Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
19 Cards in this Set
- Front
- Back
|
Making a gift:
|
1. To make a valid gift, the donor MUST intend to make a present irrevocable transfer of ownership by and effective delivery of a gift, so that the donor immediately surrenders control over the gift
a. Not a Contract: A gift is NOT supported by consideration from the donee so that a donor’s oral or written promise to make a gift is unenforceable as a TACO contract b. A gift is complete and irrevocable ONLY when it is delivered and put out of the donor’s control. NYAA 611 (requirements for a gift). c. There is NO presumption that a gift has been made i. The AID elements of a gift MUST be established by clear and convincing evidence (CLAM’S GAP CAMP), and the proof must make it “highly probable” that a gift was made ii. The burden of production and persuasion is on the donee (recipient) of the gift d. ✪Under NY and FRE, the donor’s out-of-court statements accompanying the delivery of a gift are NOT hearsay because the words themselves have legal effect |
|
|
Gift Delivery
|
There are three types of delivery – ACE:
a-actual c-constructive e-escrow |
|
|
A
ACE |
i. A – actual delivery, passing title immediately, and ending the donor’s possession of the gift
|
|
|
C
ACE |
ii. C – constructive delivery, which frequently arises when actual physical delivery is impractical because of the nature of the gift
1. Ex. Delivery of the title and the keys to a car or a boat |
|
|
E
ACE |
iii. E – escrow delivery, where the law allows someone other than the donor to deliver the gift
1. HOWEVER, if that delivery was entrusted to the donor’s escrow agent, then delivery to the donee MUST be completed BEFORE the donor’s death, mental incompetency, or contrary instructions to the escrow agent not to deliver the gift 2. EXCEPT: If the escrow delivery agent is either 1) an independent contractor (the post office, the county clerk’s recording office for deeds, or a corporation’s stock recording office), OR 2) the donee’s agent, then the gift is deemed complete when the agent takes control of the gift a. Thus, a donor’s subsequent death, incompetency, or his change of mind prior to the donee actually receiving the gift is no longer relevant because the delivery is complete when that escrow agent took possession. |
|
|
Delivery (ACE) problem: D gave M a $5,000 check for the Fourth of July. The next day, M purchased X’s car for $4,000, and paid X $1,000 for money that M had previously borrowed from X. By M endorsing D’s check to X, the next day when X attempted to cash the check, D’s bank B refused to honor the check because D died the night before. What are X’s rights against D’s estate?
|
a. No completed gift occurs until a check is negotiated at the donor’s bank because until that moment, D could have called his bank and stopped payment on the check (the bank is the agent)
b. X could look to D’s estate for $5,000 because X was an HDC who “paid value” (the $4,000 car and the $1,000 past consideration, which under UCC Art 3 is “good value”) c. X took the check free from the estate’s personal defense that the check was an incompleted gift (failure of consideration) i. By signing a NI, D impliedly stated that he surrendered his personal MU2FFIN defenses against any subsequent HDC of that check d. X also could look to M, who with M’s endorsement on the check, M contracted that he would pay $5,000 to X if the check bounced, and M also warranted (T SAID) that no defenses existed against M, but there WAS good defense against M (failure of consideration on the incomplete gift) |
|
|
Delivery Problem #2: (1/3)
R, a widow, sent L, her lawyer, a $20,000 diamond ring. She wrote, “I want this to go to my niece N when I die. But if I should need money during my lifetime, I may ask you to return it.” L put the ring in her safe, but L’s secretary S learned the safe’s combination by secretly peering over L’s shoulder when he opened the safe. S stole the ring and left it with J a jeweler to be cleaned. C, a customer, purchased the ring in the ordinary course of J’s business. R died and the theft was discovered. What are the rights and liabilities of the parties? |
a. The issue is whether R made a b to N.
i. N has no right to the ring because although R had a donative intent, her ACE escrow delivery was to the donor’s agent, whose authority to deliver to N was revoked when R died. 1. What R did was intend to make a gift, BUT the gift lacked an effective delivery that put control of the ring out of R’s reach. 2. R could have obtained the ring by merely asking L for its return |
|
|
Delivery Problem #2: (2/3)
R, a widow, sent L, her lawyer, a $20,000 diamond ring. She wrote, “I want this to go to my niece N when I die. But if I should need money during my lifetime, I may ask you to return it.” L put the ring in her safe, but L’s secretary S learned the safe’s combination by secretly peering over L’s shoulder when he opened the safe. S stole the ring and left it with J a jeweler to be cleaned. C, a customer, purchased the ring in the ordinary course of J’s business. R died and the theft was discovered. What are the rights and liabilities of the parties? |
b. The issue is whether R’s estate can sue L, J, or C for conversion.
