Wills, Trusts and Decedent’s Estates – Fall 2014, Cancelosi
Text Book – Wills, Trusts and Estates (Dukeminier 9th)
§ Wills, Trusts and other nonprobate transfers allow for the transfer of property either before or at death
§ Probate Succession – Passing property by will or intestacy
o Intestacy = dying without any testamentary instruments
§ Distribute property based on what is accepted as what most people would want
§ Nonprobate Succession – inter vivos trusts, pay-on-death contract, or other will substitutes
§ Dead Hand – Allowing a person to posthumously allocate their property
Policy Considerations and Transfers
§ Limits on the Freedom of Disposition and Dead Hand applicability
o For the most part, people can condition gifts on whatever they want, so long as they do not violate public policy or the rule against perpetuities
§ Violations of Public Policy
o Absolute Restraints on Marriage – I give to my wife, W, X, so long as she remains single
§ Courts hold this violates a persons fundamental right to marry and thus hold these clauses void.
§ Exceptions – Partial Restraints on Marriage OK:
· Courts hold these generally as valid, so long as they are a reasonable restriction – fact sensitive
· Look at age of intended beneficiary, time frame, feasibility
o I give to my daughter, D, X, so long as she marries within 10 years
o I give to my son, S, so long as he marries a Jewish woman. – Shapira v. Union National Bank (also included a 7 year limitation)
· Do not arguably restrict a person’s right to marry – just encourage them to marry within a certain time frame or within a certain religion.
o Religion Requirement – Requiring beneficiary to remain faithful to a particular religion
§ Violation of ones 1st Amendment freedom of religion and invalid
o Encouraging Separation or Divorce – Similar to restraint on marriage argument
§ Invalid as against public policy – courts do not want to encourage breaking up a family
§ Possible exception – if a gift is intended to benefit someone in the event of divorce may be valid because decedent does not intend them to get divorced but wants to provide for beneficiary in the event of a divorce.
o Promoting Family Ostracizing – A gift to son, S, so long as they do not communicate with aunt, A.
§ Similar to public policy argument for encouraging divorce
· Want to keep families together – Invalid
o Destruction of Property upon Death
§ People can destroy property all they want when they are alive, however upon death, this is seen as an economic waste – Invalid.
§ Remedy – If condition violates public policy, examine testamentary instrument to see if there is a gift-over clause (if condition not met, gift goes to someone else)
o If there is a gift-over – Courts strike clause, yet give gift to the beneficiary of the gift-over clause
§ If no gift-over – Strike clause and give to beneficiary free and clear of any condition
Probate Process in General
§ Jurisdictional Issues
o Probate Court has Domiciliary JDX over the estate where the decedent died and all personal property and real property located in that JDX.
o If the decedent has property in other JDX, the probate court having Domiciliary JDX can exercise Ancillary JDX over out-of-town property to promote judicial efficiency.
§ Formal v. Informal Probate and Will Contests
o Informal Probate – UPC§ 3-301 – Validity of will not litigated unless an interested party objects
§ Petition got appointment of informal probate
§ Petition contains information regarding decedent, names & addresses of spouse, children, and devises (if will).
§ The original will if will is requested for informal probate
§ Give notice within 30 days to all interested parties including apparently disinherited heirs
§ If any of the above parties objects, goes to formal
o Formal Probate – UPC § 3-401 – Litigated judicial determination after notice to interested parties
§ Used to probate a will, block an informal proceeding, or to secure a declaratory judgment of intestacy.
o Bars against Creditors
§ Every state has a statute that requires a creditor to file a claim against the estate within a certain period of time of the estate entering probate (2 – 6 mo. on average [UPC 4 mo.]) or within a certain period of time that the decedent dies (1-5 yrs [UPC 1 yr.])
Rule Against Perpetuities
Basic Rule: No interest is valid unless it vest no later than 21 years of some life of being after the creation of the trust
· life of being does not need to be beneficiary of the trust
· Just someone alive today that will live a long time and add 21 years
o If we can not know after 21 years the death of the life of being who the gift is going to, it fails RAP
RAP has been the traditional trap in trust: traditionally, any jurisdiction where traditional rule applies, need to make sure trust document complies w/ RAP
o It would be malpractice if attorney failed to comply w/ RAP- it is a lawyer issue
o RAP is a limit on the deadhand-limit is for about a century
Today: Need to include a perpetuities saving clause: this saving clause will fix any risk of violating RAP- it kicks in and distributes income if the trust violates RAP (e.g. in the event that some gift will not vest in 21 years… give to X)
· Probably close to malpractice for not including saving clause
Jurisdictions are starting to take different approaches
· Some jurisdictions still apply traditional rule à so always need saving clause
· Some jurisdictions apply USRAP (Uniform Statutory Rule Against Perpetuities): To be valid, the interest either has to vest w/in the traditional RAP rule or the interest must vest w/in 90 years
o provides wait and see period: wait until the 90 years are up to see what happens if you are unsure if interest will vest
· Dynasty/Perpetuities Trust: completely abolished RAP rule or jurisdiction comes up w/ variation
o about half the states have completely abolished RAP
o Others come up w/ variations like interest must vest at least in 300 years
Who Takes your Property at Death?
§ Joint Tenancy – When people own property as joint tenants (with rights of survivorship), the surviving tenant(s) obtain the deceased tenant’s interest.
o All tenants own the property in equal percentages so when one dies – percentages are recalculated.
§ Life Insurance Policy – A life insurance policy is a payable on death contract, so the benefits of the insurance policy are transferred to the beneficiaries named on the life insurance policy.
§ Life Estates and Remainders – The named remainder takes the property when the party holding the life estate dies.
§ Inter Vivos Trust – The beneficiaries in the trust take upon the death, thus avoiding probate.
§ Intestacy – If decedent does not have a will or does not dispose of ALL of their property through their will, the remaining property not passed through the will passes through intestacy.
§ Will (Opting Out of Intestacy) – Valid will
§ Default distribution scheme of the state
§ Set out by state statute – based on presumed intent of decedent
§ If decedent does not have a valid will or will substitute, or does not dispose of all their property, remaining property passes through intestacy.
UPC § 2-101 – Intestacy Estate
§ Any part of a decedent’s estate not effectively disposed of by will passes by intestate succession to the decedent’s heirs as prescribed in this code, except as modified by the decedent’s will.
§ A decedent by will may expressly exclude or limit the right of an individual or class to succeed property of the decedent passing by intestate succession. In that individual or a member of that class survives the decedent, the share of the decedent’s intestate estate to which that individual or class would have succeeded passes as if that individual or each member of that class had disclaimed his [or her] intestate share.
Summary of UPC Intestacy Provisions
S = Surviving spouse, D = surviving descendants of decedent, P = Surviving parents of decedent, BorS = surviving siblings of decedent or descendants of decedents parents; G = surviving grandparents of decedent, GD = surviving descendants of grandparents.
S; no D; no P
All to S
All to S if all D are also S’s and S has no other surviving descendants. (i.e. S and D only had kids with one another) *MI does not follow
$225,000 plus half of the rest to S if D are also S’s and S has other descendants; other half to D. (i.e. S has kids from a previous marriage)
$150,000 plus half of the rest to S if one or more D is not S’s, other half to D. (i.e. D has kids from a previous marriage)
S; no D; P
$300,000 plus ¾ of the rest to S; other ¼ to P
No S; D
All to D (Per Capita at each generation)
No S; no D; P
All to P
No S; no D; no P; BorS
all to BorS (Per capita at each generation)
No S; no; D; no P; no B or S; G or GD
if both paternal and maternal G or GD, one half to paternal G or GD and one half to maternal G or GD (all to G or, if none, per capita at each GD generation)
If survivors on one side only, all to G or GD on that side (all to G or, if none, per capita at each GD generation)
No S; no; D; no P; no B or S; no G or GD
stepchildren or, if none, then
escheat to state; therefore no “laughing heirs”
Policy Considerations for Spousal Share, Children, and Parents:
§ In general, we assume that the spouse will provide for their children. However, the UPC adopts the approach stating that children get a percentage as well. This is because we assume that the decedent also wants to make sure that the children are well taken care of. Also, we are concerned with the spouse playing favorites, especially if any children are from the decedent’s prior marriage.
