Wills and Trusts
Prof. Gillett
I. Introduction to Estate Planning
A. The power to transmit property at death
1. Wills, testaments, rights of inheritance, and successions are all created by law and can be limited, condition or abolished by legislatures
2. Hodel v. Irving
a. Congress passed law limiting rights of inheritance to Indian lands in order to prevent fractional interests from passing
b. The S.Ct. found that the statute was unconst. B/c it did away with the right to pass property to heirs. (Abolished the rights of descent and devise)
c. S.Ct. looked to 3 factors to determine if it was “taking” of land:
Ø Economic impact= high
Ø Interference with reasonable investment backed expectation=none
Ø Character of gov’t action=right to pass to heirs is important
d. The statute could have limited the right to pass by intestacy just not by both will and intestacy
B. Transfer of the decedent’s estate
1. General definitions
a. Testator = person writing the will
b. Testate = die with a will
c. Executor = takes care of will
d. 2 kinds of gifts:
Ø Devise = real property
Ø Bequest = personal property
e. Executor = named in the will
f. Administrator = not named in the will; statute creates first order of preference
2. Probate/Non-Probate Property
a. Probate
Ø Passes under will or by intestacy statutes
Ø Principal reason to probate property is to clear title
Ø Can probably limit passing of property in a will by stating that someone must marry, but probably can’t preclude something from passing b/c someone marries.
Ø In a will, you can require things of grandchildren or other heirs, but probably not spouses
b. Non-Probate
Ø Passes through another instrument effective before death
§ Joint tenancy property
§ Life insurance
§ Contract with payable upon death provision
§ Interests in trust
Ø Advantages of a revocable trust
§ If person becomes incompetent, then trustee can manage property
§ Much easier to distribute property to beneficiaries
§ No attorney fees
§ Not public documents
§ Saves probating on land in other states
Ø Disadvantages
§ Attorney’s charge more
§ More administrative costs
§ Must file income tax returns for trust
§ More difficult to deal with property during life
§ Will not save on taxes
3. Process of Probate
a. Admit to probate
b. Certain persons can contest
Ø 58 O.S. § 41: Proceedings on contest
§ Must file written notice as to reasons for contest
§ Can allege the following issues of fact: competence of decedent, freedom from duress, etc., proper execution and attesting, an other questions substantially affecting the validity of the will
Ø 58 O.S. § 61: Causes for contesting a will after probate
§ any person can contest the validity of a will within 3 months of the date the will was admitted to probate
§ must allege either: discovery of a will dated later than the one in probate, some jurisdictional fact was lacking, that the testator was not competent, was under duress, menace, fraud or undue influence or that the will was not properly executed and attested
c. appoint representative; this person will:
Ø Collect assets
Ø Inventory property
Ø File inventory with the court
Ø Conserve assets for distribution
Ø Pay the debts
Ø Pay taxes (they become personally liable for estate and income taxes)
Ø Account to court and make distribution
4. Duties of attorney in drafting a will
a. Simpson v. Calivas
Ø Action brought against atty who drafted father’s will
Ø I: does atty. have a duty to intended beneficiaries?
Ø H: yes, based on foreseeability of the injury, not on the privity of relationship
Ø Contestant must show that the atty negligently failed to effectuate the testator’s intent as expressed to him
Ø Most of the time, the court is bound by the “4 corners of the will” unless the will is ambi
irculatory and respiratory functions or a brain death standard
§ Ct. here applied both and found that b/c functions of W resumed on their own after H was dead, she had survived.
C. Shares of Descendants
1. children and issue of children take remainder after spouse’s portion is set aside
2. Issue of children “represent” the dead child and take their share; 2 ways to divide:
Ø Strict per stirpes: divide property into as many shares as there are living children of the designated person and deceased children who have descendants living (always divides at child level)
Ø Modern per stirpes: divide shares at level where descendants are still living; Okla. uses this
3. Disinheritance
Ø In order to disinherit a child, you must dispose of ALL of your property; otherwise the remainder will pass by intestacy to that child
D. Shares of Ancestors and Collaterals
1. Collateral kindred = persons related by blood but not descendants or ancestors
Ø 1st line collaterals = descendants of deceased’s parents (excluding deceased and his issue), i.e. deceased’s siblings
Ø 2nd line collaterals = descendants of deceased’s grandparents (excluding deceased’s parents and their issue), i.e. deceased’s aunts and uncles
Ø If there are no 2nd line, then two schemes are used: parentelic, which distributes it back through grandparents; and, degree-of-kinship, which counts steps for each generation and the closest one gets it (chart on p.92 of book). Okla. uses the degree-of-kinship system
E. Relationships by half-blood
1. 84 O.S. § 222: half and whole siblings inherit equally, UNLESS there are specific items which came from ancestor (applies mainly to real estate)
