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328 Cards in this Set

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What does intestate mean?
When a person dies without a will.
What does testate mean?
When a person dies with a will (person is testator).
What is an administration proceeding?
A surrogate court proceeding to appoint a personal representative, also known as an administrator, to administer the estate of a person who dies without a will.
What is a probate proceeding?
A surrogate court proceeding to admininster the property of a person who dies with a will (person who administers is called the executor).
What does operation of law mean?
Property that passes automatically because of the way title is held in the property and is not affected by intestacy rules of by a will.
What is the probate estate?
Assets held in the decedent's name alone that do not pass by operation of law and that which the Executor administers in accordance with the decedent's will.
What bodies of law govern wills and estates in NY?
1) Estates Powers & Trust Law (EPTL);
2) Surrogate's Court Procedure Act (SCPA)
What is the basic purpose of probate proceedings?
1) To prove a document is the last validly executed Will of the decedent; and
2) To appoint an executor to administer the estate.
Where are the rules of descent and distribution in intestacy found?
Article 4 of the EPTL
When do such rules typically apply?
When:
1) Decedent left no will (or left a will that was not properly executed);
2) Will does not make a complete disposition (partial intestacy); or
3) An heir ("distributee") successfully contests the Will, and the Will is denied probate.
What is the preferered term for one who inherits in NY?
Distributee
What does "issue" mean?
All persons who have descended from a common ancestor. Synonymous with "descendants." Includes those in direct line of inheritance with the decedent, i.e., children, grandchildren, etc.
What is the term for those individuals who inherit property under intestate succession?
Distributees (or heirs, but NY prefers distributees)
What is the term for those who inherit under a Will?
Beneficiaries
What are those beneficiaries who inherit personal property under a Will called?
Legatees
What are those beneficiaries who inherit real property under a will called?
Devisees.
What is the result where the intestate decedent is survived by a spouse, but not by any issue?
The surviving spouse takes the entire estate. Parents, siblings, etc. get nothing.
What is the result where the intestate decedent is survived by his spouse and one or more children or their issue (decendants)?
1) The surviving spouse takes the first $50,000 off the top of the estate and half of the balance;
2) The issue inherits the rest.
What if some of the issue are from this marriage and some are from another marriage?
Doesn't matter - all issue treated the same here.
If an intestate decedent is survived by children only, what is the result?
The whole estate passes to the kids in equal shares.
What is the result where the intestate decedent is survived by children and the issue of predeceased children?
The estate passes to the issue of hte dead child by representation; or, said another way, it is distributed per capita at each generation.
What steps does this involve?
1) First, the property is divided into as many equal shares as there are at the first generational level at which there are survivors (usually children);
2) Then, all living persons at that first generational level take one share;
3) Finally, the shares of the deceased persons at the first generational level are combined and then divided equally among the takers at the next generaltional level in the same way.
What is this rule?
Persons in the same degree of kinship to the decedent always take equal shares (equally near; equally dear).
Are in-laws counted as issue or legal descendents?
No.
What if one of the predeceased children had left a will granting "any interest he has in his mother's estate" to his wife, then will the in-law take?
No, because he had no interest in his mother's will at the time he died. He had a mere expectancy, which is not a legal right or interest that you own and can pass along in a will - not a property right.
What is the rule with respect to predeceased will or trust beneficiaries?
For Wills and trusts executed on or after September 1, 1992, a gift to someone's will or trust beneficiaries is also distributed by representation or per capita at each generation (as with intestacy).
What is the priority list for an intestate decedent not survived by spouse or issue?
1) All to parents or survivign parent;
2) If not survived by parents, issue of parents (brothers, sisters, issue of deceased brothers and sisters), who take per capita at each generation;
3) 1/2 to maternal grandparents or surviving grandparent or (if neither is living) to their children and grandchildren, who take per capita at each generation and 1/2 to paternal grandparents or grandparent in the same matter. If no maternal grandparents, or their children or grandchildren, all to paternal grandparents and their issue and vice versa;
4) If none of hte above, great grandchildren of grandparents. If decedent's nearest kin are great grandchildren of grandparents, 1/2 to great-grandchildren on maternal side and 1/2 to great-grandchildren on paternal side;
5) No inheritence beyond great grandchildren of grandparents. If nearest kin are great great grandchildren of grandparents, or issue of great grandparents, the estate escheats to NY.
How are half blood relatives treated?
As if they were relatives of the whole blood.
What are the inheritance rights of adopted children?
1) Adopted children and their issue have FULL inheritence rights from the adopting family (and vice versa).
2) A child adopted by a new family has NO inheritance rights from natural parents of their kin.
3) EXCEPTION: Where a child is adopted by the spouse of a natural parent, the child and its issues can inherit from ALL THREE LINES.
What if a child is adopted by a relative (e.g. aunt or uncle)?
There is a special rule: If the adopted child is related to the decedent by both a natural relationship AND adoption, the child inherits UNDER THE NATURAL RELATIONSHIP UNLESS the decedent was the adopting parent, in which case the child inherits under the ADOPTIVE RELATIONSHIP.
What is the rule for adopted out childrern and class gifts?
Adopted out children do not take as beneficiaries of class gifts made in the Will of a member of the child's natural family.
Why is this the rule?
1) Allowing would be against NY policy that seals adoption records;
2) Adopted out children have a new family from which to inherit.
What if the "adopted out" chlid had been adopted by a relative?
Then he would be included in the class gift b/c he would inherit under the natural relationship, not the adoptive relationship.
What are the inheritence rights of non-marital children?
1) A child born out of wedlock ("nonmarital child") has full inheritance rights from the mother (and mother's kin" and vice versa.
2) However, the chlid inherits from the natural father ONLY IF paternity is established?
How can paternity be estalished?
By one of the following tests:
1) Legitimated by marriage (father married mother after child's birth); or
2) Order of filiation in a paternity suit, entered during the father's lifetime adjudicating the man to be the child's father; or
3) Father files a witnessed and acknowledged affidavit of paternity with the putative father registry; or
4) After death, paternity is established in probate proceeding by clear and convincing evidence AND the father openly and notoriously acknowledges the child as his; or
5) A blood genetic marker test (DNA) plus other evidecne proves paternity by clear and convincing evidence.
*Focus on the last two.
What was the common law rule with respect to lifetime gifts to intestate distributees?
At common law, a lifetime gift to a child was presumptively an advancement (i.e., and advance payment) of his intesteate share, to be taken into account in distributing the estate at death. This was based on hte preumption that a parent would always want to treat his or her children equally.
What is the NY rule with respect to lifetime gifts to intestate distributees?
NY has rejected teh "advancement" presumption by statute. In NY, there is no advancement unless proved by a CONTEMPORANEOUS writing made at the time of the gift that is signed by the donor or the donee. **Contemporaneous requirement is very strict
So, where there has been no contemporaneous writing with a lifetime gift, and parent dies intestate, how is distribution made amongst children?
Equal shares - ignore any lifetime gifts.
Where the gift IS considered an advancement, how is the estate distributed?
Take the value of the estate and add the date-of-death value of advancement property; the total is distributed evenly amongst the children (with the child who received the lifetime gift subtracting the value of the gift out of his share).
What was the common law rule wiht respect to lifetime gifts by testator to beneficiary ("satisfaction of legacies")?
At common law, a lifetime gift to a beneficiary named in a donor's will (executed BEFORE the gift was made) was presumptively in partial (or total) satisfaction of the legacy, to be applied against the amount to which the beneficiary was entitled under the Will.
What is the NY rule with respect to lifetime gifts by testator to beneficiary ("satisfaction of legacies")?
NY has rejected the "satisfaction of legacies" presumption by statute. In NY, such a gift is NOT treated as a satisfcation of lgacy UNLESS proved by a CONTEMPORANEOUS writing made at the time of hte gift that is signed by the donor or donee.