§ We also assume that, when parents are involved, that the decedent wishes to take care of the parents as well, although the decedent most likely wants to take care of the spouse more (considering parents have already made their money)
Disinheritance by Negative Will
§ At CL, In order to disinherit someone, you could not just state it in a will when they are entitled to take under intestacy. You had to devise all your property. If any property was left over, the disinherit declaration would be ignored and the person who the decedent was attempting to disinherit would take under intestacy
§ UPC authorizes a negative will by way of an express disinheritance provision.
o If there is a disinheritance provision – person being disinherited is seen as predeceasing decedent.
§ Note – This could result in giving the disinherited person’s heirs an intestate share.
§ A valid marriage is generally easier, however, where common law marriage is recognized, a common law marriage can suffice to take under intestacy
§ The length of marriage does not matter for intestacy, however note that it is taken in consideration under the UPC for when a spouse takes forced share under the decedent’s will.
o Arizona says, if there is no descendants and marriage less than 3 yrs, spouse takes half. Otherwise, takes full amt.
§ Informal or Invalid Marriage
o Common Law general requirements – Must live together for a requisite period of time and hold themselves out as a married couple.
o Invalid Marriage – i.e. one party thought it was a valid marriage, however due to some circumstances such as other party still married or had an invalid divorce or marriage violates states degree of relationship requirements for marriage, the court can create a constructive marriage, called putative spouses, and treated as spouses for most intestacy schemes
§ One party must reasonably believe, in good faith, that the marriage is valid.
§ Domestic Partners and Same Sex Marriage
o Depends on the state, however DOMA being struck down means that same sex partners means that, so long as the couple is married in a state where it is recognized, they are entitled to federal benefits.
o See CB p. 72 for state recognition
o If there is a written or oral contract to make a will, even though a will may not be made, a surviving spouse may have a contract claim under unjust enrichment or reliance. – depends on JDX
§ Married but Separated
o There must be a final judgment or decree of dissolution of marriage, otherwise the surviving spouse, even though separated, may still qualify for intestate share.
In order to take from estate, the taker must actually “survive” the decedent.
· Under Common Law – Preponderance of evidence by taker and Q of Fact.
· Some JDX change this, but in general this is a good guideline
· Some JDX change requirements based on what kind of property is being claimed, i.e. probate intestate, probate testate, and nonprobate property
· If there is a WILL or Will substitute that discusses survival requirements, that trumps statutory requirements.
At common law, only needs to prove that taker survived by one millisecond
Some statutes use 120 hour rule – See UPC §§ 2-104, 2-702
· Clear and convincing evidence
Uniform Simultaneous Death Act – Codified CL rule – where no sufficient evidence as to who predeceased whom, the party claiming a right to take is to be treated as having predeceased the decedent.
· Janus v. Tarasewicz – Couple just got married, brother died because of laced Tylenol. Both took Tylenol without knowing it was laced. Husband lost vital signs in ambulance ride and pronounced dead shortly after arrival at hospital, wife put on a respirator and had some vital signs. survived 48 hrs after being put on respirator
o H had life insurance policy – beneficiary was wife, if she survives him, if not, H’s mom.
o H’s Mom sued W’s estate.
o Court held that there was sufficient evidence to show W survived H and awarded money to W’s estate, applying USDA.
Determining time of death
· Common Law – Irreversible cessation of respiratory and circulatory functions (heart and lungs).
· Modern approach – advances in medicine allow this to happen much faster, so they judge based on irreversible cessation of brain activity.
Applying Survival Requirement – Two part analysis:
· Did the taker actually survive the decedent? – Q. of Fact
· Did the taker legally survive the decedent? Look at the statute. How long must they survive the decedent?
· Remember to look at both spouses on an exam. I.E. did H survive W – if yes, legally? – if yes, H gets W. Who gets H’s property? did W survive H? No – H’s decedents.
Calculating Shares for Descendants/Issue
· All of decedents children survive decedent – Each child takes equally
· Strict Per Stirpes
o How it was done at Common Law
o Divides shares at first generation and shares are distributed to issue who are alive or are dead with bloodline issue
o Creates vertical equality at the expense of horizontal equality – I.E. Grand children and GGchildren are all on the same level, but take more or less depending on how many siblings they have in relation to their cousins.
