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118 Cards in this Set

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Governing Law of Wills
Estate Powers and Trust Law (“EPTL”)
All the essays should start with “Under the EPTL…”
Definition: Testator
Dead person with a will
Definition: Intestate
Without a Will
Definition: Decedent
Dead Person
Definition: Testate
With a Will
Definition: Distributees
Those individuals who inherit property under intestate succession
Definition: Administration Proceeding
A proceeding to appoint a personal representative, also known in NY as an administrator, to administer the estate of a person who dies without a will
Definition: Probate Assets
Assets held in 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
Definition: Operation of Law
Property that passes automatically because of the way the property’s title is held (not affected by existence of a Will or intestacy)
Definition: Issue
All persons who have descended from a common ancestor. Issue and descendants are synonymous and includes those in the direct line of inheritance with the decedent (children, grand children, etc)
Definition: Residuary Estate
Balance of the Testator’s estate after all claims, taxes, and “particular” bequests have been distributed. The “rest” of the state
Definition: Beneficiaries
Everybody who receives a bequest, sometimes called a legacy or device (those who inherit real property) under a Will
Intestacy Rules
Article 4 of EPTL contains rules of descent and distribution of property (real and personal) in intestacy which typically contain when:
1) Decedent left no will or did not get around to signing it (or left will that was not properly executed)
2) will does not make a complete disposition of the estate (partial intestacy) typically due to the fact there was poor drafting by the attorney or
3) an intestate distribute successfully challenges the will, and the will is denied probate
If there is no will left by the decedent an administration proceeding is started by an intestate distributee to be appointed as administrator of the estate
Order of priority for appointment as administrator
1) Surviving spouse**
2) Children**
3) Grandchildren
4) Father or Mother
5) Brothers or Sisters
6) Any other Distributee
Intestate Decedent Survived by Spouse and No Children
If survived by spouse and no children, spouse takes everything
Intestate Survived by Spouse and Children
If survived by spouse and 1 or more children or their issue, whether current or earlier marriage, surviving spouse takes $50,000 and half of residuary. Children get the rest of the residuary divided equally. If estate less than $50,000, whole thing goes to the surviving spouse.
Intestate Decedent Survived by Children Only
If survived by children only, pass in equal shares to children
Intestate Decedent Survived by Children and Issue of Predeceased Children
If decedent survived by children and issue of predeceased children, passes to alive children or issue of dead children “by representation” or per capita at each generation.
Step 1: Make initial division of shares, one share for each line of issue, at first generation level where there are survivors.
Step 2: All living persons at the first generational level take one share each
Step 3: Shares of deceased persons at first generational level are combined and then divided equally among the takers at the next generation level in the same way.
Result: Persons at same generation always have equal shares
Per Capita Issues
Used to have “per stirpes” where each issue takes share parent would have had but NY follows per capita unless will overrides that
In-laws do NOT count and get nothing
Cannot give interest to spouse until you have it – if die before you have it then cannot give it
Per capita at each generation may also apply if decedent had a will (absent a contrary provision, ie per stirpes)
Per capita at each generation (by representation) creates a different distribution than per stirpes only if more than one person at the first generational level died and all have issue. If only one person had died, distribution by representation or per stirpes would give you the same distribution.
Remember to chart it and take off dead people!!!
Intestate Decedent not Survived by spouse or issue
1) All to parents or surviving parent
2) If not survived by parents goes to issue of parents (brothers, sisters, issue of deceased brothers and sisters), who take per capita at each generation
When is Spouse disqualified from taking their intestate share
DISMAL
D = Divorce – final decree of divorce or annulment valid under New York law
I = Invalid Divorce – surviving spouse procured a divorce/annulment outside of NY not recognized in NY (one way street rule, doesn’t bar surviving spouse if deceased spouse got the invalid divorce/annulment – surviving spouse was bad)
S = Separation decree – rendered against surviving spouse because spouse was bad, doesn’t bar surviving spouse if decree against deceased spouse and ONLY applies to the decree, not agreement unless you waive rights in agreement under EPTL
M = Marriage is void – incestuous or bigamy
AL = Abandonment or lack of support of deceased spouse
If any of these are true, assume the surviving spouse had predeceased the dead spouse and drop their share to their kids.
Inheritance Rights of Adopted Children
1) Adopted children and their issue have full inheritance rights from the adopting family (and vice versa if child dies first)
2) A child adopted by a new family has no inheritance rights from the natural parents or other members of the natural family
Exception: Where a child is adopted by the spouse of a natural parent (Mom remarries and new Husband adopts child) the child and its issue can inherit from the adopting parent and either or both natural parent
3) But, if child is adopted by a relative (ex: aunt, uncle) there is a special rule. If the adopted child is related to decedent by both a natural and adopted relationship, the child inherits under the natural relationship only UNLESS the decedent was the adopting parent, then the child inherits under the adoptive relationship only.
Construction of Class Gifts – The “Adopted Out” Child
Suppose child placed up for adoption and adopted to new family. Does the “adopted out” child take as beneficiary of a “class gift” (gift to “group” ie to “my children,” “my brothers and sisters”) made in the will of a member of the child’s natural family?
No, an adopted child into a new family has no inheritance rights from the natural family.
If adopted by another family member, would inherit under the natural family.
Inheritance Rights of Nonmarital Child
Child born out of wedlock (“nonmarital child”) has full inheritance rights from the mother and the mother’s family.
