DECEDENTS’ ESTATE AND TRUSTS
CASTLEMAN
SPRING 2012
TERMINOLOGY
· Heirs: persons designated by statute to take intestate
o no heirs until die (“heirs apparent”) à have no rights, just “mere expectancies”
· Descendants: lineal (i.e., children, grandchildren)
· Collaterals: no direct line (i.e., sister, uncle, maternal cousin)
· Escheat: property that doesn’t go to anyone goes to the State
INTRODUCTION
· Donor intent à Facilitate, not regulate, donor’s decisions
o Exceptions: Violates public policy; violates law
o Instructions to destroy property à Balance testator’s intent & societal interests
§ Courts are more likely to refuse to destroy
· Estate tax
o Nozick à Involuntary taxation is extortion
§ person is entitled to what they have so long as obtained in a morally permissible manner
o Rawls àinvoluntary taxation is price have to pay for a state within which you can exploit your talents
§ when the attributes to attain success within that society are distributed randomly
· Malpractice
o Duty to intended beneficiaries
§ Foreseeability of injury to intended beneficiary
§ Lack of privity not a bar
o Evidence allowed à extrinsic (majority); four corners (minority)
o Result à move toward correct mistakes, reforming wills
INTESTATE SUCCESSION
· Succession laws
o Real property à law of state where property located
§ Ancillary jurisdiction: state different from domiciliary where property kept
o Personal property à law of state where decedent domiciled at death
§ Domiciliary jurisdiction: where person lived/died
· 1st à Share of Spouse (UPC 2-102) [NCGS § 29-14]
· 2nd à Share of Issue & Descendants of Issue [NCGS § 29-15 & § 29-16]
o Basic distribution scheme (no multigenerational concerns) à each child receives equal share
o English per stirpes (by right of representation)
§ Language: to his children surviving; to descendants of his children who are dead
§ Vertical equality à each line of descent treated equally
§ Steps
· (1) Start at children’s generation (even if no survivors)
· (2) Add together number of each of surviving children & each of deceased children who left surviving descendants
· (3) Distribute shares at children’s level to surviving children based on (2)
· (4) Distribute each remaining share per stirpes to the surviving descendants of the predeceased children à do not recombine shares
o Modern per stirpes (per capita with representation)
§ Language: when the persons entitled to take under this chapter other than as surviving spouse are all in the same degree of consanguinity to the decedent, they shall take in equal shares
§ Each line of descent treated equally beginning at 1st generation w/ a living taker
§ Steps
· (1) Find the first generation with a survivor
· (2) Add together number of surviving members of that generation & each of the deceased members of that generation who left surviving descendants
· (3) Distribute shares at this level to surviving members based on (2)
· (4) Distribute each remaining share per stripes to the surviving descendants of the predeceased member of the generation determined by (1) à do not recombine shares
o Per capita at each generation (UPC & NC)
§ Horizontal equity à each taker at each generation treated equally
§ Steps
· (1) Find a survivor
· (2) Add together the number of each surviving member & each of the deceased members who left surviving descendants at level you found survivor
· (3) Distribute shares at this level to surviving members based on (2)
· (4) Recombine the shares of the predeceased members & drop down to next level with survivors; repeat (2)
· Repeat as necessary
· 3rd à Share of Ascendants & Collaterals [NCGS § 29-15 & § 29-16]
o Goes to parents & then down parental line (siblings, nieces, nephews, etc.)
