I) INTRO TO ESTATE PLANNING
A) The power to Transmit Prop at Death: Its Justification and Limitations
B) Transfer of Decedent’s Estate
1) Probate and Nonprobate Property
(a) Probate property – prop that passes under the decedent’s will or by the laws of intestacy; a person dies intestate if they die without a will. – Probate ct gets involved w/administration and distribution of property of a will or a finding of intestacy followed by appt of personal rep to settle the probate estate.
(b) Nonprobate property is property passing under an instrument other than a will which became effective before death – distrib of assets doesn’t involve court proceeding
(i) joint tenancy property – no interest passes to survivor – to perfect title, survivor files death certificate
(ii) life insurance proceeds – goes to beneficiary named on policy
(iii) contracts w/POD provisions – pension plans, IRAs, stock custodian account
(iv) interests in trust – if decedent has testamentary power of appt over assets in trust, the decedent’s will must be admitted to probate, but the trust assets are distributed directly by the trustee to the beneficiary named in the will and dsnt go through probate
2) Administration of Probate Estates
(a) personal rep – duties are to inventory and collect assets of decedent, manage assets during administration, receive and pay claims of creditors, to distribute remaining assets to those entitled
(i) executor – person named in will who is to execute the will and administer the probate estate
(ii) administrator – when person in charge is not named in the will, the personal rep is called the administrator
(i) selected from statutory list of persons who are to be given preference – SS, children, parents, siblings
(ii) appointed admin required to give a bond – not required if named executor in will
(b) one court in each county had jurisdiction over administration of decedents’ estates
(c) person dying testate devises real property to devisees and bequeaths personal property (i.e., cash, jewelry, etc.) to legatees (use “I give”)
(d) through intestacy – real property descends to heirs and personal property is distributed to next of kin
(e) at common law, a spouse was not an heir (only had dower or curtesy rights) – but today, all states treat spouse as possible intestate successor
(f) 3 functions of probate – establish title in new person, protect creditors by requiring payment of debts, and make sure property passes to who it was supposed to pass
(g) under UPC, if no proceeding is brought w/in 3 yrs of death, presumption of intestacy is conclusive
(h) in many states, the actions of pers rep in administering the estate are supervised by the court – UPC authorizes unsupervised
(i) judicial approval of pers rep’s action is required to relieve the rep from liability when close estate
3) Is probate necessary
(a) even property that is transferred by will or intestacy doesn’t always have to go through probate
(i) Establishment of transferee’s title is not necessary for many items of person property, such as furniture and personal effects
(ii) but for items for which ownership is evidenced by a doc (auto, stock) the transferee needs some official recognition of his rights
(i) Statutes permit heirs to avoid probate where the amount of property is small
(ii) also, many states allow close relatives to obtain possession of personal prop by presenting affidavit to holder of prop if estate doesn’t exceed a certain figure (doesn’t give you title, just possession)
(b) universal succession (Europe and Louisiana) – court not involved, the heirs or residuary devisees succeed to the title of all of the decedent’s property; there is no personal rep appointed by the court
Problem pg 38 #1
t of surviving spouse who survives decedent (saves cost of having to appoint guardian for property going to children)
2. the first $200,000, plus ¾ of any balance of the intestate estate, if no descendant of the decedent survives the decedent, but a parent of the decedent survives
3. the first $150,000, plus ½ of any balance of the intestate estate, if all of decedent’s surviving descendants are also decedents of the surviving spouse and the surviving spouse has 1 or more surviving descendants who are no descendants of decedent
4. the first $100,000, plus ½ of any balance of intestate estate, if 1 or more of the decedent’s surviving descendants are not descendants of surviving spouse
(iii) §2-103 – share of heirs other that surviving spouse, p.61
(i) any part of estate that doesn’t pass under 2-102, or entire estate if no surviving spouse, passes in following order to individuals designated below who survive decedent
1. decedent’s descendants by representation (per stirpes)
2. ) if no surviving descendant, to decedent’s parents equally if both survive, or to surviving parent
3. if no surviving descendant or parent, to descendants of parents or either of them by representation (brothers and sisters, whether or not ½ bloods)
4. if none of above, but decedent is survived by 1 or more grandparents or descendants of grandparents, ½ of estate passes to the decedent’s paternal grandparents equally if both survive…1/2 to maternal grandparents (known as “laughing heirs”)
§2-105 – no taker, p.62
