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Wills, Trusts, and Estates
University of South Carolina School of Law
Medlin, S. Alan

Wills, Trusts, and Estates

Fall 2010 — Outline

Professor Medlin

Intestacy (Focus on SCPC 2-101 to 2-109)

INTRODUCTION:

· Definitions:

o Intestate: dying without a valid will.

o Partial Intestacy: occurs when the decedent has disposed of some, but not all of his/her property.

§ NOTE: Can have a will and still have partial intestacy.

· A valid will is so poorly drafted that it disposes of only part of the probate estate ® The presence of a residuary clause can help prevent partial intestacy (Absence of a residuary clause ® end up with a partial intestacy).

§ Residuary Clause ® takes care of all assets not itemized ® Failure to have a residuary clause is essentially malpractice.

o Probate asset: asset distributed by a decedent’s will or by intestacy.

o Non-probate asset: assets distributed by other means (deeds, etc.)

o Intestacy Scheme: The passing of property titled in decedent’s name

· Reasons for not leaving a will:

o Most people cannot accept and plan for the fact of their own deaths

o Wills are relatively expensive

· Procedure: Distribution of the probate property of a person who dies without a will, or whose will does not make a complete disposition of the estate ® governed by the statute of descent and distribution of each state.

o Applicable state law:

§ Personal Property:

· The law of the state where the decedent was domiciled at death governs the disposition of personal property.

§ Real Property:

· The law of the state where the decedent’s real property is located governs the disposition of real property.

· Policy behind an intestacy statute:

o To carry out the probable intent of the average intestate decedent

o Family protection

§ Preserving the economic health of the family after death

§ Protect the surviving spouse

§ Next of kin

§ Eliminate the laughing heirs: people who inherit property with little relationship to decedent

o Two basic schemes:

§ Parentelic scheme:

· the closer related you are, the more deserving you are

· distributed according to parentelics or collaterals

§ Consanguinity:

· Finding the nearest common ancestor of decedent and potential inheritor, then counting up to nearest common ancestor and down to decedent

· Lower number wins

Operation of the South Carolina Intestacy Statute

Governs the estate of a decedent who dies on or after July 1, 1987, the effective date of the SCPC.

NOTE: South Carolina use modern per stirpes ® Skip over the 1st generation ® divide only at the generation where there is a living taker.

· Surviving Spouse: § 2-102 (pg. 14)

o If no issue ® Spouse takes entire estate

o If surviving spouse and surviving issue ®

§ Surviving spouse takes half, surviving issue takes half ® Go to § 2-103

o In no surviving spouse ® Go to § 2-103

· Heirs other than surviving spouse: § 2-103 (pg. 14 – 17)

o If no surviving spouse, but surviving issue:

§ First ® Divide only at the generation where there is a living taker.

· Higher/closer issue take to the exclusion of those at a lower level

§ Representation ® allows issue in a more remote generation to step into the shoes of a predeceased heir.

· Deceased child’s children take the portion that would have been afforded to child had he not died

· Modern per stirpes: estate is divided only at a generation where there is a living taker

§ Children granted split the portion of estate afforded to a deceased child

§ If no living children, each living grandchild will take an equal portion

o If no surviving spouse, no surviving issue: § 2-103 (2)

§ Parents of the decedent take equally →

· If only one parent of the decedent survives then that parent takes all.

o If no surviving parents ® § 2-103 (3)

§ Representation (Issue of the decedent’s parents step in to take)

· Issue of Decedent’s parents ® brothers, sisters, nieces, nephews, etc.

§ Half-blood treated the same as whole blood ® § 2-107 (pg. 24 – 25)

o If no issue, parent or issue of parent ® § 2-103 (4)

§ ½ to maternal grandparents and ½ to paternal grandparents →

o If no surviving grandparents ®

§ Representation kicks in and their surviving issue takes.

o If no surviving grandparents or issue on one side ®

§ That half defaults to the other grandparent’s side.

o Great grandparents → § 2-103 (5)

§ Same procedure as above

o If no surviving issue of great-grandparents ® § 2-103 (6)

§ Stepchildren of the decedent →

· Stepchildren = Decedent’s spouse with child from a previous marriage.

§ Surviving issue of predeceased stepchildren take by representation.

o If none of these people exist ® § 2-105

§ Then estate escheats to the state.

Survivorship Requirement ® § 2-104 (pg. 20 – 21) ® Heir must survive decedent to take under intestacy.

· In order to take as an intestate heir, potential heir must survive by 120 hours (5 days).

o Applies only to Intestacy ® No such requirement at law for testate inheritance.

· Exception: If applying this rule would cause escheat then the rule is inapplicable.

o If there is only one potential heir who does not meet the 120-hour requirement, the law acts as if he actually survived the decedent in order to prevent escheat.

· NOTE: Prior to the SCPC, SC law did require an heir to survive for some period of time, but not a specific period of time (could perhaps have been for only an instant).

· Uniform Simultaneous Death Act ® § 1-501

o Deals with a situation where we can’t decide who died first between the decedent and beneficiary.

o Must have a true simultaneous death ®

l needs.

o By law, a child cannot take care of his physical/personal needs, and needs a guardian ® Every child under the age of 18 needs a guardian unless emancipated.

§ Parent is automatically the guardian of the child

· Conservator: Someone who has the legal responsibility and authority to take care of the financial matters and property of someone unable to do so themselves.

o Every child needs one because they are unable to contract.

o Parent is not automatically the conservator of the child ® Many times it is the parent, but not always.

§ Must always be appointed by the court

Bars to Succession

Homicide/Slayer’s Act ® § 2-803 (pg. 105 – 107)

· If you feloniously and intentionally kill the decedent, then you are treated as if you predeceased the decedent.

o Murder and Voluntary Manslaughter = Felonious and Intentional

o Involuntary Manslaughter ¹ Intentional ® Slayer’s Act does not apply.

· Applies to intestacy, testacy and non-probate transfers.

· Relationship between civil and criminal sides:

o A criminal conviction of murder or voluntary manslaughter is conclusive on the civil side and the Slayer’s Act applies.

o For anything else, it is necessary to try the potential heir on the civil side.

§ A not guilty verdict, conviction for involuntary manslaughter, or a plea bargain on the criminal side will not trigger the operation of the Slayer’s Act.

§ A not-guilty verdict (or a plea bargain) on the criminal side may nonetheless result in the civil side finding the homicide statute applies.

· Murder/Suicide ® § 2-803 (g) (pg. 107)

o The killer is considered to have predeceased the decedent if the killer dies within 120 hours after feloniously and intentionally killing the decedent.

o Decedent’s estate inherits from killer’s estate, even though physically, the killer died later.

Expectancy ® (pg. 35)

· Before an intestate decedent dies, the decedent’s heirs have only an expectancy in the intestate estate.

o A potential heir can lose his expectancy if he predeceases the decedent or if decedent executes a will.

· Transferability ® No SCPC provision covers (pg. 35)

o SCPC does not have specific provisions governing transfers of an expectancy.

§ Presumably the pre-SCPC law will continue to apply.