Wills, Trusts & Estates—Carey–2013
o Ct's give deference to descendents intent subject to policy limitation
o Best evidence does not exist
o Courts use the most reliable evidence of the decedents intent
o No will or will doesn’t answer the question – the ct's use presumptions.
· Property Rights
o Types: Home, Car, Jewelry, Business/rental property, retirement plans, bank accounts, furniture, clothing, tangible personal property.
o Someone dies; probate process takes place & decides who get the prop b/c the owner cant sign off on it anymore.
§ Statutes control, but common law can control as well.
· Public Policy
o Right to give property, right to sell it, cant do something illegal
o Ct's have public policy restriction in death. (greater limits after death than during life; easier to look at intent, self interest, and capricious waste)
§ Eyerman: Public policy: One that conflicts w/ the morals at the time, &contravenes w/ any policy of the state.
s Look in the Constitution, laws of the state, and judicial decisions of the state. (can’t tear down house)
o Gather and Decide what is probate estate
o Pay allowable claims
o Distribute to the rest – Testate, or Intestate.
· Probate Estate: Ct procedure to approve the will after the person dies. Proving what the will is, what they own.
o Note: Joint property ownership w/ survivorship, tenancy in common, life insurance, retirement plans, revocable trusts – will not pass under here.
· Executor/Personal Representative: Person who goes to ct and figures how to transfer property.
o Tends to be the spouse, individual tends to be picked through the person writing the will. If not stated in the will, the public admin will chose the executor.
· Estate: Any property from the decedent
· Net Estate: Part of the property that is actually going to the people after the bills are paid.
· Testate (Testacy): To die with a will, left all property devised in a valid will.
· Testator: A person who dies w/ a valid will
· Will: Some attempt to distribute the probate estate. (whether recognized as valid is up to state statute)
o Including a document to appoint a personal rep, a document that amends a will
o Negative Bequest allowed in Mi
· Devise (Devisee): Gift given under the will. Devisee is the one who receives. (devisee to testacy)
o That someone is a devisee Used only under a will
· Intestate (Intestacy): To die w/o a will, w/. part or all their estate not covered by a valid will
· Decedent: Dies intestate, w/o a valid will. Descends from you. Children (natural born, adopted, but NOT step/foster)
o Surviving spouse gets the 1st share. Look at state laws.
· Heir: Someone who is inheriting property under the laws of intestacy (w/o a will) (heir to intestacy)
o A person who survives and is entitled under the laws to receive the property. Spouse, parents
o Children of parents are NOT necessarily heirs. MUST survive parents.
o Must be 120 hours or will be considered to have died before.
o Individual Gestation: Future Grandchild – Life of 120 hrs or more after the birth takes place constitutes as heir.
· Gifts Causa Mortis: Gift made in contemplation of death based on a condition of death.
o Elements: DDAIN
§ (1) Donatives Intent
§ (2) Delivery (constructive or actual is ok)
§ (3) Acceptance
§ (4) In Anticipation of Death
§ (5) Need to Die of What You Thought You Feared of Dying of
s Need to have clear and convincing evidence that there was this. Need FEAR of death.
s If there is no death or elements are not met, the gift is revoked, and the property would still be in the will.
s Mental illness is ok, even though depression isn’t necessarily fatal.
– Van Wormer: Stock not in will, wanted to treat is as gift causa mortis. Bro is the rep. Broker stated should be the bros (this is how the ct got the clear convincing evidence from neutral parties)
Payments of Claims
· EPIC 3805 – All get paid before the distributable estate.
o (1) Costs and Expenses of Administration
o (2) Reasonable Funeral and Burial Expenses
o (3) Homestead Allowances 15k
§ Statutory protections for immediate family
§ Comes out of the gross estate before distributable
§ Allowance of 15k adjusted to inflation and goes to surviving spouse, if no spouse then divided by each minor or dependent children
§ It is in addition to anything the kids would get under the laws of intestacy
§ Priority over all claims except cost of administration and burial expenses!
§ Unless the will provides otherwise, its in addition to any other share devised passing to the children.
o (4) Family Allowances 18k
§ Statutory protections for immediate family
§ Maintaining the family during the estate’s administration
s Duration: It last from the time of death to the closing of the estate
§ Not enough money to pay the bills, it can only last the year
s Deceased spouse w/ visa bills. Alive spouse takes 15k, cannot keep estate open to avoid paying bills.
§ Paid to the surviving spouse, AND minor children who were supported, and children would supported
§ Amount: reasonable amount needed to the support, give up to 18k without taking to the court
§ Duration – While it’s in probate, can’t continue for more than 1 yr of the estate cant pay bills.
o (5) Exempt Property
§ Statutory protections for immediate family
§ Entitled certain family members to certain items like cars, appliances, furniture
§ Up to 10k, net of any security interest. If there is not enough property take up 10k, other assets can be used.
