Wills & Trusts
Prof Guzman
Fall 2009
OUTLINE
I. Introductory Material
What is property? Bundle of rights. Relational.
1. Series of rights w/ respect to property: Right to possess; Right to enjoyment; Right to distribute; Right to transfer; Right to exclude others; Right to destroy or consume; Right to use.
2. Right of distribution or transfer
a. Transfer during life:
(1) voluntary transactions – sell, partition, gift;
(2) involuntary transactions – condemnation, judgment lien, taxes, adverse possession, theft.
b. Transfer at death:
(1) voluntary – will;
(2) involuntary – intestacy
c. Difference b/w life & death transfers – psychological & sociological ramifications.
(1) Intervivos Gift (gift during life)
(a) Three elements:
(i) present donative intent – intend to give away property at that point in time;
(ii) delivery (actual or constructive);
(iii) acceptance
(b) Is a completed gift revocable? Not revocable at point of transfer of title – when last element occurs. Legal, not only moral, obligation.
(2) Will
(a) Requirements:
(i) Future intent (not to transfer property at present but in future);
(ii) Writing;
(iii) Witnesses (caveat – don’t always need witness).
(b) Transfers at death at the earliest – but probably later at administration of will.
(c) Is will revocable? Yes, generally, but becomes irrevocable at death. Technically, not proper to say that one has revoked a gift when one has changed a will b/c no gift was completed initially.
II. Intestate Succession
Testamentary Freedom – Donative freedom – the right to pass property during life or at death; right to choose who gets it; right to choose form in which they get it; & right to give anther person right to make those choices.
1. How many limits/conditions/ impediments on this freedom? Can put in will, transfer to wife on condition that she quit smoking? Different theoretical perspectives on limits of freedom to transfer.
2. Hodell v. Irving (Sup Ct) – transfer thru will is not a constitutional right but state & federal gov restrictions on property owner’s right to transfer property at death amounts to taking w/o just compensation.
Initial Information
1. Intestate is scheme that applies if one dies w/o will.
2. Policy underlying Intestate Succession
a. designed to effect orderly distribution of property for decedents who lack foresight or diligence to draft wills;
b. purpose is to provide distribution that approximates what decedents would have done under will;
c. spouses & kids enjoy favored position under laws of intestate succession b/c they are natural objects of most people’s bounty.
3. Every state has statute of intestacy that tells where property goes & in what percentage. This class will talk about three things in relation to these statutes:
a. schemes – where property goes – Rule
b. status – show spouse is actually spouse, etc. Nonmarital or adopted children, etc – policy
c. alterations – know scheme & status, can alter that?
Schemes
1. Scheme for Spouse
a. Generally – Spouse must survive decedent. Except for spouse, heirs are always related by blood & not marriage. When decedent leaves surviving spouse, he or she will always take at least some of intestate estate no matter what intestacy scheme applies.
b. Jip – joint industry property – property acquired during marriage by joint efforts of husband & wife. Property brought to marriage not included nor is property acquired through gift. Income from separate property also not joint.
(1) All decedent’s property at death presumed to be jip & up to someone else to challenge to take out of jip status. High degree of proof.
c. Relevant Statute for OK – Title 84 § 213 – do not look at § 213(a). § 213(b) – applies today.
d. Handout #2:[1]
(1) Spouse only survives
(a) UPC – spouse takes all.
(b) OK – spouse takes all.
(2) Spouse & joint issue survive
(a) UPC – spouse takes all
(b) OK – spouse takes HALF
(c) Policy reasons for different treatment under UPC & OK law:
(i) Conduit theory – technically, disinheriting kids under UPC, but kids will be taken care of thru distribution to surviving spouse who will spend money on their care.
(ii) If kids are adults, they do not necessarily need inheritance. Also, may be more important for money to go to surviving spouse for support during old age.
(iii) Efficiency – if kids are minors, requires inheritance to go to trust .
(3) Spouse + any issue of decedent only (surviving spouse’s stepchild)
(a) UPC – Spouse takes first $100,000 plus half of balance
(b) OK – half of jip + equal part of non-jip w/ decedent’s decendants.
(c) Policy – UPC gives spouse more than OK. Policy for having special rule regarding stepchild – conduit theory breaks down – stepparent may not transfer anything (or very little) to stepchild.