What is the rule with respect to disclaimer or renunciation by intestate distributee or beneficiary?
1) No one can be compelled to be a beneficiary under a Will or to take property by intestacy.
2) A beneficiary under a Will or an intestate heir can disclaim or renounce (in whole or in part) their interest in the decedent's estate;
What other parties can disclaim?
1) Beneficiaris of life insurnance policeis, employee benefit plans, trusts, other non-testamentary transfers;
2) Surviving joint tenants or tenants by the entireties (to the extent decedent furnished consideration for tenancy's acquisition).
Who can make the disclaimer?
With court approval, disclaimer can be made on a person's behalf by a guardian, holder of a durable power, or a decedent's personal representative.
What is required to be a valid disclaimer?
1) Must be in writing, signed and acknowledged (before a notary public);
2) Must be accompanied by a separate sworn affidavit that they received no consideration for making the disclaimer (unless court authorizes the receipt of consideration for the disclaimer);
3) Must be irrevocable (Feb 1999) (after disclaimer is filed, you can't change your mind);
4) The Will must be filed with the Surrogate's Court wihtin 9 months after decedent's death.
How is property distributed if disclaimed by distributee?
Disclaiming party's share is distributed as though he had predeceased the decedent.
Why would anyone want to dislaim an inheritance or testamentary gift?
1) To avoid gift taxes;
2) To avoid creditor's claims
In what situations may an heir or beneficiary NOT disclaim?
1) In order to remain eligible for Medicaid;
2) To defeat a federal tax lien.
What does probate refer to?
The Surrogate's Court proceeding in which:
1) it is judicially determined that the decedent died with a validly executed will and his or her heirs or intestate distributees are determined AND;
2) a personal representative named in the Will, the executor, is appointed by the court to adminsiter the decedent's estate.
What happens if there is no Will left by the decedent?
An administrative proceeding is started by a distributee to be appointed administrator of the estate.
What is the order of priority for appointment as administrator?
1) Spouse;
2) Children;
3) Grandkids;
4) Parent;
5) Siblings;
6) Other collateral relatives (follows intestate distribution rules)
What are teh requirements for a validly executed Will?
To have the capacity to make a Will, the testator must be 18 years old.
1) Signed by Testator (or by someone at testator's direction and in her presence);
2) Testator's signature must "be signed at the end thereof," meaning at the end of hte document;
3) Testator must either sign the will (or acknowledge earlier signature) in presence of each witness;
4) Will publication;
5) 2 Attesting Witnesses;
6) Execution ceremony must be completed within 30 days.
What is required where T's name is signed by another person (proxy signature)?
Such person:
1) Must also sign her name;
2) Cannot be counted as one of the two necssary witnesses; nad
3) Shall affix her address
What is the result of failure to affix address by the proxy signer?
Failure to affix address will nto invalidate the will.
What is the Will publication requriement?
Testator must "publish" the Will, i.e., he or she must declare the document to be his last Will and testament - must communicate to the witnesses that they are witnessing a Will (and not some other legal document).
When does the 30-day time period for completion of the excecution ceremony begin to run?
When the first WITNESS signes (not when the testator signs)
What is a codicil?
A later amendment or supplement to a Will.
How must a codicil be executed?
With the same six-part formalities.
What are other formalities required in some states, but not required in NY?
In NY,
1) Witnesses do NOT need to sign in each other's presence;
2) Witnesses do NOT need to sign in the testator's presence;
3) Only the testator needs to sing in the presence of the witnesses.
Is a Will admissible to probate that is not signed at the end therof?
Yes. The only consequence is that the words following the signature are ignored.
What is the exception to that rule?
The entire Will will be invalid ONLY IF: what came after the signature was so important and material that to ignore that and enforce everything else in the Will, would defeat the testator's intention.
Is it OK in NY if a witness signs BEFORE the testator?
Yes. The exact order of signing is not crucial, as long as all of the signatures are part of ONE CONTEMPORANEOUS TRANSACTION.
Is there a problem if the testator's signature is barely legible?
No. Any mark intended as the testator's mark will satisfy the signature requirement.
Is it OK in NY if one of the witnesses guides the testator's hand while she signs?
No, as long as it was the testator's VOLITIONAL act. Testator cannot be comatose -need volition.
When will the testator be considered to have acknowledge his signature to a witness?
When you give a witness your will with your signature showing in NY, that is a tacit acknowlegement.
Who has the burden of proof as to due execution?
Burden of proof as to due execution is on the wil proponent (the one offering the Will for probate; usually teh executor).
What is the requirement to prove due execution?
If Will is not self-proved, both attesting witnesses must testify as to the facts necessary to show due execution.
When will the testimony of one witness suffice?
If one witness id dead, absent from the state, incompetent, or cannot with due diligence be found.
What if none of the witnesses are able to testify?
Will proponents must prove two signatures - the signature of testator and one witness.
What is an attestation clause?
Appears below testator's signature and above the witnesses' signatures and recites all of the elements of due execution:
"On the above date, testator declared to us thaht the foregoing instrument was her Will and she asked us to serve as witnessees thereto. She then signed the Will in our presence, we being present at the same time. We then signed the Will as attesting witnesses in testator's presence and in the presence of each other."
Is attestation legally required?
No, not in any state.
What is the value of an attestation clause?
Such a clause is prima facie evidence of the facts recited.
When is an attestation clause useful?
1) Witness with bad memory - probate of a will does not turn on teh memory of the attesting witness;
2) Hostile witness - attestation clause can be used to rebut this witness.
What is a self-proving affidavit?
Witnesses sign a sworn affidavit in the presence of a notary public that recites all statements they would make if called to testify in court. Affidavit is usually signed at the same time as the will is executed.
What is the effect of the self-proving affidavit?
Unlike an attestation clause (which is merely corroborative of Ws testimony - you have to call the Ws to testify, or else prove their signature), a self-proving affidavit is a legal record of the witnesses. The affidavit serves the same function as an interrogatory or deposition, i.e., it is sworn testimony.
What effect does the self-proving affidavit have on probate?
The Will is admissible to probate on the strength of the sworn recitals in the affidavit UNLESS an interested party (an heir, or legatee under an earlier Will) objects, in which case the formal rules of proof of due execution apply and you must call the two attesting witnesses to testify.
What is the effect of a Will beneficiary being an attesting witness?
The fact that a Will beneficiary is an attesting witness never affects the validity of the Will. The only consequence is that the bequest to the witness is void UNLESS:
1) Supernumerary rule applies;
2) Witness would be a distributee (intestate heir) if testator had died w/o a Will
What is the supernumerary rule?
There were 3 witnesses and the other 2 were disinterested witnesses. Therefore the signature of the third intersted witness is not needed to admit the Will to probate.
What is the rule where witness would have been a distributee if testator had died without a Will?
The "whichever is least" rule applies. The witness-beneficiary takes the lessor of:
1) The bequest in the Will; or
2) Their intestate share.
Is the interested witness rule triggered where an attesting witness is named executor of the estate in the Will?
No. Even though the executor will be paid by the estate, only beneficial gifts trigger the interested witness rule. Compensation that is eaned as an executor does not trigger the interested witness rule.
What is the Foreign Wills Act?
A Will is admissible to probate in NY if it was validly executed under:
1) NY Law; or
2) Law of hte state where it was executed, regardless of testator's domicile at that time; or
3) Law of the state where testator was domiciled, eithere when the Will was executed or at testator's death.
Once the Will is admitted to probate, what law governs construction and application of its provisions?
NY law.
What is a holographic will?
A will that is written entirely in the testator's handwriting that is signed but not witnessed.
What is a nubupative Will?