However, the child inherits from the natural father only if paternity is established by one of the following tests:
1) Legitimated by marriage: Father marries 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, acknowledged (before notary public) affidavit of paternity with the Putative Father Registry or
4) After death, paternity is established in a probate proceeding by
a) Clear and convincing evidence (Participation in school activities, visitations, gifts; support by itself is NOT enough (because they want to encourage support))
b) Fatherly openly and notoriously acknowledged the child as his own
5) Blood genetic marker test (DNA) plus clear and convincing evidence – only have to show clear and convincing evidence if the DNA test is rebutted
Lifetime Gifts to Intestate Distributee – Advancements (intestacy)
At common law, a lifetime gift to a child was an advancement of the intestate share to be taken into account when distributing estate at death. NY rejects this by statute, there is no advancement unless proved by:
1) Contemporaneous writing made at the time of the gift (2 weeks later is not contemporaneous)
2) Signed by the donor or the donee
Note: on the bar, pay attention to time frames!
“Advancement” math: if have contemporaneous writing making it an advancement you take the value of the estate and add in the date of death value of the advancement property then divide the total by 3 and the child who already got the advancement will have that taken out of his share
Lifetime Gift by Testator to Beneficiary: “Satisfaction of Legacies” (Will exists)
At common law, lifetime gift to beneficiary in will was presumed to be in partial or total satisfaction of legacy to be applied against amount beneficiary entitled to under the will. NY has rejected the “satisfaction of legacies” presumption by statute.
In NY, such a gift is not treated as “satisfaction of legacy” unless proved by
1) Contemporaneous writing made at the time of the gift and
2) Signed by donor or donee
Disclaimer (“Renunciation”) by Intestate Distributeee or Beneficiary
No one can be compelled to be a beneficiary under a will or to take property by operation of law. A beneficiary under a will or an intestate distribute can disclaim or renounce (in whole or in part) their interest in the decedent’s estate. (Don’t have to take a gift if you don’t want to)
What is the effect of a disclaimer/renunciation by intestate distributee or beneficiary?
Person who disclaims is considered to have pre-deceased the testator and drop that share down to issue
Valid Disclaimer by intestate distributee or beneficiary
1) Must be in writing, signed, and acknowledged (before a notary public) AND
2) Accompanied by a separate affidavit that states no consideration was received and no one paid you to disclaim (unless court authorizes receipt of consideration for the disclaimer) AND
3) Disclaimer must be irrevocable (after it is filed, you cannot change your mind) AND
4) The disclaimer/ renunciation must be filed with the Surrogate’s court within 9 months after the date of death
Disclaimer cannot screw up someone else’s share – the disclaimer share is always preserved, go per stirpes rather than per capita if have the disclaimer
Why would you want to disclaim the gift?
1) Avoid taxes
2) Avoid creditor claims
Can a person disclaim in order to remain eligible for Medicaid?
No, against public policy.
Execution of Wills: Probate
Probate refers to the Surrogate’s Court proceeding in which:
1) it is judicially determined that the decedent died with a validly executed will and the intestate distributes are determined (to put them on notice of existence of will) and
2) Personal representative named in the will, also known as an executor, is appointed by the court to administer the decedent’s estate
Execution of Wills: Requirments to Send a Will to Probate
Must be 18 AND
1) Must be signed by the testator or someone at testator’s direction and in her presence (that person must also sign name, not be counted as a witness, and affix address)
2) Testator’s signature must be at “the end thereof”
Can sign at a place other than the end but the words following the signature will NOT be given effect
Exception: Entire will invalid but only if the matter following the signature is so material to that above the signature and not what is below would defeat the testator’s intention
3) Testator must sign the will or acknowledge his earlier signature in the presence of each witness
4) Testator must publish the word (“publish” = declare document to be Last Will and Testament”) Testator must communicate to witnesses they are witnessing a Will
5) There must be at least 2 attesting witnesses
6) Execution Ceremony must be completed within 30 days
When does the 30 day time period start to run? When the first witness signs, not when the testator signs
Codicil
Later amendment or supplement to a will executed with the same formalities as above
Execution of Wills: Other Issues for a valid will to send to probate
NY does not require witnesses to sign in each other’s presence or for witnesses to sign in the testator’s presence
Testator must sign or acknowledge her signature in the presence of the witness
Exact order of witness/ testator signing is not critical as long as the ceremony is contemporaneous
If testator forgets to sign when witness signs and signs it a week later the will is not valid because it is not contemporaneous. Attesting witness must attest testator’s signature when testator signs the will
Signature does not have to be legible, an X would be sufficient if it is the testator’s
Testator must voluntarily sign the will – doesn’t matter if someone guides his hand, signature just must be voluntary act
If attesting witness predeceased the testator, can still probate the will if you meet the 6 point test above.
If it is a “duly executed will” don’t go through the 6 elements above
Burden of proof is on the will proponent – the one offering the will for probate, usually the executor. The witnesses must testify to show due execution, if one is dead or cannot be found then testimony of 1 is ok. If neither is there, must prove 2 signatures (testator and a witness).
Attestation Clause
Appears below Testator’s signature line and above witness lines reciting that the testator said this was the will, signed in the presence, and witnesses signed in presence of Testator and each other. Clause = prima facie evidence of the facts stated. Not required, but useful if the witness has a bad memory or in the case of a hostile witness (recalls it was a Power of Attorney or some other document) – Attestation Clause can be used to rebut witness
Self-Proving Affidavit
This is attached to back of Will. Procedure recognizes that most probates are harmonious and no one is going to contest the will's validity
What is it? Witnesses sign a sworn statement in the presence of an attorney that recites all the statements they would make if called to testify – recites 6 point test was fulfilled.
