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182 Cards in this Set
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What is probate?
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Probate = court procedure to
1. Determine that D left a VALIDLY executed will - or died w/o will and intestate heirs are determined 2. Personal representative appointed to administrate estate (EXECUTOR if named in will, ADMINISTRATOR if appointed by court from statutory list of preferred next of kin) 3. LETTERS TESTAMENTARY (if executor) or LETTERS OF ADMINISTRATION (if an administrator) are issued by the court, showing the personal representative's authority to represent the estate in dealing w/ 3d parties. 3. |
VPL
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When do we go to intestacy?
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Intestacy applies when:
1. No will or bad will 2. Will doesn't dispose of entire estate 3. Heir successfully contests will and will denied probate 4. Testator marries after will execution - will revoked by operation of law |
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What share does the spouse receive when:
1. Spouse but not by descendants or parents 2. Spouse + parent (no descendants) 3. Spouse + descendants, all of whom are descendants of the surviving spouse AND surviving spouse has no descendants from earlier marriage 4. Spouse + Descendants, all of whom are descendants of the surviving spouse BUT surviving spouse has some descendants who are NOT descendants of the decedent 5. Spouse + descendants, some of whom are NOT the descendants of the surviving spouse Apply Revised Uniform Probate Code (1990 version) |
1. All
2. First $200k plus 3/4 of balance 3. All 4. First $150k plus 1/2 of balance 5. First $100k plus 1/2 of any balance |
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What share does the spouse receive when:
1. Spouse but not by descendants or parents 2. Spouse + descendants, all of whom are descendants of the surviving spouse 3. Spouse + Descendants, some of whom are NOT descendants of the surviving spouse (2nd marriage situation) 4. Spouse + No descendants + one or more parents Apply Uniform Probate Code (1969) version |
1. All of estate
2. First $50k plus 1/2 of balance 3. One Half 4. First $50k plus 1/2 of balance |
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What rights do adopted children have?
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Adopted Children - full inheritance rights - once final decree of adoption is entered - no inheritance rights from parents who lost rights
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What rights do non-marital children have?
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In most states, non-marital child can inherity from natural father if (PAP)
Paternity Suit Acknowledged Paternity - acknowledged in writing Probate Proceedings - proven to be father in probate w/in 1 year after death |
PAP
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What about children that are conceived posthumously, what rights do they have?
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Posthumously conceived - yes IF:
a. D consented to posthumous conception b. Consented to support resulting child c. Prompt and orderly administration of estate not compromised - no guidance as to precise scope of P&O admin |
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What happens if two people die almost simultaneously?
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Deaths in quick succession - Uniform Simultaneous Death Act - USDA - when no sufficient evidence that the persons didn't die simultaneously THEN presume each predeceased the other.
Example: JT With right of survivorship, both die simultaneously, 1/2 distributed through A's estate as though A survived and 1/2 through B's, as though B survived. |
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What about lifetime gifts? Can they count as an advance on the will?
UPC - majority rule Minority rule/Common Law |
1. Majority rule - Lifetime gifts to heir or will beneficiary - Lifetime gifts are not an advancement unless:
i. Declared as such in a contemporaneous writing by the donor ii. Acknowledged as such in a writing by the donee 2. Minority rule - Lifetime gift to child (or other descendant) was presumptively an advancement (advance payment) of child's intestate share - taken into account in distributing intestate estate at death. |
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Can I disclaim a gift from the will?
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Disclaimer by Heir or Beneficiary
i. Must be in writing and signed ii. Must be filed w/ probate court w/in 9 months after decedent's death iii. Disclaimer can be partial iv. Cannot disclaim after accepting an interest/benefit v. Cannot exercise dominion while attempting to disclaim (I disclaim and I want interest to go to husband.) |
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What are the major nonprobate assets?
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Nonprobate Assets - major types:
1. Property passing by right of survivorship (Joint bank account, tenancy by entirety) 2. Property passing by contract (life insurance, employee retirement benefits) 3. Property held in trust 4. Property over which the decedent held a power of appointment. Mnemonic - CATS - Contract, Appointment, Trust, Survivorship |
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What’s required for a validly executed will?
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T must be 18 years old
1. Signed by testator 2. Testator must sign the will (or acknowledge earlier signature) in EACH witness's presence 3. Two attesting witnesses, each of whom witnessed either T's signing of will OR T's acknowledgement of his earlier sig 4. Witnesses must sign w/in a reasonable time after witnessing And (in most states) 5. Witness must sign in testator's presence (minority/UPC doesn't require this) |
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What about codicils? Do they have the same requirements?
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Yes -=> Codicil must be executed with same formalities
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What doesn’t MA require in its wills?
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MA Does not require:
a. Sign at foot or end of will b. Witnesses know they are signing will c. Witnesses sign in each other's presence Doesn't matter if need help signing, signature illegible, witnesses not sign in each other's presence, W thought witnessing something else |
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What about if the Testator signs after the Witnesses?
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T signs right after Ws - 2 old cases say W must sign after T, but modern view (cases in other J) exact order unimportant
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What is meant by in the presence of the testator?
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Minority - w/in line of sight - If could see the W if you turned, then okay
Majority: J in more recent cases require CONSCIOUS PRESENCE test - must see and be conscious of what they're doing |
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What happens if a witness gets something under the will?
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Interested witness statute - W gets nothing from will, unless he's an extra witness
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What's a holographic will?
Are holographic wills allowed? |
A will entirely in the handwriting of the testator and signed.
Majority rule: holographic wills are allowed Minority rule: holographic wills not allowed |
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What Constitutes valid revocation?
Can I revoke by proxy? I can't reach the pen. |
i. Later testamentary instrument
ii. By physical act - burning, tearing, canceling or obliterating iii. Operation of law Mnemonic - POT (Physical, Operation, Testamentary) Under revised UPC, the DISPENSING POWER ("harmless error") statute applicable to the execution of wills also applies to revocations. Probate court can relax statutory requirements, if there is CLEAR AND CONVINCING EVIDENCE that the testator intended to revoke her will. Revocation by proxy okay - but must be at (1) T's direction and (2) In T's presence. (Telephonic presence not okay.) |
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What happens if you lose a will?
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Proof of lost wills rule
1. Prove due execution - bring in the witnesses 2. Prove non-revocatory cause of will loss 3. Contents must be proved by secondary evidence (xerox) (oral testimony must be "strong, positive and free from doubt.") |
Prove ELC
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What do we presume when a will is lost or mutilated?
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Presumptions as to revocation
1. When will last seen in T's hands, loss = revocation 2. Last in T's hands, mutilation = revocation 3. When last w/ someone adversely affected - no presumptions |
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Can a revoked will be revived?
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Revival of revoked wills - 2nd will revokes first, later destroy 2 to revive 1.
1. Majority rule - no revival of revoked wills 2. MA - not revived unless: 1) Will is still in existence and 2) Evidence that T intended to revive earlier will 3. Dependent Relative Revocation |
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Okay, so what’s Dependent Relative Revocation?
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Dependent Relative revocation
1. DRR permits a revocation to be disregarded when the act or revocation was premised upon, or dependent on, a mistake of law or fact as to the validity of another disposition. 2. AKA "second best solution" DRR not applied unless distribution that results from disregarding revocation comes closer to doing what T wants than intestacy. (So, works for increases in benefits, but probably not for decreases, T presumably would prefer nothing to go to B than greater amount in Will 1) |
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What happens when there’s a change on the face of the will?
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Changes on the face of the will after it has been executed - revokes part crossed out, does not instate the added part.
1. So, cross out $2k and put in $5k, you've just revoked the $2k. A. DRR would get you the $2k 2. Cross out name and put in new name A. DRR doesn't save anything. 3. Cross out and change before will signed/witnessed - valid if can be established by proof |
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What happens when the beneficiary dies during the testator’s lifetime – specific gift?
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Anti-Lapse Statutes
Some narrow: Apply only to child or descendant of testator UPC: Applies when predeceasor was grandparent or descendant of a grandparent of testator Some broad: Apply to any relative (MA) or relative of spouse or former spouse of testator (CA) Predeceasing beneficiary must have been within the scope of the statute AND must have left descendants who survived the testator. |
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What happens when there’s a lapse in a residuary gift?
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Lapse in residuary gift - surviving residuary beneficiaries rule
If residuary estate is devised to two or more persons and gift to one of them lapses, surviving residuary beneficiaries take the entire residuary estate, in proportion to their interests Anti-Lapse statute trumps surviving residuary beneficiaries rule |
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What happens when there’s a lapse in a class gift?
What if the class is made up of named individuals? When is a class closed? |
Class gifts - if class gift ("children" "brothers and sisters") then if class member predeceases T, Class members who survive T take (unless anti-lapse applies)
Named B's who constitute class take individual share, missing part goes as per rest of will (residuary) ["A, B, C, the children of J] Subject to anti-lapse Class closed on death of T - rule of convenience (280 day gestation period) |
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What happens when the testator gets married after his will is executed?
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Under omitted spouse statute found in many states, if marriage follows execution of a will, the omitted spouse takes an INTESTATE SHARE.
Unless: 1. it appears the omission was intentional; OR 2. Provision was made for the spouse by TRANSFERS OUTSIDE THE WILL and it is shown that the transfers were intended as in lieu of testamentary gifts by testator's declarations, by amount of the transfer, or otherwise. But, only as to that portion of the estate that was not devised to testator's children or descendants from an earlier marriage. |
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What happens when the testator gets divorced after his will is executed?
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Divorce - will revoked as to divorced spouse - as if they predeceased T - Anti-lapse does not apply, since they are related by marriage, not blood
If they divorce, then remarry, so that she's wife at H's death, she takes under the will. |
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What happens when the will forgets a child?
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Omitted Child - any child, whether alive when will was executed or born/adopted after takes intestate share, unless evidence shows omission was intentional OR child provided for before death - will applies to remaining assets
Out of wedlock children - take if they would be heir in intestacy - see above Gifts to "children" include out of wedlock if they would take as heirs in intestacy |
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What are the order of priority for testamentary gifts?
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1. Specific devise - gifts of specifically described property
2. Demonstrative legacy - general amount from specific source 3. General legacy - Amount only 4. Residuary gift - remainder 5. Intestate property - if no residuary, remainder goes to intestate Mnemonic: Some Dumb Girls Read Internet (Specific, Demonstrative, General, Residuary, Intestate) |
Some Dumb Girls Read Internet
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What if there is not enough money to pay all the testamentary gifts?
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Abatement of legacies to pay debts - if debts, pay in reverse order, intestate, residuary, general/demonstrative, then specific. W/in each class, no distinction b/w real/personal property.
Exception - gifts to spouse and minor children = last to abate |
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What happens if the property that is specifically devised disappears?
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• Specifically devised property not in estate at death - ademption by extinction - gift fails
Exception - property sold by guardian or conservator - B entitled to proceeds if traceable in estate at T's death. • Doesn't apply to demonstrative gifts - except the property named has to be sold first to satisfy gift Watch for equitable conversion ! |
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What happens when there’s a bequest of stock or other securities?
Characterize these two devises (Specific, demonstrative): "I give my 100 shares of IBM stock to A" "I give 100 shares of Kodak to B" |
Bequests of stock or other securities
"I give my 100 shares of IBM stock to A" "I give 100 shares of Kodak to B" First is specific devise, second is demonstrative - ademption applies to first, not second If B would benefit from shares (Kodak splits) then treat as specific |
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What happens if the property I’ve devised is subject to a lien? Can specific devisee demand the residuary pay off the lien?
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Common Law: Yes because liens on specifically devised property are "exonerated" from the residuary estate.
UPC/majority rule: No, unless the will directs exoneration, because the exoneration of liens doctrine has been abolished. |
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What happens if I want to incorporate an external document?
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Incorporation by reference - can incorporate other writing IF
1. Writing in existence when will executed 2. Will shows intent to incorporate writing 3. Will describes writing in sufficient detail to permit identification Exception to 1) when writing describes disposition of tangible personal property, can be changed at any time |
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What if I refer to something outside the will? (“I give my car to A" then buy new car )
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Acts of independent significance - Lifetime acts w/ lifetime motive or purpose don't affect will ("I give my car to A" then buy new car, doesn't change that A gets car)
Same effect for "contents of sea chest" Except - don't get Title documents - only get tangible property and cash |
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What’s the general rule about mistakes on wills that are unambiguous?
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Mistakes or ambiguities - plain meaning rule - unambiguous will = no extrinsic evidence to show mistake - conclusive presumption that T read and intended contents of will
("I give 200 shares to A" - meant 100 shares, no extrinsic evidence) |
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What if there’s a latent ambiguity because of misdescription? I give a gift to John Paul Jones, but I have a nephew John Peter Jones and one named John Paul Stephens.
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Latent ambiguity b/c misdescription - extrinsic evidence admissible - allows court to find meaning of words used, as opposed to above where changing meaning of words used.
("I give $100 to John Paul Jones" - has nephew named John Peter Jones and one named John Paul Stevens - extrinsic evidence allowed) |
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What if there is a patent ambiguity on the will? ("I give Twenty-five dollar ($25,000) to A")
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Patent ambiguity - OLD MA cases say no evidence allowed, but modern trend in other J is to allow extrinsic evidence (Wigmore criticized MA law, 50 years ago)
("I give Twenty-five dollar ($25,000) to A") |
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What if there is a mistake in the inducement?
("B/c A got lots of money from H, I'm not giving her anything." But, H's estate wiped out by debt.) |
Mistake in the inducement - absent fraud - no relief
("B/c A got lots of money from H, I'm not giving her anything." But, H's estate wiped out by debt.) DRR limited to mistake as to validity of another disposition - this is mistake as to fact of other disposition |
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What if there is fraud in the inducement? (I get you to sign a will pretending it’s a credit application)
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Fraud in the inducement - constructive trust in A's favor
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How do I establish the existence of a contract to make a will or not to revoke a will?
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Contracts relating to wills
1. Will must state contract exists and state material provisions of K OR 2. Binding and enforceable written agreement |
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What about words of disinheritance?
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Majority Rule: Words of disinheritance are ineffective if partial intestacy - when a will does not make a complete disposition of the estate, words of disinheritance are ineffective - rationale: when property passes by intestacy, it passes pursuant to statute, not decedent's will
UPC: A will can provide how property shall NOT be disposed of, meaning words of disinheritance are effective. Estate distributed as though disinherited person predeceased. |
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L prepares will for T, but fails to secure two witnesses - can B sue?
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Minority rule: No, no privity of contract.