An oral will.
What is the rule with respect to holographic and nucupative wills in NY?
Holographic Wills and nuncupative Wills are not valid in NY. EXCEPT FOR:
1) Armed services during declared or undeclared war (expires one year after discharge); and
2) Mariners at sea (expires after 3 years).
Is there a general requirement that a Will be typed?
No, a Will in one's own handwriting is fine so long as it is signed by two witnesses and met the 6-point test.
Who does recognize holographic Wills?
About 30 states, including NJ, so if a NY resident executes a Will in NJ and dies in NY, the Will will be valid under the Foreign Wills Act.
Where attorney fails to counsel correctly on how to validly execute a will and it is later denied probate, do the intended beneficiaries of the Will have a cause of action agaisnt the attorney for negligence?
No, becuase there is no privity of K between the lawyer and the will beneficiaries. The lawyer's duty runs only to the client who contracted for her services.
What constitutes a valid revocation of a will?
A will can be revoked only in one of two ways:
1) By a subsequent testamentary instrument, executed with the 6-point Will formalities; or
2) By a physical act (burning, tearing, cutting, cancelling, obliteration, or anotehr act of mutilation).
If a Will is found with the words "This Will is void, s/testator" at the bottom of every page, is this a valid recovation by physical act?
No. It is not a cancallation b/c none of the testator's written words crossed the words of hte will. You would have to have defaced the words of the will.
Is crossing out the signature on a Will a valid revocation by physical act?
Yes. Anything done to the signature qualifies as a decisive act of revocation.
What is the result where there are two successive Wills but the later does not contain language of revocation of the earlier Will?
1) To the extent possible, you read the two instruments together and the second Will is treated as a codicile to the first Will and revokes the first Will only to the extent there are inconsistent provisions.
2) But if second Will is wholly inconsistent with the first (e.g., first Will leaves all my property to A; and second will leaves all my property to B) the first Will is revoked by implication.
How can revocation by physical act by another person (revocation by proxy) be valid?
Must be:
1) At the testator's request;
2) Done in the testator's presence;
3) Need at least two witnesses.
How many people have to be in the room?
4.
What presumptions exist with respect to revocation of wills?
1) Where a Will was last seen in testator's possession or control AND is not found after death, there is a presumption that the testator revoked the will by phyiscal act;
2) Where a Will was last seen in testator's possession or control and is found mutilated after testator's death (e.g., torn in two), the presumption is that the testator did the mutilating, meaning it is revoked by physical act.
When do the presumptions not apply?
Neither presumption arises if the Will was last seen in the possession of someone adversely affected by its contents.
Can presumptions be rebutted?
Evidence is admissible to reput the presumption of revocation where Will cannot be found or is found in damaged condition.
How can a testator make changes to his will in NY?
Only by:
1) Writing a new will; or
2) Adding a codicile
AND both would have to satisfy the 6-part test.
What is the effect of words added to a Will after it is signed and witnessed?
They are called unattested words and we disregard them.
What is the rule with respect to partial revocation by physical act?
It is not recognized in NY. This is a minority rule.
What are scratch marks on a will called?
Interliniations - given no effect.
What is the status of anything done to the will after execution?
It is nugatory.
What if interlineations and cross-outs are made by the testator immediately before he signed the Will and the witnesses signed as attesting witnesses?
Then the markings will be valid - they'll be part of the duly executed will.
How can a revoked Will be revived?
A Will that has been revoked by a later Will containing a recovation clause CANNOT be revived simply by destroying the later Will. (This also applies to codicils). It can only be revived in one of two ways:
1) If it was re-executed, re-signed by the testator and two witnesses; or
2) The doctrine of "republication by codicil" applies (e.g., testator adds a duly executed codicil to the first Will that makes various changes).
What doctrine mitigates the harshness of the revival rules?
Dependent Relative Revocation (DRR)
What is the Dependenet Relative Revocation (DRR) doctrine?
This common law doctrine permits a revocation to be disregarded when premised upon, conditioned upon, or dependentr upon a mistake of law as to the validity of another disposition.
What is the effect of applying DRR?
To disregard the revocation fo the second Will (the one that was revoked based on the mistake of law) and permit its probate.
What is the status of DRR in NY?
The doctrine has been applied by one Appellate Division case, but never by the Court of Appeals, so in an essay, argue BOTH ways.
What is application of DRR sometimes called?
The second best solution doctrine.
When should the doctrine be applied?
Should NEVER be applied UNLESS disposition that results from disregarding the revocation comes closer to doing what the testator tried (but failed) to do than an intestate distribution.
What is required under the proof of lost wills statute?
1) Due execution must be proved as in any case;
2) Must be established that the Will was not revoked (The "lost Will" proponent must overcome the presumption of revocation that arises from teh Will's nonproduction; or that the revocation should be disregarded b/c of DRR);
3) "All provisions of the Will must be clearly and distinctly proved by each of at least two credible witnesses or by a copy or draft of the Will proved to be true and complete."
What happens when a Will beneficiary dies during the testator's lifetime?
The gift lapses (fails) UNlESS the gift is saved by the states anti-lapse statute.
What does NY's anti-lapse statute provide?
NY's anti-lapse statute provides that the gift does not lapse but it vests in the deceased beneficiary's issue who survive the testator if two conditions are satisfied:
1) NY anti-lapse statute applies only when the deceased beneficiary was testator's issue or sibling;
AND 2) The predeceased beneficiary leaves issue who survived the testator.
What if the testator's will devises property "to my brother, if he survives me," and the brother predeceases the testator?
The anti-lapse statute will not save this gift because there was a condition that was not met and so the gift "fails according to its terms."
What is the rule for lapse in residuary gift in NY?
The "surviving residuary beneficiaries rule":
In NY, if testator's residuary estate is devised to two or moer persons and the gift to one of them lapses or fails for any reason, and the anti-lapse statute does not apply the other residuary beneficiaries take the entire residuary estate, in propotion to their interest in the residue, absent contrary provision in the Will.
As between the anti-lapse statute and hte surviving residuary beneficiaries rule, which wins?
The anti-lapse statute, where it applies, trumps/overrides the "surviving residuary beneficiaries" rule.
What is the rule for simultaneous deaths?
Under the Uniform Simultaneous Death Act (USDA), if two persons die under circumstances such that there is insufficient evidence that they have died otherwise than simultaneously, the property of each is distributed as though he or she survived.
What is the effect of the uniform simulataneous death act on jointly held property?
The USDA prevents operation of the right of survivorsjhip in cahses of jointly held properly. So, in effect, the property passes as though a tenancy in common was involved.
What if there is evidence that one victim survived the other by some small amount of time?
Then USDA doesn't apply. Only applies if there's no evidence of other than simultaneous death. NY doesn't follow the 120 hour rule, so heir doesn't have to survive decedent for more than 120 hours in order to take.
What is the class gift rule?
(A rule of construction based on presumed intent).
If a Will makes a gift to a group of persons generically described as a class ("children, "brothers and sisters," etc.) and some class members predecease the testator, the class members who survive the testator take (absent contary provision)
What is the rationale for this rule?
Testator was "group-minded" in making the gift, and wsanted this class of persons - and no one else - to share ownership of property. Another explanation is that the in determining the takers of a class gift, you read the Will as of testator's death.
What is the result where the beneficiaries are not named as a class, but rather individaully?
Then, if one member of the group predeeases the testator, his share will fall into the residuary estate and the residuary heirs will get it. BUT, this is subject to possible application of the anti-lapse statute.
What is the relationship b/t the class gift rule and the anti-lapse statute?
The class gift rule gives way to the anti-lapse statute when hte predeceasing class member is within the scope of the anti-lapse statute. Class gift rule is overridden by the anti-lapse statute.
