Decedents' Estates

Terms in this set (91)

Bequeath Give personal property

Devise Give real property

§2-102 Share of Spouse: No Entire Estate

issue, no parents.

§2-102 Share of spouse: No First $300K and 3/4 of balance of intestate estate.
issue, parents.

2-102 Share of spouse: Issue Entire estate

(that are decedent and
spouse's issue).

2-102 Share of spouse: Issue First $225K and 1/2 of intestate estate
(that are are decedent and
surviving spouse issue);
Surviving Spouse Issue (that
are not decedent's).

2-102 Share of spouse: Issue First $150K and 1/2 of intestate estate
(that are decedent and
surviving spouse issue); Issue
(that are not surviving spouse
issue)
When can issue in gestation When they outlive decedent by 5 days.
take:

Community Property: Individual Property acquired prior to the union, gifts, and
Property inheritance.

Community Property Everything earned or acquired during a marriage .

Putative Spouse Curative device. When the marriage is annulled due

to a major impediment, but one of the spouses
entered into it in good faith. (Ex. Guy secretly
married to two women).

Per capita Person takes in and of himself

Per stirpes Person takes through another.

Distribution: Old UPC Per capita first line with survivor, per stirpes at each
succeeding line.

Distribution: New UPC Per capita at first line with survivor, per capita at
each succeeding line.

Distribution: Next of Kin Find first line with survivor, give all to person or
group equally. No person takes through another.

Distribution: Strict Per Stirpes Distribute at first line, regardless of survivors. Per
stirpes from there.

§2-105 Escheat to the State. If no takers, goes to the state.

 Relatives by the Half Blood Siblings who share one parent.

UPC makes no distinction, but VA and GA say you'd

take half.

Statutory Adoption Parents sever their legal rights, no relationship with

genetic parent unless exception applies.

Stepparent Adoption Stepchild can inherit through both genetic parents

and adoptive parents.

Equitable Adoption No actual adoption but allowing a child to get an

intestate share,

§2-119 Allows adopted child to inherit through genetic

parent when adopted by relative of generic parent
or after the death of both genetic parents.

Presumption of Paternity (1) Born to intact marriage;

(2) Born within 300 days of divorce or death;
(3) Born to putative spouse marriage;
(4) After birth of child, marry mother;
(5) List self on birth certificate;
(6) Promise to support child;
(7) Hold child out as my own and live with for two
years.

Authority to deny genetic Look to best interests of the child

testing

Release Disclaiming inheritance during life of decedent.

Most common is a prenuptial agreement. Requires
consideration.
 Renunciation Disclaiming inheritance after death of decedent.
Most commonly done for tax purposes.

When treated as predeceased? (1) Divorced spouses;

(2) Simultaneous death;
(3) Release;
(4) Renunciation;
(5) Intentionally and felonious conduct (Slayer
statutes)

Advancements (Common Law) ONLY APPLIES TO INTESTATE SUCCESSION

Presumption of advancement when a parent makes

a substantial gift to a child. Can be rebutted by
preponderance of evidence that parent intended a
gift.

Advancements (UPC) ONLY APPLIES TO INTESTATE SUCCESSION

Presumption of advancement only occurs when

parent makes a substantial gift to an heir with a
written acknowledgement that it is intended to be
an advacement.

Settlor Person who creates the trust, transfers the res or

corpus with a purpose.

What separates a trust from a Purpose. If money is set aside for a purpose (for
gift? education, welfare, support, travel, etc.) and that
purpose is not realized, the money goes back to the
settlor.
Who can modify the "rules" of Trust protector.
the trust and make changes to
best comport to the intentions
of the settlor?

Trustee Administers the trust for the settlor, often for a fee.
Has legal title to the trust.

If settlor, trustee, and The trust is terminated.

beneficiary are all the same
person?

Benecficiary The person (or entity) who benefits from the trust.
Has equitable title to the trust.

Private Trust Must have identifiable beneficiaries. No advantages

against RAP.

Res Property transferred in a trust. Can be stocks,

bonds, jewelry, anything really--including a future
interest.

Charitable Trust Enforced by the AG of the state. Benefit is that you

don't have a problem with RAP. Must be concerned
with education, health, government, religion...

Honorary Trust Hybrid between private and charitable trust. Often

for pets, but pets can't be lives in being.

