Trusts and Estates Myers
Tuesday/Thursday/Friday
· A will disposes of probate property only
· Probate
o Testate (valid will)
o Intestate (no will)
o Non probate
§ Joint tenancy
§ Life insurance/payable on death contracts
§ Legal life estates and remainders
§ Passes pursuant to the terms of the instruments in question
· Analytical key:
o First, check for nonprobate property: if there is any non probate property, it will pass to the transferees properly identified in the nonprobate instrument
o Whatever fails to qualify as nonprobate property is probate property.
§ Who takes the decedents probate depends on whether the decedent died with a valid will. If the decedent died with a valid will that properly disposes all of his property, the decedent died testate. The property will pass to the beneficiary identified in the will.
§ If the decedent died without a will (intestate) or with a will that does not properly dispose of all the decedents’ property, the property will be distributed to the decedents heirs pursuant to the jurisdiction state of decent and distribution.
Probate (overview)
· The probate courts in the county where the decedent was domiciled at time of death has primary jurisdiction over the decedent’s probate estate.
· Probate is opened by presenting the decedents death certificate. Depending on the situation, the probate court issues letters testamentary appointing an executor or letters of administration appointing an administrator.
· Opening Probate
o Type
§ Formal or Informal
o Venue
§ Where the decedent was domiciled
§ 2nd venue where any real property is located (known as ancillary probate)
o Letters
§ Used to derive authority to the PR
o Contest
§ Debate of who the PR should be
§ Any action that the PR takes regarding the estate can be challenged (land sales)
o Creditors
§ Identify creditors and make payments
§ Public notice must be made to give creditors right to bill
§ Usually after 90 days of notice, creditor claims are extinguished
o Misc
§ PR (personal rep) or executor usually opens probate
§ Usually necessary within 30 days of death; however, wills are generally good for 2 yrs
§ Get judge to “bless” PR’s actions before they are taken
· Supervising the Representative’s Actions
· Closing the estate
o Do whatever the will indicates you should do
o Final accounting to be taken to court for a final hearing
INTESTSATE SUCCESSION
*attempt by legislature to draft a default “will” for the public who do not have a will or will substitute
Requirement of Survival
Current UPC states: any individual who fails to survive the decedent by 120 hrs is deemed to predeceased the decedent. Moreover, there is a requirement that survival by 120 hrs be established by clear and convincing evidence.
· Persons who are born after the decedent’s death generally are not eligible to receive the decedent’s property
· Infants born immediately pursuant to a parents death are considered under common law as alive at decedent’s death
GENERAL PATTERNS OF INTESTATE SUCCESSION
Statutory Rules (Spousal)
· Marriage assumes that the couple has gone through a valid marriage ceremony
o No married couples who live together do not qualify
o Common law marriage is valid only in jurisdictions that recognize common law marriage
o No same sex couples
o Putative spouse: where the couple goes through what they believe to be a valid marriage and it turns outs to be invalid
§ As long as the parties reasonably believe in good faith that the marriage is valid the spouses qualify and are treated as spouses for purposes of most intestate schemes.
· Spouse will inherit the entire estate if the decedent leaves no surviving descendants or parents (spouse takes precedent over decedent’s siblings and grand-parents)
o Statutes are varied by state and no general rule applies. Sometimes a spouse will have to split estate with decedent’s parents or descendants
· Former UPC, which some states still use, utilized “lump-sum-plus-fraction” to divide estate.
o If a descendent or parent AND the spouse survived the decedent, the spouse received the first 50,000 plus one-half of the remaining balance of the estate
o If one or more of the decedent’s descendants were not the surviving spouse’s descendants, the former UPC did not give the spouse priority on the first 50,000. Instead, it limited the spouse’s share to one-half of the intestate estate.
· Current UPC Section 2-102 continues to favor the surviving spouse, but attempts to take into account multiple marriage situations
o UPC 2-102(1) If no parent or issue (or Beaver family), spouse gets all
o UPC 2-102(2) if parents, but no issue, spouse get’s $300,000 plus ¾ remainder
o UPC 2-102(3) if all dead person’s kids are also spouses, $225,00 plus ½ remainder
o UPC2-102(4) if one or more of dead person’s kids are not spouses, $150,000 plus ½
· Once you have descendants, than parents are not eligible for taking
· Step children are not taken into account, only real and adopted children
o Property not passing to surviving spouse passes as follows:
§ Children – equally
§ Parents – equally, or all to the survivor
§ Children of parents – equally
§ Grandparents – 50% to paternal and 50% to maternal; otherwise to their children equally
Survival requirement
· To be eligible to receive property, a taker must survive the decedent.
· UPC 2-104 and 2-702
o Requires that to qualify the take must prove by clear and convincing evidence that he or she survive the decedent by 120 hours (five days).
· 1 – did the claimant ACTUALLY survive the decedent?
· 2 – Did the claimant LEGALLY survive the decedent? UPC – 120 hours
Statutory Rules (Descendants)
· In the absence of a surviving spouse, descendants get entire estate
· Descendant’s, aka issue, share can be divide
d
UPC 2-114(c) precludes a biological mother/father (or kindred from which) from inheriting from a marital or nonmarital child unless the parent “has openly treated the child as his and has not refused to support the child.
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Assisted Reproduction
Posthumous reproduction
o If spouse dies before the placement of eggs, sperm, or embryo, the deceased spouse is not considered the parent of any resulting children unless the deceased spouse had consented in writing to be the parent of children so conceived (UPC 2-707). UPC 702 provides a blanket rule that the donor of the eggs or sperm is not the parent of any child conceived by any form of assisted reproduction.
Gestational Carrier UCP 2-121
o Gestational carrier is not a parent; the intended parent is the parent for intestacy
All other births (intended mother carries child) UPC 2-120
o Sign contract indicating you as a party are the parent
o Others listed in 2-120 (f)(2)
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Construction
*rules of construction operate as special-purpose presumptions in the law of donative transfers
· UPC 2-705 Definition for documents (wills, trusts, etc.)
· Adopted child may not always be a child in terms of other’s probate (but always the parent’s probate) 2-705 (f). Is considered a child unless:
o 2-706 (f)(1)(2)
**Adopted child may be found to be a valid taker if he was adopted during the life of the donor and the donor approved of the adoption and looked fondly upon the adopted child
· Courts do not construe class gifts to include stepchildren, usually (contrast this with adoptive children)
o CA has stare decis indicative that if a stepchild is reared by a stepparent through minority and clear and convincing evidence indicates that the stepparent would have adopted the child but for a legal barrier, the stepchild may be eligible to take
· “Issue” is deemed to mean both legitimate and illegitimate children Will of Hoffman
o **Identify in will that issue is to mean legitimate children only
Transitive Gift Rules
· Genetic children will not be considered in non-parental gifts if the parent /spouse/other blood did not actually rear the child
· Adopted children will not be considered in non-parental gifts unless 2-705(f)
***Determine whether you have intestate secession or a transitive gift and apply above differing rules accordingly