What is the rule of convenience?
The rule of construction used to determine the takers of a class gift. The class is cloase, meaning tat later born members are excluded from sharing, at the time a distribution to the class must be made. We close the class in order to determine the distribution rights of each living class member so a distribution can be made without the necessity of asking for a rebate or refund later on.
When does a class close where there is an outright gift by Will?
The class closes at testator's death, subject to the gestation principle, the common law presumption that we include people who were in gestation at time of T's death (280 days from conception to birth).
Where there is a life estate and the class gift is to the remainderman, when does the class close?
The class closes at the life tenant's death, not at the testator's death.
What is the effect of testator marrying after his or her will is executed?
In NY, marriage following execution of Will has no effect on the Will because the elective share statute protects all surviving spouses.
What is the effect of testator divorcing after his or her will is executed?
If testator is divorced or the marraige is annuled after execution of the Will, all gifts and fiduciary appointments in favor of the former spouse are revoked by operation of law. You read the Will as though former spouse predeceased the testator. BUT, a bequest to a sone or daughter of the former spouse is not revoked by the divorce.
What are the exceptions to the general effect of divorce on an already executed will?
1) Appointment of former spouse as guardian of the couple's child is not affected;
2) If the couple reconcile and remarry, all provisions in favor of hte former spouse are restored. Statute applies only if they are divorced (or the marriage is annuled) at the time of teh testator's death.
Does the statute apply if a spouse had applied for divorce but a final decree had not been entered at testator's death?
No. You need a final decree of divorce or annulment to trigger revocation.
Does the statute apply if a decree of separation was entered against the spouse before testator's death?
No. Only a final decree of divorce or annulment will do.
What is the rule for the spouse taking by intestacy or taking an elective share?
Here, a separation decree is sufficient to kick prevent them from taking, but wiht a gift by will, we require a final divorce decree or annulment.
Does the "divorce revokes" rule apply to life insurance policies?
No. The divorce revokes rule applies only to wills, not other forms of non-probate transfers.
What is a pretermitted child?
A child born or adopted after will is executed.
When does the NY pretermitted child statute apply?
The NY pretermitted child statutes give no protection to children who are alive when the Will was executed. The statute applies ONLY:
1) To after-born and after adopted children;
2) Who are unprovided for by any other settlement; or
3) Who are not mentioned in the Will.
What is the purpose of the statute?
To avoid omitting an afterborn child from sharing distributiton with his or her siblings.
What is the result if testator had one or more children when the Will was executed?
1) If no provision is made for any such child, an afterborn shild inherits the same share as the already borns;
2) If the Will made gifts to the testator's other children, the afterborn child shares in the gifts to the other children as if a class gift were made;
3) If it appears that the intention of the testator was to make a limited provision only to the testator's children living at the time the Will was executed, then the afterborn child takes an intestate share (If testator had disinherited the kids already alive, we don't inflict that on the after-born).
What is the result if testator had no other children when Will was executed?
Then the afterborn child takes an intestate share.
If afterborn or after adopted child gets a share, what does it come out of?
It will come out of the testamentary gifts to testator's other children only. No other beneficiary in the will has to give up anything. You treat it like a class gift.
What if the children alive when the Will was executed were given different amounts?
The after-born would take a proportionate share of each gift - e.g., if the after born is the third child, he would take 1/3 of each of his sibling's gift.
What if the already living children were given nothing by the Will?
Then the after born takes nothing UNLESS the Will made a "limited provision" for testator's existing children (e.g., I give $5 to my children, Michael and David"), in which case, the afterborn child takes an amount equal to his intestate share.
What is the purpose of this exception?
When you name someone in a will and give them a nominal amount, that is a disinheritence clause.
What if the decedent had a life insurance policy naming the after born child as the primary beneficiary?
Then the pretermitted child statute provides the afterborn no protection. It only appplies where the afterborn is not provided for under any other settlement.
What if the decedent had no children at the time the Will was executed?
The statute operates and teh afterborn or after adopted child takes an intestate share.
What is the common law rule with respect to incorporation by reference?
At common law, and in nearly every state, the terms of an extrinsic instrument, not present at the time the Will is signed (and thus not part of the Will itself) can be read into the Will ("incorporated by reference") if:
1) the document was in existence ewhen the Will was signed;
2) the Will shows an intent to incorporate the document's terms; and
3) the extrinsic document is clearly identified by language in the Will.
What is the NY rule with respect to incorporation by reference?
NY does NOT recognize the incorporation by reference rule. All documents have to conform to the 6-part formalities test.
What is the "acts of independent significance" doctrine?
Also called the doctrine of independent acts. Sometimes people do lifetime acts that have their own purpose or motive independent of any testamentary purpose. These acts that occur AFTER a will is executed should be given full effect in the distributions made (even though they don't comply with the 6-prat formalities test)
What are some examples of acts of independent significance?
If the Will says X takes the car I own at death, when testator buys a new car while still alive - this affects the Will, but it's OK under the doctrine.
What if the Will says "the contents of my seea chest"?
This is OK too, EXCEPT for title documents, deeds, stock certificates, and bank passbooks - these kinds of title documents are held to a higher standard and cannot be transferred by the doctrine of independent significance.
What is hte probate estate?
The property owned only by the decedent at his death and that is disposed of pursuant to the terms of the Will.
What are nonprobate assets?
Interests in property that are not subject to disposition by Will or inheritance, and are not part of the probate estate for purposes of administration.
What are the major types of nonprobate assets?
1) Property passing by right of survivorship (joint bank account, etc.);
2) Property passing by K: Life insurance, EE death benefits paid to a beneficiary other than insured's executor or estate;
3) Property held in trust, including revocable trusts (Trust terms govern distribution of assets):
4) Property over which the decedent held a power of appointment.
Where a Will directs that the proceeds of a life insurance policy be given to X, but the beneficiary under the policy is Y, which controls?
The life insurance K. Can't change beneficiaries by Will.
What types of gifts can e made by will (testamentary gifts)?
1) Speicifc gift;
2) Demonstrative legacy;
3) General legacy;
4) Residuary disposition;
5) Intestate property
What is a specific gift?
Only that asset can satisfy the gift. E.g., "I devise Blueacre to X"
What is demonstrative legacy?
A general amount from a specific source. E.g., "I bequeath $5000 to be paid from the proceeds of sale of IBM stock, to X"
What is a general legacy?
Gift of a general dollar amount. E.g., "I give the sum of $5000 to X"
What is a residuary disposition?
"I give the rest, residue and remainder of my estate to X."
What is intestate property?
If a partial intestacy results because Will was poorly drafted, has no residuary clause.
What happens when there are so many claims against the estate that there aren't enough assets to cover all the gifts made by the Will?
The gifts under a Will will abate, i.e., they are not given effect so that creditors' claims can be satisfied.
Absent provisions in the Will, what is the order of testator's property to pay debts and claims?
Usually, the residuary bequests abate first, and, working backwards from order of list of gift types, specific bequests are the last to abate.
How is real and personal property treated within each class of gift?
Within each class of gift, no distinction is made b/t real and personal property.
So, how are debts and expenses paid?
1) Debts and expenses are first paid out of any intestate property, if there is any;
2) If there are still debts, go in reverse order: residuary estate, general legacies, demonstrative legacies, and specific gifts. Within each class of gift, no distinction is made b/t real and personal property;
3) Last to abate are dispositions that qualify for the estate tax marital deduction.
What is the rule with respect to apportionment of estate taxes?
Absent contrary provision, death taxes are apportioned pro rata among all persons interested in the estate (beneficiaries of BOTH probate and non-probate transfers).
What is the exception to the pro rata apportionment rule?
Interests that qualify for the charitable or a marital deduction get benefit of that deduction (do not have to contribute pro rata). These gifts don't generate tax.