Affidavit, which ca be signed anytime after the Will is executed, is usually signed at the same time as the will. Affidavit is a substitution for the witnesses’ testimony, it is sworn testimony and admissible unless an interested party objects and in which case the formal rules of due execution apply and must call witnesses to testify.
Basically must have affidavit now.
Interested Witness Statute
Fact a will beneficiary is an attesting witness never affects the validity of the will. The only consequence:
Bequest to witness is void UNLESS
1) Supernumery rule: there were at least three witnesses and 2 were disinterested. Therefore the signature of witness is not needed to admit the will to probate
2) ***Interested witness, will beneficiary, would also be an intestate distribute if Testator died without a will. In which case “whichever is least” rule applies: witness beneficiary takes: the lesser of
a) the bequest under the will or
b) his intestate share
For interested witness question first ask: Would witness still inherit if testator died intestate? If yes, take the less amount, either intestacy or bequest.
Purpose of “Interested Witness Statute” = to avoid fraud – always give it if take less
Do NOT throw out the will, just give the lesser amount.
Only gifts under the will trigger the interested witness statute – attesting witness can still serve and be compensated as an executor of the will because they earn their compensation
Foreign Wills Act
Will admissible in NY if if it was validly executed under
1) Law of state where it was Executed, regardless of testator’s domicile or
2) New York Law or
3) Law of the state where testator was Domiciled, either when will executed or at death
END: Executed, New York Law, or Domiciled
This only matters if the question is whether will is admissible to probate in NY
Holographic Will
Entirely in testator’s handwriting, signed but NOT witnessed
Nuncupuative Will
Oral Will
Holographic Will and Nuncupative (oral) Will
Both void in NY EXCEPT for members of armed forces during declared/undeclared war (expires 1 year after discharge) and mariners at sea (expres after 3 years)
If holographic will is entirely in testator’s handwriting and witnessed by 2 witnesses then it is admissible – there is no requirement that the will be typed!
Example: NJ does recognize holographic Wills so if a NY resident executes a will in NJ and dies in NY the will is valid under the Foreign Wills Act.
Lawyer Malpractice
There is no privity of contract between the beneficiaries and the lawyer – lawyer has no duty to the beneficiaries. The duty is only to the client who retained the lawyer’s services.
The estate could bring an action for the cost of drafting the will but not worth it – beneficiaries out of luck if will isn’t executed correctly
Revocation of Wills
What constitutes a valid revocation? A will can only be revoked by:
1) By subsequent testamentary instrument executed with appropriate formalities or
Need to be properly witnessed by 2 people
2) By physical act (burning, tearing, cutting, canceling, obliteration, or other act of mutilation) and ALWAYS need the intent to revoke (ripping it up by accident is not a revocation)
Can’t just write on the bottom “this will is void” or “I cancel this will” without crossing anything out, etc but writing “void” across the whole page would be a cancellation
Anything done to the signature shows an intent to revoke the entire will (rip it off, put an “X” through it, etc)
Revocation by Implication
Typical revocation language = “I hereby revoke all wills heretofore made by me”
If there is no such language and you have 2 wills made at different times, to the extent possible you read the two instruments together – second will is treated as a codicil (amendment with formalities) to the first will and only revokes the first will to the extent that there are inconsistent provisions
Exception: If the second will is wholly inconsistent with the first then the first will is revoked by implication
Revocation by act of anotehr persion (Revocation by proxy)
Must be:
1) At the testator’s request
2) In the testator’s presence and
3) Witnessed by at least 2 witnesses
How many people have to be in the room?
Four: testator, person actually revoking the will, and the 2 witnesses
Presumptions Regarding Revocation of Wills
1) Where a will was last seen in testator’s possession or control is not found after death:
Presumption = testator revoked the will through a physical act
2) Where will is found in Testator’s possession or control is found mutilated after Testator’s death (ex: torn in two)
Presumption = Testator revoked the will
Neither presumption arises if will was last seen in possession of someone adversely affected by its contacts (kind of assume foul play)
Evidence is admissible to rebut presumption of revocation where will cannot be found or is found in damages condition
Examples: Will left with attorney for safekeeping and attorney cannot find it or testator told witnesses the destruction was accidental
Changes on the Face of the Will After it has been Executed
In NY, the only 2 ways a testator can make changes in her will:
1) Write a new will which revokes the first will or
2) Make a codicil to the first will that only changes parts of the will
Both need to be properly executed under all the formalities (6 point test) under the law
Note: Cannot take staples out of a will and take out pages!
Key Things Tested:
1) Words added to a will after it is signed and witnessed are disregarded
2) Partial revocation by physical act is not recognized in NY
Cannot just cross out things in your will
If make changes and then immediately witnessed then would be ok because part of duly executed will
No Revival of Revoked Wills: Dependent Relative Revocation
Rule: A will has been revoked by a later Will containing a revocation clause (ex: “I hereby revoke all wills heretofore made by me…”) CANNOT be “revived” simply by destroying the later will. It can only be revived in one of two ways:
1) If it was duly re-executed: signed by testator and two witnesses again or
2) Doctrine of “republication by codicil” applies (testator executes a codicil to first will that makes various changes)
In NY there “no revival” rule also applies to codicil
REMEMBER: always need a validly executed document to make changes
Dependent Relative Revocation
Common law doctrine permits a revocation to be disregarded when premised upon, conditioned upon, or dependent upon a mistake of law as to the validity of another disposition. The effect would be to disregard the revocation of the second will and permit its probate. This doctrine has been applied by one Appellate Division case, but never by the Court of Appeals. If you are given a DRR question, ARGUE BOTH WAYS!