i. L was a bailee solely for the benefit of the bailor (R) 1. Thus, L would be liable ONLY IF L was grossly negligent ii. R’s estate has a cause of action in conversion against J and C because neither had good title to the ring under the Entrusting Rule 1. J acquired only that title that J’s transferor (S) had – she was a thief and had no title to transfer iii. Even though C purchased the ring from a merchant who regularly dealt in goods of that kind, the estate will prevail against C because S, and therefore J, had no title to re-convey to C iv. When R’s estate demanded the return of the ring, and C refused, the estate could assert two claims against C: 1. The tort of conversion, seeking money damages 2. A replevin claim to recover back the ring 3. *Both claims are governed by a 3-year SOL running from the date of the demand a. The estate must elect which remedy to pursue before the issue goes to the jury |
|
|
Delivery Problem #2: (3/3)
R, a widow, sent L, her lawyer, a $20,000 diamond ring. She wrote, “I want this to go to my niece N when I die. But if I should need money during my lifetime, I may ask you to return it.” L put the ring in her safe, but L’s secretary S learned the safe’s combination by secretly peering over L’s shoulder when he opened the safe. S stole the ring and left it with J a jeweler to be cleaned. C, a customer, purchased the ring in the ordinary course of J’s business. R died and the theft was discovered. What are the rights and liabilities of the parties? |
c. The issue is whether C, who purchased stolen property from a merchant, can get his money back
i. C has a claim against J for breach of the M FEET implied warranty of title |
|
|
Problem-Marital Gift Variation:
Assume that when D got the ring from the estate, she gave it to F, her fiancé, as an engagement present. Six months later, D broke the engagement, but broken-hearted F refuses to return the ring. Was there a completed AID gift? |
a. To avoid unjust enrichment, NY allows suits to recover money, realty, or personal property given in contemplation of marriage where the “sole consideration” (the sole motive or reason) for the gift was a promise to marry
i. It is treated as a conditional gift, and if the condition fails, regardless of fault, the ring or its value must be returned 1. Gifts quest 3 pg 62 b. Not Marital Property: Once the donor and donee get married, the ring is deemed a gift made prior to the marriage i. Thus, the ring is NOT subject to equitable distribution upon divorce c. Any gifts made by a spouse to anyone within one year prior to that spouse’s death where the gift exceeds $14,000, may be brought back into the decedent’s estate for purposes of determining the surviving spouse’s right of election (BRA2G IT, JP) i. The donee of that gift will contribute ratably to the surviving spouse’s elective share |
|
|
Problem:
: T’s will left his coin collection to his friend F. At T’s death, it could not be found in T’s possession (ademption). T’s son S came forward with the coins stating that T had transferred the coins to him by way of a completed inter vivos gift. |
i. When faced with this situation, the Surrogate applies three rules:
1. The claim of an AID gift MUST be established by clear and convincing evidence, making proof of the gift highly likely, and the donee has the burden of persuasion 2. The court’s policy of not attempting to salvage donative transfers that fail to meet all three AID elements 3. The Dead Man Statute a. Under CPLR 4519, since death has sealed the lips of the decedent, is also seals the lips of an “interested person” about his observations of the decedent’s conduct and statements made by the decedent overheard by the interested person |
|
|
Gifts Causa Mortis
|
a. The same AID elements are required for GCM, BUT such gifts are conditional and made in apprehension of impending death
i. The donee’s interest in a GCM is a mere expectation which DOES NOT vest until the donor dies from the contemplated peril of disease ii. RP Exception: There can be NO GCM of real property b. Revocation: A GCM is revoked by: i. By the donor at any time before he dies ii. If the donee predeceases the donor iii. If the donor recovers and does not die iv. If the donor dies, BUT NOT from the contemplated peril |
|
|
Totten Trusts
|
a. A TT is a bank account in the depositor’s name in trust for another named on the account whose interest in the account vests ONLY when the depositor dies
i. Until that time, the funds in the account belong entirely to the depositor, and the deposits can be depleted, and the beneficiary on the account altered or revoked at any time b. Stock brokerage accounts can now be held in the owner’s name followed by the phrase “pay on death” OR “transfer on death” to a named beneficiary i. These accounts are treated exactly like TT accounts |
|
|
Revocation of a Totten Trust
|
There are three ways a depositor can revoke a TT:
i. Withdraw the funds and close the account ii. Change the name of the beneficiary at the bank in a signed writing where the signature is acknowledged like a deed by a notary. NYAA 614. iii. Through specific language in the depositor’s will, specifically stating: 1. “The account is in trust” 2. The name of the bank, AND 3. The name of the beneficiary 4. Ex. T’s will stated, “I leave all money I have in any banking institution to my friend X.” a. This language would NOT revoke a TT for Y because to do so, the will MUST specifically name the bank, the beneficiary, and mention it is a trust account. iv. ✪In NY, there can be NO implied testamentary revocation of a TT. |
|
|
Extinguishment of a totten trust:
|
: A TT is extinguished if the beneficiary pre-deceases the testator
i. Ex. T opened a TT in trust for C and D. If C dies before T, and then T dies, D takes 100% of the TT. |
|
|
Joint Bank Accounts
|
a. JBAs and joint stock brokerage accounts (“to A or B or the survivor”) raise a rebuttable presumption that the depositor intended an immediate vested gift of 50% of each deposit (a moety), and that the balance in the account passes to the survivor when one of them dies
i. The survivor takes whatever is remaining in the account UNLESS she destroyed the survivorship right by earlier withdrawing more than her 50% moety interest while the decedent was still alive ii. That other JT or his estate can sue for the tort of conversion to recover the excess wrongfully withdrawn |
|
|
JBA Presumption Rebuttal:
|
: The presumption created when a JBA is opened MAY be rebutted by clear and convincing evidence that the depositor opened the account merely for her convenience
i. If the bank records state that the JBA is “for the convenience of the depositor,” this REBUTS the presumption |
|
|
Joint Bank Account-Bank Immunity
|
: A bank is NOT liable for paying more than one-half to either joint party UNLESS it has received written instructions not to do so
i. The banking law immunizing banks from liability for excess withdrawals made by a JT from a JBA |
|
|
JBA Survivorship
|
A will CAN revoke a TT if it does so with specificity
i. BUT a will CANNOT revoke a JBA because all of the funds in these accounts pass to the survivor by operation of law |