What is the formula used to determine estate taxes?
Value of each testamentary and non-testamentary gift/ Total value of taxable estate
X Total Tax to be allocated.
Are life insurnace proceeds subject to income taxes?
No, but they are subject to estate taxes.
What is the common law rule with respect to specific gifts of encumbered property?
At common law, if testator made a specific bequest of property that was subject to a mortgage lien or another similar encumbrance on which the testator was personally liable, the beneficiary was entitled to have the lien "exonerated" (i.e., paid from teh residuary estate).
What is the NY rule with respect to specific gifts of encumbered property?
By statute in NY, liens on specifically devised property are NOT exonerated unless the Will directs exoneration.
Does a clause that directs the executor to pay "just debts" qualify as a direction for exoneration?
No. A general provision in the Will for the payment of debts is not an indication that liens are to be exonerated.
What is ademption?
If a Will makes a specific gift of property, and the property is not owned by the testator at her death, the gift fails underr the docrrine of ademption, without regard to the testator's intent.
When does ademption NOT apply?
Ademption does not apply to general legacies or demonstrative legacies. Assets will haev to be sold to satisfy a general disposition if there isi not enough cash or to satisfy a demonstrative disposition if the designated account is empty.
To what does ademption apply?
Ademption ONLY applies to specific devises and bequests.
Where a testator bequeathed Blackacre to X and the residuary estate to Y, and before he dies, testator sells Blackacre for cash and a note, what does X get on testator's death?
Nothing. It was a specific gift of Blackacre and so ademption applies - testator did not own Blackacre at time of death, so he can't bequeath it. X does not get the cash and note because that's not what the Will said - the cash and note go to the residuary estate - to Y.
**What are the three statutory exceptions to the ademption doctrine?
1) Casualty insurance proceeds for lost, damaged, or destroyed property - beneficiary takes insurnace proceeds to the extent paid AFTER death;
2) Executory contract - beneficiary gets sale proceeds paid AFTER death;
3) Sale by guardian or conservator of specifically bequeathed property - the beneficiary is entitled to receive the moeny or the property into which the proceeds from the sale or transfer can be traced and have not been spent. If proceeds cannot be traced, then ademption applies.
What is the common law rule with respect to eminent domain?
Identity theory - ademption applies. The reason why the asset is not in the estate at death is irrelevant.
What is the NY rule with respect to eminent domain?
NY followsthe common law rule - no statutory exception for eminent domain. Ademption applies.
What type of gift is a gift of shares of stock in a closely held corporation?
A gift of shares of stock in a closely held corporation is presumptively a specific bequest.
What type of gift is a gift of stock in a publicly traded company?
A gift of stock in a publicly traded company is classified as a general legacy fo ademption purposes unless the testator says I give "MY...stock", which evidences an intention to make a specific gift.
What is the result where the source specified for a demonstrative legacy is no longer owned by the testator at time of death?
Ademption does not apply to demonstrative legacies, so the beneficiary still gets the gift, but it can't come out of the proceeds specified b/c testator didn't own them anymore at time of death. So, other assets have to be sold to satisfy it.
What is the result where testator bequeaths 100 shares of IBM to X, but does not own 100 shares of IBM at time of death?
Because it doesn't say "my shares of IBM," it's treated as a general legacy and thus ademption does not apply. The beneficiary gets the date of death value of 100 shares of IBM stock.
What is the result where the issue is stock split?
When the issue is stock split, the bequest of stock is treated as a specific bequest regardless of whether or not a possessive pronoun ("my") was used, and whetehr publicly traded or closely held stock is involved.
Are dividends declared after the Will is executed specific bequests?
No.
Where testator bequeaths "100 shares of IBM to X" and IBM splits two for one, what does X get on testator's death?
X gets the additional shares produced by the stock split even though this would have been classified as a general legacy for ademption purposes. A bequest of securities can be construed as general for one purpose - avoiding ademption - and specific for another - the stock split.
What if there is a stock split in a closely held corporation?
The stock split is treated as a specific bequest regardless of the possessive pronoun "my".
What is the result where testator bequeaths stock that he owns, but later, before he dies, the company in which he owns stock is taken over and the stockholders receive the stock of the larger corporation in exchange for their small corporation shares?
Ademption doesn't apply because this is only a change in form, not substance. The new stock is directly traceable to the old stock that testator owned before the merger. So, the beneficiary of the old stock will take the new stock.
What is the rule where there is a clerical error that goes unnoticed when Will is being drafted?
The plain meaning rule says that if there is no ambiguity in language, extrinsic evidence is NOT admissible to overturn the plain meaning of the will.
On what presumption is this rule based?
Absent suspicious circumstances, it is conclusively presumed that testator read teh Will and intended its contents.
When is there a latent ambiguity?
When there is a misdiscription.
What rule applies when htere is a latent ambiguity?
Then, extrinsic evidence is admissible to find the meaning of hte testator's words. Here, we're not trying to overturn the plain meaning, we're trying to discern meaning.
Does the admissible evidene include "facts and circumstances" evidence?
Yes.
What is "facts and circumstances" evidence?
Evidence about the testator, his family, the claimants under the Will and their relationship to the testator, testator's habits and thoughts, etc.
Does the admissible evidence include testator's declaration of intent?
Yes.
Does the admissible evidence include testator's statements to the attorney who prepared th ewill?
Yes.
What if the extrinsic evidence doesn't cure the ambiguity?
The gift will fail because there will be no ascertainable beneficiary.
What is a patent ambiguity?
A mistake that appears on the face of the Will. A careful proofreading would have caught a patent ambiguity.
Where there is a patent ambiguity, is extrinsic evidene admissible?
Yes.
What kinds of evidence is admissible?
1) Facts and circumstances evidence;
2) Testator's statements to his attorney;
3) BUT NOT testator's declarations of intent to a third person -- this is the difference b/t latent and patent ambiguities.
What is the rule where the will says something like, "If anything happens to me on X trip, I leave..."?
The question is whether this is a condition Will, meaning that probate would be denied b/c the condition did not occur (testator did not die on the trip), OR whether the reference to the trip merely relfected the motive or inducement for making a Will, in which case it would be OK.
What should you do with such a fact pattern on the exam?
Argue both ways - NY courts are SPLIT on this. A key fact to bring out would be how much later the decedent died. Some courts might think it too long.
What is the common law rule with respect to contracts relating to Wills?
Old NY cases sometimes found a contract merely from the execution of a joint Will using plural possessive pronouns (we, us, our), that made a dispositioni of the combined estates.
What is a joint Will?
Will of 2 persons on one piece of paper.
What is the current NY rule with respect to contracts relating to Wills?
Under the EPTL, a contract to make a Will or not to make a Will can be established only by an express statement in the Will that its provisions are intended to constitute a contract b/t the parties.
What is the result if a Will is contractual and the survivor breaches the contract by writing a new Will with inconsistent provisions?
1) Step 1 - Apply the probate code;
2) Step 2 - Apply contract law and say that this new will breached the K. Impose the constructive trust for the remedy to the breach of K.
May a contractual Will be revoked?
Yes, by agreement of the parties.
What is the common law rule where Will results in partial intestacy and includes words of disinheritance?
At common law and in MOST states, when a Will does not make a complete disposition of the estate (resulting in a partial intestacy), words of disinheritance in the Will are wholly ineffective. The rationale is that property passing by intestacy is governed by the intestacy statutes, not by the decedent's Will.
What is the NY rule with respect to this situation?
NY has a "Negative bequest" statue, which provides that workds of disinheritance in a Will are given full effect. A Will may provide how property may NOT be disposed of.
Where, under the negative bequest statute in NY, a disinherited party does not take under intestacy rules, although he otherwise would have, how is his share treated?
The estate is distributed as though he predeceased the testator. Thus, if the anti-lapse statute applies, his share can go to his issue.
What is the purpose of the elective share statute?
To protect surviving spouse against disinheritance, by giving spouse entitlement to minimu share of decedent's estate.
What is the amount of the elective share?
The amount of the elective share is hte greater of $50,000 or 1/3 of the net estate, plus interest at 6% beginning 7 months after issuance of Letters Testamentary to the executor (or letters of Administration to the administrator appointed by the court).
To what portion of the estate does elective share apply?
Elective share applies to net estate after payment of debts and expenses, but before payment of estate taxes.
What should you mention in any question involving a surviving spouse?
Mention the exempt personal property set aside. These ittems come "off the top" over and above property passing to the spouse by Will, intestate share, or elective share.
What items are included in the exempt personal property set aside?
1) Car (up to $15,000 in value);
2) Furniture, appliances, computers, etc. (up to $10,000 in value);
3) $15,000 cash allowance;
4) Animals, farm machinery, tractor (up to $15,000);
5) Books, pictures, videotapes, softeware, stc. (up to $1000).
Is the cash allowance subject to creditors' claims?
No, EXCEPT joint tenancy creditors.
What is the total value of exempt persoanl property?
Can be as high as $56,000.
To whom is the right of election NOt available?
Under the EPTL, the right os election is not available to the spouse of a decedent who was not domiciled in NY at the time of his or her death.
What is the exception to this rule?
If the decedent had real property in NY, AND expressly stated in his Will that the disposition of his real property in NY is to be governed by NY law, then the property will be subjet to the elective share.
Where a NY domiciliary owns real property in another state, and the surviving spouse files a notice of election to take an elective share of 1/3 of the net estate, does the net estate against which the NY elective share applies include the value of the real estate in the other state?
Yes. Even though NY court cannot adjudicate ownership of real property in another state, it still takes account of hte value of that real estate in calculating the elective share.
What was the old rule with respect to elective share trusts and the right of election?
For estates of decedents dying beforee September 1, 1994, the right to an elective share could be wholly eliminated through the use of an elective share trust that gave the surviving sposue a life estate (an income interest for life), as long as at least $50,000 was given outright to the spouse. If the sum of:
1) outright dispositions of at least $50,000, plus
2) the corpus of the trust,
equalled or exceeded the one-third elective share amount, the surviving spouse could not elect against the Will.
What is the current rule with respect to elective share trusts and the right of election?
Life estates ("terminable interests") no longer satisfy the elective share entitlement.
How do you calculate the elective share to which a surviving spouse is entitled?
Net probate estate
+ Testamentary substitutes
_________________________
= Augmented estate

Elective Share amount (greater of $50,000 or 1/3 of augmented estate)
- Value of outright dispositions to spouse
________________________
= Net elective share.
What happens to a surviving spouse's trust income interest if she files for an elective share?
Administer the trust as though the surviving spouse had predeceased the testator, meaning as though there was no life estate in the surviving spouse. The remainder is accelerated, and the remainderman takes the remainder.
How is the elective share made up?
In making up the net elective share, all other beneficiaries contribute pro rata.
Why does the elective share also apply to testamentary substitutes?
If the elective share applied only to the provate estate (i.e., property owned at death and passing by Will or intestacy), a person intent on disinheriting his or her spouse could make non-probate transcers (revocable trusts, joint bank accounts, etc.) in favor of others, and thereby defeat the policy and protection of the elective share statute.
When is a disposition a testamentary substitute?
A disposition (other than irrevocable disposition) is a testamentary substitute whether created before or after marriage.
What is the augmented estate?
Because the probate estate is augmented by the testamentary substitutes, the amount subject to the elective share is called the augmented estate.
What transfers are considered testamentary substitutes?
TS LEG UP
1) T - Totten trust ("A, Trustee for B") bank accounts);
2) S - Survivorship estates;
3) L - Lifetime transfers with strings attached;
4) E - Employee pensions, profit-sharing, deferred compensation plan IF EE designated the beneficiary on or after September 1, 1992 (and then only 1/2 of qualified plan is a testamentary substitute);
5) G - Gifts in excess of the $11,000 gift tax annual exclusions made within one year and gifts causa mortis even within the $11,000 exclusion;
6) U - US government bonds and other payable on death arrangements;
7) Powers of appointment
What things count as survivorship estates?
1) Joint tenancies;
2) Tenancies by the entirety;
3) Joint and survivor bank accounts
but ONLY if created on or after Sept. 1, 1966.
What types of lifetime transfers are considered to have strings attached?
Transfers with a retained power to revoke, invade, consume or dispose of principal or name new beneficiaries AND irrevocable transfers with retained life estate made on or after September 1, 1992
What are powers of appointment?
Property over which decedent held a presently exercisable general power of appointment (but not property over which he held a general testamentary power).
What types of lifetime transfers are NOT considered testamentary substitutes?
LOGPIT
1) L - Life insurance proceeds (whether payable to surviving spouse or third party);
2) O - half Of a qualifed pension and profit-sharing benefits (but note that these are not testimentary substitutes at all if the EE named a beneficiary before Sept. 1, 1992 and did not change the beneficiary designation thereafter).;
3) G - Gifts within $11,000 annual exclusionis, even made within one year of death;
4) P - Pre-marriage irrevocable transfers;
5) I - Irrevocable transfers made more than one year before death - transfers in which grantor did not retain power to revoke, invade, consume or dispose of principal;
6) T - Transfers with retained life estate made before Sept. 1, 1992.
What amount of any survivorship estate is a testamentary substitute?
1) For a survivorship estates with deceased spouse and third party (joint tenancy, joint and survivor bank account), the consideration furnished test applies.
2) For a survivorship estate with a surviving spouse (joint tenancy, tenancy by the entirety, joint bank account), the consideration furnished test does NOT apply; one half is a testamentary substitute, regardless of which spouse furnished the considerration for the property's acquisition.
What is the consideration furnished test?
The surviving spouse has teh burden of proof as to amount of hte decedent's contribution to the property's acquisition (or amount of decedent's deposits in joint bank account).
What is the rule for survivorship estates with deceased spouse and third party created BEFORE marriage?
Although the consideration furnished test applies to such estates, an added complication is raised by the rule that irrevocable dispositions before marraige are NOT testamentary substitutes.
So, where a joint tenancy b/t deceased spouse and third party was created before marriage, and surviving spouse can prove that deceased spouse provided the entire consideration for the property's acquisition, what result?
Only half of the property's value is a testamentary substitute. Thsi is b/c when the deceased spouse acquired the properrty before the marrriage and took title in this form, she made an irrevocable disposition of a one-half interest to the third party. As this was an irrevocable disposition before marriage, this one half is NOT a testamentary substitute.
What else does this rule apply to?
The rule applies to joint bank accounts and CDs, etc. with third parties to the extent that deposits were made before the marriage.
What is the rule in NY with respect to deposits in joint bank accounts?
Under NY law, a deposit in a joint bank account is irrevocable (i.e., is a gift) as to half of the amount deposited.
How is the elective share made up?
In making up the net elective share, all other beneficiaries contribute pro rata: beneficiaries under the Will, beneficiaries of testamentary substitutes, intestate distributees.
When must election by filed?
Must be filed within 6 months after Letters (Letters Testamentary or Letters of Administration) are issued by Surrogate at the start of probate proceedings, but even if there is no estate administration, in no event more than 2 years after decedent's death.
Can the executor of administration of a deceased spouse elect?
No. The right of election is personal to the surviving spouse. The purpose of hte elective share is to protect the surviving spouse and not her heirs.
What if the surviving spouse is incapacitated?
