Select Page

Wills, Trusts, and Estates
WMU-Cooley Law School
Matthews, Daniel W.

Matthews Wills, Estate & Trust Outline Michalmus 2012
Beneficiary/grantee/donee: An individual receiving the financial benefit of the trust (equitable title). A beneficiary can also be the settler of a trust. A settler beneficiary during life time but there are other individual in case you die as remainder, cannot be the sole beneficiary. A trustee can also be a beneficiary so long as there are other beneficiaries; otherwise you have a fee simple and not a trust. There are people that have remainder beneficiaries in the trust.
·         Child: An individual entitled to take as a child by intestate succession from the parent whose relationship is involved.
·         Codicil:  A codicil is an amendment or supplement to a will.
·         Decedent: A descendent is an individual who has passed away
·         Descendants/issue: Consist of one's children, grandchildren, adopted and illegitimate, etc.
·         Devise/bequest/legacy: A testamentary disposition of real or personal property by the way of a will.
·         Devisee: A person designated in a will to receive a devise. Under EPIC, a devisee dying within 120 hours/5 days of the testator’s death is deemed to predecease the testator.
·         Estate: The property of the decedent can be real or personal or it can be an interest in real or personal property. Net estate or distributable estate is the amount of the estate that remained after certain claims have been paid to creditors.
·         Heir: A person, including surviving spouse or estate that is entitled under intestate succession to decedent's property. Must survive the decedent by 120 hours. A will can contain a provision expressly disinheriting an heir (i.e., a negative will). This could be need in case the testator does not believe that the heir or devisee is suitable to inherit.
·         Intestacy/intestate succession: The passage of the property of a person who died without a valid will. Partial intestacy occurs when the decedent left a valid will that serves to pass only part of the estate, the part that does not pass under the will passes by intestacy just as if there had been no will as to that part. Intestacy or partial intestacy can be avoided if a person forms a valid will.
·         Joint tenants with rights of survivorship (JTWROS): Includes co-owners or ownership of property held under circumstances that entitle 1 or more to the whole of the property on the death of the other or others. By tenancy in common there is no right to survivorship.
·         Parent: A parent includes an individual entitled to take or who would be entitled take by intestate succession from a child who dies without a will and whose relationship is in question. It does not include an individual who is only a stepparent, foster parent, or grandparent. A person's blood relations other than ancestors or issues include brother, sister, uncle, aunts, cousins, niece, nephew. Generally there is no distinction between half and whole blood relations, both are equally eligible to take by intestate succession.
·         Personal representative: A person in charge of the estate after the decedent passed away.
·         Probate: The process of proving a will and declaring it valid.
Settlor/grantor/trustor of the trust:  The person who creates the trust.
·         Surviving descendant: Has to survive the decedent for at least for 120 hours. A person who was not born at the time of the decedent’s death is considered a surviving descendant. Under the gustation rule an individual that is in conceived, so long as that baby is alive and survives for 120 hours can be a surviving heir of the father’s estate.
·         Tenancy by the entirety: This is a special form of JTWROS between spouses
·         Testator/testatrix: I an individual that died leaving a valid will.
Trust Property/res/corpus: There must be something for the trustee to protect and manage. There does not have to be much property, but some.
Trustee: The person (fiduciary) holding legal title and who manages property for the benefit of a beneficiary (it is a special relationship; a fiduciary owes duty to someone). The trustee does not need to be an individual. It can be an entity (bank.) A trustee can also be a settlor so long as there is someone else who will be the beneficiary; this is common on revocable trusts.
Under what circumstances may a person be the settlor, trustee, and beneficiary at the same time? Where there is a revocable trust. If the trustee is in-capacitated then the court would appoint one. A trust won’t fail for lack of naming a trustee.
·         Will: A will is a testamentary instrument that appoints a personal representative, nominates a guardian, revokes or revises another will, OR expressly excludes or limits the right of an individual or class to succeed to the decedent's property that is passing by instate succession. A will is a direction to the probate court with what will happen with your property after you die. A will does not avoid probate court.
·         During your lifetime you can dispose of your property however you want to. After your death property can be devised.
·         Generally, a decedent’s intent is given great deference, subject to certain legal and public policy constraints.
·          Eyerman v Mercantile Trust co. – It is wasteful and against public policy
·         What goes into the Estate?
o    Probate Estate
§  Assets owned solely by decedent with no beneficiary designation or as tenant in common.
