WILLS AND TRUSTS
I. Probate and Non-probate Property
a. Language of wills and intestacy
1. Will and testament: Traditionally, “will” refers to an instrument disposing of real property and “testament” refers to an instrument disposing of personal property. In modern law, it is acceptable to use “will” to refer to an instrument that disposes of both kinds of property.
i. Traditionally, a will devises real property to devisees and bequeaths personal property to legatees. This distinction is still observed in some jurisdictions; using “I give” instead of “I devise” or “I bequeath” avoids the terminology problem.
2. Heir/next-of-kin: those persons designated by applicable statute to take a decedent’s intestate property. In intestacy, real property descends to heirs; personal property is distributed to next-of-kin.
3. Heirs apparent: those people who will be a person’s heirs, but that person is still alive. Heirs apparent have an expectancy interest in a party’s estate, but that interest can be destroyed by will or other instrument.
4. Joint will: one instrument executed by two persons; the single instrument disposes of the property of both people. Relatively uncommon and not recommended in good estate planning.
5. Mutual will: separate wills of two people (most commonly spouses) that have mirror-image provisions.
6. Constructive trust: equitable remedy (not an actual trust) imposed on the beneficiary of a will created through fraud, or upon a beneficiary who killed the testator (or donor of a trust), or upon a beneficiary whenever the court believes the beneficiary would be unjustly enriched.
7. General gift/devise: a gift of general benefit and not particular asset (e.g., money)
i. Note: classifying general versus specific can be tricky. “To X, 100 shares of MNO stock” is general, so long as the stock is traded on a major exchange. “To X, my 100 shares of MNO stock” is specific. Look for whether the property devised is fungible.
8. Demonstrative gift/devise: a general gift payable from a specific source (e.g. “To X, the sum of $10,000 to be paid from the proceeds of the sale of my General Motors stock.”)
9. Words of purchase: words indicating the donee, e.g., “To A.”
10. Words of limitation: words indicating the property rights devised. E.g., “To A and her heirs forever,” indicates A is the donee and A is getting a fee simple. If the words were “To A or her heirs forever,” the words are all words of purchase.
b. Probate property: property passing by will or by intestacy
1. Administration of probate property:
i. When a decedent is testate, the personal representative (in this case, AKA executor) named in the will winds up the decedent’s affairs. PR’s duties: to inventory and collect the assets, to manage the assets during administration, receive and pay creditor and tax claims, clear any titles, distribute the assets to the beneficiaries.
ii. When a decedent is intestate, the PR (in this case, AKA administrator) is usually appointed by the court but otherwise has the same duties as an executor.
iii. All property not governed by a non-probate instrument goes through probate; i.e., the management and distribution of such is overseen by the courts. The courts with jurisdiction are known by different names in different states: probate court, surrogate’s court, orphan’s court, probate division of a district or chancery court.
c. Non-probate property: property that passes other than by will or intestacy
1. Examples of common non-probate transfers: trusts, life insurance
2. Joint tenancy property is a form of non-probate property. The decedent’s interest in joint tenancy property vanishes at death; the survivor has the whole of the property and is relieved of the decedent’s participation. To perfect title, the survivor must file the death certificate of the decedent. Real estate, bank accounts, and mutual funds are often held in joint tenancy.
3. POD accounts are also non-probate property. These are accounts the contracts for which specify that the property is to transfer to a death beneficiary. Examples: pension plans, tax-deferred investment plans. To perfect title, the named beneficiary must file the death certificate with the custodian of the property.
d. Sending estates (testate or intestate) through probate
1. Will should be probated (or, in the case of intestacy, letters of administration sought) in the jurisdiction of the decedent at the time of death. This is primary/domiciliary jurisdiction.
2. If real property owned by the decedent is in another jurisdiction, ancillary administration there is required to prove title in the situs state and to subject those assets to probate for the protection of local creditors.
3. Probate generally occurs in one of two ways: common (AKA ex parte, AKA informal) and solemn (AKA notice, AKA formal).
i. Common form (disallowed in most states west of the Mississippi): no notice or process issued. Executor and any other required witnesses swear to the due execution of the will, the will gets admitted to probate, letters testamentary granted to the executor, and the executor begins administration of the estate.
ii. Solemn form: prior notice must be issued to interested parties before will is probated or administrator appointed. Petition for letters (of administration if intestate, testamentary if testate) must be accompanied by an affidavit swearing that the statutory requirement of notice was met. After notice, will is probated, letters granted, and administration begins.
iii. UPC allows for common and solemn form, granting to the person asking for letters the right to choose which for
scendants in the generation nearest to the decedent which contains one or more surviving descendants and (ii) deceased descendants in the same generation who left surviving descendants, if any. Each surviving descendant in the nearest generation is allocated one share. The remaining shares, if any, are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent.
ii. 2-106(c) à [Descendants of Parents or Grandparents.] If, under Section 2‑103(3) or (4), a decedent’s intestate estate or a part thereof passes “by representation” to the descendants of the decedent’s deceased parents or either of them or to the descendants of the decedent’s deceased paternal or maternal grandparents or either of them, the estate or part thereof is divided into as many equal shares as there are (i) surviving descendants in the generation nearest the deceased parents or either of them, or the deceased grandparents or either of them, that contains one or more surviving descendants and (ii) deceased descendants in the same generation who left surviving descendants, if any. Each surviving descendant in the nearest generation is allocated one share. The remaining shares, if any, are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent
1. Under UPC 2-103(4), if there are no surviving parents or descendants of parents, then estate is split into two halves, one going to paternal side and the other to the maternal side. Apply per capita to each half of the estate separately. Do NOT combine halves and then divide.
d. Rules of Succession
i. Half-bloods (§ 2-107)àtake the same as whole-bloods would
ii. Afterborn heirs (§ 2-108)àindividual in gestation at a particular time is treated as living at that time if individual lives 120 hours or more after birth
iii. Person related through 2 lines (§ 2-113) àa person related to the decedent through 2 lines of relationship shall take one share only which shall be the larger share