The guardian or committee of an incapaciteated spouse may elect on their behalf with court approval.
Can the elective share be waived?
Yes, can be waived with or without consideration; before or after marriage; as to a particular Will or testamentary substitute; or as to all Wills and testamentary substitutes generally.
What are the requirements for waiver?
Waiver must be in writing, signed, and acknowledged before a notary public.
What is the scope of waiver?
General waiver (e.g., pre-marital agreement) of all rights in spouse's estates waives right to elective share or intestate share, but does NOT waive rights to specific gifts made by the spouse's Will; there must be an explicit waiver of such bequests.
When is a spouse disqualified from taking an elective share?
DISMAL
1) D - Divorce (final decree of divorce or annulment valid under NY law;
2) I - Invalid divorce procured by a surviving spouse, outside of NY, divorce or annulment not recognized as valid under NY law (doesn't bar the surviving spouse if deceased spouse procured the invalid divorce or annulment);
3) S - Separation decree rendered against the surviving spouse (doesn't bar spouse if ht efinal decree of separation was rendered agaisnt the deceased spouse);
4) M - Marriage is void (as incestuous or bigamous);
5) AL - Abandonment and Lakc of support - surviving spouse abandoned or refused to support deceased spouse.
What is the rule where H and W enter into a separation agreement and live apart from each other, but there is no decree of separation?
The surviving spouse if not disqualified from filing for an elective share.
When are gifts and fiduciary appointments in favor of former spouse revoked?
Only if we have a final decree of divorce or annulment. Thus, a decree of separation disqualified the surviving spouse from filing for an elective share, but not from taking under decedent's Will.
What are the requirements for testator to have had capacity?
Did testator have sufficient capacity to:
1) Understand the significance of what he was doing (i.e., that he was writing a Will);
2) Know the nature and approximate value of his property;
3) Know the objects of his bounty;
and
4) Understand the disposition he was making.
*This is a very low threshold - lower than other legal capacity thresholds.
If a person is adjudicated incompetent and a guardian was appointed to manage her affairs, and on that basis, a Surrogate enterd a directed verdict that the testator lacked capacity to make a Will, is this proper?
No. This will be reversed and remanded.
1) Adjudication of incapacity involves a different legal test (capacity to K, to manage one's affiairs) than capacity to make a Will;
2) Jury could find that testator signed the will during a "lucid interval."
What is an insane delusion?
Where T is of sound mind on other subjects, but has a persistent belief in supposed facts which have no real existence exept in T's perverted imagination, and are agaisnt all evidence and probability, and which control and produce the exercise of hte testamentary act (e.g., paranoia).
What is undue influence?
Existence of a testamentary capacity subjected to and controlled by a dominant influence of power.
Who has the burden of proof to show undue influence?
Burden of proof is on the contestant to prove undue influence.
What must contestant show to prove undue influence?
1) Existence and exertion of an influence;
2) Effect of such influence was to overpower the mind of the testator;
3) It produceed a testamentary act that would not have been executed but for the influence.
What situations are NOT enough to demonstrate undue influence?
1) Mere opportunity to exert influence;
2) Mere susceptibility to influence due to illness, age;
3) Unfair disposition.
What is the rule where a Will makes a gift to one in a confidential relationship?
Where a Will makes a gift to one in a confidential relationship (e.g., attorney/client or adult child with power of attorney) and that person was active in perparing the Will, there is an inference of undue influence which, if not rebutted, satisfies the contestant's burden of proof.
What is the rule where a Will makes a bequest to the drafting attorney?
If the Will makes a bequest to the drafting attorney, the Surrogate makes a Putnam Scrutiny even if no objectoin is filed (i.e., an automatic inquiry) to detemine whetehr the gift was voluntarily made.
What is the rule where a Will names the drafting attorney executor?
He must give written disclosure to the client:
1) That any person, not just attorney, can be named executor;
2) That executor receives statutory commission; and
3) That the attorney will also be entitled to legal fees for representing the estate.
The client must sign the acknowledgement of the disclosure in the presence of at least one witness other than the attorny/executor.
What is the effect of failure to comply with the statute?
The lawyer's commission as executor will be reduced by 50%.
What is the common law rule wiht respect to no-contest or In terrorem clauses?
At common law, and in a majority of states, no contest clauses are given effect unless court finds that contest was brought in good faith and with probable cause (it wasn't a frivilous suit designed to extract a settlement).
What is the rule in NY with respect to no-contest clauses?
No contest clauses are given full effect even if there was goodcaue to challenge the Will.
What are the exceptions to the NY rule that no-contest clauses are fully enforceable?
1) Ground of contest is forgery or revocation by a subsequent will if the Surrogate finds that there was probable cause for the contest (note: only revocation by subsequent will, not physical act);
2) If the Will contest is filed on behalf of a minor or incapacitated beneficiary;
3) If it is a construction suit about interpretation, not about admissibility;
4) Objections to jurisdiction.
2) i
What types of power of appointment are there?
1) General power of appointment;
2) Special power of appointment;
3) Presently exercisable power of appointment;
4) Testamentary power of appointment
What is a general power of appointment?
Donee can appoint to themselves, their estate, their creditors.
What is a special power of appointment?
Donee cannot appoint to themselves, their estate, or their creditors.
What is a presently exercisable power of appointment?
Donee can appoint during donee's lifetime (don't have to wait for a will).
What is a testamentary power of apointment?
Donee can only appoint by will after donor's death.
What is the purpose of a power of appointment?
Permits the income beneficiary to desginate the remaindermen.
Who is the donor?
The creator of the trust or life estate.
Who is the donee?
The recipient.
What are the people who will take if the donee does not exercise the power of appointment called?
The takers in default.
Is a residual clause enough to exercies the testamentary power of appointment?
Yes, by statute in NY.
What is the rule in NY?
In NY, a Will exercises all powers of appointment held by the testator (botrh special powers and general powers) unless the instrument creating the power called for its exercise by a specific reference to the power.
Where the instrument requires a speific reference to the power in order to appoint, will a residuary clause suffice?
No. In that case, the takers in default of appointment take.
Is a presently exercisable power of appointment exercisable by will?
Yes. A presently exercisable power of appointment is ALSO exercisable by will UNLESS exercise by will is expressly prohibited.
What types of powers of appointment are testamentary substitutes for elective share purposes?
General presently exercisable powers of appointment only.
What types of pwoers of appointment are NOT testamentary substitutes for elective share purposes?
1) General testamentary power of appointment;
2) Special power of appointment
Can creditors reach a presently exercisable general power of appointment?
Yes, because the donee can appoint to himself he is treated as the owner for creditor purposes.
Where X holds a presently exercisable special power of appointment and X dies leaving a will that exercises the poewr, can creditors of X's estate reach assets that are subject to the power of appointment?
No. It must be a general presently exercisable power of appointment.
If X holds a general testamentary power of apopintment and dies leaving a Will that exercises the power, can creditors of X's estate reach assets that are subject to the power of appointment?
No. Only a presently exercisable generral power of appointment can be reached by creditors.
How do you determine what is taxable in a decedent's estate/
Take an invevntory of all property in which the decedent had an interest the moment before he died. That property will be the decedent's taxable estate for Federal Estate Tax purposes.
What exemption is granted for estates of decedents dying in 2004 and 2005?
IRC grants a $1,500,000 exemption (tied to a credit) for estates of decedents dying in 2004 and 2005.
What exemption is granted for estates of decedents dying in 2006, 2007, and 2008?
$2,000,000
What is the exemption granted for the estate of a decedent dying in 2003?
$1,000,000
What is the rule for an estate under the applicable exemption size?
No estate tax is due and no estate tax return has to be filed.
What is the NY Estate Tax exemption amount?