Application of DRR is sometimes called the second best solution doctrine. The best solution, giving effect to testator’s intent by reviving the first will, is not possible under New York law. The doctrine should never be applied unless the disposition that results from disregarding the 2nd revocation comes closer to doing what the testator tried, but failed, to do (reviving 1st will).
If there are 2 totally different testamentary schemes, do not apply DRR
Proof of Lost Wills Statute
1) Due execution must be proved as in any case AND
2) Must be established that the Will was not revoked (The “lost Will” proponent must:
a) overcome the presumption of revocation that arises from the Will’s non-production or
b) prove that the revocation should be disregarded because of Dependent Relative Revocation) AND
3) All provisions of the will must be clearly and distinctly proved by each of at least 2 credible witnesses or by a copy or draft of the will proved to be true and complete
Note: Revoking a codicil doesn’t revoke the entire Will. Provisions in the will that were not changed by the codicil remain in effect.
New York Anti-Lapse Statute (“does not fail” statute)
Note: This works really well with disclaimer and intestacy questions. The concept of anti-lapse can also appear on multistate though every state has its own statute)
If a will beneficiary dies during the Testator’s lifetime, the gift fails or lapses since you can’t make a gift to a dead person, unless the gift is saved by the state’s anti-lapse statute
***NY’s anti-lapse statute provides that the gift does not lapse (fail) but vests in the deceased beneficiary’s issue who survive the testator if two conditions are satisfied:
1) Predeceased was the testator’s issue or brother or sister AND
2) The predeceased beneficiary leaves issue who survive the testator
Must satisfy both conditions
Anti-lapse provides for a substitute taker so the gift does not go to the testator’s estate.
The words in the will “if he survives me” trumps anti-lapse
Normally if adopted out you don’t get anything from the natural family but NY COA said if testator puts the child’s name specifically in the will then the adopted out child’s issue would take under anti-lapse.
Lapse in Residuary Gift: “Surviving Residuary Beneficiaries” Rule
If testator’s residuary estate is:
1) Devised to 2 or more persons and
2) The gift to one of them fails or lapses for any reason and
3) The anti-lapse statute does not apply;
the other residuary beneficiaries take the entire residuary estate, in proportion to their interests in the residue, absent contrary provision in the will
REMEMBER: Pay attention to the words describing the parties!
Anti-lapse statute trumps the “surviving residuary beneficiaries” rule
Class Gifts
Rule of construction based on presumed intent. If a will makes a gift to a group of persons generically described as a defined class (“children,” “brothers and sisters,” etc) and some class members predecease testator, the class members who survive the testator take (absent contrary provision of the gift). Rationale: Testator was “group minded” in making the gift and wanted the class of persons, and no one else, to share ownership of the property
Result: In determining the takers of a class gift you read the will as of the testator’s death
If you name the beneficiaries individually, and one predeceases the testator, then the gift goes into the residuary (though possibly subject to anti-lapse statute)
Anti-lapse trumps the “class gift” rule
Rule of Convenience
It is the rule of construction used to determine takers of class gift. Class is closed at the time a distribution to the class must be made. We close the class in order to determine the minimum share of each class member so as distribution can be made without the necessity of asking for a rebate or refund later on.
Outright gift by will: class closes at testator’s death (subject to gestation principle: 280 days from conception of birth)
Life Estates
If there is a gift of a life estate or income interest with a remainder to a “class of beneficiaries” the class closes at the death of the life tenant or income beneficiary
Simultaneous Death
Under the Uniform Simultaneous Death Act (USDA): If 2 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.
This means: 2 people died together and there’s no proof who died first then presume each one outlived the other when figuring out how to distribute property
USDA and Jointly Held Property
Property passes as though each co-owner survived. The USDA prevents the operation of the right of survivorship in cases of jointly held property.
The property passes as though a tenancy in common is involved, not survivorship property. Converts joint property to tenancy in common.
USDA prevents right of survivorship in simultaneous death cases.
The reason for that is because if it didn’t and both people died instantly but are presumed to survive the property would just bounce back and forth so needed this rule.
Note: Need to be “simultaneous” death for USDA to apply, otherwise, even if one survives 1 minute longer then the USDA doesn’t apply
Testator Marries after Will is Executed
In NY marriage following execution of the will has no effect on the will. NY law provides for a “right of election” which provides that one cannot disinherit spouse
Testator Divorced after Will is Executed
If testator is divorced or the marriage is annulled after the 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 the spouse predeceased the testator. But, a bequest to a son or daughter of the former spouse is not revoked by the divorce.
Testator Divorced after Will is Executed: Exception
1) Appointment of former spouse as a guardian of the couple’s children is not affected.
2) If couple reconcile and remarry, all provisions in favor of former spouse are restored.
Statute ONLY applies if they are divorced or the marriage is annulled as of the testator’s death – not if you are in the process of getting divorce/annulment (need final divorce decree or annulment for these rules to apply – decree of separation is NOT sufficient)
Fiduciary appointments (like executor) are also revoked after divorced
The final divorce decree is the only thing that will knock a spouse out under a will – a will is an overt act while intestacy is an omission so higher standard when you’re dealing with how a spouse gets knocked out of a will
Does the statute apply to life insurance policies naming spouse as beneficiary? No, statute only applies to those assets passing via the will to the spouse primary.