· Modern Per Stirpes
o Divides shares at generation where there is a live taker and, again, divides shares to issue who are alive or are dead with issue
o Creates vertical equality at the expense of horizontal.
· Per Capita at each Generation
o Divides shares at generation where there is a live taker.
o Live takers take their share, dead descendants shares are pooled and divided equally amongst next generation’s eligible takers.
o Creates horizontal equality at the expense of vertical (i.e. one bloodline can take more than others based on how many kids they have.)
Strict per Stirpes, Modern per Stirpes, and Per Capita – Calculating Shares
For All examples, assume A,B,C,E,G,H, and J all predecease decedent
Strict per Stirpes
Modern per Stirpes (Per capita w/ Representation)
Per Captia (Per Capita at Each Generation)
1. Always divide property at first generation, i.e. children, even if everyone dead. (here, property is is 33% shares)
2. Give one share to each party alive and one share to each person who is dead, but survived by issue. (here, everyone survived by issue, so 1/3 àA, 1/3 àB, and 1/3àC)
3. Give share for dead parties to issue by bloodline. (so A’s 1/3 share goes to E* and F equally, B’s 1/3 share to G*, and C’s 1/3 share to I and J* equally. Note: H does not get a share because H is dead and not survived by issue. If H survived, they would take with I and J*.
a. E is dead – so E’s 1/6 share (half of 1/3) goes to K, L and M equally. (1/18th each)
b. F takes 1/6th of A’s share
c. G is dead – N takes G’s full 1/3 share
d. H – See above
e. I – takes 1/6th of C’s share
f. J is dead – so J’s 1/6 share gets divided equally between O and P. (1/12th Each)
1. Divide property at first generation where there is a live taker. (here second generation of E,F,G,H,I and J)
2. Give one share to each party alive and one share to each party who is dead but survived by issue. (here, E,F,G,I and J get 1/5th shares. Note: H does not get a share for the same reason why they did not get a share in strict per stirpes)
3. Give shares to dead parties’ issue
a. E is dead – so E’s 1/5th share goes to K, L, and M equally (1/15th each)
b. F gets full 1/5th share
c. G is Dead – N takes G’s full 1/5th share
d. H – See above
e. I – takes full 1/5th share
f. J is dead – so J’s 1/5th share gets divided equally between O and P. (1/10th Each)
1. Divide property at first Generation where there is a live taker. (here, second generation of E,F,G,H,I and J)
2. Give one share to each party who is alive and one share to each party who is dead but survived by issue. (Here, one share each to E,F,G,I and J. Note: Again, H takes nothing because they are dead and not survived by issue)
a. F and I take their 1/5th shares since they are alive – E, G and J’s shares are dropping shares
3. Add up dropping shares (i.e. 3/5 of estate) and divide equally amongst the next group of eligible takers (Here, there are 6 surviving issue so 1/10th shares)
a. E is dead – So E’s share is dropped and pooled – K, L, and M get 1/10th each
b. F gets full 1/5th share
c. G is dead – G’s share is dropped and pooled – N gets 1/10th
d. H – See above
e. I gets full 1/5th share
f. J is dead – So J’s share is dropped and pooled – O and P get 1/10th each.
UPC adopts Per Captia at each Generation (UPC §2-106(b))
Most Jurisdictions are split between Strict Per Stirpes and Modern Per Stirpes.
Ancestors, Collaterals and Others
Following Above Chart:
o Assume “Person” is Deceased
o All people below Person are descendants
o All people above Person, i.e. Parents, GP, GGP, GGGP, are ancestors
o Parental Line and down = First line; Grand parents and Line down = Second Line, etc.
o Everyone not a descendant or a ancestor are known as “collateral kindred”
· In EVERY STATE, where there is no spouse or descendants, the intestate property goes to siblings.
o Note – when distributing to the siblings, it goes according to the states jurisdictional scheme of distribution. See above for schemes – per stirpes, etc.
· Once we get past siblings, two basic schemes are used:
o Parentelic System
§ Travels Upwards from parents to grandparents to GGparents to GGGparents until someone in one of those lines is found
o Degree-of-Relationship System
§ Goes outward based on degree of relationship and passes to closest degree of relationship (see the number above the box)
§ One counts the degrees of relationship between the decedent and the relative
§ To determine the degree of relationship count from the decedent UP to the closest common ancestor (the head of a parentelic line – a grandparent or great grandparent), THEN count down to the live relative
o Most states have variations and mixtures of these schemes, such as what to do with tie breakers
§ i.e. Mass follows degree of relationship subject to a parentelic tie breaker.