NY exemption remains at $1,000,000 for 2005 and 2006, creating a difference b/t the Federal exemption amount and hte NY exemption amount for the first time in several years.
What interests are includable in the "gross estate"?
All assets the decedent had an ownership interest in and all assets over which the decedent exercised dominion and control or had incidence of ownership.
Is a group term life insurance policy for which premiums are paid by the ER, but where the EE has the right to name and/or change designated beneficiaries includible in the EEs gross estate for estate tax purposes?
Yes. B/c the EE held incidence of ownership in that property - could name and change the beneficiary.
What is the rule with respect to transfer of assets out of your estate?
If you transfer an asset out of your estate and die wihtin three years of the transfer, the asset comes back into your estate for tax purposes.
Are life insurance proceeds subject to income tax for the recipient?
No. Life insurance proceeds are excluded from income taxes, but not from estate taxes.
Is a revocable trust includible in the gross estate for estate tax purposes?
Yes.
Is a recovable trust a testamentary substitute?
Yes.
Is a Totten Trust Bank account includable in the gross estate?
Yes.
Is a Totten Trust Bank acccount a testamentary substitute?
Yes.
Are qualified pension plan benefits includable in gross estate?
Yes.
Are qualified pension plan benefits testamentary substitutes?
One half if EE named or changed beneficiary after 9/1/92
Are life insurance proceeds includable in gross estate?
Yes.
Are life insurance proceeds testamentary substitutes?
No.
Is a joint tenancy b/t W and H includible in gross estate?
One half.
Is a joint tenancy between W and H a testamentary substitute?
Half (automatic)
Is a joint tenancy between W and a third party includable in gross estate?
Yes, in amount of consideration furnished.
Is a joint tenancy between W and third party a testamentary substitute?
Yes, in amount of consideration furnished.
Is an irrevocable trust with retained life estate includable in gross estate?
Yes.
Is an irrevocable trust with retained life estate a testamentary substitute?
Yes, if created during the marriage and on or after 9/1/92.
What is the federal marriage deduction rule?
The federal estate tax grants an unlimited marital deduction under both the gift tax and the estate tax for qualifying gifts to a spouse. This enables a H or W to make provision for his or her spouse, without any diminution by estate taxes.
What is necessary to qualify for the marital deduction?
The property must be left in a form that will cause it to be taxed in the surviving spouse's estate at his or her death. Thus, the marital deduction doesn't necessarily avoid taxes; it defers the estate tax until the surviving spouse's death.
What forms of transfer qualify for the unlimited marital deduction under the estate tax?
The general test is that it must be an interest that:
1) is includable in the decendent's gross estate; and
2) will be includable in the surviving spouse's gross estate on her subsequent death - the the extent not given away, consumed, or disposed of during the surviving spouse's lifetime.
What specific forms of transfer qualify?
1) Outright dispositions by will, intestacy, elective share, life insurnace in lump sum, etc.;
2) Q-TIP (Qualified Terminale Interest Property) trusts;
3) Life estate wiht a power of appointment in surviving spouse.
What is required to be eligible for a QTIP election?
1) Income must be payable to spouse annually for life. (If the income interest terminates on the spous's remarriage, the trust is NOT eligible for QTIP treatment);
2) During the spoue's lifetime, no one else can be a permissible beneficiary of the trust (Neither the spouse nor the trustee can have power to distribute trust property to anyone other than the spouse). Any distribution of the property at or after the death of the surviving spouse is permissible;
3) The executor must make QTIP election on estate tax return.
When did QTIP become available?
1982.
Before 1982, could a life estate to a surviving spouse qualify for the marriage deduction?
No, b/c it's a terminable interest, so won't be includable in surviving spouse's estate when he/she dies. If it were 1982, the executor could make a QTIP election and it could qualify.
What are the requirements for a life estate with a power of appointment in a surviving spouse to qualify for the marital deduction?
1) All of the income must be payable to spouse at least annually for life;
2) During the spouse's lifetime, no person other than the surviving spouse can be a permissible beneficiary of hte trust;
3) Surviving spouse must be given a general power of appointment under which he can appoint to himself, or his estate. Can be eithr an intervivos or a testamentary power.
Is election required for a power of appointment trust to qualify?
No, unlike QTIP trust, power of appointment trust automatically qualifies for the marital deduction if it meets the requirements.
What is a Bypass Trust?
Established to make use of the decedent's unified credit, now called the "applicable credit amount," so that the $1.5 million exemption ($2 million beginning in 2006) is fully utilized in the estate of the first spouse to die.
What can the beneficiary be given?
A life interest and limited powers over trust principal, all without causing the property to be taxed in the beneficiary's estate on his or her death.
What is the result if a bypass trust is drafted properly?
The bypass trust is not included in the estate(s) or the beneficiary of the trust so there is no estate tax on the death of hte beneficiary either.
What CAN'T the beneficairy be given to qualify for a bypass trust?
Can't be given a general power of appointment over the trust principal.
Where beneficiary can invade the trust and appoint principal to herself as needed for "health, education, maintenannce and support," is this invasion power a general power of appointment that will cause the trust principal to be included in her gross estate?
No. This is within an ascertainable standard exception - limited to HEMS. If it "HEMS" her in, it is NOT a general power of appointment.
What if the trust gives the beneficiary the power to invade the trust "for health, maintenance, support, and comfort."?
Here, the value of the trust corpus will be includible in her gross estate b/c comfort is NOT on the HEMS list.
What other words will trigger inclusion?
Benefit, welfare, well being
What if a trustee, rather than the beneficiary herself, has the power to distribute principal to the beneficairy for her "comfort"? Is the
There the value of the trust corpus is NOT includible in her gross estate b/c the trsutee holds the power, not the beneficiary. There is only a problem if the beneficiary has the non-HEMS power of appointment.
What if the beneficiary is named as trustee of the trust and as trustee she has the power to distribute principal to herself "for her "health, support, maintenance and comfort." Can she make distributions of principal to herself?
NY by statute says no. It's a disabling statute and it prevents her from appointing to herself beyond the HEMS standard.
If beneficiary is a co-trustee with someone else (an individual or corporate trustee, what happens?
Only the other trustee can distribute tot the beneficiary for non-HEMS purposes. If she is the only trustee, then only hte court can make the distribution.
What if the trust gives the beneficiary the power to invade the trust for her COMFORTABLE health, support and maintenance?
The value of the trust corpous is NOT includable in her gross estate b/c the word "comfortable" is just an adjective that is modifying the HEMS standard.
What if the trust gave the beneficiary the power to appoint the trust principal to such persons, including her estate, as she appoints by Will?
Here, the value of the trust corpus will be includible in the beneficiary's gross estate b/c she has the power to appoint to her estate, meaning that it is a general power.
What is the estate tax charitable deduction rule?
For a remainder passing to a charity, there is no charitable deduction under teh income tax, gift tax, or estate tax, UNLESS the gift takes the form of:
1) An annuity trust; or
2) A unitrust
What is an annuity trust?
Under an annuity trust, a stated dollar amount, which can be no less than 5% of the initial trust corpus, is payable to the individual beneficiary for life.
What is a unitrust?
Under a unitrust, a stated percentage (which can be no less than 5%) of the trust corpus, valued annually, is payable to the individual beneficiary for life.
What is the basis rule?
Usually what a person pays for the property becomes their basis and for lifetime gifts the donee takes the donor's tax basis without regard to the fair market value of hte property at the time of the gift. This is the carry-over basis rule.
But, if an item passes from a decedent, i.e inherited under a Will, intestacy or other wise, the recipient of hte property gets a "step-up" in basis or takes a tax basis of the FMV on the decedent's date of death. Any built in KG, i.e., gain that occurred whil the decedent owned the property, is NOT subject to income tax.