Trusts & Estates – Wilcox
I. Introduction
A. The Power to Transmit Property at Death
1. The legislature cannot take away the entire right to devise or leave intestate.
2. A father can condition inheritance on his son marrying a Jewish girl.
a. Not unreasonable – plenty of Jewish girls to choose from
b. Not a penalty – b/c the other option is the property goes to Israel, showing the decedent’s testamentary plan to encourage the preservation of Judaism.
3. Protect Family Relationships – A clause conditioning a gift upon the upsetting of family relationships is void as violating public policy
B. Transfer of the Decedent’s estate
1. Introduction
a. Will – testate; no will – intestate (by virtue of law)
b. Heirs – inherit by law; Devisees – inherit by will
2. Probate Estate
a. Contents of Probate Estate:
1) Probate Estate includes everything that does not pass by other means.
2) Nonprobate Estate includes joint tenancy property, life insurance payable to a beneficiary, payable-on-death contracts (e.g. pension plans), and inter vivos trusts
b. Purposes of Probate
1) Clears land records,
2) Leads to a shorter statute of limitations
3) Resolves disputes over property
3. Probate Process
a. Personal Representative administers the estate (Executor – will; Administrator – intestate)
b. Where to probate:
1) State where decedent was domiciled at the time of death
2) Ancillary Probate – for property in a state other than the one in which the decedent was domiciled at the time of death.
c. 10-year statute of limitations for presenting a will to probate.
d. Notice
1) Formal Probate does not occur until notice has been given to all potential heirs and devisees. (A challenged will must go through formal probate).
2) Notice must be sent to creditors, usually through publication in smaller papers.
3) Known or ascertainable creditors must be given actual notice before the shorter statute of limitations runs on them. (8 months of probate; 1year of death)
e. You must file an accounting, and the balance must be $0
f. Must wait 8 months before distributing the estate.
4. Professional Responsibility
a. An attorney drafting a will or planning an estate has a duty to foreseeable beneficiaries.
b. Attorney cannot mislead the potential devisees, especially when he has an attorney-client relationship with all of them.
II. Intestate Law
A. Spouse and Children
1. Was decedent married? Did they have children? – If yes, no more info. needed
2. S.C. à Spouse – gets 50% if there is a surviving issue; 100% if there is not
3. South Carolina system (per capita by representation)
a. Issues of equal degree of kinship share equally.
b. If unequal degree, those of more remote degree take by representation.
1) The estate is divided into as many equal shares as there are surviving heirs in the nearest degree of kinship + deceased persons in the same degree who left issue
2) The share of each deceased issue should be divided to his issues in the same manner
c. If there is nobody alive at a degree, the estate is not divided.
4. Other Systems
a. Per Stirpes – divide at each level, even if nobody is alive, unless a person is dead without issue
b. Per Capita – all issue, regardless of kinship, share equally
5. Special Rules
a. Issue of decedent (only) conceived before death, and born within 10 months of death inherits as if born within his lifetime.
b. 120 hour rule – must survive a person by 120 hours, or you are deemed to have predeceased them.
1) This does not apply to wills, only intestate
2) If there are no other heirs, this rule is ignored.
3) Determining time of death (brain dead?) can be difficult.
6. Adopted Children
a. Generally
1) Parent-child relationship as of the day the final decree of adoption is entered.
2) Once a child is adopted, he is no longer the child of his natural parents.
3) Adoption by a spouse of a natural parent does not preclude THAT parent from the parent-child relationship. (The other parent is excluded)
b. Special Rules
1) Child Abuse – If parental rights are terminated b/c of child abuse, neglect, etc., the child can still inherit from or through a parent, but parent cannot inherit from the child.
2) Adult adoption – adult is not an heir unless the court degree so states.
3) Equitable adoption – parents never finished the adoption, but the court should act as though they did – not recognized by S.C.
7. Illegitimate Children
a. Child of mother
b. Child of father if:
1) There was a void marriage (ex. bigamy)
2) You can establish paternity by adjudication before death.
3) You can establish paternity by clear & convincing evidence within 8 months of death or within 6 months after appointment of PR
c. Father cannot inherit from child unless he has treated the child as his and has not refused to support the child.
8. Stepchildren – last ones to inherit – infra
B. Share of persons if no surviving spouse or issue
1. South Carolina has a Parentelic system
2. General Rules
a. Half-blood relationships inherit the same as whole blood.
b. Debts owed to decedent from an heir
1) Offset from the debtor’s share
2)
ct property one owns
2) Must know the persons who are the “natural objects of the testator’s bounty”
· Children, spouse, perhaps a person who cared for the testator.
3) One must understand the disposition of the property he is making.
b. Problems:
1) When a person decides upon an unnatural disposition of property, the courts are more likely to claim the person did not have the capacity to make the will.
2) An insane delusion (continue believing in the face of rational explanation)
a) Can affect only part of the will in some states
b) Invalidates the entire will in South Carolina
c) Must prove the delusion could have caused the unnatural disposition
3. Undue Influence
a. Those with lesser capacity are more susceptible to undue influence.
b. Coercion – when the will of another is substituted for the will of the testator
c. Social acceptability – often wrongfully taken into account by the courts, who subsequently decide the will must be tainted by undue influence if the result of a socially unacceptable activity is an unnatural distribution of property.
d. Severability – Undue influence may only invalidate part of the will
e. Must prove more than simply motive and opportunity.
4. Fraud
a. Severability – Fraud may only invalidate part of the will
b. Types of fraud
1) Fraud in the inducement – misrepresent facts to affect disposition
2) Fraud in the execution – misrepresent the contents of the instrument
c. Preventing a person from revoking a will is also fraud
· Under the slayer statute, the next of kin get the property.
· Under fraud, a constructive trust is created for those who would have received the property in the new will the decedent was prevented from executing.
d. Tortious Interference with expectancy – used when probate case would not allow a remedy for the fraudulent activity.
5. In terrorem clauses
a. Threaten to take away the devise of anyone who challenges the will.
b. Only enforceable against frivolous claims.
c. If there is reason to believe a challenge is legitimate, the clause will not be enforced.
