Decedent’s Estates and Trusts
Hylton
Fall 2011
Testamentary Power
The Power to Transfer Property at Death
· although a decedent has some right to dispose of his property at death, states have broad authority to regulate the process
· any protections of such a right only extend to the decedent’s power, it does not extend to the particular heirs or beneficiaries of the decedent’s property
· a will can devise only property rights in existence at the testator’s death; however, the state has the power to retroactively create property rights and decide how they should be distributed
Dead Hand Control
· when a decedent conditions a gift to a beneficiary upon that beneficiary behaving in a certain way
· the donor’s intention will be given effect to the maximum extent allowed by law
· but will be invalid where it is prohibited or restricted by an overriding rule of law
o condition would violate public policy
o would constitute state action violating constitutionally protected fundamental rights
§ absolute restraints on marriage
· will be invalid when there are insufficient reasonable possibilities to marry within the condition imposed, amounting to court enforcement of a virtual roadblock to marriage
· will be valid if it is only a partial restraint on marriage, and beneficiary will reasonably be able to satisfy the condition
§ religion requirements
· gifts that require a beneficiary to remain faithful to a particular religion are general void in violation of public policy and religious freedom
§ encouraging separation or divorce
· depends on whether the donative intent is to encourage divorce in which case it is invalid
· but if the condition is meant to provide for someone in the event of divorce, then the condition will be upheld
§ promoting family strife à invalid
§ property destruction à invalid unless insignificant (being buried in a suit or with a watch)
o remedy
§ gift-over clause à strike invalid condition but give to the alternative beneficiary
§ no gift-over clause à strike invalid condition but give to that beneficiary unconditionally
INTESTACY
· choice of law – the law of the state where decedent was domiciled at death governs decedent’s personal property; real property is governed by the law of the state where it is located
Survival Requirements – UPC §§ 2-104, 2-702.
· to qualify as a taker (under will, intestacy, or life insurance policy) the taker must prove by clear and convincing evidence that he survived the decedent by 120 hours (five days).
· if someone fails to meet the survival requirement, they are treated as having predeceased the decedent
· when is someone dead?
o where circulatory or respiratory functions are maintained artificially, death occurs when there is irreversible cessation of total brain activity
Intestate Distribution UPC §§ 2-101, 2-102, 2-103, 2-105 – (p. 73–74)
1) Surviving Spouse
o 100% if no issue or parents
o 100% if all of decedent’s issue are also issue of the surviving spouse who survives the decedent and surviving spouse has no other issue
o 300K + 75% if no issue, but surviving parent
o 225K + 50% if all issue are also issue of surviving spouse and surviving spouse has other issue
o 150K + 50% if one or more issue are not issue of the surviving spouse
2) Any property not passing to surviving spouse passes as follows:
o issue
o parents
o issue of parents
o grandparents or their issue, with half going to paternal side and half to maternal side; if no grandparents or issue on one side, then all to the other
o step-children by deceased spouse or their issue
o the state
Þ a decedent can always opt out of the default intestacy rules by executing a valid will
Þ negative disinheritance by valid will is recognized
Surviving Spouse
· spouses who are separated but still married generally still qualify as spouses for purposes of intestate distribution
· some states disqualify spouses from inheriting if they abandon the decedent spouse
· putative spouses are generally treated as spouses entitled to take under intestacy
Descendents/Issue – Who Qualifies?
· step-children do not qualify, unless adopted
· UPC uses per capita at each generation
o divide shares equally at each generation with a live taker
· posthumous children are presumed to be the child of the decedent if born to his widow within 300 days of the decedent’s death, rebuttable – entitled to a factual determination by a jury
o UPC § 2-120
§ a posthumously conceived child inherits from the deceased parent if
1. during life the parent consented to posthumous conception in a signed writing or consent is otherwise proved by clear and convincing evidence, and
2. the child is in utero no later than 36 months or is born not later than 45 months after the parent’s death
§ there is a similar rule for when posthumous children can take through the parent under intestacy, or a class gift in a will or trust, the rule is the same except that the focus is on the distribution date rather than the date of the parent’s death UPC § 2-705
· illegitimate children can establish father’s paternity by subsequent marriage to the mother, acknowledgment by the father, adjudication during the life of the father, or by clear and convincing evidence after the death of the father
· surrogate mothers do not have a parent-child relationship with the child unless the surrogate is the child’s genetic mother and no one else has a parent-child relationship with the child UPC § 2-121
o unless there is a court-order to the contrary
o the intended parent (a person who entered into an agreement with the surrogate stating that the person would be the parent of the child) has a parent-child relationship with the child if the person functioned as a parent of the child within two years of the child’s birth
· for same-sex couples who use assisted reproduction technology, the child’s birth mother will have a parent-child relationship, there can also be a parent-child relationship with another person if either: UPC § 2-102
o the other person either consented in writing to assisted reproduction by the birth mother with the intent to be the other parent of the child, or
o functioned as a parent of the child within two years of the child’s birth
UPC – Parent-Child Relationship (p. 101) – Adoption
· the key determination is whether there is a parent-child relationship UPC § 2-116
o there is a parent-child relationship between an adopted child and the adoptive parents UPC § 2-118
o but not between an adopted child and that child’s genetic parents UPC § 2-119
§ step-parent adoption
· adopting parent married to genetic parent have parent-child relationship
· adopted child can still inherit form or through other genetic parent, but not the other way around
§ adoption b
me court supervision
§ conservator has trustee-like powers
o custodianship – favored by the Uniform Transfers to Minor’s Act
§ custodian is a fiduciary and has discretionary power to use the property to benefit the minor without court approval
§ more efficient than guardianship, appropriate for small and moderate-sized gifts
o trusts – best for large gifts
Bars to Succession
Slayer Statutes – UPC § 2-803
· applies to all types of property: nonprobate and probate
o joint tenancy – will be severed and the killer will still be allowed to keep his half, but victim’s will pass elsewhere
· whether, under a preponderance of the evidence standard, the individual would be found criminally accountable for the felonious and intentional killing
o a final criminal conviction of a felonious and intentional killing is conclusive
o a guilty plea to a lesser sentence does not preclude a civil finding of accountability mentioned above
· the killer is treated as having disclaimed/predeceased the victim
· constructive trust provides the conceptual foundation for slayer statutes and could be used in the alternative to the same effect
Disclaimer – UPC § 2-1106
· a taker may elect to disclaim his share of a probate estate, in which case the recipient will not be treated as having predeceased the decedent
· the UPC does not require that the disclaimer be made within 90 days, however most states do have such a requirement which reflects the federal tax systems requirement for disclaimers in order to avoid tax liability
· benefits of disclaiming include avoiding income, estate, and gift tax consequences
WILLS
Capacity and Contest
· no contest clauses – the UPC refuses to enforce no contest clauses if there is probable cause to support the will contest, whatever the nature – UPC § 2-517
Mental Capacity
· To be competent to make a will, the testator must:
o be at least 18 years of age, and
§ “capable of knowing and understanding in a general way
§ the nature and extent of his property,
§ the natural objects of his bounty,
§ the disposition that he is making of that property, and also must
o be capable of relating these elements to one another and forming an orderly desire regarding the disposition of the property
· The test is one of capability, not actual knowledge
Þ burden of proof – once the proponent of the will adduces prima facie evidence of due execution, the party contesting the will on the grounds of lack of capacity has the burden of persuasion. There is a strong presumption that one has testamentary capacity
Þ standing – to have standing to contest the validity of a will, the challenging party must be in a position to financially benefit if his challenge is successful