§ Any security interest, like a loan, the 10k is net of any security interest
§ Surviving spouse, and if none, then to ANY children (EVEN ADULT)
s Car worth 15k, can still take it. The 10k is the NET not the gross. Can still take on the car payment.
s Spouse/Parent doesn’t have 10k. You are not limited to the furniture etc. Can take other assets like cash.
s In addition to any share, you would have gotten under will or intestacy.
s Can put a clause in the will, so somebody will get extra (ie piece under the will, and something under this)
s 10k car. Use the fair market value at the time of death! NOT the price when it was purchased.
s Children cannot waive their share. If Spouses waive it, the kids do not get it either!
o (6) Debts and taxes w/ priority under federal law
§ Includes the govt to go back to Medicaid recovery back
o (7) Hospital and Medical Bills
§ If you don’t have enough to pay the 55k for medical, then everyone would get something
o (8) Debts and Taxes with State Taxes
o (9) All other claims car loans, mortgages
Family Protection: 3 Priority Claims
· Family gets paid 1st. Good for intestate and when there is a will.
· EPIC 2101 – Any part of the decedent’s estate not effectively disposed by will passes by intestate succession to the decedent’s heirs as prescribed by in this act. Statute determines who gets what and how much.
o Descendents: Children, grandchildren, etc
§ Children: EPIC 2114 – An individual of his or her natural parents, regardless of their marital status
s Doesn’t matter if you are an illegitimate child or not
s (c) If child is born out of wedlock or your father is not your mother’s husband at the time of birth, the man is the natural father if he acknowledges of child, requests the change of the birth certificate, the man and child start to relate to each other, or there is a paternity order.
§ Half Blood – Are the same
§ Adopted children are treated like natural child.
§ Stepchildren – Do not take or foster children
s Exception: Stepchild where the step father adopts. The mothers right + newly adopted father have it.
– Note: Once a parent gives up their rights, the rights CANNOT come back. EPIC 2114.
o Largest piece normally goes to the spouse, marriage is determined by the states, so we go to state law.
· EPIC 2113 – Sometimes family intermarry w/in the tree.
Statutory Provisions (How much and Who Takes what)
· EPIC 2102: Surviving Spouse & What They Get: of ANY balance of the intestate
o (a) The entire intestate if there are no parents of decedent or descendants survive. 100% Spouse Only.
o 1st 150k + ½:
§ (b) All surviving decedents are descendents of surviving spouse & there are no other decedents.
s Only kids from your marriage together.
§ (d) All of the D’s are the surviving spouses, + “SS” has 1 + descendent NOT related to descendent.
§ (e) 1 or more but NOT all of the surviving descendants are not surviving spouse descendents. SS steps kids.
o (c) 1st 150k + 3/4th: No other decedents survive but the descendents PARENT. Spouse + Descendents Parent
o (f) 1st 100k + ½: NONE of the surviving descendents are descendents of the surviving spouse. All SS steps kids
· EPIC 2103: Any part of the intestate estate that does not pass to the spouse passes in this order:
o (a) The Ds descendants by Representation
o (b) NO surviving D, to the decedents parents equally, if both survive or to the surviving parent.
o (c) No surviving D’s or parent, D’s of decedents’ parents or either of them by rep. Siblings + their descendents.
s Half brothers and sisters are treated the same
o (d) If no parent, descendants, or siblings, then grandparents (or descendants of grandparents)
§ Estate split into 2. ½: paternal/maternal side.
s The surviving side gets ½ & the descendants of grandparents get the other half. (cousins, uncles, aunts)
§ If no one survives on 1 side, it goes to the other side.
§ If nothing on either side or only have 2nd cousins/distant relatives – escheat to the state. 2105.
Types of Representation Systems
· Stocks and Generations
o A generation is a horizontal line, everyone who has the same r/ship w/ the decedent.
§ All the kids in the same generation, all grandchildren’s are in the same generation.
o Stem – A vertical line, w/ the descendants.
· Per Capita – Disregard generation, count heads then divide equally by the number of heads. Or By Representation
o Per Stripes
§ Look at the generation closest to the decedent, the children
§ Divide up by how many living children, and dead children who have left descendants
§ Each keeps everything in each stem
§ Always 1st generation = Root generation.
o Per Capita w/ Rep (Old UPC)
§ Modern Stirpes, If a generation is wiped out (all kids are dead), drop down to the next generation, & treat that next generation (grandchildren) equally
§ With one person in the closest generation is still alive.
s ½ of 1/3 = 1/6th 1*1 2*3. 2 sets of great grandchildren.
s 1st generation w/ at least 1 actual survivor = root.
o Per Capita at each generation (Michigan) EPIC 2106
§ If a generation is wiped out, then it goes down, start with the generation with at least one living member
§ Divide the shares, and then add the remainder. Then move down to the next generation & divide it equally among the next generation members.