Children Born or Adopted After the Will is Executed
EPTL gives no protection to children alive when the will was executed. The statute applies only to afterborn and after-adopted children who are unprovided for by any settlement and are neither provided for nor mentioned in the will
Policy: make sure afterborn or after adopted child inherits somewhat equally with the siblings
Children Born or Adopted After the Will is Executed: First Section of the Statute
Testator has one or more children when will is executed:
1) If no provision is made for any children, afterborn child inherits nothing – put on equal footing with other children already existing
2) If the will made gifts to the testator’s other children, the afterborn children share in the amount to the other children as if a class gift was made
3) If it appears the intention of the testator was to make a limited (nominal) provision only to the testator’s children living at the time of the will, then the afterborn takes its intestate share
Children Born or Adopted After the Will is Executed: Second Section of the Statute
If the testator had no children when the will was executed, then the afterborn child takes an intestate share
If give different amounts to the first kids, add them up and divide them equally by the number of children including the afterborn and give that amount to each child – amount for afterborn comes from the other children. Don’t do the math, just give the rule.
If afterborn child is provided for by life insurance policy = another settlement so not subject to this statute
Reference to Facts and Events Outside of the Will
At common law and nearly every state, the terms of an extrinsic document not present at the time the will is signed can be incorporated by reference if
1) document was in existence when the will was drafted
2) the will shows an intent to incorporate the document and
3) the extrinsic document is clearly identified by the language in the will
In NY we do NOT recognize incorporation by reference – EVERYTHING must be formally executed which requires the 6 point test.
Acts of Independent Significance (“Nontestimentiary Acts”)
Acts of independent significance doctrine is that sometimes people do lifetime acts that have their own purpose or motive independent of any testamentary purpose. These acts that occur after the will is executed should be given full effect when distributions are made.
Works with tangible property but intangible property must be transferred as mandated by law
Non-Probate Assets
Property that the decedent owned solely in his name at the time of death disposed of pursuant to the terms of the will and is referred to as Probate Estate. Non-probate assets are interests in property that are not subject to the disposition under the Will and therefore not part of the probate estate.
Major Types:
1) Property passing by right of survivorship (bank account, joint stock account, etc)
2) Property passing by contract (life insurance policy, employee benefits payable to a beneficiary other than the decedent or decedent’s estate. If paid to the insured’s executor or insured’s estate, it becomes a “probate asset”)
3) Property held in trust (Trust terms govern disposition of assets)
4) Property over which the decedent had a “Power of Appointment”
Specific gift
Simple gift: “I devise X to John”
Demonstrative Legacy
General amount from a specific source
General Legacy
“I give sum of money to John”
Residuary Disposition
“I give all the residue and remainder or my estate to John”
Intestate Property
If partial intestacy results because will poorly drafted and there’s no residuary clause piece of gift in the Will will fall into partial intestacy
Abatement
Gifts under the will abate (not given affect) so that creditor claims can be paid. Creditor gets priority.
Order of Abatement: Start at the bottom of the list above and then work your way up
So, debts and expenses are first paid out of intestate and residuary property and those are treated the same.
Where there are still debts, general legacies abate “pro rata” (or proportionately) and then demonstrative legacies abate pro rata, then specific gifts are the last to abate.
Think of what the testator put the most thought into – specific gift is most thought.
If 2 people at equal level, abate proportionately
Specific Gift of Encumbered Property – No exoneration of Liens
At common law, if got bequest with lien or mortgage would have that paid by (exonerated by) the residuary estate.
By statute in NY, liens on specifically devised property are not exonerated unless the will specifically directs exoneration.
General provisions for payments of debt do not work to exonerate liens – must be specific to exonerate liens.
Adepmtion: Failure of a Gift
If a will makes a specific gift of property and the property cannot be found or is not owned by the testator at her death, the gift fails under the doctrine of ademption without regard to testator’s probable intent.
If the specific gift does not exist then the person getting the gift loses (sometimes).
Note: Ademption does not apply to general and demonstrative legacies.
A demonstrative legacy will turn into a general legacy if there is no cash available from the specific source designated. Assets have to be sold to satisfy the demonstrative legacy if the account is no longer there or cash in estate is missing.
Ademption Exceptions
1) Casualty insurance proceeds for lost, damaged or destroyed property:
Beneficiary takes insurance proceeds to the extent they are paid after death.
2) Executory contract (contract that hasn’t been performed yet): Beneficiary gets the sale proceeds which are paid after death
3) Sale by guardian or conservator of specifically bequeathed property:
Beneficiary is entitled to receive money or property to which the proceeds from the sale or transfer of the property can be traced
If you can’t trace the funds, ademption occurs
If the asset is taken by eminent domain, ademption occurs. Reason for it not being in the estate does not matter. “Identity theory”
Bequests of Shares of Stock and Securities
1) Gifts of shares of stock in publicly traded corporations (for ademption purposes) are: General legacies, which means they don’t adeem UNLESS testator says “I give my…stock” which evidences an intention to make a specific bequest
2) Gifts of shares of stock in closely held companies are: Specific Legacies which mean they adeem
Categorize gifts and then figure out what happens to it
When issue is a stock split, the request is treated as a specific bequest whether or not the word “my” is used and whether it is publicly traded or closely held stock
Note: For dividends, the regular rules apply
If stock is directly traceable, even though a company buys the original one, there is no ademption as courts deem the takeover change a change in form, not substance
Latent Ambiguity
Misdescription. Outside evidence is allowed to clarify or find the meaning of the testator’s words.