·         Need a letter of authority from the probate court.
o    Non-probate Estate
§  Will Substitutes
·         Revocable inter vivos (living) trust – trust made during life
·         By contract/beneficiary designation – life insurance, retirement account, pension, IRA, payable on death (P.O.D.) – assuming a beneficiary survives decedent
§  Joint ownership
·          JTWROS – assuming joint owner survives decedent
·         Tenants by entirety – assuming spouse survives decedent
§  Gifts causa mortis – conditional gift
·         A gift made in contemplation of death that is revocable until the death of the donor and is automatically revoked or remains revocable in some jurisdictions upon recovery.
·         Elements: Donative intent; effective upon delivery; transfer has to be made in contemplation of death; acceptance is presumed.
·         A valid gift cause mortis trumps a valid will because a will only become effective when you die and the gift was made before the death.
o    Assets that are not part of the Estate
§  Gifts made inter vivos and irrevocable living trust (treated like a gift)
·         EPIC 3805 – Priority of Claims
o    (1) If the applicable estate property is insufficient to pay all claims and allowances in full, the personal representative shall make payment in the following order of priority:
§  Costs and expenses of administration
§  Reasonable funeral and burial expenses
§  Allowances
·         EPIC 2402 – Homestead allowance
A decedent's surviving spouse is entitled to a homestead allowance of $15,000, adjusted for inflation. If there is no surviving spouse, each minor child and each dependent child of the decedent is entitled to a homestead allowance equal to $15,000, adjusted for inflation, divided by the number of the decedent's minor and dependent children.
The homestead allowance is exempt from and has priority over all claims against the estate, except administration costs and reasonable funeral and burial expenses. 
Rent, payment of mortgage, homeowners insurance, or payment of property taxes on the real estate
EPIC 2403 – Family allowance
(1) For their maintenance during the period of administration, a reasonable family allowance is payable to the decedent's surviving spouse and minor children whom the decedent was obligated to support, and children of the decedent or another who were in fact being supported by the decedent, which allowance shall not continue for longer than 1 year if the estate is inadequate to discharge allowed claims. The family allowance may be paid in a lump sum or in periodic installments.
(2) The family allowance is exempt from and has priority over all claims except administration costs and expenses, reasonable funeral and burial expenses, and the homestead allowance.  The family allowance is not chargeable against a benefit or share passing to the surviving spouse or children by the will of the decedent, unless otherwise provided, by intestate succession, or by way of elective share.  The death of an individual entitled to family allowance terminates the right to allowances not yet paid.
EPIC 2405, personal representative may determine up to maximum of $18,000/year (adjusted for inflation) on his or her own authority.
EPIC 2404 – Exempt property.
(1) The decedent's surviving spouse is also entitled to household furniture, automobiles, furnishings, appliances, and personal effects from the estate up to a value not to exceed $10,000 more than the amount of any security interests to which the property is subject.  If there is no surviving spouse, the decedent's children are entitled jointly to the same value.
(2) If encumbered assets are selected and the value in excess of security interests, plus that of other exempt property, is less than $10,000, or if there is not $10,000 worth of exempt property in the estate, the spouse or children are entitled to other assets of the estate, if any, to the extent necessary to make up the $10,000 value. Rights to exempt property and assets needed to make up a deficiency of exempt property have priority over all claims against the estate, except that the right to assets to make up a deficiency of exempt property abates as necessary to permit payment of all of the following in the following order: Administration costs and expenses; Reasonable funeral and burial expenses; Homestead allowance; Family allowance.
§  Debts and taxes with priority under federal law
§  Reasonable expenses of last illness – Necessary medical and hospital expenses of the decedent's last illness, including a compensation of persons attending the decedent.
§  All other claims – To cover all personal property via a will have a residual clause. Nobody inherits debts.
o    (2) A preference shall not be given in the payment of a claim over another claim of the same class, and a claim due is not entitled to a preference over a claim not due.
o    (3) If there are insufficient assets to pay all claims in full or to satisfy all allowances, the personal representative shall certify the amount and nature of the deficiency to the trustee of a trust described in 7501(1) for payment by the trustee in accordance with 7502. If the personal representative is aware of other non-probate transfers that may be liable for claims and allowances, then, unless the will provides otherwise, the personal representative shall proceed to collect the deficiency in a manner reasonable under the circumstances so that each non-probate transfer, including those made under a trust described in 7501(1), bears a proportionate share or equitable share of the total burden.