Cy Pres Court reforms a trust that violates RAP so as to carry

out the testator's intent w/in the perpetuities period

Will a trust fail for lack of No, if none is named the court will appoint one.
trustee?
Will a trust fail for lack of Yes. When a settlor did not intend to create a trust
purpose? in the first place, there will be no trust. Additionally,
if its purposes have become impossible to achieve
and the settlor did not contemplate continuation of
the trust under the new circumstances, the trust will
be terminated.

Mandatory Trust Income. Trustee told what to do, not given

discretion.

"Ex. $100 per month to J"

Brainard Rule To be valid trust property, the money in the trust

must be ascertainable and explicitly exist.

Can't create a trust "from future profits."

Discretionary Trust At the discretion of the trustee to spend for the

benefit of the beneficiary.

"Give J what he needs for health, education, living

expenses."

Oral Trusts Almost impossible to enforce. Only hope is clear

and convincing evidence to prove.

Resulting Trust A trust that arises by operation of law when an

express trust fails or makes an incomplete
disposition.

Ex. $1M for David's JD education; David graduates,

still have $100K left over, will result back to the
settlor; or David is killed, can't complete purpose,
results back to settlor
 Constructive Trust Remedy we use in order to provide equity; there
must be a bad act to do constructive trust such as
unjust enrichment, murder, abuse.

Logic: A person should not profit from his/her

wrongdoing.

Spendthrift Trust A trust whereby a settlor has placed a restriction on

the trustee giving income or principle to creditors
of the beneficiary. Beneficiaries can't voluntarily
alienate their interests nor can their creditors reach
their interests.

Point: benefit beneficiary while avoid giving money

to a creditor.

Self-settled asset protection Allows settlor to insulate his own money from
trusts creditors. Settlor can't commit fraud to insulate from
known creditor.

Pour over trust During lifetime, inter vivos trust established. At

death, LWT names trust as beneficiary. Pour
testamentary devices into LWT.

§2-511 Can establish inter vivos trust without property. The

mere mechanism of creating an pour over trust is
sufficient.

Benefits of Inter Vivos trust. Avoids probate, property passes quickly, no

publication and disclosure, law of another
jurisdiction may be applied, fewer disputes, more
than one party can create.
 Revocable Trust When you establish a trust and retain the power to
revoke. Creditors may go after funds to satisfy
debts. However, first all probate assets must first be
exhausted.

Marital Trust provide a trust at the date of your death for your
spouse for life; upon her death, to another party.
Qualifies for marital deduction, doesn't allow
beneficiary to own the property—spouse restricted.

Dynasty Trust To pay income to children, then grandchildren, etc.

Preserve family capital for future generations. May
violate RAP, unless it's in a jurisdiction that allows for
dynasty trusts.

Priority of LWT/will substitutes A valid LWT may not affect a valid WS; WS takes
priority over a LWT

§6-211, §6-212 When you have an account with two joint tenants,
creditor of the other tenant cannot get to it. Money
is "owned" during lifetime by person who
contributed it but at death the survivor takes
ownership of all

Totten Trust A settlor who is also the trustee puts money in bank
for benefit of beneficiary but with no trust purpose.
They are allowed (even without purpose), but are
available in elective share.

Payable on death (POD) Such as Will Substitutes (i.e. life ins. policy). Anything
accounts payable to someone at testator's death is POD. New
UPC allows for valid POD accts to come under anti-
lapse.
When can settlor terminate a If the trust is revocable (presumed), the settlor may
trust? always modify/terminate it. If the trust is irrevocable,
the settlor may only modify/terminate the trust with
the consent of all beneficiaries.

When can beneficiary A beneficiary may terminate a trust if the he was

terminate a trust? given the right to terminate by the settlor, if the
settlor and ALL beneficiaries agree, or the material
purpose of the trust has been accomplished.

When can trustee terminate a A trustee may terminate a trust only if permitted to
trust? do so by the settlor, or a trust corpus drops below
the statutory minimum.

Prudent Administration of (1) Automatic duty to diversify;

Trusts (2) Should not look at acts in hindsight;
(3) Must show at the time act or ommision was
reasonable.
(4) Impartiality
(5) Record Keeping
(6) Disclosure

Duty of Loyalty: Can't borrow, loan money, or purchase any assets

from to or from the trust EVEN IF it benefits the
trust.

