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Decedent's Estates
Villanova University School of Law
Brady, Kathleen A.

Introduction:
 
A.     Uniform Probate Code
1.     Why study:
a.     State law governs law of wills and trusts
b.     UPC enacted in many states; influences laws of others
2.     Revisions
a.     1969 – major revision
b.     1990 – last major revision (but some states still follow 1969)
3.     Policy objectives of the UPC:
a.     Unification of probate and non-probate transfers (traditionally, law treats these differently)
b.     Gender equality
c.      De-emphasis on formalism in the law of wills
d.     Effort to respond to changes in the American family (greater prevalence of multiple marriages)
B.     Course topic: Wealth Transmission (usually at death but not always)
1.     Wills: drafting, execution, revocation, interpretation
2.     Trusts: creation and use in estate planning
3.     Non-probate transfers
C.     Testamentary Freedom: Freedom of individuals to pass property to who they want
1.     One purpose of trust laws – to protect testamentary freedom
2.     Policy questions:
a.     Should you be able to cut off spouse, kids, or aging parents?
3.     Limitations on testamentary freedom:
a.     Testator cannot disinherit spouse (but can disinherit children)
b.     Limits on how far in the future individuals can seek to control the use of their property (ex: Rule against perpetuities)
c.      Public policy limitations (vary from state to state) – Examples: You can’t condition a gift on:
i.       To influence a child to get divorced
ii.    On someone remaining unmarried
iii. On religion or profession
iv.   Can’t order destruction of property upon your death
d.     Tax Limitations: purpose is to break down great family fortunes
i.       Gov’t estate taxes: 45% tax rate over $2 million (raises to $3.5 million in 2009)
ii.    Federal estate and gift tax goes away in 2010, but will come back in 2011
D.     Terminology
1.     Decedent: person who dies
2.     Testate: if you die with a valid will
a.     Testator: person who died
b.     Real property: the Testator devises real property to devisees
c.      Personal property: the Testator bequeaths personal property to legatees
3.     Partially Intestate: die with a valid will but will doesn’t dispose of all your property
a.     Property in will à disposed of according to will
b.     Other property à governed by intestacy laws
4.     Intestate: died without leaving a valid will
a.     Decedent: Person who died
b.     Real property: descends to heirs / takers
c.      Personal property: distributed to next-of-kin / distributees
5.     Careful with terminology; don’t just say “I give”
E.     Probate vs. non-probate:
1.     Probate: property that passes to beneficiaries under a valid will or by intestacy
a.     Must pass through probate system before reaching the recipients
b.     Personal representative
i.       If you die with a valid will, you can nominate an executor
ii.    If no valid will, court will appoint a personal representative (called an administrator)
(1) Chosen by the court from a statutory list
iii. Duties of personal representative:
(1) Inventory Collect assets in decedent’s estate
(2) Manage and protect assets (Clear titles if necessary)
(3) Pay off creditors
(4) Distribute assets to beneficiaries
iv.   Personal reps are fiduciaries (entrusted with property for benefit of beneficiaries and creditors)
2.     Non-probate (“Will substitutes”)
a.     Transfer property at death, but the property doesn’t go through the probate system
b.     Takes effect now (when executed) but property is not passed until death
c.      Examples:
i.       Life insurance policy (purchase now and retain control, beneficiary gets money at your death)
ii.    Pension and retirement plans with death beneficiaries
iii. Bank accounts with payable on death designations
iv.   Trust
(1) Fiduciary relationship; trustee holds legal title to the property and manage it for someone who holds equitable title
(2) Terminology:
(a) Settlor – person who create the trust
(b) Beneficiaries – enjoy the trust
(c)   Trustee – manages the trust
(d) Corpus Res – property in the trust
v.      Joint tenancy property
(1) Ex: joint tenancy in land, bank accounts
(2) When joint tenant dies, the interest disappears, so the other automatically owns the property (since the interest disappears, there’s nothing to pass through probate)
d.     Most wealth flows through non-probate transfers
e.     Some jurisdictions have “small estate transfers” to allow people with small estates avoid the expense and hassle of probate
F.     Attorney liability
1.     In most jurisdictions, a beneficiary can sue the drafter of the will
a.     Theories: Negligence, contrac

)(2))
o        An individual who was a party to a valid proceeding concluded by an order purporting to terminate all marital property rights (§2-802(b)(3))
 
a.     Divorced: not surviving spouse
b.     Separation:
i.       UPC: still has status of surviving spouse
ii.    Many states: bar the survivor from taking due to desertion or adultery (not UPC)
c.      Marriage-like relationship:
i.       Some jurisdictions: survivor can take (If jurisdiction recognizes common law marriage – 2 people have to believe they are married) (not many states)
d.     Putatuve spouses: person who in good faith believes they are married to someone, but they are mistaken (ex: decedent had another spouse out there and the surviving spouse didn’t know about it)
i.       Some jurisdictions allow them to take for intestacy purposes
ii.    § 209 of Uniform Marriage and Divorce Act (supplement)
e.     Long-term relationship with no intent to marry:
i.       Not treated as spouses
ii.    Exceptions: civil unions (possibly)
C.     Simultaneous Death:
1.     Situation: decedent and his/her devisees die at the same time in similar circumstances. A person has to survive a decedent in order to take under a will (or not under a will)
2.     Common law rule: must survive by just an instant
3.     NEW RULE (UPC): Must survive by 120 hours, and there must be clear and convincing evidence that the taker survived by 5 days
a.     §2-104: rule for intestacy
b.     §2-702: rule for wills and non probate transfers
i.       Rule of construction: If there is a condition in the will that the beneficiary must survive the testator, read that as requiring 120 hours. If you want something different, put it in the will
c.      Don’t rely on every state having the 120 hour default rule; put it in the will
i.       Decedent might move, might have real property in another state, etc.