·         EPIC 2101 – Intestacy
o    Courts want to give deference to decedent’s intent regarding distribution of his/her property at death. Therefore, the court will use reliable evidence to determine intent – the most reliably being a validly executed will. When there is no reliable evidence, the court and statute will make presumptions.
o    Intestacy applies to any part of a decedent's estate not effectively disposed of by will. This part of the estate passes by intestate succession to the decedent's heirs as prescribed in this act.
·         Surviving spouse:
o    A survi

tors survived. A scheme of distribution of an estate whereby all individuals of the relevant status take equal shares.
Per Capita with Representation – Original UPC (1969) method (still used in many states)
Like pure stirpes, except the nearest generation with descendants who survive the decedent is used as the “root” of the distribution (instead of using the decedent’s children as the “root”).
1 share for each surviving descendant of the “root” generation and 1 share for each predeceased descendant in “root” generation who, in turn, left at least one surviving descendant.
Sometimes called “moden per stirpes” or “per capita with per stripes representation.”
EPIC 2106 – Per Capita at Each Generation – UPC (1990) – Default
Like per capital with representation, (i.e., nearest generation with descendants who survive the decedent is used as the “root” of the distribution), except all takers of an estate in a generation are treated equally, regardless from whom they are descended of how many siblings they have.
Break into primary shares at nearest generation with at least one surviving descendant (1 share for each surviving descendant and 1 share for each predeceased descendant who, in turn, left at least one surviving descendant).
After “root” generation, recombine unused primary shares and divide the primary shares per capita in the next generation (repeat again if necessary).
What is the “root” generation?
Per stripes – always the next generation, even if no surviving members.
Per capita with representation and per capita at each generation – first generation with at least one surviving member.
1 share for each surviving member of root generation + 1 share for each predeceased member leaving at least one surviving descendant.
What happens to shares allocated to members of root generation who did not survive the decedent?
Per stirpes and per capita with representation – share passes down directly to descendants of person represented.
Per capita at each generation – combine the unused shares and divide equally among members of next generation.
A disclaimer or renunciation is the refusal to take the benefits under a will or under intestate succession.
Under EPIC a person may disclaim in whole or in part. A disclaimer must be in writing, must be signed, declares a disclaimer, describes a disclaimed interest and it has to be delivered to a proper person in a proper time. It has to be disclaimed to a personal representative.
It is treated more like a gift. It can be disclaimed before acceptance. Once you have accepted the benefits of this property you can no longer disclaim the interest in it.
Coomes v. Finegan – A testamentary trust, bequest or devise, may, prior to any act of acceptance, be renounced by the beneficiary, so long as there is no estoppel, or fraud or collusion for the benefit of the renouncer, and such renunciation when made will revert back to the death of the testator and will displace the lien, of any personal judgment against the beneficiary existing at that time, or of any levy on the property made subsequent thereto.
EPIC 2907(1) – Effect of a disclaimer
If a disclaimed interest arises under a will or testamentary trust, or by the laws of intestacy, and the decedent has not provided for another disposition of that interest if it is disclaimed or for another disposition of disclaimed or failed interests in general, the disclaimed interest devolves as if the disclaimant had predeceased the decedent.
However, if by law, or under the will or testamentary trust, the descendants of the disclaimant would take the disclaimant's share by representation if the disclaimant predeceased the decedent, then the disclaimed interest passes by representation to the descendants of the disclaimant who survive the decedent.
EPIC 2803(1) – Slayer’s Statute
An individual who feloniously and intentionally kills the decedent forfeits all benefits with respect to the decedent's estate, including an intestate share, an elective share, an omitted spouse's or child's share, a homestead allowance, a family allowance, and exempt property.  If the decedent died intestate, the decedent's intestate estate passes as if the killer disclaimed his or her intestate share.
The felonious and intentional killing of the decedent does all of the following:
Disposition or appointment of property made by the decedent to the killer in a governing instrument. Severs the interests of the decedent and killer in property held by them at the time of the killing as joint tenants with the right of survivorship, transforming the interests of the decedent and killer into tenancies in common.