Admissible evidence includes “facts and circumstances,” testator statements to third parties, attorney. If the extrinsic evidence does not cure the ambiguity then the gift fails because there is no ascertainable beneficiary.
Patent Ambiguity
Mistake appears on the face of the will
Allow extrinsic evidence to cure it, including “facts and circumstances” evidence and statements to attorney but not testator declarations of intent to third persons (will not allow evidence from third parties contradicting what the will says for a patent ambiguity)
Prepartory Language
Doesn’t express a definitive statement, can’t say “I want so and so to get this” – did not impose mandatory obligation so didn’t allow it
Conditional Wills
Argue both arguments:
1) conditional will means probate denied if condition doesn’t occur or
2) reference to condition reflects motive or inducement in making a will only, can go to probate
Contracts Relating to Making a Will
One will for 2 people.
Under NY law a contract to make a will or to not revoke a will can only be established by an express statement that the Will’s provisions are intended to constitute a contract between the parties.
If a Will is contractual and the survivor breaches the contract by writing a Will with inconsistent provisions:
Step 1: Tell bar examiners: probate the new Will even though the first Will is written as a contract
Step 2: Impose a constructive Trust in favor of the original intended beneficiaries and still have to probate the second Will
Note: contractual joint will can be revoked by agreement of the parties while they are both alive
NY's "Negative Bequest" Rule
At common law when will does not make complete distribution of the estate (resulting in partial intestacy), words of disinheritance in the Will are ineffective with respect to the property that’s passing via intestacy
Rationale: property passing by intestacy is governed by intestacy statutes
NY’s Statute:
Words of disinheritance are given full effect even in partial intestacy
Treat that person as if predeceased. If had kids then would take since only parent was disinherited.
Elective Share Statute
Purpose of Elective Share Statute: To protect surviving spouse against disinheritance, by giving spouse entitlement to minimum share of decedents estate
Elective share = The greater of $50,000 or 1/3 of the estate
Plus interest at 6% beginning 7 months after issuance of Letters Testamentary by executor
Elective share applies to net estate after payment of debts but before taxes
Contrast intestate:
If survived by spouse and issue: Surviving spouse’s intestate share is $50,000 plus ½ balance of estate
Survived by estate and no issue: Entire estate
If decedent died without a Will, surviving spouse’s intestate share is always larger than elective share unless: “Testamentary Substitutes” are involved
Testamentary Substitutes
If intend to disinherit spouse elective share applies to property owned at death must follow testamentary substitutes with the elective share. Because the probate estate is augmented by these testamentary substitutes, cases have referred to the amount subject to the elective share as the augmented estate or the elective share estate. Under current law, almost all non-probate transfers (except life insurance, irrevocable dispositions made before marriage, and irrevocable dispositions made more than one year before death) are testamentary substitutes
List of Testamentary Substitutes
T: Totten Trusts (“A, Trustee for B”) bank accounts
S: Survivorship Estates – joint property that passes to survivor by operation of law, joint tenancies, tenancies by entirety, joint and survivor bank accounts (only if after Sept 1, 1966). Watch for pre and post marriage scenarios.
L: Lifetime Transfers with strings attached. Basically revocable trusts. Transfers with a retained power to revoke, invade, consume or dispose of principal or name new beneficiaries AND irrevocable transfers (made during the marriage) with retained life estate made on or after Sept 1, 1992
E: Employee pension, profit sharing, deferred compensation plan IF employee designated the beneficiary on or after Sept 1, 1992 and after the marriage. In any case, only ½ of a qualified plan (qualified for favorable income tax treatment) is a testamentary substitute.
G: Gifts made within 1 year of death in excess of the $12,000 annual gift tax exclusion (any gift made within 1 year of more than $12,000 is a Tsub). Also gifts causa mortis – made in fear of impending death, even within the $12,000 exclusion (automatically revoked if survive)
U: US government bonds and other POD (“pay on death”) arrangements
P: Powers of Appointment – property over which decedent held presently exercisable general power of appointment (but not property over which held a general testamentary power)
List of things that are NOT Testamentary Substitutes
L: Life insurance whether payable to spouse or third party
O: ½ of qualified pension and profit sharing benefits (In any case, benefits in qualified pension plans are not testamentary substitutes if the employee named a beneficiary before Sept 1, 1992, and did not change the beneficiary designation thereafter.
G: Gifts made w/in one year of death w/in $12,00 annual exclusion
P: Pre-marriage irrevocable transfers – gift to friend prior to marriage
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.
T: Transfers (irrevocable) with retained life estate made before Sept 1, 1992
To want to screw spouse, have to give everything away and then die 1 year and 1 month from now without knowing that or else it would be a gift causa mortis.
Survivorship estates with deceased spouse and third party (joint tenancy, joint and survivor bank account)
“Consideration furnished” Test Applies:
Surviving spouse has the burden of proof as to the amount of the decedent’s contributions to assets, acquisitions, or deposits in a joint account
Have to show how much money was the dead spouse’s
Survivorship estates with surviving spouse (joint tenancy, tenancy by entirety, joint bank account)
Half of the amount or value is a testamentary substitute.
