Wealth Transfers Outline
Spring 2015
Prof. Atiba Ellis
Chapter 1—Introduction
Power to Transmit Property at Death
Wealth Transfer-transfer of property
at point of death or in anticipation of owner passing on.
Two major issues today:
Right to transfer property at death
Policy of transmission of property at death
Law wants to honor wishes of the owner of the property
Three options:
Probate-property that passes through probate under the descendant’s will or by intestacy (Will)
Probate- Intestate succession
Non-probate- property that passes outside of probate under an instrument other than a will
More property in U.S. transmits through non-probate transfers such as:
Gifts
Contracts (payable on death provisions-life insurance)
Deed (JTWROS)
Joint bank accounts
Trusts
Life insurance
Why do we need probate? What is the policy rationale for/against it?
Trust & estate law is about state law, which tries to codify English common law (which was based on feudalism). Notion of passing property through family-we are replicating English common law
INTESTACY IS THE DEFEAULT
Policy Arguments (see “Pro/Con Chart” in Notes—8/25/10)
Some state that property should go to state upon death
For social reasons (equality of opportunity)
Cultural inheritance (what you learn from your family) is gravest source of inequality of opportunity-Blum & Kalven
Keeps wealth concentrated in a few hands
Others say it is right of owner-honor the decedent’s wishes
a) incentive to work hard to be able to take care of loved ones
b) family unity and stability as well as a sense of satisfaction of the decedent to be able to die knowing loved one’s are take
ers from state to state
1969-Uniform Probate Code
1/3 of states follow it, including WV
In most states, surviving spouse usually receives ½ the estate
Another policy of intestacy laws is family protection
UPC provisions (see examples of intestacy distribution on pp. 87-92)
2-102 Share of Spouse
Surviving spouse gets entire estate if no parent or descendant or all surviving descendants are also descendants of surviving spouse
If parent survives, SS gets ¾
½ if SS has descendants on his/her own
2-103 Share of Heirs other than surviving spouse
Lays out priority to other heirs
2-105 No Taker
If no taker, intestate estate passes to the State (escheats)