· More than half the states, and the UPC, have drawn the line at grandparents and their descendents before it escheats to the state. UPC §2-103(a)
Step Children, Half-bloods, and In-laws
o About 1/3 of states and UPC recognize step children as potential heirs
o UPC §2-103(b) – step children take if there are no surviving grandparents, descendants of grandparents or closer kin.
o Some states, such as California, allow for some in-laws to take, such as MIL, FIL, BIL and SIL, but not son* or daughter* in law. – Book and Supplement disagree on Cali
· Half-Blood Children – See figure below for example – A and B are whole blood to one another, C is half-blood with A and B.
o Half-Blood share one parent in common with other siblings. i.e. Mom and Step-dad or vice versa
o Under CL (this is abolished in ALL states) – Half blood children were excluded from taking land through intestate succession
o Majority of states treat half blood siblings as whole blood siblings – as does UPC – UPC §2-107
o Some states only allow for ha
and two other couples were socializing. Testator stated that he wanted two of the guests to attest to will. Testator walked into the other room with one of the witnesses, showed the first witness his signature and the first witness signed. The second witness, who had a leg ailment, followed behind and didn’t see the first witness signed (who went back in the other room) before he signed. – The court stated that, although it is clear that the testator intended the will to be valid, he failed to acknowledge his signature in front of two witnesses at the same time and held the will invalid.
o Steven v. Casdorph – Will executed at a bank. The testator signed the will in front of a first bank teller, who was a notary. The teller then took the will to two other employees who signed it, but not in the presence of the testator. Court applied strict compliance and held the will invalid.
Swapped Wills – Testator signs the wrong document
· General Rule – Since the testator did not sign his or her own document, the will is held invalid. The printed words of the will state that it is someone else’s will. In general, most courts will rule the will as null and void and refuse to probate it, since most courts refuse to correct mistakes.
· In re Pavlinko’s Estate – H and W had mirror wills drafted for them. Each left the estate to the spouse, should they survive them, and if not to W’s brother. Specifically, for example, the wife’s stated, “if my husband, Vasil Pavlinko, should predecease me…” They accidentally signed each other’s will. W died first, H didn’t bother probating. H died and brother offered H’s will for probate when the error was discovered. The court held that the document was not properly executed so it wasn’t a valid will.
o Misdescription Doctrine – Helps to construe an otherwise valid will that contains a misdescription. The court will not add words, but will strike words that constitute a misdescription to see if there are enough words to discern the testators intent.
§ Ex. – to John Smith of 1234 Memory lane, but there exists only one John Smith who lives on Memory Lane. The Court will strike 1234 and the provision reads John Smith of Memory Lane. The one John Smith on Memory Lane will take. – She discussed a case like this in class
§ Note: this still wouldn’t work in Pavlinko’s Estate because both husband and Vasil would have to be struck and the remaining terms would be unintelligible.
· Two Wills as One – When two wills are signed that are mirror image of one another with the exception of the name at the top. These are mutual wills
o Some courts, when these are signed incorrectly, may still admit them to probate
o In re Snide – H and W executed mutual wills but signed each other’s will at the ceremony. When it was discovered, guardian ad litem for child objected. Court stated that the two wills constituted reciprocal elements of a unified testamentary scheme that were executed as part of one unified execution ceremony and held the will valid.
Modern Approach – UPC Requirements for a valid will
UPC §2-502 Requirements for a valid Will – (a)(1) a writing (a)(2) signed by the testator; or in the testators name by another in the testators conscious presence and by the testator’s direction; and (a)(3) either (A) signed by at least two individuals who signed within a reasonable amount of time of either witnessing the testator signing the will or the testator acknowledging that he or she signed the will; or (B) the will was acknowledged by the testator as signed in front of a notary public or other individual authorized by law to make acknowledgments.
Also – UPC § 2-504 allows for a self-proving affidavit which is basically has the witness sign that they in fact witnessed the signing of the will and that it was duly executed without fraud or any other improprieties.
