Trusts and Estates Outline

TRUSTS AND ESTATES OUTLINE
I. INTRODUCTION
a. General
i. Multi-jurisdictional issues
1. Will drafted in one state is generally recognized by other states, as long as it is valid in the state it was drafted in
2. Wills have to be admitted into probate in two places:
a. Primary (administrative state) = where you are domiciled
b. Ancillary = own property outside domicile
3. State you live in will impose their state rules to the will
b. Intestate Succession (Intestate = if die without a will)
i. State statutes that create a pattern of distribution (if you do not provide otherwise)
1. Every state has one – state law will decide how your property passes (intestate succession laws)
2. All property not passed otherwise = passes intestate
ii. Intestate succession applies if:
1. Invalid will
2. No will
3. Valid will but neglected to deal with certain properties
4. Partially invalid will
c. Wills (Testate = if die with a will)
i. Types of Wills
1. Will – formalized document that provides for the distribution of person’s assets upon person’s death
a. Valid will controls = where property goes, to whom, how much, other conditions
2. Holographic Will (handwritten will)
a. Written, but less formal
b. Ex: plane crash – written on side of plane
3. Non-Cupative (oral will) = last sickness will, peril will
a. Some states recognize in a limited sense (OH does)
b. Not valid for real property (Statute of Frauds)
4. Standing – who has standing:
a. Intestate successors
b. People taking under a previous will
5. Ambulatory – wills are revocable and mean nothing until you die
a. Beneficiaries have no rights until person dies
6. Fiduciary
a. Person who administers will
b. Trustee – handles trusts
c. Executor – named in will to administer
d. Administrator – appointed by state (not named in will) = intestate
i. If property subject to probate – ct appoints an administrator (becomes fiduciary)
e. Personal representative – new term for both (administrator and executor)
i. UPC – calls those (either with a will or non-will) = personal representative
ii. What happens when a decedent dies?
1. Read the document!!
2. Admit the will to probate
a. Probate = proof – to prove that it is the last will of the individual
i. Ohio = Court of Common Pleas
b. Establish validity of the will
i. Valid last will and testament
c. Admitted/accepted to probate
d. Probate – Matters involving property passing under will, intestacy, or other devises
i. Probate Jurisdiction:
1. Will
2. Intestacy
e. Will substitutes = Non-Probate (avoids probate and probate fees – but not taxes)
i. Certain properties that pass at death not under will – but not through the state
ii. Generally do not protect from creditors or surviving spouse
iii. Historically the law that applied to wills did not apply to will substitutes (Lapse, Slayer Rule, Divorced Spouse treated as predeceased)
1. UPC is more liberal with allowing this
2. Must look at the jurisdiction that you practice in to see how much of the law of wills has been allowed to creep over into law of will substitutes
a. Ohio – Took the law of wills dealing with former spouses and have applied this to insurance, pension plans and revocable trusts – can overcome by specific actions or writing
b. UPC wants to apply all wills law to will substitutes
iv. Examples
1. Joint tenancy with right of survivorship (not revocable) – imperfect/impure will substitute
2. Joint bank accounts (revocable)
3. K arrangements – property passes under contract – (revocable) – but can’t change by will (will doesn’t become active until death and a dead person cannot contract):
a. Pension plans
b. IR