC 2-101 authorizes negative will by way of EXPRESS disinheritance provision à barred heir is treated as pre-deceasing decedent

j. Transfers to Children

i. Adopted children (varies widely by state)

1. Can only take from new parents – Hall v. Vallandingham

2. Can take from both (some states)

ii. Adult Adoption

1. Most statues draw no distinction

2. Some states don’t let you adopt of it’s your “lover”

3. Spousal adoption allowed in some states (not NC)

iii. Adoption and Wills/Trusts

1. Minors adopted are presumptively included in a gift by another to their “children,” “issue,” descendants, or heirs à reasoning is that the donor likely intended to include any of these children

2. BUT à adult option may not be okay if it’s meant to circumvent donor’s intent, Minary v. Citizens Fidelity

iv. Equitable Adoption

1. Depends on the state à O’Neal v. Wilkes (no equitable adoption established)

2. Now recognized by a majority of states, but it depends on factual circumstances of each case

a. Two different views:

i. Majority from O’Neal: contractual model (4 prong test when a K for equitable adoption is recognized à K is between legal guardian and equitable parents

ii. Dissent from O’Neal: equitable argument (functionalism over formalism à agreement is between child and parents (not guardian))

1. trend is moving in this direction

v. Posthumous children

1. Courts have rebuttable presumption that normal period of gestation is 280 days

2. UPA: rebuttable presumption that child born to woman within 300 days after death of husband is child of that husband

vi. Nonmarital Children

1. Most states amended their intestacy stateus to liberalize inheritance by nonmarital children

vii. Posthumously conceived children

1. Evidence must show that deceased intestate parent affirmatively consented (1) to the posthumous reproduction and (2) to support any resulting child, Woodward v. Commissioner of SS

2. Children born with new biotech with consent of parent are entitled to the same rights as natural children, In re Martin B.

k. Advancements and Hotchpot

i. Generally:

1. Inter vivos transfer or something of value to a putative heir that is intended as an advance to the inheritance that the putative heir would otherwise receive; a prepayment against inheritance

ii. Common law: lifetime gifts presumed to be advancements

1. Hotchpot: if a gift is treated as advancement, it is brought into hotchpot (gifts added back to pot to calculate how much the kids get)

iii. Modern Law:

1. Many states have reversed common law presumption of advancement; a lifetime gift is no longer presumed unless someone shows this was the intention (see pg 128)

l. Guardianship and Conservatorship of Minors

i. Guardian: responsibility of custody and care; parents are natural guardian – if one of two dies no need to appoint guardian

ii. Guardianship for property: expensive and inflexible

iii. Conservatorship: UPC – a trust-like arrangement where conservator has title as trustee to protect person’s property with similar investment powers as regular trustee

iv. Custodianship: person holds property for minor

v. Trusteeship: most flexible

m. Bars to Succession

i. Slayer Rule

ii. Un

g

i. 1990 UPC: material portions must be handwritten and extrinsic evidence IS allowed

1. Estate of Kuralt: handwritten will must show intention to make posthumous disposition of property (this one did)

c. Revocation

i. Express

1. Oral declaration without more is not enough

ii. By inconsistency

1. Subsequent writing is enough

a. Subsequent will that doesn’t expressly revoke as presumptively revoking prior will by inconsistency

b. If incomplete, it’s treated as codicil (but subject to wills formalities)

iii. By physical act

1. (a) By testator herself or by someone in presence (b) intention to revoke

2. burn, tear, draw lines through

iv. By operation of law

1. Purging statute: interested witnesses are purged of any provision in their favor

2. Slayer statute

3. Divorce: all states have statutes revoking dispositions in favor of ex-spouses

4. Marriage:

a. in some states a premarital will is revoked upon marriage

b. in most states, premarital will is valid but surviving spouse is entitled to estate share unless it appears that omission was intentional or pretermitted spouse is provided for in will or will substitute

v. Dependent Relative Revocation (DRR)

1. If testator undertakes to revoke will upon mistaken assumption of law or fact, under DRR the revocation ins ineffective if testator wouldn’t have revoked but for mistaken belief

2. If court finds testator wouldn’t have revoked old will, court will disregard revocation and probate destroyed prior will

d. Components of a Will

i. Integration

1. All papers that are present at time of execution are intended to be part of will and treated as part of will

ii. Republication by Codicil

1. Validly executed will is re-published as of the date of the codicil

2. Restatement: a will is treated as if it were executed when its most recent codicil was executed

iii. Incorporation by Reference

1. Allows you to incorporate a pre-existing document if you accurately describe it

2. Incorporating printed text into holographic will

a. Johnson v. Johnson: valid holographic codicil incorporating prior will by reference and republishing gives effect to intention of testator

b. Berry v. Trible: no probate because handwriting and typed text were interwoven