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Wills, Trusts, and Estates
WMU-Cooley Law School
Torielli, Gina M.

Wills, Trusts, and Estates OUTLINE – Michaelmas 2008

I. WILLS AS A SUBJECT

A. The Law of Wills:

1. There is no federal code; statutes and common law determine the law of wills.
2. Michigan’s version of the Uniform Probate Code is called Estate and Protected Individual Code (EPIC), and is very typical.
3. What law applies? In general, the law that is applied to the decedent’s estate is the law of the state where the decedent was domiciled at the time of death.

B. Four Underlying Principles Relating to Estate Distribution:

Courts like to give deference to a property owner’s intent; courts want to honor the property owner’s intent because the property owner has rights (within limits).

a. Money cannot be left in a will for an unlawful purpose.
b. Property owners cannot violate public policy.
c. Eyerman v. Merchantile Trust Case:
i. Facts: Decedent’s will says to tear down the house and sell the land (with no reason left in the will).
ii. Holding: This is against public policy. Rights of the decedent are balanced against public policy to not leave a gap in the neighborhood and depreciate adjoining property values. It is a waste of an asset, with no apparent good to come out of it. If decedent provided a reason for her intent, the outcome may have been different.
iii. Definition of Public Policy: We will know it when we see it; it contradicts the morals of the time. Examples would include something that is arbitrary and capricious OR wasting of an asset with no good reason.
iv. General Rule: Courts will allow a deceased person to direct their property in death; if they can direct the property in life, they can do it in death. Courts will defer to a decedent’s intent in terms of where they want their property to go after death.
v. Exception – Public Policy Exception: If it goes against public policy (i.e. illegal, unconstitutional, or some other reason backed up by statute, case law, etc.), decedent’s intent is against public policy and will not be honored.
vi. Note: While living, a person may manage, use, or dispose of his property with fewer restraints than a decedent by will; the transfer of property in life is more broad; there are more restrictions in death.

The decedent is not available to testify (dead), so there is no expert on his/her intent, i.e. no expert to tell the court what the decedent intended.

a. Courts are suspicious of oral testimony of testator’s intent.

Courts will consider other reliable evidence to determine D’s intent.

a. The court must rely upon reliable evidence to determine what a person’s intent is.
i. The most reliable evidence is a person’s will.
ii. Beyond that, the court may look outside the will for additional evidence in certain situations.

When there is no reliable evidence or the court doesn’t feel confident due to ambiguity in the will, then the court has to make presumptions. The presumptions will be based on statutes or common law.

C. Property and Property Rights:

Types of Property:

a. Personal Property (two types):
i. Tangible Property: Car, Clothing, I-Pod, Computer
ii. Intangible Property: Bank Accounts, Patent Rights, Contract Rights, Retirement Plans, Life Insurance.
b. Real Property: House, Condo

Rights to Property:

a. Sell it
b. Give it away
c. Difference between a person’s ability to control disposition and use of property intent in life and after death:
i. In death, you are more restricted on how you can handle your property.
ii. If you have not designated a beneficiary, the state will step in via the laws of intestacy.

II. BASIC TERMINOLOGY

A. Probate:
1. Definition: The process of “proving” a will, or having it declared valid and effective following the death of the testator
2. Other Names for It: Testacy Proceeding.
3. EPIC 1107(k): A testacy proceeding is a proceeding to establish a will or determine intestacy.

B. Personal Representative:
1. Definition: The person appointed by the probate court to administer the estate of a decedent; it is the executor of a will or administrator of an intestate estate. In other words, the personal representative is assigned to stand in the place of the decedent.
2. Duties: The personal representative collects and inventories the estate’s assets, invests or manages them to the extent necessary, gives all required notices to interested parties, sees that taxes are paid and creditor’s claims are satisfied or rejected, and distributes the remaining assets to legatees or heirs.
3. EPIC 1106(n): “Personal representative” includes, but is not limited to, an executor, administrator, successor personal representative, and special personal representative, and any other person who performs substantially the same function under the law governing that person’s status.

C. Estate:
1. Definition: Either the total property of a decedent that passes by will or intestate succession, or the nature and extent of an interest in real or personal property. In other words, it is all the property the decedent owns and has a right to at the time of death.
2. Note: The estate does not necessarily encompass all the property that passes at the testator’s death; usually only the probate estate is included. It thus excludes so-called non-probate assets, such as life insurance proceeds and property held in joint tenancy.
3. EPIC 1104(b): “Estate” includes the property of the decedent, trust, or other person whose affairs are subject to this act as the property is originally constituted and as it exists throughout administration.
4. EPIC 1106(s), Property: “Property” means anything that may be the subject of ownership, and includes both real and personal property or an interest in real or personal property.

D. Distributable (Net) Estate:
1. Definition: The amount that is available for distribution after any bills or priority claims are paid; in other words, after creditors; you start with the gross estate and subtract any priorities to get the net estate.

E. Test

the decedent in order to take under the laws of intestacy.
4. Heir Presumptive: A person who would inherit from another if the latter died intestate; this is what the heir is called when the decedent is still alive.
5. Heir Apparent: One who certainly will inherit when and if another dies intestate, needing only to survive the intestate.

L. Descendant/Issue:

1. Definition: Issue refers to a person’s descendants, consisting of one’s children, grandchildren, and so forth down through later generations; descending line.
2. Note: Issue never includes relations by marriage, although it does include adopted and illegitimate descendants.
a. Also Note: There is a difference between heirs and issue because a spouse can be an heir, but not an issue.
3. EPIC 1103(m): Descendant means, in relation to an individual, all of his/her descendants of all generations, with relationship of parent and child at each generation being determined by the definitions of child and parent contained in this act.

M. Ancestors:

1. Definition: An ancestor is a person’s parents, grandparents, and so forth up through prior generations, i.e. up the line.
2. Note: A person related to another only by marriage is not considered an ancestor.

III. PROBATE PROCESS: HOW DOES IT WORK?

A. Step One: Person dies.
1. At the moment of death, property passes.
2. Look for a will.
3. If there is a will, the person who dies is a testator. If there is no will, the person who dies is a decedent.

B. Step Two: The person who wants the process to move along will file the death certificate with the court.
1. If there is a document believed to be a will, this is filed with the court as well.

C. Step Three: The court must determine who the personal representative of the estate will be.
1. Will: EPIC tells us to first look to the will to see if a person has been designated. If the will designates a personal representative, that person becomes the personal representative.
2. No Will or Will with No Specification: If the person dies intestate or the will doesn’t assign a person, there is a list of priority relatives that the courts like to use, and the judge will appoint a person (fiduciary person).
a. The preference list starts with a spouse, and then other family members.
b. If there are no family members in the will, the court will pick someone, i.e. a public administrator.

D. Step Four: Administration: