Wills And Estates

Front 1

Does each spouse have an unrestricted power of disposition over his or her separate property?

Back 1

Yes. II, p. 23

Front 2

Does Texas law allow one spouse to make gifts of their CP without the others consent?

Back 2

Yes, but only "reasonable" gifts subject to a list of restricting doctrines. II p. 23-25

Front 3

What doctrines restrict gifts from a spouse's CP outside the marriage?

Back 3

Fraud on the spouse, illusory trust doctrine, and transfers subject to lifetime transfer rules. II, p. 23-25

Front 4

What are several ways of showing fraud on the spouse?

Back 4

Excessive or capricious gifts, especially in contrast to community estate. Relationship of donee to spouse i.e. not related. Portion of estate left to wife. II. 23-25

Front 5

What is the remedy for fraudulent gifts? During donor's lifetime? After?

Back 5

During: transfer can be set aside in its entirety. After: W's one half community interest is set aside but beneficiary can keep H's one half interest. Sometimes transfer is allowed to stand and W reimbursed out of other assets. II, 23-25.

Front 6

What is the best practice to avoid fraudulent gifts from one spouse?

Back 6

Get spouse's joinder or consent. II, p. 25

Front 7

In Texas, W has stock prior to marriage. After marrying, she receives a dividend on the shares. Is that income SP or CP?

Back 7

The stock is SP, but the income from the stock is CP.

Front 8

In Texas. W has stock that she acquired prior to marriage. Post marriage, she sells the stock at a profit. Is that profit SP or CP?

Back 8

The stock is SP, income from stock would be CP, but capital gains from the stock is SP.

Front 9

What is "inception of title"?

Back 9

Way of determining if the asset is CP/SP, which is done at the time of acquirement.

Front 10

What is the "martial estate" according to FC §3.401?

Back 10

One of three estates:

1) CP owned by spouses together, community martial estate

2) SP owned individually by husband and referred to as a separate martial estate, or

3) SP owned individually by the wife, also sep. martial estate.

Side note about BS TX law: a spouse is defined as a husband, who is a man, or a wife, who is a woman. Same sex couples are not considered spouses.

Front 11

TX: Are spouses allowed to convert SP to CP?

Back 11

Yes, § 4.202: at any time, spouses may agree that all or part of SP owned by either or both spouses is converted to CP.

Front 12

TX: What are the requirements of a conversion from SP to CP?

Back 12

Must be in writing, signed by both spouses, identify property being converted, and specify that property is being converted to spouses CP, and is enforceable without consideration. Mere transfer of name of other spouse is insufficient to convert. II, p. 27.

Front 13

What is a rural homestead?

Back 13

200 acres. Value is irrelevant. If single person, that max is 100 acres.

Front 14

What is an urban homestead?

Back 14

Ten acres, regardless of relationship status; value is irrelevant.

Front 15

What are the five consequences of a classification as a homestead?

Back 15

1. Freedom from creditors claims during lifetime (with some exceptions),

2. Both spouses must join in a lifetime conveyance of the homestead.

3. Homestead passes at death free of creditors claims in some cases

4. A surviving spouse has a right to occupy the household. TX EC § 102.003.

5. exemption from real property ad valorem taxes

Front 16

What are the exceptions to creditors claims during the lifetime of a homesteader?

Back 16

There are 3: Purchase money liens, taxes on the homestead, and second mortgages on homestead. See TEC § 102.004, Liability of Homestead for Debts. II, p. 31

Front 17

Are homestead rights affected by the character of the homestead as SP or CP under Texas law?

Back 17

No, § 102.002 states that homestead rights are not affected whether the homestead was the decedent's SP or was CP.

Front 18

Can a homestead be partitioned among the decedent's heirs?

Back 18

No, §102.005 of TEC does not allow for that during the lifetime of SS, if SS is exercising the right to occupy the homestead. II, p. 32.

Front 19

Is a widow, choosing to occupy the homestead of her deceased husband's separate property, liable for the payment of insurance premiums? What is she liable for?

Back 19

No, according to Hill v. Hill, the occupier is akin to having a life estate. Like a life tenant, she must protect the interest of the remaindermen from forfeiture and preserve the estate.