L's duty is to client that contracted for services, only he can sue for negligence Emerging majority rule: L also has duty to intended B's, privity rejected as defense MA: No case, argue both ways (Handwriting on wall, Spinner v. Nutt distinguished majority rule, holding L liable b/c of conflict, probably find no conflict b/w T & B's.) |
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When do I have to file for election?
And if I don't? |
Spouse must file for election w/in 6 mo after will is admitted to probate.
Failure = conclusive presumption take under will (unless continuance granted by court) |
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What about if the spouse is incapacitated can someone make his/her elective share for him/her?
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Election may be made for incapacitated spouse with court approval, but not for spouse who dies before probate (intended to protect living spouse, not her estate)
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What rules apply for satisfying the elective share?
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To satisfy elective share, abatement rules apply. Comes out of residuary first, but property devised to spouse is abated first. (So, if will gives 15k in stock to W, this will be taken first)
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Can the spouse waive the elective share by contract?
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Right to elective share may be waived by contract, assuming adequate consideration
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What if the spouse deserted the decedent, can she still get an elective share?
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Surviving spouse is disqualified from right to elective share if he deserted the decedent or if couple has been living apart for justifiable cause.
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What if I don't want to take an elective share. What other possibility does a spouse have if he/she has been disinherited?
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Dower - (unlikely) can take a life estate in D's real property. Only reason is if D was insolvent, since Dower takes precedence over creditor's claims
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Who can contest a will?
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Will Contests - only interested parties can contest - only persons adversely affected by will's probate - creditor's don't count. Child born out of wedlock has standing if he would be an heir if D had died intestate
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How do I challenge a will based on capacity?
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Lack of testamentary capacity - burden on contestants - Test - did T have capacity to:
1. Understand the nature of the act he was doing? 2. Know the nature and approximate value of his property? 3. Know the natural objects of his bounty 4. Understand the disposition he was making Adjudicated incapacitated evidence of lack of testamentary capacity, but not conclusive. Mnemonic: how WILL i DIVIDE this CASH between the KIDS (T must understand: Will, Division, Property, Kids) |
how WILL i DIVIDE this CASH between the KIDS (T must understand: Will, Division, Property, Kids)
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How do I challenge a will based on undue influence?
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Undue influence: Free agency of the T destroyed and the will of the bad actor substituted.
Contestants must prove: 1. Existence and exertion of the influence 2. Effect is to overpower the mind and will of the testator 3. Product is a will (or gift) that would not have been made but for the influence. (Undue influence may be shown for the entire will, or as to one gift in the will.) |
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What isn’t enough on their own to prove undue influence?
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While evidence of UI is circumstantial, these are not enough:
1. Mere opportunity to influence 2. Mere Susceptibility to influence 3. Mere fact of Unnatural disposition But, a combination of those three (opportunity, susceptibility, unnatural disposition) may be enough. |
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What if there is a fiduciary relationship between the testator and the beneficiary who gets something?
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Fiduciary relationship -=> if benefit from transaction - presumption of undue influence.
Fiduciary must show: i. T made bequest with full knowledge and intent OR ii. T had independent counsel |
Please, Keep It In Church
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Are no contest clauses okay? Enforceable? Does a will construction suit trigger forfeiture under a no contest clause?
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Majority rule: full effect UNLESS court finds that the contest was brought in good faith and with probable cause. (Not a "pay me and I'll go away suit.")
Minority rule (MA): No contest clause - fine regardless of probable cause to file contest - only if contest is successful is the no contest clause voided. |
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When must a claim against the estate be made?
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Nonclaim statute unconstitutional as to KNOWN creditors or creditors reasonably ascertainable. Due Process requires personal notice to those.
UPC: 1. May give permissible personal notice to creditors, requiring them to present claims within later of (i) 60 days after receipt or (ii) 4 months after first publication of notice 2. All claims not presented w/in 4 months after first publication are barred (only bars unknown or unascertainable creditors) 3. 1 year statute of limitation in all cases whether will or intestate. All claims not presented w/in this year are barred. Probably okay under Supreme Court rule since applies to all cases. |
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Can the administrator of the estate dispose of estate assets?
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Not by administrator of intestate estate, not by executor or trustee named in will unless given that explicit power by will.
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What is a trust?
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Trust = arrangement for making gift of property and for management of assets under which trustee holds legal title and beneficiaries hold equitable title
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What are the requirements for a valid trust?
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Requirements for a valid trust –
(1) Grantor (settlor) (2) delivers (3) res (trust property) to (4) trustee for the benefit of (5) beneficiaries, with (6) intent to create a trust. Must be for (7) Lawful purpose. [No consideration required] Mnemonic: GeRBIL DaT (Grantor, Res, Beneficiaries, Intent, Lawful, Deliver, Trustee) |
GeRBIL DaT
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What does it mean to have delivery?
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Delivery - does not apply to self-declaration (I am trustee) or testamentary trust (will)
But, for inter vivos trust that names 3d party, must deliver property So, if you die before delivering assets to IV trust, no trust |
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What are the requirements for a trustee?
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Trustee - Individual must have legal capacity to deal w/ property - > 18, capacity to contract, etc. Corp - only banks and trust companies w/ trust powers in charter can be trustees
• Court will appoint trustee if one not named • Trustee cannot be removed unless cannot perform duties (conflicts w/ beneficiaries only enough when severe conflict) • Named trustee must have actual power - otherwise, Beneficiary holds fee simple • So, spendthrift clause w/o other power invalid |
Captain Power
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What does res mean?
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Res - legal title conveyed to trustee - so must have title to convey
Cannot create a trust of an expectancy Trust must have corpus |
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What are the requirements for beneficiaries?
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Beneficiaries - noncharitable trust must have beneficiaries and interests must vest w/in Rule against Perpetuities time
• Failed trust = resulting trust, which isn't really a trust • Class gift is okay - look by intestacy rules by analogy to determine who in class • Charitable trust - must be for charitable purpose (relief of poverty, religious purposes, etc.) • So, "trust to train spiritualistic mediums" argue both ways • "scientific proof of sole" - court holds hearing to determine who can best address that purpose |
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What is the Rule against Perpetuities?
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Rule against Perpetuities - No future interest is good unless it must vest, if it does vest, not later than 21 years after some life in being at the creation of the interest.
Example: T devises "to son J for life, and on his death to J's children who have attained age 30." |
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Can you give me a quick two step process for evaluating the RAP?
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Example: T devises "to son J for life, and on his death to J's children who have attained age 30."
Step 1: What interests are created (w/o regard to rule) J - life estate J's children - contingent remainder in FS T's estate - reversion Step 2: Apply rule - remainder to J's children is void, since it might vest remotely (beyond 21 years) J's currently living children might die, and J might die with a child under age 10 (meaning vests in that child >21 years after life in being) |
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Can you give me an example of a bequest that doesn't violate the RAP?
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CF - if "on his death to J's children who have attained age 21" that's okay, since even if J dies with child in gestate, there's a 280 day gestation window
• Ignores impossibilities - even 90 year old barren women can have children in RAP |
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Tell me about the USRAP?
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Uniform Statutory Rule against Perpetuities (USRAP) - Alternate vesting period of 90 years. Trust valid if:
• Satisfies RAP • Actually vests or terminates w/in 90 years after interest's creation So, very high probability that J's children will reach age 30 w/in 90 years. |
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What does it mean that I have to have intent to create a trust?
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Intent to create a trust - precatory language does not create a trust (It is my wish and desire that T hold G for B in trust.")
• CF - G gives S a check for $10k w/ notation on check "for use and benefit of GSG." This creates a trust • No particular words are needed to create a trust |
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What does it mean that a trust has to have a lawful purpose? Anything I need to know WRT to trusts for land?
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Lawful purpose - unlawful conditions also unenforceable.
• Encouraging divorce not valid • Total restraint on marriage not valid • Partial restraint on marriage (marry Jewish) okay • Remarriage revocation okay - provides support during widowhood Oral trusts of land are not valid - statute of frauds - oral trusts of personal property okay |
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What happens if the grantor is also the trustee?
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Self declaration of trust - I'm the trustee, if I don't revoke before I die, then the remainder goes to B - okay
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What is a pourover will?
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Pourover will - assets from will go into inter vivos trust already set up - valid (i) even if trust is subject to revocation or amendment and is later amended (ii) even if trust is unfunded during T's lifetime (iii) trust can be created after will is signed.
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Can you name the trust as a beneficiary to life insurance or employee benefits?
Can creditors reach revocable trusts if the probate estate is exhausted? Do insurance proceeds have to go to a specific person or is there some way you can decide that later? |
You can name trust beneficiary to life insurance, employee death benefits
Creditors can reach revocable trusts if probate estate is exhausted Insurance proceeds can also go to "trustee named in my will" that's okay - allows one legal fee to set up will/trust |
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What is the Uniform Transfers to Minors Act (UTMA)?
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Uniform transfers to minors act (UTMA) - Allows gifts to minors w/o naming a guardian and also qualifies for tax exemption up to 12k per donee
Custodianship under UTMA is fixed at 21 years of age |
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The account says, “JT TEN TOD LDPS,” WTF?
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JT TEN - Joint tenants with right of survivorship
TOD - Transfer on death LDPS - Lineal descendents per stirpes |
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Do charitable trusts have to comply with the Rule Against Perpetuities?
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Not subject to RAP - can be perpetual
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What is the tort liability limitation for charitable trusts?
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Liability of charitable trust limited to $20k.
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What happens if we can’t do what the settlor wanted to do in a charitable trust?
What's an honorary trust and will it be enforced? |
By statute in MA conclusive presumption that settlor had a general charitable intent, so cy pres must always be applied.
[Similar doctrine - can change administrative terms if changed circumstances would make original terms frustrate primary purpose of the trust.] Honorary trust - an animal or object is B - only enforceable if the trustee chooses to perform. |
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What is a constructive trust?
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Constructive trust = not true trust - equitable remedy to disgorge unjust enrichment
Appropriate if: Wrongful conduct & Unjust enrichment |
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T wills to A & B. T asks L to prepare will giving estate to D. L returns w/ will and reads it to T in A & B's presence. They wrestle will out of L's hands and T goes into coma.
What happens here? |
Step 1: apply law - cannot admit new will - unexecuted, old will not validly revoked
Law result - admit old will to probate Step 2: apply equity - (1) Wrongful conduct and (2) unjust enrichment = constructive trust - distribute estate to D |
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What happens if there’s a murder?
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• Murder as if murderer predeceases T
• Prove murder by preponderance of evidence, not beyond reasonable doubt • Murderer does not forfeit his ownership of undivided interests, but does lose right of survivorship |
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Example S promised M that she'd get estate if she would work as his housekeeper. Gave deed to H saying, "keep in trust for M in consideration of her housekeeping."
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• Invalid express trust - SOF
• But, can be constructive trust, if H promised to serve as trustee but had no intention to do so (fraud in the inducement) OR • Grantor-trustee were in confidential relationship - business associates, father-child, etc. • If M can prove H promise by clear and convincing evidence constructive trust imposed • Possible quantum meruit claim for housekeeping |
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What is a Purchase Money Resulting Trust?
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Purchase Money Resulting trust - if A purchases item and puts title in B, presumption that it was in trust for A, unless relatives, then presumption gift
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What is a spendthrift trust? How do you create one?
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Prevents the beneficiary from assigning away the assets or benefits.
Creditors cannot reach assets. Creation: No interest of beneficiary assignable nor subject to any claim by creditors. "No interest of any beneficary herein shall be assignable by such beneficiary nor shall it be subject to the claims of the beneficiary's creditors by attachment or other legal process." |
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Are spendthrift trusts valid?
If they're valid, what exceptions are there? |
Spendthrift trusts valid except as to:
1. Contracts for necessities - med, food, rent 2. Alimony, child support 3. Any interest retained by Settlor 3a. Revocable trust - settlor is treated as owner for creditors' purposes 4. Federal tax liens. Mnemonic: NAT RR (Necessity, Alimony, Tax, Retained, Revocable) |
NAT RR
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What are the rules of self-dealing by the fiduciary?
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• Trustee cannot buy or sell trust assets to himself
• Trustee cannot borrow trust funds • Trustee cannot loan funds to the trust • Trustee cannot profit from serving as trustee • Corporate trustee cannot buy its own stock as a trust investment • Duty to segregate Statute of Limitations - doesn't begin running against fiduciary until: o Repudiates the trust (denies existence of trust) o Dies or resigns o Gives an accounting that makes full disclosure of the facts upon which action is based Mnemonic - can't SLOB - PS SOL RAD(Sell, Loan, Own, Borrow, Profit, Segregate, SOL doesn't run until Repudiates, Accounting, Die) |
can't SLOB - PS SOL RAD
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What happens if the trustee is self-dealing?
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If trust self-dealing:
i. B can ratify transaction and waive the breach ii. Can bring surcharge action for loss - no further inquiry rule - Only issue in case is proving self-dealing, then proving amount of damages |
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Can the trustee sell or mortgage real property?
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Trust Administration problems - absent grant of power, trustee cannot sell or mortgage real property without prior court approval - does have power to sell personal property as long as related to proper administration of trust
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What about investments? How do we determine whether the trustee investments are good?
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Investments - Uniform prudent Investor Act (UPIA) - trustee investments are measured as to whether good or not by conduct when decision is made
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What factors are looked at by the UPIA?
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1. General economic conditions
2. Possible effect of inflation or deflation 3. The expected tax consequences of investment decisions or strategies 4. Role that each investment plays within the overall trust portfolio 5. Expected total return from income and capital gain 6. Needs for liquidity 7. An asset's special relationship or value to the purposes of the trust or a beneficiary 8. Any differing interests of the income B and the remaindermen DRILSTER - (Differing interests, Role, Inflation, Liquitidy, Special relationship, Tax, Economic, Return) |
DRILSTER
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Do I have to invest the trust res for the purpose of dividends?
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You don't have to invest for dividends anymore, so can invest for appreciation and capital gain as well as ordinary income. Prudence is measured by conduct at the time the investment decision is made, not by hindsight based on outcome or prudence.
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How are these generally divided in a trust?
Cash dividends Stock dividends Capital gains |
i. Cash dividends - income
ii. Stock dividends - principal iii. $10,000 capital gains - principal* subject to trustees adjustment power under UPIA |
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Are trustees liable for torts?
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Only if personally liable - sue in his representative capacity
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How are trusts terminated early? What about spendthrift trusts?
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Early Termination of trusts - All B's (over 18) can consent to terminate trust if no further trust purpose of the settlor to be served. Must be unanimous - one minor B kills agreement
Spendthrift clause makes trust indestructible. |
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What is the power of appointment?
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Power given to named person in will to decide who gets what.
T wills to "D for life and on her death to distribute trust principal to such persons, including D's estate as she appoints by her last will. If she does not exercise this power of appointment, on D's death the trustee shall distribute the trust principal to D's descendents." |
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Who are the players in the power of appointment?
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T, the testator = donor of power of appointment as his will created power
D is donee of a general testamentary power of appointment, b/c not limited in class of B to whom she can appoint; she can give property to anyone, including herself, or her creditors, or her estate |
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What are the types of powers of appointment?
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General power – exercisable in favor of the donee herself, her estate, her creditors or the creditors of her estate.
Special Power – exercisable in favor of a limited class of persons, which does NOT include the donee, her estate, her creditors, or the creditors of her estate. Inter Vivos power – exercisable during the lifetime of the donee. Testamentory – only exercisable by the donee’s will Mnemonic: GITS (General, Inter Vivos, Testamentary, Special) |
GITS
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If there’s no appointment who takes the property? What if the will has a residuary clause? What if it disposes of the property as if it were her own?
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D's descendents are takers in default of appointment, as they will take the property on D's death if the power of appointment is not exercised.
Will must expressly exercise power of appointment SO if D's will gives "residuary estate 1/2 to H, 1/2 to son" then descendents take T's estate as default appointees. Exception: If donee attempts to dispose of property as though it was her own ("devise B to my son S") then the power of appointment is exercised by implication |
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M’s will creates trust: "Income to daughter B for life and on her death principal to such of B's descendants as she shall appoint by her last will. In default, to B's children in equal shares." What are the interests?
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B has a life estate and a special testamentary power of appointment b/c she is limited in the class of person she can appoint.
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M’s will creates trust: "Income to daughter B for life and on her death principal to such of B's descendants as she shall appoint by her last will. In default, to B's children in equal shares."
B dies 10 years later, her will devises "all property, including any property over which I may have a power of appointment, to my daughter D." What happened? |
This exercises the special testamentary power in favor of Diane. Blanket exercise of the power works.
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Trust provided "an on B's death principal to such of B's descendants as she shall appoint by a will that specifically refers to this power of appointment…." What is the significance of the quoted text?
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This kills the ability of B to do a blanket grant.
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M created trust for son R for life and on his death principal "to such one or more of R's descendants as he appoints by his will; on default to his children." R, for consideration, agrees to appoint daughter Denise by will. Valid exercise?
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No - b/c to hold otherwise would transform R's testamentary power of appointment into an inter vivos power - he was supposed to exercise this in will, not while alive and R benefits himself impermissibly
Also, by receiving consideration for exercising power of appointment that was supposed to be limited so as to benefit R's descendant, would benefit a non-object of the power. |
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T wills to "D for life and on her death to distribute trust principal to such persons, including D's estate as she appoints by her last will. If she does not exercise this power of appointment, on D's death the trustee shall distribute the trust principal to D's descendents."
Turns out D's estate at death is insolvent, some of her creditors remain unpaid. Can D's creditors reach the "appointive assets" (those assets in the trust created by T's will)? |
o Only general powers that are exercised are reachable by creditors!
• Yes if D's will exercised general power of appointment • No if D's will did not exercise the power • No if T's will had given D a special testamentary power of appointment, and D's will appointed son John. |
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In what order do we pay off creditors to the estate?
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1. Surviving Spouse's Allowance
2. Administrative Expenses 3. Funeral Expenses 4. Preferred Debts under US law 5. Child Support debts and Taxes 6. Debts to Division of Medical services 7. Debts for labor incurred in the year before death (up to $100) 8. Necessities up to $100 (incurred in year before death) 9. Secured debts - up to the value of the property 10. Unsecured debts Mnemonic: Some Americans Find Pasta Too Long, Now, Shut Up! (Spouse, Administrative, Funeral, Preferred, Taxes, Labor, Necessities, Secured, Unsecured) |
Mnemonic: Some Americans Find Pasta Too Long, Now, Shut Up!
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What can't a trustee do?
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• Trustee cannot buy or sell trust assets to himself
• Trustee cannot borrow trust funds • Trustee cannot loan funds to the trust • Trustee cannot profit from serving as trustee • Corporate trustee cannot buy its own stock as a trust investment SLOB-P (Sell, loan, own, borrow, profit) |
SLOB-P
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What must a trustee do?
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Segregate the funds
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When does the statute of limitations start running against the trustee?
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Not until he:
o Repudiates the trust (denies existence of trust) o Dies or resigns o Gives an accounting that makes full disclosure of the facts upon which action is based RDA - Repudiates, Dies, Accounting |
RDA
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What gifts from a will may be disclaimed?
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- Any interest can be disclaimed
Disclaimer can be partial |
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What if a person is incapacitated, how do they disclaim a testamentary gift?
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v. Personal representative can disclaim for incapacitated beneficiary if court finds disclaimer in best interest of the beneficiary.
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I'm bankrupt. The property that I'm about to get would go to my sister if I disclaimed it. Can I do that?
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No - Disclaimer cannot be used to defeat creditors' claims if disclaimant is insolvent.
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What defines a charitable trust, what purpose is it for?
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Must be for charitable purpose - must confer substantial amount of social benefit
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Who are the beneficiaries in a charitable trust?
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Must be in favor of a reasonably large number of unidentifiable members of the public at large and cannot benefit identifiable individuals
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What happens when the purpose of a charitable trust can no longer be accomplished? ?
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Cy Pres
When stated purpose can no longer be accomplished, must be reformed by cy pres |
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Is a trustee personally liable for contracts?
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No unless
(1) contract imposes personal liability or (2) trustee fails to disclose her representative capacity and identify the trust in the contract |
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What is it called when the beneficiaries bring a claim against the trustee for misdealing?
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surcharge action
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What doesn't the probate estate include?
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Non-probate transfers - those that pass by right of survivorship (Joint & survivor bank accounts)
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What share does the spouse receive when:
1. Spouse but not by descendants or parents 2. Spouse + parent (no descendants) 3. Spouse + descendants, all of whom are descendants of the surviving spouse AND surviving spouse has no descendants from earlier marriage 4. Spouse + Descendants, all of whom are descendants of the surviving spouse BUT surviving spouse has some descendants who are NOT descendants of the decedent 5. Spouse + descendants, some of whom are NOT the descendants of the surviving spouse Apply Revised Uniform Probate Code (1990 version) |
1. All
2. First $200k plus 3/4 of balance 3. All 4. First $150k plus 1/2 of balance 5. First $100k plus 1/2 of any balance |
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Define per stirpes
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By the roots - means one share for each LINE of descendants
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Define "per capita"
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By the head - one share per person
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Martha dies intestate and is survived by:
Al Ben Carol's Children - C1 & C2 Donna's Children - D1, D2 & D3 What share at common law? |
Strict Per Stirpes - 1/4 share for the first generation, then divided between their heirs:
Al - 1/4 Ben - 1/4 C1 & C2 - 1/8 D1, D2, D3 - 1/12 |
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Martha dies intestate and is survived by:
Al Ben Carol's Children - C1 & C2 Donna's Children - D1, D2 & D3 What share under the original UPC and in most states today? |
Per capita with representation - per capita at the first level, then by representation - cut the shares at the first generational level at which there are living takers, then one share for each family line
1/4 share for the first generation, then divided between their heirs: Al - 1/4 Ben - 1/4 C1 & C2 - 1/8 D1, D2, D3 - 1/12 |
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Martha dies intestate and is survived by:
Ben Carol's Children - C1 & C2 Donna's Children - D1, D2 & D3 What share under the revised UPC? |
Per Capita at each generation - make the initial division of shares at the first generational level at which there are living takers. Each taker gets one share. Shares of deceased persons are then lumped back together and divided at the next generation equally. Etc.
Al - 1/4 Ben - 1/4 C1, C2, D1, D2, D3 - 1/10 |
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What if decedent is survived by neither spouse or descendants? Parents survive
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All to parents or surviving parent - in most states, collateral kin - sisters/brothers never inherit if there's a parent still alive
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What if decedent is survived by neither spouse or descendants? Parents don’t survive
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To descendants of parents (sisters/brothers) doesn't matter if half
Use method of distribution - per stirpes, per capita - as for descendants |
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What if not decedent is not survived by parents or issue of parents?
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1/2 to maternal grandparents (or if no maternal G-p's live, then their descendants)
1/2 to Paternal grandparents (if no paternal G-p's live, then their descendants) If no-one in one line, give all to other line |
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How far afield can I go in finding someone to take the estate?
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Most states have no limit - some states disallow taking by "laughing heirs" those who are more remotely related than the descendants of grandparents. Escheats to state.
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Mary gives Blackacre (worth $60k) to son Al on 35th b-day, telling B & C they'd get similar gifts when they reached 35. Mary dies intestate 2 years later w/o having made gifts to B & C. She left an estate valued at $300k.
What distribution at common law? Under Majority/UPC rule? |
1. At common law - Mary's estate is treated as a [$300k+60k =] $360k estate, divided 3 ways. Each child's share would be $120k, and Al got $60k of it already.
2. Majority rule/UPC - Each child gets $100k |
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What happens if an heir disclaims?
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It's as if she predeceased - her share passes to children by representation
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Mom and son are hit by a train. Both die instantly. Mother did not leave a will. For purposes of distributing an estate, is Son an heir?
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No, if the controlling law is the Uniform Simultaneous Death Act
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What is the Uniform Simultaneous Death Act?
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When title to property depends on order of deaths and there is no sufficient evidence that the persons have died otherwise than simultaneously, the property of each passes as though he or she survived (absent contrary provision)
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How does the Uniform Simultaneous Death Act work in intestacy?
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As though the intestate survived and the heir predeceased
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How does the Uniform Simultaneous Death Act work in wills?
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As though testator survived and beneficiary predeceased (see lapsed gift doctrine and anti-lapse statutes)
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How does the Uniform Simultaneous Death Act work in insurance proceeds?
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As though insured survived and beneficiary predeceased
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How does the Uniform Simultaneous Death Act work in joint tenants with right of survivorship?
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1/2 distributed through A's estate as if A survived B and 1/2 distributed through B's estate as though B survived A
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Mom and son are hit by a train. Son dies 71 hours later. Mother did not leave a will. For purposes of distributing an estate, is Son an heir?
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Yes - if the Uniform Simultaneous Death Act applies - evidence of non-simultaneous death
No - if the state has enacted the Uniform Probate Code's 120-hour rule |
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Does the 120-hour rule apply to wills? If so, what effect?
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Yes - if a will beneficiary fails to survive testator by 120 hours, deemed to have predeceased testator
Invokes lapsed gift rule and anti-lapse statute |
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Tom types a will that leaves all property to Sue and neighbor Nell in equal shares. It is undated. Is this a problem?
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No, undated wills are okay.
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Tom types a will that leaves all property to Sue and neighbor Nell in equal shares. It is undated. There is no attestation clause. Is this a problem?
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An attestation clause is not required in any state.
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Tom types a will that leaves all property to Sue and neighbor Nell in equal shares. It is undated. There is no attestation clause; below the signature line for the testator the will simply provides "Witnesses" and has two signature lines. Tom takes the will across the street to his neighbor Nell and asks Nell to "witness my will." Nell signs on the first witness line, THEN Tom signs.
Is it a problem that witness signed before T? |
No, the exact order of signing is not critical when "execution" (will signing) ceremony is a contemporaneous transaction.
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Tom types a will that leaves all property to Sue and neighbor Nell in equal shares. It is undated. There is no attestation clause; below the signature line for the testator the will simply provides "Witnesses" and has two signature lines. Tom takes the will across the street to his neighbor Nell and asks Nell to "witness my will." Nell signs on the first witness line, then Tom signs. Tom's signature is barely legible.
Is it a problem that Tom's signature is barely legible? |
Any mark, intended by Testator is sufficient. X would work.
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Tom types a will that leaves all property to Sue and neighbor Nell in equal shares. It is undated. There is no attestation clause; below the signature line for the testator the will simply provides "Witnesses" and has two signature lines. Tom takes the will across the street to his neighbor Nell and asks Nell to "witness my will." Nell signs on the first witness line, then Tom signs. Tom's signature is barely legible because of an arthritic condition. Tom then takes the will to his neighbor Oscar and asks: "would you mind witnessing this legal document for me? It needs two signatures besides mine." Tom gives the will to Oscar. Oscar thinks he's witnessing a power of attorney.
Is it a problem that Oscar thinks he's witnessing a power of attorney? |
A minority of states require that a witness KNOW they are witnessing a will.
Most states don't require this. |
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Tom types a will that leaves all property to Sue and neighbor Nell in equal shares. It is undated. There is no attestation clause; below the signature line for the testator the will simply provides "Witnesses" and has two signature lines. Tom takes the will across the street to his neighbor Nell and asks Nell to "witness my will." Nell signs on the first witness line, then Tom signs. Tom's signature is barely legible because of an arthritic condition. Tom then takes the will to his neighbor Oscar and asks: "would you mind witnessing this legal document for me? It needs two signatures besides mine." Tom gives the will to Oscar. Oscar thinks he's witnessing a power of attorney. After Tom's death, the will, which is undated, is offered for probate.
Is it a problem that Nell is a witness and a recipient under the will? |
Majority rule: The signing of a will by an interested party does not invalidate the will or any provision of it.
Minority rule: Interested witness doesn't affect the validity of the will, but witness/beneficiary loses legacy. |
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Tom types a will that leaves all property to Sue and neighbor Nell in equal shares. It is undated. There is no attestation clause; below the signature line for the testator the will simply provides "Witnesses" and has two signature lines. Tom takes the will across the street to his neighbor Nell and asks Nell to "witness my will." Nell signs on the first witness line, then Tom signs. Tom's signature is barely legible because of an arthritic condition. Tom then takes the will to his neighbor Oscar and asks: "would you mind witnessing this legal document for me? It needs two signatures besides mine." Tom gives the will to Oscar. Oscar thinks he's witnessing a power of attorney. After Tom's death, the will, which is undated, is offered for probate.
Should it be admitted? |
Yes - the four point test for will validity is satisfied:
1. Signed by testator 2. Testator signed will in each witness's presence (acknowledged signature for one witness) 3. Two attesting witnesses 4. Witnesses signed w/in a reasonable time after witnessing T's signature |
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An attestation clause:
"On the above date, testator declared to us that the foregoing instrument was her will and she asked us to serve as witnesses thereto. She then signed the will in our presence, we being present at the same time. We now sign the will as attesting witnesses in testator's presence and in the presence of each other." What value is an attestation clause? |
Prima facie evidence of facts in clause.
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When might an attestation clause be important?
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1. Witness with bad memory
2. Hostile witness |
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How might I protect the witness signatures?
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Self-proving affidavit - Testator and witnesses sign will, then execute a sworn affidavit before notary public - affidavit recites statements witnesses would testify to in open court (T over 18, witnesses signed in T's presence; witnesses' opinion T was of sound mind, etc.)
Unlike an attestation clause (which merely corroborates W's testimony) the affidavit serves the same function as a deposition or interrogatory - total substitute for live testimony of attesting witnesses in open court. |
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T downloads will form. Neighbor signs, affixes notary seal. Can this be admitted?
Majority rule? UPC rule? |
1. Majority rule - no, missing witness
2. UPC - yes - DISPENSING POWER statute - harmless error - probate judge can excuse full compliance with formalities if there is CLEAR AND CONVINCING EVIDENCE that testator intended the document to be her will |
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M was in the ICU after a heart attack. His lawyer read his will aloud and Mel signed it then had a massive seizure. He died before his witnesses could sign the will. Since they were there, they signed it anyway. What result?
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Majority rule: Witnesses must sign in the testator's CONSCIOUS presence - therefore will not probated
Uniform Probate Code: If the witnesses sign within a reasonable time after the testator, that's okay - will probated |
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Do the intended will beneficiaries have a cause of action against the attorney whose negligent drafting of a will left them out?
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Minority rule: No - no privity of contract
Majority rule: Yes - privity rejected as a defense |
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Tim executes "my last will." Two years later, Tim executes another "my last will." The second will doesn't mention the first and doesn't have language of revocation.
What effect? |
To the extent possible, you read the two instruments together. The second "last will" is treated as a codicil to the first will, and revokes it only to the extent of inconsistent provisions. But if the second will is WHOLLY INCONSISTENT with the earlier will (the first gives "all property to Al", and the second gives "all property to Betty.") the first will is REVOKED BY IMPLICATION.
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What if I revoke just the codicil to a will?
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Revocation of a codicil to the will does not revoke the will and (majority rule) the part of the will that was modified or revoked by the co
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Tim executes "my last will." Two years later, Tim executes another "my last will." The second will doesn't mention the first and doesn't have language of revocation.
What effect? |
To the extent possible, you read the two instruments together. The second "last will" is treated as a codicil to the first will, and revokes it only to the extent of inconsistent provisions. But if the second will is WHOLLY INCONSISTENT with the earlier will (the first gives "all property to Al", and the second gives "all property to Betty.") the first will is REVOKED BY IMPLICATION.
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What if I revoke just the codicil to a will?
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Revocation of a codicil to the will does not revoke the will and (majority rule) the part of the will that was modified or revoked by the co
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Elsie decides to make some revisions in her will without the assistance of an attorney. She deletes this clause:
10. I give the sum of $5,000 to my nephew, Hobie Gates. Is that clause validly revoked? |
Majority rule: Yes
Minority rule: A few states do not recognize partial revocation by physical act. Most states and under the UPC, partial revocations by physical act are valid. |
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Elsie decides to make some revisions in her will without the assistance of an attorney. She amends this clause:
11. I give the sum of $2,000 to my niece, Susan Slade. She crosses out $2,000, and writes $5,000 above it. She initials the changes and dates the margin alongside the changes. She dies 3 years later. Does Susan get $5,000 in majority of states? |
No. The overwhelming majority of states say that words added to a will after it has been signed are disregarded and not part of the duly executed will.
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Elsie decides to make some revisions in her will without the assistance of an attorney. She amends this clause:
11. I give the sum of $2,000 to my niece, Susan Slade. She crosses out $2,000, and writes $5,000 above it. She initials the changes and dates the margin alongside the changes. She dies 3 years later. Does Susan get $5,000 under the Revised UPC? |
Yes - under the HARMLESS ERROR or DISPENSING POWER.
We have CLEAR AND CONVINCING evidence that Elsie intended to modify the will by making the alteration. |
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Elsie decides to make some revisions in her will without the assistance of an attorney. She amends this clause:
11. I give the sum of $2,000 to my niece, Susan Slade. She crosses out $2,000, and writes $5,000 above it. She initials the changes and dates the margin alongside the changes. She dies 3 years later. Does Susan get anything? |
Under Dependent Relative Revocation (DRR) Susan gets $2,000.
It is closer to Elsie's intent to give Susan $2k than to give her nothing. Her striking out the number was premised on a flawed understanding of the validity of a revocation. |
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Elsie decides to make some revisions in her will without the assistance of an attorney. She amends this clause:
11. I give the sum of $2,000 to my niece, Susan Slade. She crosses out $2,000, and writes $500 above it. She initials the changes and dates the margin alongside the changes. She dies 3 years later. Does Susan get anything? |
No.
It is clear that by striking out the $2k, Elsie was saying, first, that Susan should not get $2k. It would defeat Elsie's clear intent that Susan get $2k. |
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Elsie decides to make some revisions in her will without the assistance of an attorney. She amends this clause:
11. I give the sum of $2,000 to my niece, Susan Slade. Change the facts - Elsie crossed out the $2k and wrote in $5k BEFORE the will was signed and witnessed. Are the changes valid? |
Yes - they were part of the duly executed will.
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What happens when a will beneficiary predeceases the testator?
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The gift lapses. You cannot give to a dead person.
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Tom wills Blackacre to son, Sam, and residuary to sister. Sam dies 2 years later, survived by wife and son. Sam's will devises all property to wife, Wendy. Tom dies 2 months after Sam, survived by Sam's wife, Wendy, Sam Jr., and Tom's sister Mary.
Who takes Blackacre? |
Sam Jr takes under the anti-lapse statute.
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Tom wills Blackacre to son, Sam, and residuary to sister. Sam dies 2 years later, survived by wife and son. Sam's will devises all property to wife, Wendy. Tom dies 2 months after Sam, survived by Sam's wife, Wendy, Sam Jr., and Tom's sister Mary.
Why doesn't Wendy take Blackacre? |
Because the anti-lapse statute names the SUBSTITUTE taker
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Tom wills Blackacre to son, Sam, and residuary to sister. Sam dies 2 years later, survived by wife and son. Sam's will devises all property to wife, Wendy. Tom dies 2 months after Sam, survived by Sam's wife, Wendy, Sam Jr., and Tom's sister Mary.
What if Sam was NOT survived by descendants, meaning the anti-lapse statute doesn't apply - who takes Blackacre? |
If a bequest or devise lapses and the anti-lapse statute does not apply, the lapsed gift falls into the residuary estate.
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Tom wills Blackacre to son, Sam, and residuary to sister. Sam dies 2 years later, survived by wife and son. Sam's will devises all property to wife, Wendy. Tom dies 2 months after Sam, survived by Sam's wife, Wendy, Sam Jr., and Tom's sister Mary.
Suppose the will gave Blackacre "to my son Sam IF HE SURVIVES ME." Would the anti-lapse statue apply in favor of Sam Jr (majority rule)? |
No - gift fails according to its terms.
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In a state that has enacted the UPC's 120-hour rule. Tim's will provides, "I give all of my Micron stock to my sister Sarah, and my residuary estate to my mother Macree." Tim and Sarah are fatally injured in an auto-accident. Tim is pronounced dead at the scene; Sarah dies 2 days later. Sarah is survived by her daughter Donna and her mother; Sarah leaves a will that devises "all my property to the Red Cross.