(4) Spouse, joint issue, & spouse’s own kid
(a) UPC – Spouse takes first $150,000 plus half of balance
(b) OK – Spouse takes 50% w/ remainder going to joint issue
(c) Policy – OK has no confusing or special rule regarding decedent’s step kids. Policy of giving to joint issue & not to surviving spouse’s sole kid – when inherit from surviving spouse, will inherit equally – conceptually not fair for stepkid to receive equally w/ joint issue.
(5) Spouse & parent
(a) UPC – Spouse takes $200,000 plus ¾ balance
(b) OK – all jip & 1/3 non-jip to spouse
(c) Policy – For practicality, spouse will get all most of the time. Why not, then, just have rule for spouse to get all? Rule applies only if no children. Probably younger at death, not married for long, money probably not jip but brought into marriage. T/f spouse should not receive all. Also, perhaps wealth came from ins policy or wrongful death settlement or litigation damages.
(6) Spouse & two siblings survive
(a) UPC – no rule – would rather money go to spouse than to siblings.
(b) OK – Siblings get 1/3 of non-jip property. Statute presumes decedent would rather money go to lineal relatives (parents) rather than collateral relatives (siblings). Where parents & siblings survive, parents receive all & not siblings. But when no parents survive, siblings inherit. In theory, if parents don’t use all money, will be distributed to siblings at parents’ death.
2. Scheme for Descendants
a. Generally – In absence of surviving spouse, law of all states gives entire estate to descendants.
b. Representation – any share that goes to decedent’s descendants is divided among them by representation.
(1) Property divided among living persons who are nearest to decedent in each descending line.
(2) Descendant who has living ancestor who is also descendant of decedent is not eligible taker.
c. Roots & Degrees
(1) example:
X
A B
1
Two roots – A & B
Two degrees – A/B & 1
(2) example:
X
A B
1, 2, 3, 4, 5 6
If all survive, A & B inherit
If A & B predecease, two ways to distribute:
Pure per sterpies – split 50-50 into the two stock (roots) & then 1-5 split their half equally (1/10th each) & 6 would take its half.
Modified per sterpies – all six grandkids get 1/6 share each.
d. Three Approaches:
(1) Pure Per Sterpies
(a) Step One – go to child generation & count number of live roots. (Root still alive even if kids dead if grandkids. Root alive as long as can continue to grow).
(b) Step Two – allocate share to each root & divide down
(c) Policy – respect kids’ decision whether to have many or few kids
(2) Modified Per Sterpies
(a) Step One – go to first generation w/ at least one living member & count roots
(b) Step Two – allocate shares & divide down
(c) Policy – focuses on living rather than on dead & acknowledges dead
(d) OK § 213(2)(a) – not facially clea, but judicial interpretation follows modified per stirpes.
(3) 1990 UPC
(a) Step One – go to first generation w/ at least one living member & count number of live roots
(b) Step Two – allocate share to each living member of that generation
(c) Step Three – combine remainder, if any, & divide equally among qualified takers at next level.
e. Hypo:
X
A B C
1 2 3 4 5 6
7 8 9
All living
– Pure – 1/3 to A, B, C each
– Modified – 1/3 to A, B, C each
– 1990 UPC – 1/3 to A, B, C each
A, B, C predecease
– Pure – 1, 2 = 1/6th each; 3=1/3rd; 4, 5, 6 = 1/9th each
– Modified – 1-6 get 1/6th share each
– 1990 UPC – 1-6 get 1/6th share each
A, B, C, 3, 6 predecease
– Pure – 1, 2 = 1/6th each; 7 = 1/3rd; 4, 5 = 1/9th; 8, 9 = 1/18th
– Modified – 1, 2 = 1/6th; 7 = 1/6th; 4, 5 = 1/6th; 8, 9 = 1/12th
– 1990 UPC – 1, 2 = 1/6th; 4, 5 = 1/6th 7, 8, 9 = 1/9th (each gets 1/3rd of the 1/3rd remainder)
f. For more examples & hypos, refer to notes from September 7
3. Scheme for Ancestors & Collaterals – irrelevant when have even one descendant.
a. 3 rules:
(1) Parentellic – (parentella – person & their roots). Expands up – Parentella #2 includes Mom & Dad’s parentella & so on. Parentella #3 includes grandparents, aunts, uncles, cousins.
(a) Find parentella closest to decedent w/ at least one living member & distribute all. Heads of parentella trump all.
(b) Examples:
(i) Mom & dad are only survivors. Second parentella – distribute 50-50 b/w parents.