She pays: the interest of existing indebtedness (but not towards the principal).

She does not pay: insurance premiums.

Front 20

The person who is named in a will to probate the will is called the _________. If appointed by the court, that person is called an __________. Both are ____________.

Back 20

Executor, administrator. Personal representatives.

Front 21

Probate means:

Back 21

"to prove" literally. A court proceeding with a list of function in glossary p. 1.

Front 22

What is issued by the court to show the personal representatives authority to represent the estate in dealing with third parties?

Back 22

Letter testamentary if an executor, or letters of administration if an administrator.

Front 23

Strictly speaking, you _________ the decedent's will and then you ___________ the decedent's estate.

Back 23

Probate; administer.

Front 24

What are the prinicipal duties of a personal rep?

Back 24

To take possession and control of the assets that comprise the estate; give notice to creditors and pay creditors claims; satisfy the tax authorities; and distribute the remaining estate to the will beneficiaries or heirs.

Front 25

What must the personal representative give to secure the proper performance of his duties, unless this requirement is waived?

Back 25

Personal rep must give a fiduciary bond (a surety bond). But the decedent's will can waive this. The annual premium on the bond is paid out of the decedent's estate.

Front 26

When does the rules for intestate distribution apply?

Back 26

When the decedent left no will, or it wasn't validly executed. The will did not make a complete disposition of the estate, so partial intestacy. An heir successfully contests the will on the ground of lack of testamentary capacity or undue influence, and the will is denied probate.

Front 27

What is an 'heir'?

Back 27

Person who takes by intestate succession (who take by "descent").

Front 28

What is a 'beneficiary'?

Back 28

Also called devisee or legatee, a person who takes under a will.

Front 29

What is a codicil?

Back 29

A later amendment or supplement to a will, must be executed with the same formalities of the will.

Front 30

What are nonprobate assets?

Back 30

Interests in property that pass at death but which are not subject to disposition by will or intestate succession, and are not part of the estate for estate admin purposes.

Front 31

What are some major types of nonprobate assets?

Back 31

Property passing by right of survivorship (JT, tenancy by entirety, joint and survivor bank account, etc). Property passing by contract (life insurance proceeds, employee death benefits, etc) where a contract governs the naming and changing of beneficiaries. Property held in trust, including a revocable trust, where the trust instrument names the beneficiaries. Property over which the decedent held a power of appointment.

Front 32

What is it called when the administration of a decedent's probate state are taken with little or no court involvement?

Back 32

Independent administration (TX), non-intervention will (WA), and unsupervised administration (UPC).

Front 33

Why are revocable trusts used as will substitutes?

Back 33

Because in states like CA and OH the probate procedures are so costly and cumbersome, requiring prior court approval for even routine transaction, that rev trusts (sometimes called living trusts) are widely used to avoid a probate admin.

Front 34

A trust created by will is called _________ trust, while one created during lifetime is called a __________ trust.

Back 34

Testamentary; inter vivos. Person who creates an inter vivos trust is called the settlor or grantor.

Front 35

What are the nine CP states?

Back 35

AZ, CA, ID, LA, NV, NM, TX, WA, WI. In Alaska and Tenn, couples can elect into the CP system.

Front 36

What is equity?

Back 36

Difference b/w an asset's FMV and the amount of any encumbrance on the property. Glossary, p. 4.

Front 37

What is the situs rule?

Back 37

the law of the state in which the decedent was domiciled at death govern the disposition of the decedent's personal property (both tangible and intangible). Real prop is governed by state its located.

Front 38

Under TX law, for purposes of inheritance under laws of descent and distribution, an adopted child is regarded as inheriting from whom?

Back 38

The adoptive parent or parents.

Front 39

Can the natural parent inherit from the child?

Back 39

No, TEC 201. 054: the natural parent or parents of an adopted child and the kindred of natural parent may not inherit from or thru adopted child. HOWEVER, the adopted child inherits from and thru natural parents except as provided by FC 162.507 (c). See II, p. 39.

Front 40

What are two avenues for clearing title to real estate when someone died without a will?

Back 40

Bring a statutory proceeding to determine heirship under 202.001 of TEC. But this is costly. Or an affidavit of heirship.