Decedents’ Estates and Trusts Outline

 
DECEDENTS ESTATES
GARLAND
2013
 
 
 
 
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
·         Table of consanguinity:  table which spaces relatives purely by blood (or adoption).  No in-laws or spouses. 
·         Intestate/intestacy:  No will
·         Testate/testacy:  Will/trust
 
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
o   Donor’s intent determines the maximum extent allowed by law
o   Shapira v. Union National Bank
§  Daniel has to marry a Jewish girl with Jewish parents in order to take under the will.
·         Not unconstitutional
·         Not against public policy
o   Incentives for trusts:  moral, encouraging education, being productive
·         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 (fiduciary duty) is not a bar,
o   A v. B
§  Wife wants to descend her property to husband and his “issue” which would include a non-marital child that wife has no knowledge of but firm however does have knowledge of.
·         YOU TELL THE WIFE. 
·         ABA:  You owe formal clients a duty to not adverse affect the previous interest.
·         ACTEC:  “I will be representing both H and W and cannot keep secrets and nothing will be confidential from each other.” 
o   This is the only way to have clients who may have adverse interests
o   Evidence allowed à extrinsic (majority); four corners (minority)
o   Result à move toward correct mistakes, reforming wills, harmless error
·         Right to descend and Devise: 
o   Hodel v. Irving:
o    Escheated Indian land,
o   Scotus said it “goes too far”  the government can create laws editing and limiting succession but total escheatment is a “taking.” And violates our rights to descend and devise (not rights to take).
·         Donor’s intent determines the maximum extent allowed by law
o   Shapira v. Union National Bank
§  Daniel has to marry a Jewish girl with Jewish parents in order to take under the will.
·         Not unconstitutional
·         Not against public policy
o   Incentives for trusts:  moral, encouraging education, being productive.
 
PROBATE:
Probate:  is the administration of a will or intestacy.  Take will and put will into probate.  
·         Probate is good because it:
o   Protects creditors (they get first dibs on their interests)
o   Evidence of transfer
·         Initiate probate
o   Is there a valid will?
§  Yes:  file will copy, acknowledges executor
§  No:  open court process, administer appointed
·         After either option
o   Collect property
o   Pay creditors
o   Distribute property
·         Probate property:  property transferred through will or intestate.
o   Car, money, etc.
·         Non-probate property:  contract that already determines ownership
o   Property held in life estate or with joint right of survivorship, life insurance
 
 
INTESTATE SUCCESSION
            Government writing the wills, the person failed to write.
            This is the vast majority of deaths. 
·         Succession laws
o   Real property à law of state where property located
§  Ancillary jurisdiction: state different from domiciliary where property kept
§  Residence, house, lake property
o   Personal property à law of state where decedent domiciled at death
§  Domiciliary jurisdiction: where person lived/died
§  Stock, money, life insurance, watch, clothes, etc.
1st Share à Surviving Spouse (UPC 2-102) [NCGS § 29-14] Spouse; no surviving parents or descendants OR only descendants are children of spouse & decedent (and spouse has no other surviving descendants)
All goes to spouse
Spouse; decedent’s children are also children of spouse, but spouse has other surviving descendants who are not decedent’s
$225k + 1/2 balance to spouse; rest to descendants
Spouse; surviving parents, but no descendants
$300k + 3/4 of balance to spouse; rest to parents
Spouse; decedent’s surviving descendants are not spouse’s descendants
$150k + 1/2 balance to spouse; rest to descendants
 
 
·         Simultaneous Death
o   No statutory rule à when someone dies in same accident or at the same time as one of his successors, court must determine who died first so that court can determine whether successor (takes if died after; doesn’t take if died before)
 
o   Modern rule à when someone dies simultaneously with one of his successors, successor is treated as having predeceased decedent if certain conditions are met
 
§  Janus v. Tarasevics
·         Newlywed couple both died by unknowing taking poisoned pills at the same time.  The husband died that night and the wife died a few days later.  Because the wife died later she inherited his estate and then her parents inherited her estate leaving the parents of the husband nothing. 
§  Uniform Simultaneous Death Act (1940, rev. 1953)
·         if there is no sufficient evidence of survivorship, deemed to predecease
§  UPC 2-104, 2-702, USDA (1991)
·         Must establish survivorship by 120 hours (5 days) by clear and convincing evidence
o   Modern statute à if title to property or devolution of property depends on priority of death and it cannot be e