Wills Trusts & Estates
FREEDOM OF DISPOSITION
Exercising freedom of disposition through
Probate AND
Intestacy (default)
Formal document
Will Substitutes
Courts are not granted authority to question the wisdom, fairness or reasonableness of the donor’s decision about how to allocate their property.
Cannot dispose of property to achieve a purpose that is prohibited or restricted by an overriding rule of law. (Rest 3 of Property 10.1 cmt. C)
Shapira v. United National Bank
A testator may validly impose a restraint on the religion of the spouse of a beneficiary as a condition precedent to inheriting under the will.
A partial restraint on marriage that imposes only reasonable restrictions is not void as a violating public policy.
Ways to dispose of property
Decedent leaves behind a will that provides for the disposition of her property at death.
Decedent leaves no will. The probate estate passes by intestacy.
Goes through probate, to carry out the probable intent of what the donor would want.
Partial Intestacy
Decedent leaves a will that disposes of only part of the probate estate. The rest passes by intestacy.
INTESTACY
Spousal Intestate Share
Examples
Husband dies, leaving a Wife and Child
All goes to surviving spouse under UPC 2-102 (1)(A)
Husband dies, leaving Wife and child from wife and child of husband from another 1st spouse.
$150 k plus 50% of remainder to Surviving spouse (2-102(4))
Remainder to surviving descendants.
Wife dies, leaving husband and child from husband and child of husband from previous marriage (step kid)
$225 K & 50% of remainder to surviving spouse (2-102(3))
Remainder to surviving descendants.
Husband dies, leaving Wife, no children but parents.
$300k to surviving spouse & 75% of remainder (2-102(2))
Remainder to husband’s parents.
Tylenol Case
The determination of legal death must be made in accordance with the usual and customary standards of medical practice.
Stanley died first, life insurance was paid to wife’s estate. Stanley’s mom sued.
Descendant’s Intestate Share- Per Stirpes
When one of several children die before the decedent, leaving descendants, all states provide that the child’s descendants shall represent the dead child and divide the child’s hare among themselves.
If a person takes, his issue does not: If B survives the decedent, B would receive a share but B’s issue would not.
Absent adoption, only blood relative qualify as heirs. If C predeceases the decedent, survived by his wife and her children from a prior marriage, neither C’s surviving wife nor her issue from the prior relationship are entitled to share in the distribution of the decedent’s intestate property.
In laws and stepchildren do not qualify as eligible takers under the intestate distribution scheme.
Lineal Equality
Must Identify
Which generation should the decedent’s property be divided first?
Which generation the estate is divided first, how many shares should the estate be divided into?
How should dropping shares be distributed?
Shares for the descendants who are dead but survived by issue.
English Per Stirpes or Strict Per Stirpes (1/3 of state follow)
Treats each line of descent equally, divide estate down the line.
Always make the first division of the decedent’s property at the first generation of descendants, whether there are any live takers or not; the dropping shares then drop by bloodline.
Step 1
Under per stirpes, always divide the decedent’s property at the first generation (among decedent’s children), even if everyone at the generation is dead.
Step 2
One share is given to each party who is alive, and one share is given to each party who is dead but survived by issue. Here, Although A, B, and C are all dead, A, B, and C are all survived by issue, so each receives a 1/3 share.
Step 3
Shares for each party who is dead but survived by issue drop by bloodline. Each share drops only to the issue of the predeceased party. A’s 1/3 drops to his or her issue; B’s 1/3 drops to his or her issue; and C’s 1/3 drops to his or her issue.
When distributing A’s 1/3, drop to the next generation of A’s descendant and divide it one share for each party who is alive at that level and one share for each party who is dead but survived by issue. A’s 1/3 is divided equally between E and F, 1/6 each, and E’s 1/6 drops by bloodline to E’s issue, K, L, and M, to be shared equally, 1/8 each.
B’s 1/3 drops by bloodline to B’s issue, G. Because G is alive and takes, N takes nothing.
C’s 1/3 drops by bloodline to C’s descendants. Dividing up C’s share at the next generation, the formula is one share for each party who is alive and one share for each party who is dead but survived by issue. H predeceased C and is not survived by issue, so H does not take a share. I is alive, so I takes a share. J is dead but survived by issue, so J takes a share. C’s 1/3 is split 1/6 to I, 1/6 to J
h
The degree of relationship approach focuses on the degree of relationship between the decedent and claiming relative, regardless of which parentlic line the taker is in. Once counts the degrees of relationship between the decedent and the relative, and those relatives of the closest degree (lower degree) take to the exclusion of those of a more remote degree (higher degree). Some jurisdictions start with the parentelic approach but at some point (either after the first collateral line or the second) switch to the degree of relationship approach.
To determine the degree of relationship, count from the decedent up to the closest common ancestor (head of a parentlic lien-a GP or GGP, or so on), and then down to the live relative.
Laughing Heirs- some states will layer on top of the Parentelic Approach and the Degree of relationship approach a cut of to stop laughing heirs from getting an estate from someone they didn’t know. Due to the goal of fulfilling the probable intent of the donor.
Half Bloods: Relative who share only one common parent as opposed to the traditional relationship where siblings share both parents.
English Approach: Half-bloods do not inherit.
Majority American Approach: Half-bloods treated equally.
Minority American Approach 1: Half-bloods get a half share.
Minority American Approach 2: Half-bloods inherit only when no whole-blood relatives of same degree.
Adopted Children (formal adoption)
Hall v. Vallandingham: An adopted child is no longer considered a child of either natural parent and loses on adoption all rights of inheritance from his parents.
3 Approaches
Adopted children inherit only from adoptive parents and relatives.
Adopted children inherit from both adoptive parents and genetic parents and relatives
Adopted children inherit from adoptive relative and from genetic relatives it the child is adopted by a stepparent.
UPC Approach (slide): looks to each adoption circumstance to decide whether the child can inherit and from whom.