Regardless of which spouse put in the compensation, half is automatically a testamentary substitute. NO consideration furnished test.
Net Probate Estate
What’s left after debts have been paid
MATH for Elective Share Involving Joint Tenancy
If surviving spouse can prove all funds used to buy joint tenancy property was contributed by dead spouse (and nothing by 3rd party) then start with the net probate estate. Then NY has created a fiction that the joint tenancy is split in half for each spouse and add in the deceased spouse share as a testamentary substitute to the net probate estate. Then add the testamentary substitute of the full value of the real property if proved dead spouse contributed all the money for it. Add it all up = elective share estate.
Elective share amount for husband is one third of the elective share estate. To figure out what the surviving spouse gets, you have to back out what spouse was explicitly given in the Will and back out the fiction of the half of the joint tenancy and look at it as if dead spouse gave it to surviving spouse and back it out. Then what is left over is the “net elective share” for the surviving spouse that you get from the other beneficiaries.
MATH for Elective Share Involving Joint Tenancy Continued
Start with the net probate estate, add in the half of the joint tenancy (using NY fiction) but since cannot prove any of the funds were from the dead spouse don’t add anything for that (don’t get benefit of that). Add up the net and the fiction and get the election share estate. Surviving spouse entitled to 1/3 – elective share amount. To get that for surviving spouse: again back out what surviving spouse is getting from the will and also knock out the fiction half of the joint tenancy. Add everything up and get the “net elective share,” get some of it from the will already and some from the other beneficiaries
Note: if surviving spouse able to prove dead spouse gave some portion of the joint tenancy then that amount would come in to finding the elective share estate. Added complication: Survivorship estates w/deceased spouse and 3rd party created before marriage. Although consideration furnished test applies to such estates, an added complication is raised by the rule that irrevocable dispositions before marriage are not testamentary substitutes.
Under NY law, deposit in a joint bank account is irrevocable (ie: is a gift) as to ½ of the amount deposited.
Testamentary Substitutes and Intestacy
Start with totten trust with 3rd party and add it in as a testamentary substitute even though it’s intestacy. Add in all the funds from other testamentary substitutes. Add in intestacy so you’re looking at all the existing property and also back it out later when deciding how elective share is satisfied. Then surviving spouse entitled to 1/3 of the total
Still entitled to elective share in intestate situation!
To satisfy the net elective share, all the other beneficiaries have to contribute pro rata (proportionately). Way to figure that out is you take the amount leftover owed, amount need to come up with, over the remaining assets in the estate and each person have to get that proportion of their gift
Elective Share Trusts No Longer Satisfy Surviving Spouse’s Right of Election
Prior to Sept 1, 1994, right to elective share could be eliminated through an elective share trust which gave the surviving spouse a life estate as long as $50,000 was given to the surviving spouse outright. If the sum of outright dispositions of at least $50,000 plus the principle of the trust equaled or exceeded the one third elective share amount, surviving spouse had no right of election.
Life estates or “terminable interests” no longer satisfy the elective share entitlement. Note: This rule applies to people DYING on or after Sept 1, 1994 so if you have a will that was executed prior to 1994 and testator dies today or on Sept 1, 1994.
If testator died before Sept 1, 1994 then wouldn’t have a right of election, satisfy law back then. If died on or after Sept 1, 1994, surviving spouse would have a right of election because now must get 1/3 outright. Read the trust as though the surviving spouse predeceased the testator, kill the trust, accelerate it to the remainder. If survivor spouse was given 1/3 outright and put 1/3 in trust then not going to kill the trust – only kill the trust if surviving spouse does not get the 1/3 outright.
Procedural Rules Governing Election
Must file election w/in 6 months after Letters Testamentary or Letters of Administration are issued by Surrogate Court at start of probate proceedings. If no estate administration, then no more than 2 years after decedents death. Right of election is personal to the surviving spouse. Can waive election before or after marriage, must be in writing, signed before notary public.
NOTE: General waiver (for instance in premarital agreement) of all rights in spouse’s estate 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
Elective Share Multijurisdictional Problems
If Will is in probate in another state then have the Situs rule which says an ancillary administration (supplemental proceeding) in NY is required where property is in NY
Only a spouse of a decedent domiciled in NY at the time of his death is entitled to a right of election – if domiciled in another state then don’t have right of election in NY
Exception: If deceased spouse specifically says disposition of property will be covered by NY law – NY law would govern the rule even though it would be adjudicated in FL and elective share would apply
Exempt Property for Elective Share
If you have questions about surviving spouse you can strengthen your answer with this. Technically these things come off the top of the property passing to the spouse by will (car, furniture, pet, etc). Note: unless the bar examiner specifically says the decedent spouse owned a car/tractor/furniture/$15,000/ animals/books/etc then just mention it as an afterthought. It will mess up your numbers if it wasn’t what they intended.
Exempt Property:
1) Car (up to $15,000 in value)
2) Funiture, appliances, computers, etc (up to $10,000)
3) $15,000 cash allowance (not subject to creditor’s claims except funeral expenses)
4) Animals, farm machinery, tractor (up to $15,000)
5) Books, pictures, videotapes, software etc (up to $1000)
Total value can be as high as $56,000
When is a spouse disqualified from taking the elective share?