Unless: ALL beneficiaries say okay and fully

informed or with settlor permission.
3 ways to transfer wealth and 1. Will substitution: non-probate transfers (most
describe each common)
o Popular because no probate = cheap and fast

2. Testate succession: probate and a valid last will

and testament

3. Intestate succession: probate and state's statutory

formula

Estate Planning Considerations Taxation & Public Policy

(2 main)

Taxation Issues within Estate o Federal and state income taxes

Planning o State estate tax
o State inheritance tax
o Federal and state gift tax
o Generation-skipping transfer tax

Public Policy Issues within o Spousal claims

Estate Planning ♣ Can't disinherit spouse unless there is a prenuptial
agreement, and spouse has right of election

o Federal benefits
♣ Cannot bequeath federal benefits like social
security (but can name someone as beneficiary of
social security)

o Freedom of disposition
♣ Balance between allowing people to do what
they want with property vs public policy. Example,
you can disinherit child for not marrying a Catholic,
but you cannot specify that your ashes should be
spread over city—public health issue, or on
condition that they leave spouse - preserve sanctity
of marriage
2 Forms of Government Role in Constitutional Guarantee
Estate Distribution
Procedural Responsibilities regarding
creditors/claims against estate

Gov't Role: Constitutional o There is a constitutional guarantee to give your

Guarantee unless one of property to who you want UNLESS
following (3) applies ♣ Terrorist organization
♣ Foreign organization with no American
counterpart
♣ Hodel—Congress passed statute saying if through
Native American program received less than 2% of
land and produces less than $100, then land
escheats to the state. SCOTUS holds this is
unconstitutional: cannot interfere with right to
bequeath property
Gov't Role: Procedural o When personal representative can reasonably
Responsibilities re: Creditors ascertain a creditor's identity, must give notice by
mail or other means to ensure actual notice of death
so can make claims
♣ Tulsa Professional Collection Services—hospital
was not given notice, so could not make claims
against estate as creditor. State statute should have
required wife of decedent to send a letter (specific
notice) rather than just publishing in newspaper
(general notice). Duty of actual notice if reasonably
ascertainable creditor.
• Because the state is so involved with the probate
process, due process applied here because held it
was state action (procedure established by the state
was insufficient)
• E.g. not reasonably foreseeable: decedent is a
gambler in secret and owes money

o Rebuttable presumption: for purposes of

creditors, you own half of a joint account (even
though really the entire thing belongs to both
parties)
Attorney's Role in Estate Increasingly, beneficiaries can sue attorneys for
Distribution, issues that come negligence. Conflict of interest because helping
up, and majority & minority rule client with will makes lawyer $
o Negligence suit even though not in privity

Majority rule: if the attorney can foresee

beneficiaries to whom she is negligent, the attorney
is responsible to those foreseeable beneficiaries
• E.g. if named beneficiary, definitely foreseeable.
The beneficiary can sue you for negligence
• Cannot be a class of people: e.g. if leave money to
future class of 2020, attorney doesn't know who
they are, so they won't be able to sue

Minority rule: no privity = no ability to sue for

negligence
• Barcelo—attorney never executed will and
intervivos trust. Grandkids were named
beneficiaries. Could not sue for negligence because
not in privity with attorney (attorney was not
representing them)

4 changes in client • Aging of America

characteristics • Portfolio of assets (People now have very different
types of assets)
• Diversity of wealth transfer devices
• Planning for incapacity (Medicaid spend-down:
give away assets to make yourself poor so state will
pay for you to stay in a home)
5 situations that result in (1) No last will and testament and no non-probate
intestate succession (public transfers to pass the property to named others
policy) (2) There is a last will and testament, but does not
provide for all property owned by the decedent
(3) Last will and testament revoked or found to be
invalid as result of contest and no other will is
probated
(4) Decedent directs in last will and testament for
property to pass via intestate statutes
(5) Non-probate instrument is payable to "heirs"
instead of "estate" —> use intestate statute rather
than will

How many degrees out can a Most states say that if you are related to a decedent
decedent inherit (majority beyond the 4th degree, cannot inherit
rule)? o 4th degree: first cousins, grand nephews and
nieces, great uncles and aunts
o 5th degree: first cousins once removed, great
grand nephews and nieces
o This may violate due process: rationale was that
they are too hard to find, but does that really apply
now?

