Professor Matthews
Wills, Estates and Trusts
Fall 2013
· Probate Assets: assets owned solely by decedent with no beneficiary or tenant in common
o Reasons to avoid probate:
§ Takes time
§ Expensive
§ Will becomes public record
· Non-Probate Assets: assets that automatically pass outside of the probate process – does not go into the estate
o Non-Probate Transfers: transfers other than by will or intestacy
§ Examples:
· Will substitutes (same practical effect of a will)
o Revocable living trust
o Contract/beneficiary designation
§ Life insurance – beneficiary receives payment from insurer upon the death of the insured
§ Retirement account, pension, IRA, 401K, etc. – if there is a designated beneficiary
§ Payable on death – bank account belonging to depositor until it is paid to the beneficiary upon depositors death
o Joint Ownership – property passes to surviving joint owners (not a good plan – because what if joint owner doesn’t survive decedent)
§ Joint ownership with right of survivorship (assuming joint owner survives decedent)
§ Tenants by entirety – property held as husband and wife (assuming spouse survives decedent)
o Gift causa mortis (revocable gift if person recovers)
§ Requirements:
· Donative Intent
· Effective delivery (includes constructive delivery)
· Made in contemplation of death (need not be immanent – apprehension of death is sufficient)
· Acceptance (presumed)
§ Assets that are NOT part of the estate:
· Gifts made inter vivos
· Irrevocable living trust (treated like a gift)
· Gross Probate estate = total of all probate assets
· Net Estate = Gross estate – total of priority expenses
o AKA: net estate = Distributable estate
· Priority of claims – if the estate property is insufficient to pay all the claims and allowances in full, the personal representative makes the payments in the following order:
o Costs and expenses of administration of the estate (lawyers, court cost, etc.)
o Reasonable funeral expenses
o Debts and taxes under federal law(IRS)
o Reasonable and necessary medical and hospital expenses of the last illness of the decedent – including compensation of persons attending him
o Debts and taxes under other laws
o Other claims
§ If there is not enough money to cover all expenses, the money will be split proportionally in category 1 (or the next category that doesn’t have enough money to cover total expenses) and the rest are SOL
· Intestacy: person who has died without a valid will
o When does it apply?
§ When any part of a decedents estate not effectively disposed of by will – passes by intestate succession to the decedent’s heirs according to EPIC – except if intestate succession is modified by the will
· Testacy: person who has died with a valid will
· Express Disinheritance: Negative will
o A decedent can use their will to expressly exclude or limit the right of an individual or class to get property that the decedent passes by intestate succession
§ If that individual or class who has been excluded survives the decedent, the excluded person is treated as if they disclaimed their intestate share
· Survivorship Requirements
o A descendant who neither predeceased the decedent nor is considered to have predeceased the descendent
o UPC:
§ Must establish by clear and convincing evidence that an individual survived an event, including the death of another individual, by 120 hours.
· If individual did not survive the death of the other individual by 120 hours, they are considered to have pre-deceased the decedent
· After born individual: individual conceived while the decedent is still alive, but not yet born when decedent dies, is treated as a living individual if they can survive 120 hours after being born.
o Florida:
§ When the devolution of property depends on the priority of death, and there is insufficient evidence to show that the people didn’t die simultaneously, the property will be disposed of as if they survived each other.
· Spousal Share
o Who is a surviving spouse?
§ UPC describes that a surviving spouse is not:
· Someone who’s been divorced or who is a party in a divorce proceeding
o A decree of separation that does not terminate the status of husband and wife is not a divorce for purposes of a surviving spouse
§ Spouse will be defined by state’s marriage law
o Spousal share flow chart (see attached paper)
· Intestate share to heirs other than spouse
o Any part of the estate that doesn’t go to the decedents surviving spouse – or the entire estate is there is no surviving spouse – passes in the following way:
§ Spouse – defined by state law
§ Decedents descendants by representation; if none…
§ Decedents parents equally – or all to the surviving parent; if none…
§ Descendants of the decedents parents – or either of them by representation
§ If there are grandparents, and descendants of
e disclaimant had predeceased the decedent
· HOWEVER: if by law or under the will or trust, descendants of the disclaimant would take the disclaimants share by representation if the disclaimant predeceased the decedent, then ONLY the disclaimed interest passed by representation to the descendants of the disclaimant who survive
o This means that under per capita at each generation, the disclaimed interest does NOT recombine with other predeceased interests – it passes down separately
§ Example:
· If “A” disclaims and “A” has no descendants – treat “A” as if “A” had predeceased the decedent
· If “A” disclaims and “A” has descendants, then figure out what “A’s” share would have been had “A; not disclaimed and pass that share down per capita at each generation
· Slayer Statute
o Someone who intentionally and feloniously kills (intentional killings without a lawful excuse like self defense) the decedent forfeits all benefits to the estate
§ UPC:
· Person is not entitled to any benefits
· Benefits pass as if person disclaimed their interest
· If person is a joint tenant, the joint tenant interest is converted to tenants in common and they get half
o Courts determined that the slayer should not be permitted to improve their position by the killing, but anything that they would have gotten anyways they can keep
§ Florida:
· Person is not entitled to ANY benefits
· Benefits pass as if person predeceased decedent
· If person is a joint tenant, they get NOTHING
o Even if there is no conviction for the killing, the court can determine by a preponderance of the evidence that the individual would have been found guilty and the slayer statute applies
· Advancements
o A prepayment or gift to an heir as opposed to waiting until decedent dies
o UPC requires:
§ Contemporaneous writing by the decedent that the gift was an advancement; or
§ Contemporaneous writing that the heir acknowledges that it was an advancement