Who takes the Micron stock under Tim's will? |
The Micron stock passes to Sarah's daughter Donna, according to anti-lapse statute.
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In a state that has enacted the UPC's 120-hour rule. Tim's will provides, "I give all of my Micron stock to my sister Sarah IF SHE SURVIVES ME, and my residuary estate to my mother Macree." Tim and Sarah are fatally injured in an auto-accident. Tim is pronounced dead at the scene; Sarah dies 2 days later. Sarah is survived by her daughter Donna and her mother; Sarah leaves a will that devises "all my property to the Red Cross.
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If a will contains language dealing explicitly with simultaneous deaths, deaths in a COMMON DISASTER, or requires that the devisee SURVIVE THE TESTATOR in order to take, the 120-hour rule does not apply.
Here, the words, "IF SHE SURVIVES ME" serve to defeat the 120-hour rule. Gift falls into residuary estate. |
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"I bequeath my residuary estate in equal shares to my good friend, Hobie Gates, my neighbor Bill and my son Charlie. I intentionally make no provision for Stephen, as I have not seen him in fifteen years."
Hobie predeceases T, leaving a child (Hobie Jr.) who survives T. T, a widower, is also survived by Baker, Charles and Stephen. 1. Does the anti-lapse statute work in Hobie Jr's favor? 2. Who takes the residuary estate? |
1. No, Hobie wasn't related to T, so not within scope of anti-lapse statute.
2. Bill and Charlie take 1/2 each of Hobie's 1/3 share of the residuary estate. |
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"I bequeath my residuary estate in equal shares to my good friend, Hobie Gates, my neighbor Bill and my son Charlie. I intentionally make no provision for Stephen, as I have not seen him in fifteen years."
T's son Charlie predeceases T, leaving a child (Junior) who surivived T. Who takes Charlie's share of the residuary estate? |
Charlie Jr. Charlie was under the scope of anti-lapse statutes.
Anti-lapse statute trumps the "surviving residuary beneficiaries" rule. |
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When are class members set when determining who takes a class gift?
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The class is set at the time any class member is eligible for a gift.
Later-born class members do not share in the gift, when some class member is entitled to a distribution. (Subject to gestation principle - 280 days) |
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When he made his will, Tank and his wife had one child: Alvin. After Tank made his will, he and his wife adopt a child: Billy. Tank died survived by his wife, Alvin and Billy. His will left 2/3 of his $260k estate to his wife and the other 1/3 to his sister.
What rights, if any, does Alvin have in the estate? |
No rights; statute only protects the after-born child (pretermitted)
Alvin was alive when the will was signed. |
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When he made his will, Tank and his wife had one child: Alvin. After Tank made his will, he and his wife adopt a child: Billy. Tank died survived by his wife, Alvin and Billy. His will left 2/3 of his $260k estate to his wife and the other 1/3 to his sister.
What rights, if any, does Billy have in the estate? |
Pretermitted child, born or adopted after the will was executed, takes an intestate share.
UPC and minority: If T had other children when the will was executed and devised property to such other children, the pretermitted child's share is limited to gifts to the other children - nobody else's share of the estate is reduced. Thus, if T's will had devised Blackacre to Alvin, Billy would share in that gift - Alvin and Billy would each own 1/2 of Blackacre. If it appears FROM THE WILL that the omission was intentional - Billy doesn't take! |
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When he made his will, Tank and his wife had one child: Alvin. After Tank made his will, he and his wife adopt a child: Billy. Tank died survived by his wife, Alvin and Billy. His will left 2/3 of his $260k estate to his wife and the other 1/3 to his sister.
2 years after adopting Billy, Tank executes a codicil to his will that names 2nd Bank, rather than First Bank as executor. Does Billy get protected as an pretermitted child? |
No. By the doctrine of REPUBLICATION BY CODICIL, the will "speaks" on the date of the last codicil thereto. Billy is treated as having been born before the will was executed, and has no rights as a pretermitted child.
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Terry executes a will that devises Blackacre to his brother Bob and his residuary to his wife. Two years later, Terry sells Blackacre for $10,000 cash and a $90k note secured by a mortgage on Blackacre. At Terry's death, the balance on the note is $65k. What does Bob take under Terry's will if the UPC applies?
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Balance of purchase price - to extent unpaid at death. So, he gets the note, worth $65k.
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How does the UPC change common law about ademption of specifcally devised property?
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Specific devisee takes any remaining specifically devised property and:
- any UNPAID balance of purchase price - Any amount of condemnation award UNPAID - Any insurance proceeds UNPAID None of these apply if fully paid at time of death. - Property acquired as a replacement property for specifically devised property ("I devise my residence on Smith Street to Sue." Sells that house and buys residence on Oak street) |
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How does the UPC change common law about ademption when the T is declared incapacitated?
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If a specifically devised property is sold by a GUARDIAN OR CONSERVATOR the specific devisee is entitled to a general legacy equal to the net sale price.
Otherwise, guardian could change will by deciding what assets to sell. |
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Winkie dies leaving a will that provides: "I give my husband Hobie Gates the sum of $23, which is one dollar for each miserable year I spent with him. I give the rest of my property to my chauffeur, in appreciation of his many services." Winkie is survived by Hobie, Claue and the couple's daughter Dorkie. What are Hobie's rights?
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Hobie should file for an elective share. All non-community property states except Georgie have elective share statutes designed to protect spouses against disinheritance, by ensuring that the surviving spouse can take a specified minimum share of the decedent's estate.
Community property states do not have elective share statutes. |
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What is the amount of an elective share?
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Many states: 1/3 of decedent's net estate if survived by descendants, 1/2 if the decedent not survived by descendants
UPC: 1/3 of net estate rUPC: 3%/year of marriage for first 10 years and 4% per year for next 5 years - so after 15 years, the elective share is fully vested at 1/2 of estate. |
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What does a spouse do to get the elective share?
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Spouse must file notice of election. It's not automatic.
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Who can make a spousal election?
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A spouse or the guardian or conservator of a legally incapacitated spouse with court approval.
Upon showing that an election is necessary to provide adequate support for the spouse during his probable life expectancy. But, if spouse dies before election is made, election cannot be made by deceased spouse's personal representative. |
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Who contributes to the spousal election?
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All beneficiaries of the estate contribute pro rata and their interests are reduced pro rata.
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2 years before his death, H establishes a revocable trust naming Acme Bank as trustee: Income to Hank for life, and on Hank's death remainder to his son Stove (by a former marriage). Hank died two months ago, leaving a will that bequeathed his estate to his wife Wendy and Steve in equal shares.
While that sounds fair enough, nearly all of Hank's property had been placed in the trust. Hank left a net probate estate (after expenses) of $36k; the value of the assets in the revocable trust at Hank's death is $900k. Wendy files for an elective share. Does Wendy's elective share right apply to the assets in the revocable trust? |
Minority rule: No - elective share statute giving 1/3 to 1/2 of the decedent's estate means the PROBATE ESTATE. Does not apply to non-probate transfers such as revocable trust.
UPC/Majority rule: Yes - policy underlying elective shares should not be defeated by lifetime and non-probate transfers. AUGMENTED ESTATE includes net probate estate plus any lifetime transfers grantor retained power to REVOKE, or INVADE, CONSUME or DISPOSE OF PRINCIPAL. |
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