Pattern of Inheritance (1) Surviving spouse

(2) Issue (descendants)
(3) Parents
(4) Collaterals? CHECK THIS* may depend on
method
*Community Property exception
Explain inheritance of Surviving Surviving spouse gets entire estate if no descendent
Spouse - when does spouse or parent survives or if all the surviving descendants
inherit? are descendants of the surviving spouse also and
no other descendant of the surviving spouse who
survives the decedent (i.e. if kids are all theirs)
o If there are surviving parents but no other
descendants, spouse gets first $300k plus ¾ of
remainder
o If there are surviving issue that are related only to
the surviving spouse, spouse gets first $225k plus
one half of the remainder; kids they have together
get the rest
o If there are descendants not related to surviving
spouse, spouse gets first $150k plus ½ of remainder

IN SUM, gets less when there is a child related only

to descendant because that child would not take
through surviving spouse. If all the kids are both of
theirs, the kids don't get anything.
• Problem with giving everything to spouse if there
are kids: lose tax benefits —> will is better than
intestate

Community Property Exception If community property state: the property acquired

to Pattern of Inheritance during union is presumptively community property
o If acquired prior to union and maintained as
separate property during union = separate property
o If spouse dies, surviving spouse keeps separate
property and the UPC formula applies to the
community property
4 ways a surviving spouse can 1. Statutory marriage
take, & explain them o Marriage including all the formalities e.g. license
and solemnization

2. Common law marriage

o Meets the requirements except for license and
officiant
o Hold themselves out as married for a period of
time
o Even if common law marriage not accepted in
your state, if you have it in one state the other state
has to recognize it (full faith and credit)

3. Putative spouse
o Curative device that applies where decedent did
not tell 'spouse' that he was already married
o Spouse must believe in good faith that they were
really married
o Equitable way to provide for this person

4. Divorce
o If one spouse dies while living apart
♣ If signed a renunciation to claims against estate in
the separation agreement, then cannot take under
intestate statute, but the agreement must
affirmatively include a disclaimer of rights
o McKown—signed separation agreement but no
final decree of divorce. Agreement did not say
anything about a disclaimer, so former spouse was
able to elect against decedent's will since cannot
disinherit spouse without spouse permission

2 ways to describe distributions • Per capita: a person receives in and of themselves

from a decedent
• Per stirpes: a person takes via representation or
through someone else
4 Methods of Distribution and 1. Old Uniform Probate Code
5th last resort 2. New Uniform Probate Code
3. Strict per stirpes
4. Next of kin
5. escheat to state

Old Uniform Probate Code (1) Go to first line where there is a survivor
(2) Per capita on that line
• If there are four issue, each will get allocated ¼
even if predeceased if have issue of their own
o If their line ends there, then not allocated
anything
(3) Continue until fourth horizontal line
RESULT: people on the same line get different
amounts

New Uniform Probate Code (1) Go to first line where there is a survivor
(2) Per capita on each horizontal line
• With four issue, each get allocated ¼ if have issue
of own
• On each horizontal line, count how many people
are there and also have issue and make that the
denominator
RESULT: everyone on same line gets the same
amount

Strict per stirpes (1) Start on the first horizontal line, even if no
survivors
- Use per stirpes all the way down

Next of kin (1) Whoever is closest relative gets all of it

• If only one child alive, that child gets 100%
• If two children alive, they each get 50%
• If only spouse, spouse gets it all
Easy to apply, not in any intestate statutes but in
many wills or will substitutes
Last resort: escheat to the state If no will or will substitute, even if there is someone
wanting to take the estate, must follow state statutes
which may result in estate going to the state
♣ Browning—decedent had someone she treated as
a niece but was not actually; did not have a will, and
no one within 4th degree, so the estate escheated
to the state

Use of equitable estoppel Court may use equitable estoppel to account for
non-marital cohabitation romantic relationships w/
written/oral agreements.

If Oral --> need clear and convincing evidence to

enforce agreement through equitable estoppel.

Example: Byrne—Skip and Flo cohabitated 5 years.

Skip promised Flo he would take care of her for the
rest of her life. After death, court used equitable
estoppel to allow Flo to stay in the house until death
(she didn't get to own the house though)

Half-relatives under UPC UPC: half-sibling is treated as a normal sibling.

In some states, half blood gets half of what whole

blood gets.

5 Types of Adoption & if child 1. Statutory stranger adoption

can take under each one -

2. Statutory stepparent adoption

3. Statutory adoption and ART

4. Equitable adoption

5. Statutory adoption by relatives