· There are two different authorized ways of having a self-proving affidavit – (1) combining attestation clause and self-proving affidavit [one-step – not adopted in a lot of jdx], or (2) a second clause after the will is signed and attested and affixed to the will requiring a second signature by the affiants [two-step – more JDX permit this than the one-step]
Conscious Presence Test – Presence is defined by whether the party, in whose the presence the act has to be performed, can tell from sight, sound, and general awareness of the events that required act is being performed. Broader than line of sight test (CL) opening up the temporal and physical scope of the presence doctrine.
Modern Trend – UPC 2-502 – abolish requirement that the witness sign in the presence of the testator. Only “presence” requirement: that the testator sign or acknowledge the will in the presence of the witnesses.
UPC Remedies – Substantial Compliance and Harmless Error
· Substantial Compliance
o UPC §2-503 – Requires two findings (1) clear and convincing evidence that the testator intended that document to be their last will and testament, and (2) clear and convincing evidence that the will substantially complies with the wills act formalities
o In re Will of Ranney – The testator properly executed the will, however the witnesses signed the self-proving affidavit without signing the attestation clause. The court stated that he will was not duly executed, but went on to adopt the substantial compliance doctrine and remanded the case to see if the lower court thought that the Wills Act formalities had been substantially complied with.
· Harmless Error
o This basically allows the courts to excuse minor errors in compliance with the wills act so long as there is clear and convincing evidence that the testator intended that document to be their last will and testament.
§ There is an order of importance based on the wills act – most to least
§ I.E. Courts are most likely to excuse minor errors in the attestation but will be extremely reluctant, if at all, to excuse errors in the writing requirement.
· In re Estate of Hall – H and W go to attorney’s office, modified a draft of their joint will, and signed the modified version at the direction of the attorney, who stated that it would be valid until they signed the final version. They went home and destroyed all previous wills. H died before executing final version. Court adopted the harmless error doctrine and held that the document clearly and convincingly reflected the testators intent for that document to be their last will and testament
· In re Probate of Will and Codicil of Macool – Testator went to attorney with instructions to draft a new will to give to the testator’s nieces the same share
· as the testator’s step-children. The attorney gave the testator a “draft” of the will, but before she had the chance to review and sign the document, the testator died. The nieces submitted the draft for probate, but the court stated that there was no express assent to the draft and therefore it is not clear and convincing that she wished this draft to be her last will and testament. No proof that she even reviewed the document. There could have been substantial changes to the draft.
Traditional Requirements – Writing, Signature and Attestation
In general, oral wills will not be allowed
· One exception: nuncupative will – Where someone is on their death bed. Still has to be in the presence of two witnesses and can usually only devise a limited amount of personal property. Also, some statutes allow soldiers at combat to devise limited amounts of personal property via an oral will
· ONLY valid IF – person actually dies for that reason
· The signature requirement states that it must be anything that the testator intends to be his or her signature
· This could be typed in cursive, an “X”, or anything, so long as the testator intends it to be their mark
o Taylor v. Holt – In the presence of two witnesses, the testator typed in cursive his name and printed the document for the witnesses to sign. Court upheld the will as validly signed.
· The will can be signed by another person for the testator – the person signing must sign the testators name, in the testators presence, with the testators express direction to do so.
· Traditionally, the testator must first sign the document, then the witnesses. However, this trend has been changed where the order does not matter, so long as it is all apart of the same ceremony.
· Writing below the signature – Is the additionally added material below the signature valid and a part of the will?
o Two questions to ask:
§ Does the jurisdiction require that the will be subscribed (signed at the end of the document), and
§ When was the writing added?
o Subscription Required
§ Writing added before signing – If the JDX requires strict compliance, the will is void. Under Modern trend, the court might strike the provision and hold whatever is above the signature is still valid.
§ Writing added after signing – The original will is valid, and anything added after the fact will be null and void (unless it qualifies as a codicil)
o Subscription Not Required
§ Writing added before signing – As long as everything was added before it was signed and witnessed, the whole will (including the writing after the signature) is valid
§ Writing added after signing – Anything added after the signing is not considered part of the will so, similarly to the subscription required and writing after signing, everything after the fact is null and void unless it qualifies as a codicil.