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Trusts and Estates
Wayne State University Law School
Cancelosi, Susan Evans

INTRO TO ESTATE PLANNING
 
I. An heir inherits though intestacy, whereas a devisee inherits by will
II.     Hodel v. Irving (1987)
A.    ***Main point of case: Made the right to protect private property (and transmit it at death either by intestacy or will) more “natural” under the Just Compensation Clause: 5th AM…no property shall be taken w/o just compensation…A taking of Sioux property, no matter how small the interest (could have transferred an interest)
III.The Policy of Passing Wealth at Death (& the pros and cons)
A.    Justifications for the transmission of wealth from generation to generation
1)      Natural and proper…reinforcement of family ties, Least objectionable way of dealing w/ property at owner’s death, Providing security for future generations, Encourages savings, Want people to be able to do what they want w/ their property, Allowing people to build up wealth will ensure people taking care of them as they age
B.     Arguments against the transmission of wealth
1)      Perpetuates wide disparities in the distribution of wealth, Concentrates inherited economic power in the hands of a few, Denies equality of opportunity to the poor, Tends to reward not merit or productivity but the chance of “fortunate birth”, Distorts motivations and corrupts the character of the children who are expecting to get such wealth
IV.“Dead-Hand Control”
A.    Problem: don’t know any intervening circumstances b/w death and the restriction
B.     Those involving destruction of property: usually void against public policy
V.    Shapira v. Union National Bank (1974) “DEAD-HAND CONTROL”
A.    HOLDING: the restriction that T’s son must marry Jewish girl is NOT a violation of the right to marry protected by the 14th AM…The restriction is (1) reasonable, which means it is (2) not contrary to public policy, and (3) Court here is not being asked to enforce any restriction upon P’s constitutional right to marry
1)      Court wants to preserve the intent of the decedent: for his possessions to be used to encourage the preservation of the Jewish faith, either through his sons or else through the State of Israel
1)      Restrictions are arising almost entirely based on public policy
a)      We don’t allow a testator to completely disinherit his or her spouse
b)      We don’t exempt estates from debts of creditors
c)      We don’t allow provisions in wills that would encourage divorce/separation
d)     Don’t enforce provisions encouraging illegal activity
e)      In the context of trusts… many limits as to the duration of trusts
f)       Won’t enforce provisions that encourage waste
2)      Many restrictions are allowed
a)      Reasonability test imposed to determine whether or not one should be allowed
 
TRANSFER OF THE DECEDENT’S ESTATE
 
**Nonprobate assets CANNOT be disposed of by will (e.g. a divorcee isn’t going to get anything from the will if it is supposed to pass under other arrangements)
 
Administration of Probate Estates
I. Personal representatives
A.    Executor if named in the will
B.     Administrator if not named (appointed by probate court)
Vocabulary Below:
II.    A person dying testate devises real property to devisees and bequeaths personal property to legatees
III. Intestacy: Real property descends to heirs, and personal property is distributed to next of kin
IV.*Probate performs 3 functions
A.   Evidence of transfer of title
B.    Protects creditors by requiring payment of debts
C.    Distributes the decedent’s property to those intended
V.    (1) Opening Probate
A.   Figure out where to file for probate
1)      Wherever primary residence was (if split 50/50, and property in both places, probably need to file in both states)
a)      So, could end up w/ 2 estates…primary jurisdiction and ancillary jurisdiction
VI.(2) Figure out who the representative is (spouse, children, parents, siblings, almost any relative, creditor is the order if no executor)
A.    (2) Supervising the representative’s actions (often done…done by court)
1)      Any interested party may demand supervised administration
VII.    (3) Closing the estate (an accounting and affidavit sa

nce of who died first, then the beneficiary is assumed to have survived the donor
a)      Problem was trying to figure out what constituted “sufficient evidence”
II.    Janus v. Tarasewicz (1985) *Resulted in the revision of the UPC
A.    Must be sufficient evidence that B survived decedent (which there was here…laced Tylenol…she lived for 2 days after husband)
III.NOW: someone who lives for 120 hours longer than the deceased is deemed to have survived the deceased (UPC §2-104, 2-702)
A.    Under UPC, need “clear and convincing” evidence of survival
IV.Shares of descendants (children, and not just minor children)
A.   SEE NOTE CARDS
B.    In all jurisdictions in the U.S., after the spouse, if the decedent has children, the children and their descendants will take to the exclusion of everybody else
C.    *Son- and daughter-in-laws excluded from intestate successors in almost all states
V.    Shares of Parents
A.   Parents do not inherit if there are children (in general)
1)      If no children
a)      UPC: split amongst parents equally (~ ½ of the states)
2)      If neither descendants nor parents, then descendants of decedent’s parents
VI.Disinheritance (at common law)
A.   Cannot be done w/o giving the property to others…otherwise the intestate provisions of the state will be followed, and if the named (disinherited) individual is to take under intestacy, he can do so
B.    UPC allows this w/ a “negative will”: UPC §2-101(b)
VII.    Shares of Ancestors and Collaterals (**see Table of Consanguinity on p. 79)
A.   Collateral kindred: all persons who are related by blood to the decedent but who are not descendants or ancestors