DISMAL:
D: Divorce
I: Invalid
S: Separation Decree rendered against surviving spouse – but note gifts and fiduciary appointments revoked only if divorce decree or annulment
M: Marriage incestuous or bigamous
AL: Abandonment and lack of support
Testamentary Capacity
Did testator have sufficient capacity to:
1) Understand the nature of the act (ie: know he was writing a Will)
2) Know the nature and approximate value of his property
3) Know the natural object of his bounty (know your family members & loved ones); AND
4) Understand the dispositions (gifts) he was making
Testator Adjudicated Incompetent
The capacity to make a will requires less capacity than required for any other legal instrument. Even if a person is adjudicated incompetent, the Surrogate Court could find that the testator executed the will during a lucid interval. If you can show that it was a lucid interval then court will follow the Will – generally courts want to follow the Will.
Testator has an Insane Delusion
If of sound mind on other subjects but have persistent belief in some supposed facts with no evidence, probability, and control and produce the existence of a testamentary act. Insane delusion leading to testamentary act knocks it out.
Undue Influence on the Testator
Existence of testamentary capacity subject to and controlled by a dominant influence of power.
Burden of proof is on the contestant to prove
1) The existence and exertion of an influence
2) The effect of such influence was to overpower the mind and will of the testator. AND
3) The product is a Will or gift in the Will which would not have happened but for that influence.
While evidence of undue influence is usually circumstantial, these situations alone are NOT enough:
1) The opportunity to exert influence (fact one child received major share of estate lived with mother, took care of income taxes, etc – because there’s always one good kid doing this stuff)
2) Susceptibility of influence because of age or illness
3) Unequal dispositions (ie: that some children take less than others or are excluded entirely is not enough evidence of undue influence)
Confidential Relationship with Testator
1) If a will gives a gift to one in a confidential relationship and
2) That person was active in preparing the Will, THEN
You have an inference of undue influence which satisfies the Will contestants’ burden of proof, if not rebutted. (how you get out of doing family’s will)
If the Will makes a bequest to the drafting attorney, the Surrogate Court makes a PUTNAM SCRUTINY even if no objection is filed (ie: automatic inquiry) to determine whether the gift was voluntarily made.
Lawyer Named Executor
If Will names drafting attorney as executor, he must give written disclosure to the client that:
1) Any person can be named an executor and
2) That the executor receives a statutory commission AND
3) That the attorney will also be entitled to legal fees for representing the estate
Client must sign the acknowledgment with two witnesses. Effect of failure to comply with the statute: Attorney will receive only half of the statutory commissions.
No Contest Clauses: Exceptions
If the Will contest is:
1) Based on forgery or revoked by a later Will and if the Surrogate finds that there was probable cause for the contest. Does the exception apply if contest on ground revoked by physical act? No, not an exception, only revocation by a later Will works in this exception
2) If the will contest is filed on behalf of an infant or incompetent person.
3) Construction proceeding to construe the Will’s terms (latent or patent ambiguity, etc – not challenging the Will, just asking what it means)
4) Objecting to the jurisdiction of the court (just saying it should be probated somewhere else)
No Contest Clauses
Clause in the will that says: If anyone objects to my Will, the objector will get nothing.
Majority Rule: No contest clauses are given full effect unless the court finds the contest was brought in good faith and with probable cause (not frivolous suit to get settlement)
NY Rule: Give the no contest clause full effect even if there is probable cause to challenge the Will – testator should be able to protect his testamentary plan and his reputation against post-death attack.
Powers of Appointment ("POA")
A power of appointment is an authority created in or reserved by a person enabling that person to designate, within limits prescribed by the creator of the power, the persons who shall take the property and the manner in which they take it. Purpose of power of appointment: Mechanism to allow you to look at facts in existence at a later date in distributing property
Powers of Appointment: Donor
Creator of the Power
Note: When a person reserves a power in herself, she is both the donor and the donee of the power.
Powers of Appointment: Donee
Person given the power to use
Note: When a person reserves a power in herself, she is both the donor and the donee of the power.
Powers of Appointment: Takeres in Default
Persons who take the property if the donee fails to correctly exercise the power
General Power of Appointment
Donee can appoint to herself, her creditors, or her estate (as if she owned the power herself)
Special Power of Appointment
Limited power of appointment: Donee cannot appoint to herself, typically there is a class to whom she can appoint (ex: “to the issue of my brother”)
Presently Exercisable Power of Appointment
Donnee can exercise it right now, during her lifetime can set up a trust and exercise it. Donnee can exercise a presently exercisable POA through a will unless donor expressly excluded exercising the POA by will
Testamentary Power of Appointment
Donee can only appoint by Will
General Will Provision
A general Will provision exercises all POA’s held by the testator donee unless the instrument creating the POA called for its exercise by a specific reference in the donee’s Will
Power of Appointment: Elective Share: General testamentary power of appointment
Not included in elective share because dead already, cannot get to it while alive
Power of Appointment: Elective Share: Generally presently exercisable power of appointment
Is included in a testamentary substitute because can get to it during lifetime, add its value into the elective share of surviving spouse
Power of Appointment: Elective Share: Special power of appointment
Can’t get to it so not a testamentary substitute, not part of the elective share
If can get to the assets yourself, then your surviving spouse can get to it as an elective share testamentary substitute.
Power of Appointment: Creditors
If you can get to those assets then your creditors can get to them too – same as wife EXCEPT: If have a general testamentary power of appointment creditors cannot get to the assets EXCEPT:
1) Deceased was both the donor and donee – then creditors can get to it because they merge OR
2) Deceased exercises it in favor of his estate, then creditors can get to it – opposite of testamentary substitute