Spring 2014 – Professor Evans – Wills & Trusts
I. Introduction to Estate Planning and the Lawyers roles
a. General Introduction
i. Testamentary Freedom
1. Control to dispose of your property – how it should be disposed of at death.
ii. Broad Overview
1. Testacy – with will
2. Intestacy – without will
a. Default Rules
3. Probate Process – Court administer process of naming someone to be an administrator.
a. Government is paid first…
iii. Kinds of information you need in order to understand the transferors intention.
1. What’s the information you need to know?
2. Who’s going to be in charge?
3. Who showed up when I needed them?
4. Who can make good decisions?
5. Who needs to be protected from themselves?
iv. Wills
1. At the moment of death you should be able to guide and decide what happens.
2. General requirements
a. Must be in writing
b. Must be witnessed
c. Signed by the testator
d. With the testators intent to dispose of their property in the following way
v. Will Substitutes
1. Trusts
a. Inter vivo
b. Revocable
2. Life insurance
3. Pension Accounts
4. Joint Accounts
5. People involved
a. Settlor
b. Trustee
c. Beneficiary
6. Benefits
a. Probate avoidance devices
i. Page 10 definition of Probate Process
b. Asset Specific
b. The Legal System Governing Trusts and Estates
i. Wills
ii. The Emergence of Will Substitutes
iii. The Probate Process
c. Testamentary Freedom and Limitation on “Control from the Grave”
i. Rule against perpetuities
1. Been abolished in PA
ii. Elective Share
1. Despite testators intent there are laws that protect the surviving spouse
iii. Creditor Satisfaction
1. Doesn’t matter what you want to do with your property the Government gets paid first then creditors.
iv. Plans to promote illegal conduct
1. Will not be honored
2. Things against public policy won’t be honored.
v. Feinberg v. Feinberg
1. Max wants his heirs to marry within the Jewish faith if not then no money.
2. State Supreme Court – honored the will
3. Signals to us a matter of public policy
4. Meant to just highlight this overriding this… (recording)
5. CONTRAST with dead hand control
d. The Professional Standards Associated with Estate Planning
i. Introduction
ii. The Model Rules of Professional Conduct and ACTEC
1. Counseling
a. MRPC 1.2 Scope of representation and allocation of authority between client and lawyer
i. (a) Subject to paragraphs (c) and (d), a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client’s decision whether to settle a matter. In a criminal case, the lawyer shall abide by the client’s decision, after consultation with the lawyer, as to a plea to be entered, whether to waive jury trial and whether the client will testify.
ii. (b) A lawyer’s representation of a client, including representation by appointment, does not constitute an endorsement of the client’s political, economic, social or moral views or activities.
iii. (c) A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.
iv. (d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
b. MRPC 2.1 Advisor
i. In representing a client, a lawyer shall exercise independent professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation.
2. Confidentiality
a. MRPC 1.6 Confidentiality of information
i. (a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b).
ii. (b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary:
1. (1) to prevent reasonably certain death or substantial bodily harm;
2. (2) to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services;
3. (3) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services;
4. (4) to secure legal advice about the lawyer’s compliance with these Rules;
5. (5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer’s representation of the client;
6. (6) to comply with other law or a court order; or
7. (7) to detect and resolve conflicts of interest arising from the lawyer’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client.
iii. (c) A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.
3. Conflict of Interest
a. MRPC 1.7 Conflict of Interest: Current Clients
i. (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:
1. (1) the representation of one client will be directly adverse to another client; or
2. (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
ii. (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
1. (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
2. (2) the representation is not prohibited by law;
3. (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
4. (4) each affected client gives informed consent, confirmed in writing.
b. Example 1.7-1: Lawyer (L) was asked to represent Husband (H) and Wife (W) in connection with estate planning matters. L had previously not represented either H or W. At the outset L should discuss with H and W the terms upon which L would represent them, including the extent to which confidentiality would be maintained with respect to communications made by each. Many lawyers believe that it is only appropriate to represent a husband and wife as joint clients, between whom the lawyer could not maintain the confidentiality of any information relevant to the representation. The representation of a husband and
r after the appointment of a conservator, including funeral expenses and expenses of administration. The term does not include estate or inheritance taxes, or demands or disputes regarding title of a decedent or protected person to specific assets alleged to be included in the estate.
7. “Conservator” is as defined in Section 5-102.
8. “Court” means the [………. Court] or branch in this state having jurisdiction in matters relating to the affairs of decedents.
9. “Descendant” of an individual means all of his [or her] descendants of all generations, with the relationship of parent and child at each generation being determined by the definition of child and parent contained in this [code].
10. “Devise,” when used as a noun means a testamentary disposition of real or personal property and, when used as a verb, means to dispose of real or personal property by will.
11. “Devisee” means a person designated in a will to receive a devise. For the purposes of [Article] III, in the case of a devise to an existing trust or trustee, or to a trustee or trust described by will, the trust or trustee is the devisee and the beneficiaries are not devisees.
12. “Distributee” means any person who has received property of a decedent from his [or her] personal representative other than as creditor or purchaser. A testamentary trustee is a distributee only to the extent of distributed assets or increment thereto remaining in his [or her] hands. A beneficiary of a testamentary trust to whom the trustee has distributed property received from a personal representative is a distributee of the personal representative. For the purposes of this provision, “testamentary trustee” includes a trustee to whom assets are transferred by will, to the extent of the devised assets.
13. “Estate” includes the property of the decedent, trust, or other person whose affairs are subject to this [code] as originally constituted and as it exists from time to time during administration.
14. “Exempt property” means that property of a decedent’s estate which is described in Section 2-403.
15. “Fiduciary” includes a personal representative, guardian, conservator, and trustee.
16. “Foreign personal representative” means a personal representative appointed by another jurisdiction.
17. “Formal proceedings” means proceedings conducted before a judge with notice to interested persons.
18. “Governing instrument” means a deed, will, trust, insurance or annuity policy, account with POD designation, security registered in beneficiary form (TOD), transfer on death (TOD) deed, pension, profit-sharing, retirement, or similar benefit plan, instrument creating or exercising a power of appointment or a power of attorney, or a dispositive, appointive, or nominative instrument of any similar type.
19. “Guardian” is as defined in Section 5-102.
20. “Heirs,” except as controlled by Section 2-711 means persons, including the surviving spouse and the state, who are entitled under the statutes of intestate succession to the property of a decedent.
21. “Incapacitated person” means an individual described in Section 5-102.
22. “Informal proceedings” means those conducted without notice to interested persons by an officer of the court acting as a registrar for probate of a will or appointment of a personal representative.