(ii) Mom predeceases – dad only survivor – Dad gets 100%
(iii) Mom, Dad, Sibling survive – three people in second parentella – sibling gets nothing b/c heads of parentella trump. If Mom & Dad both predecease, sibling takes all.
(iv) Survived by one nephew & one sibling – Representational – Nephew gets ½ & sibling gets 1/2
(c) OK Provision – 84 OS § 213(b) – parentellic plus approach. OK goes to third parentella, then to next of kin to equal degree – civil law after third parentella.
(d) UPC – parentellic approach – diff from OK, stop at 3rd parrentella – property goes to state.
(2) Civil Law – splits property b/w all related to decedent in same degree. Count up to common ancestor & then down to that person. Distribute equally to those w/ lowest degree. Look at chart pg 56.
(a) To determine degree of pe
us Death Act – where title to property or devolution thereof depends upon priority of death & there is no sufficient evidence that persons have died otherwise than simultaneously, property of each person shall be disposed as if he had survived.
(3) OK follows traditional rule – survival by one instant.
b. Alternative Rule – must survive by 120 hours (five days) to be considered a survivor.
(1) UPC – must establish by C&CE that survived by 120 hours.
(2) Uniform Simultaneous Death Act – 120 hours rule
(3) Policy – advantages to 120 hour rule:
(a) more expedient – each estate simultaneously distributed as if spouse predeceased. No transferring to one spouse & then to their heirs.
(b) Effectuates intent of decedents
(c) Evidence – easier to establish who died first under 120 hour rule
c. What is Death? Subjective notions in philosophy, religion, sociology; but objective criteria intestacy.
(1) irreversible failure to breath & pulse
(2) total brain death – irreversible cessation of brain function, including brain stem.
(3) Uniform Determination of Death Act – individual who has sustained either (a) irreversible cessation of circulatory & respiratory functions, or (b) irreversible cessation of all function s of entire brain, including brain stem, is dead. Determination of death must be made in accordance w/ accepted medical standards.
(4) Article – Is it time to abandon brain death? Technical article that discusses paradox of what is death for organ donation/transplant & what is death for intestate purposes.
d. What is Life? Persons in gestation at Decedent’s Death
(1) Persons born after decedent’s death generally not eligible to receive decedent’s property
(2) Children in gestation at decedent’s death are treated as alive at decedent’s death if subsequently born alive. Child must be born alive & viable.
(3) 1990 UPC requires child survive birth by 120 hours.
2. Traditional Family Notions – determine or drive status issues.
a. Recent changes to these traditional notions:
(1) cohabitation w/o marriage; same sex relations; second, third marriages w/ children from previous marriages. These societal changes will most likely result in change in law.
(2) definition of family is changing in other areas of law – property, family, intestate, etc.
(3) less focus on blood but more focus on marriage. Relational aspect instead of biological. Law is not engine for social change but usually rather reflects social change.
b. Who is a Surviving Spouse for intestacy scheme?
(1) Yes a spouse:
(a) survivor w/ valid marriage certificate
(2) No – not a spouse:
(a) no discernible relationship
(b) relationship but no marriage; no legal relationship; no lawful marriage – includes domestic partners & same sex cohabitants
(c) divorced – marital status dissolved & did not exist at death
(d) parties to invalid marriage – previous divorce invalid
(3) “Iffy” – arguably a spouse:
(a) married but separated (separated does not equal divorce, so still qualify as surviving spouse)
(b) divorce filed but not final decree
(4) UPC takes position of estopped from claiming surviving spouse status in three situations:
(a) Divorce was invalid but person claiming to be surviving spouse is already remarried;
(b) Divorce was invalid but person claiming to be surviving spouse sought the invalid divorce;
(c) Divorce was invalid but person claiming to be surviving spouse consented to divorce.
(5) If survivor had deserted decedent or had abused decedent during life, some states say survivor cannot claim spouse status. OK does not have similar law.
(6) Putitive Spouse Doctrine – protect the financial & property interests of persons by recognizing valid marriage if believed in good faith that they lived in marriage although no valid marriage occurred.
(7) Common Law Marriage – most states do not recognize – but OK does.
(a) Five elements of common law marriage in OK:
(i) INTENT – actual & mutual agreement b/w spouses to be husband & wife
(ii) permanent relationship
(iii) exclusive relationship
(iv) cohabitation as husband & wife
[1] For examples using dollar amounts to be distributed intestate under these schemes, refer to Handout & Class Notes.
[2] Refer to Class Notes (Sept 14 & 15) for Examples.