§ 1st generation w/ at least 1 actual survivor = root
· Limitations on the Intestate Share
o Disclaimer (Renunciation) – When you don’t want the share
§ Renunciation: Refusal to accept a benefit or devisee under intestate. (under a will = disclaimer)
o EPIC 2901: Allows Disclaimer
§ Governing Instrument – A will, or a trust, something that is trying to transfer property
s A person may disclaim the interest under intestacy in full or in part. Intestacy is treated as part of a will.
– Note: In MI there is a complete change. Able to say NO, and it doesn’t matter if it was accepted.
ren born before the will & receives that portion.
o A pot is created, and then it is divided equally between them Pro-Rate Share
· If there are no children born before the will, the new children will be treated as if they died intestate.
· Eligible: Born after the will, adopted after the will, or thought they were dead when you drafted the will.
o Statute corrects a mistake. Treat them as though they were born after the will.
o If left to parent of the child and that parent survive.
o If the person who receives a substantial portion of the estate is the parent, the child will not gets its testate share.
o If you intentionally omits/disinherits the child, 2302 doesn’t apply
o If you can show provided for your children other than the will, 2303 doesn’t apply.
Waiver of Spousal Rights (Pre-Nuptial Agreement) 2205
· Can be before or after marriage, in full or in part.
· Waive all Rights – Only thing that would be left, is something to a will subsequent.
· Can Waive – Homestead, election, dower, exempt property, and family allowance by the spouse in property of the other and is an irrevocable renunciation by the spouse of all benefit that would otherwise pass to the spouse by intestate succession or by virtue or a will executed before the waiver or property settlement.
· Must be written, signed by the spouse, and proper disclosure. Rinvelt.
· Children can’t waive their rights, just their spouse.
Attorney Liability Issues
· (1) Not limit it to privity of contract,
· (2) 3rd party beneficiary to prove this, but
· (3) Must use the will or estate planning documents to use to prove that you are a 3rd party beneficiary
o Then you can go after the lawyer who did not do this
o Needs to involve something in the document that is wrong, (will wasn’t valid) org intent in another provision.
· Conflicts of the Wills
o Family member and they give you all the money. Beneficiary and the atrny.
o When you represent both the wife and husband
§ Real careful about the potential conflicts and waive them
§ Confidentiality problem between them
o One person you do business w/(business atrny), & then they bring in their spouse to their will (estate atrny)
· Analytical Model:
o (1) Is there an effective 1st will?
§ No, then intestate. Yes, go to step 2
o (2) Was the will or provision effectively revoked w/ intent of replacing it?
s Revocation is either by (1) Revocatory act, or (2) Subsequent will that expressly revokes
§ No, Will #1 is operative. Yes, go to Step 3
o (3) Did T attempt a new will, & was it effective? Attempt to execute replacement for will/ provision T revoked.
s T’s attempted replacement of revoked will/provision fails statutory req’s of enforceable declaration of testamentary intent.
§ No attempt – then intestacy
§ Attempt and Will #2 is effective – then Will #2 operative
§ Attempt but Will #2 is not effective, then go to Step 4
o (4) Will harmless error fix Will #2
§ Yes, then the Courts will fix the problem and Will #2 is operative
§ No, then go Step #5
o (5) Will the Court use DRR to bring back Will #1? To save revoked will or provision.
§ No, the Court doesn’t use DRR, then intestacy
§ Yes, the Court uses DRR and Will #1 is operative
s Look at the factors from LaCroix and Carter
§ (1) Does evidence show revocation of a will/provision was conditioned (dependent) on the validity of the new will or provision.
s (a) Does it appear that T revoked will/provision no matter what, or
s (b) Does it appear T would have wanted the revoked will or provision to remain valid if the attempted replacement fails?
– If condition was clear and ambiguous, ct will grant DDR. Bemm. Must talk about intent.
– If 2nd document looks like intestacy, wont hold it valid. Infer 1st applies rather than die intestate.
§ (2) If Use DDR: What is the remedy?
s Revive revoked will/provision b/c revocation dependent on a condition that failed.
· Will – Attempt to direct the distribution of ones property after death.
· Codicil – Amd or supplement to a will. It is a will, it must have its own formalities and be valid as a will.
o Instrument that just appoints personal rep
o Document nominating guardian
o Expressly excludes or limits the right of an individual or class to succeed the decedents property that is passing by instate succession
§ Wills are ambulatory – they can change anytime, and they are valid at the time of death
· General Requirements for Wills:
o (1) Testamentary Intent
§ Intends the document to be your will
§ Plan of distribution is what the signer intends what to happen to his estate assets.