§ Parents à All
§ Siblings à Per capita at each generation (UPC)
o If no surviving parental line
§ Parentelic (majority) à move to grandparents and down line
· Grandparents à split between sides; per capita at each generation (UPC)
· In NC, if no heir in grandparents line, goes to state (escheat)
§ Degree of relationship à closest survivor wins (table of consanguinity)
· If same number, each takes
· Half-blood relatives
o General rule: inherit equally with those of the whole
§ Some limit to 1/2 interest
§ Others limit to 1/2 interest but only for ancestral property
· Adopted children
o General rule à Take by, from and through adoptive parents (and vice versa)
§ But do not take by, from or through biological parents (and vice versa)
§ However, some states allow inheritance through both
o Step-parent exception
§ UPC 2-114 à adoption of a child by the spouse of either natural parent has no effect on
· Relationship between child and natural parent OR
· Right of child or descendant of child to inherit from or through other natural parent
o Class gifts à no taking by adopted child, except from adopted parent, unless acknowledged in some way (traditional); allow taking if adoption occurred during testator’s lifetime, but not if after death (modern)
· Posthumous à child in gestation at death deemed to be alive at time of death if subsequently born alive
· Nonmarital
o Inherit from mother
o Inherit from father à reluctance (traditional); proof issues (modern
§ Parentage Acts
· Child support
· Proof required within 1 year of child reaching majority
· Do Parentage Act limitations apply to intestacy issues à split
· Advancement [NCGS § 29-23 through 29-29]
o Common law à lifetime gift by decedent to child presumed to be prepayment of child’s intestate share
o Modern rule (UPC) à reverses common law
o Hotchpot
§ Advancement of $10k to A; Add $10k to $50k estate = $60k; Divide total by 3
§ Each receives $20k; A only gets $10k since already got $10k
o If advancement more than share, won’t get anything but doesn’t have to pay back overage
· Bars to Succession à Spouse [NCGS § 31A-1]; Parents [NCGS § 31A-2]
· Bars to Succession à Homicide [NCGS § 31A-3 through § 31A-15]
o Lines of decisions
§ Legal title passed to slayer notwithstanding crime
§ Legal title doesn’t pass to slayer because one shouldn’t profit from his wrongful conduct
· Passes as if slayer predeceased victim
§ Legal title passes to slayer under inheritance statutes, but because one shouldn’t profit from his wrongful conduct, holds a constructive trust for victim’s heirs
o What crime triggers statute?
§ feloniously and intentionally (UPC); willfully and unlawfully (NC)
o What proof required?
§ Preponderance of the evidence (NC/UPC)
§ Conviction not generally required because acquittal doesn’t mean innocent
o Effects?
§ On slayer à most states treat as predeceased decedent
§ On slayer’s descendant’s à line barred, unless also descendant
cing evidence that grantee acted in good faith AND acted freely, intelligently, and voluntarily
o Bequests to attorney
§ Many courts find presumption of undue influence arises when attorney-drafter receives in will, except if related to testator
· Fraud à Testator deceived by a deliberate misrepresentation; as a result, does that which he would not have done
o Fraud in inducement à causes testator to execute/revoke a will, to refrain from executing/revoking a will, or to include particular provision in wrongdoer’s favor
§ Elements: false statement; known to be false; was material; made with intent to deceive testator; actually deceives testator; causes testator to act in reliance
o Fraud in execution à misrepresents character or contents of instrument signed by testator, which does not in fact carry out testator’s intent
· Duress à Wrongdoer threatened to perform or did perform a wrongful act that coerced donor into making donative transfer that donee would not otherwise have made
· Tortious interference with an expectancy
o Elements: existence of an expectancy; intentional interference with expectancy through tortious conduct; causation; damages
o Most states that recognize this require P first to exhaust remedies in probate
· No-contest clauses
o Beneficiary who contests the will shall take nothing (or token amount) in lieu of provisions made for the beneficiary in will
o Usually enforceable à in US, only required to take care of spouse, not children
o Language of forfeiture generally strictly construed
(3) INTENT
· Must have intent to create will
o Intestacy: legislature presumes intent
o Mental capacity: if cannot form requisite intent, no intent for courts to carry out
o Insane delusion: if delusion overrides rational choice, no intent for courts to carry out
o Undue influence: if influence overrides free will, no intent for courts to carry out
(4) WILLS FORMALITIES – EXECUTION
· UPC § 2-502(a): writing, signed, (1) signed by 2 witnesses after signing or acknowledgment OR (2) notarization
· NC § 31-3.3: writing, signature, attested by 2 witnesses
· Writing à with what or on what not usually specified; typing or reasonably permanent writing
· Signature
o Where à anywhere as long as intentional (most); at end of document (some)
o What à Can take form of any symbol testator executes intended to serve as signature
§ Proxy: most states permit another person to sign for testator as long as signed in testator’s presence and at testator’s direction
· some states require proxy’s signature to appear as well
o When à testator should sign will prior to attestation of witnesses
§ Continuous transaction exception (NC) à approx. same time as part of continuous transaction
o Acknowledgement à no publication (most); publication/tell it is will (some)
