Will, Trusts and Estates
Ë Property Owner’s Rights–can donate, sell, gift, devise, destroy
Ë Inter-Vivos Transfers:
¯ Gifts- Elements: 1.) Intent; 2.) Delivery; and 3.) Acceptance
¯ Gifts Causa Mortis- revocable—Donor gives a gift b/c he is apprehensive of death from a present malady or imminent peril (Donor must die of what he feared when he gave the gift- if he doesn’t the gift is revocable)
N Analysis:- Step 1. Is this a Gift Causa Mortis— was it an outright gift (intent, delivery, acceptance)? If yes, it was an outright gift and is therefore irrevocable. If no, then it is a gift causa mortis- and you proceed to step 2
N Step 2: Gifts Causa Mortis become irrevocable when the donor DIES of the ailment he was contemplating when he made the gift? If he did then the gift is irrevocable, it he didn’t the gift is revocable
Ë Which assets go where?—-2 types of places assets go:
¯ Probate estate-Personal property, sole ownership, tenants in common and Non-Probate Estate-Insurance policies, will substitutes, inter-vivos trusts, joint tenants with right of survivorship
¯ Probate Estate: this is the estate that will pass to the decedent’s heirs through either testacy or intestacy
Ë Order of Distribution—1. Costs and expenses of administration; 2. Reasonable funeral and burial expenses; 3. Homestead allowance; 4. Family allowance; 5. Exempt Personal Property; 6. Debts and taxes under federal law; 7. Reasonable and necessary medical and hospital expenses of decedent’s last illness; 8. Debts and taxes under state law
Ë After claims are paid what is left?
¯ The distributable estate–Then you deal with elective shares
Ë Survival requirement–120 hours after the death of the decedent
Ë Who takes under Intestacy–First person who takes is: Surviving Spouse— SS will get the entire estate if there are no descendants or parents of the decedent surviving.
¯ 1.)If there are surviving descendants—(3 situations)
N 1.) if decedent’s descendants are also descendants of the SS; 2.) if 1 or more (but not all) decedent’s descendants are NOT descendants of the SS; 3.) if all of decedent’s surviving descendants are also descendants of SS, AND SS has 1 or more surviving descendants that are NOT descendants of decedent.
¥ If any of the above 3 situations are present, the SS will take the first $150,000, plus ½ of the instate estate.
¯ 2.) If NONE of the decedent’s surviving descendants are descendants of the SS, then the SS will take $100,000, plus ½ of the intestate estate.
¯ 3.) If there are surviving descendants of the decedent, the part of the estate that does not go to the SS will go to the decedents descendants by representation:
N Descendants by representation—To determine: 1.) determine the root generation (the generation closets to the decedent that has at least 1 surviving member); 2.) count the members in this generation that are alive OR that are dead but left descendants (DO NOT count those who didn’t survive and who didn’t leave behind descendants); 3.) Decedent’s estate will be spilt in to equal shares according to the # identified in step 2; 4.) those still alive will take their respective shares; and 5.) the shares for the predeceased members who left descendants will either pass to their descendants via per capita or per stripes.
¥ Per Capita Distribution- default (use this if it is not specifically asked for)
X 1.) Each surviving descendant in the root generation gets one equal share of the decedent’s estate; 2.) The shares of the predeceased descendants who left descendants are combined. 3.) The combined shares will be given to predeceased descendant’s descendants-they must be split among those descendants
¥ Per Stripes Distribution- 1.) The equal shares of the predeceased who left descendants will go to their descendants respectively
¯ 4. If there are no descendants the estate not going to SS will go the decedents parents —If there is NO surviving parent then the SS gets it all
¯ 5. If there is NO surviving parents AND NO SS, the decedent’s estate will go to the descendants of the decedent’s parents (brothers and sisters, niece/nephew)
¯ 6. If there are NO, SS, surviving parent or their descendants, go up ONE more level to the decedent’s Grandparents (both maternal and paternal)
N If there is a surviving MGP and PGP the state is divided in half. If both GPs in one bloodline predeceases, their 50% goes to their descendents, but if none of their descendents are alive, their half goes to the other bloodline still living
¯ 7. If the decedent is NOT survived by anyone the estate will escheat to the STATE.
Ë What can alter ones intestate share:
¯ Disclaimer: under current law if you disclaim even after the decedent dies, the disclaimer will be effective so long as it is filed BEFORE you take any action of ownership. If someone disclaims we treat them as predeceased
N Common law Theory: you CANNOT disclaim under intestacy
N To be V
an elect to take ½ of the sum or share that she would have gotten had decedent died w/o a will, reduced by 1/2 of the value of all property derived by the spouse from the decedent by any means other than testate or intestate succession upon D’s death
N ½ what SS would have gotten minus [-] ½ non-probate assets or property not received through testate or intestate succession = elective share
Ë After Married Spouses- when T executes a will BEFORE contemplating marriage, then LATER gets married
¯ An after married SS is entitled to– no less than the value or the share SS would have received if testator had died INTESTATE, that is NOT any of the following: 1.) property in trust for the benefit of a child of testator; 2.) property in trust for a descendant of a child;
¯ SS will not be allowed to get the share mentioned above if: 1.) will was made in contemplation of Ts marriage to SS; 2.) the will’s express intention is to be effective even if there is a subsequent marriage; or 3.) T provided for SS outside of the will.
Ë Waiver Rights- Rights of the SS may be waived, completely or partially, before or after marriage but it: 1.) Must be in writing; 2.) signed by party waiving; 3.) Naming what is being waived; and 4.) After full disclosure
Ë After Born Child (Pretermitted heir)-Child born or adopted after the will was made
¯ After Born Child will get one of the following: 1.) if T had no child living when will was executed, ABC will get a share equal to what his intestate share would have been (unless will devised all of the estate to the other parent of the child); 2.) if T had 1 or more children living when the will was made, ABC will get a share equal to what the then living children received, but subject to: a.) limited to the devises made to the then living children;
Ë Lawyer Liability to intended beneficiaries
¯ Traditionally, lawyer liability was only extended tot he testator. The modern trend extends liability to intended beneficiaries of the estate plan.