Note: stroken-through sections are covered in class but will not be tested in the exam.

Contents

I. Introduction 3

a. Freedom of disposition 3

b. Mechanics of succession 3

c. An estate planning problem p.981 4

d. Professional responsibility 5

II. Intestacy: An Estate Plan by Default 5

a. Estate plan by default 5

b. Basic structure of intestate succession 6

c. Transfers to Children 8

d. Bars to succession 11

III. Wills: formalities and forms 12

a. Execution of wills 12

b. Revocation of a will 15

c. Components of a will 18

d. Contracts relating to a will 19

IV. Capacity and will contests 19

a. Capacity to make a will 19

b. Undue influence 20

c. Duress 22

d. Fraud 22

e. Tortious interference [a tort claim] 22

V. Wills: construction 22

a. Mistake or ambiguous language 23

b. Death of beneficiary before death of testator [SUMMARY p. 373] 23

c. Changes in property 24

VI. Trusts: characteristics and creation 26

a. Trust in American law 26

b. Creation of a trust 27

VII. Nonprobate transfers and planning for incapacity 29

a. The rise of nonprobate succession 30

b. Revocable trust 30

c. Will and other will substitute 31

d. Planning for incapacity 33

VIII. Protection of the spouse and children 33

a. Protection of spouse from intentional omission 33

b. Intentional omission of a child 35

c. Community property 35

d. Protection against unintentional omission 35

IX. Trusts: fiduciary administration 36

a. Duty of loyalty 36

b. Duty of prudence 36

c. Duty of impartiality 38

d. Duty to inform and account 39

X. Alienation and modification 39

a. Alienation of beneficial interest 39

b. Modification and termination 39

c. Trustee removal 40

XI. Eliminated 40

XII. Powers of appointment 40

a. Purpose, terminology and types of powers 40

b. Tax considerations 41

c. Creditor rights 42

d. Exercise of a power 42

e. Failure to exercise a power 43

XIII. Trust: construction and future interests 43

a. Future interests handout [can bring to exam] 43

XIV. Rule against perpetuity 43

a. Policy against remote vesting 43

b. Common law rule 43

c. Reform 44

XV. Parts of textbook not tested in exam 44

Introduction

Freedom of disposition

1. Three options:

   1. Forced succession

   2. Freedom of disposition

      1. U.S. adopts this approach, tempered by certain mandatory succession rights for spouses and by wealth transfer taxation.

   3. Confiscation by the state

2. Restrictions on freedom of disposition

   1. Spousal rights

   2. Creditors’ right

   3. Unreasonable restraints on alienation or marriage

      1. Shapira: requiring son to get married only with a Jewish girl is a valid condition

      2. Shapira: a restraint unreasonably limits the transferee’s opportunity to marry if a marriage permitted by the restraint is not likely to occur

      3. Unreasonable examples:

         1. Forcing a gay man to get married with woman

         2. Give house to the son if he burns the house down

   4. Provisions promoting separation or divorce

   5. Impermissible racial or other categoric restriction

   6. Provisions encouraging illegal activity

   7. Rules against perpetuities and accumulations

3. Incentive trusts

   1. Encourage the beneficiaries to pursue an education

   2. Religious beliefs

   3. Encourage a productive career

Mechanics of succession

4. Probate property is property that passes through probate under the decedent’s will or by intestacy. Property that the decedent held alone or as a tenant in common is subject to probate.

   1. Probate: in one person’s name only

   2. Non-probate: has a designated beneficiary or in two person’s name as joint owner.

5. Non-probate property is property that passes outside of probate by way of a will substitute. Non-probate succession has become the norm. see p.42 for examples:

   1. Inter vivos trust: preferred type of trust

      1. testamentary trust is probate

      2. only intervivos trust is non-probate

   2. Pay-on-death (POD) contracts

      1. Life insurance: benefits will be paid to the beneficiaries selected by the insured.

   3. transfer-on-death contracts (TOD)

      1. Life estate is a type of TOD contract

   4. Joint tenancy: joint tenants hold the property concurrently.

      1. Right of survivorship: upon the death of one joint tenant, his fractional share is extinguished and the shares of the surviving joint tenants are recalculated.

      2. E.g. tenant of entirety (it includes survivorship)

6. Probate terminology

   1. Personal representative: oversees the winding up of the decedent’s affairs. When a person dies and a decision is made to probate his estate, someone—usually a family member—will petition a court in the decedent’s state of domicile to appoint a “personal representative” to handle the work.

   2. Testate: die with a will

   3. Executor: executor named in the will

   4. Administrator: if no executor named, or dies intestate, court appoint an administrator

   5. Person dying testate devise real property to devisee; and bequeath personal property to legatee

   6. For persons dying intestate, real property descend to heirs and personal property distributed to next-of-kin

7. Is probate necessary?

   1. Probate can be avoided provided the client during life arranges to transfer all of his property by way of nonprobate modes of transfer.

An estate planning problem p.981

8. A look at the will

   1. Standard language:

      1. Declare to be my last will

      2. Revoke any and all other wills

   2. Article FIRST:

      1. Yes it does. Required to pay off mortgage on the house. (it also depends on the state law)

      2. Yes, need to pay tax

   3. Article SECOND and FIFTH

      1. No, in this case the court will appoint one

   4. Article FOURTH

      1. We don’t know

   5. Article SIXTH

      1. Not desirable

9. Additional Information on the family and their property

   1. For purposes of this will, “my children” include Michael

      1. Otherwise Michael would not receive anything

   2. “grandchildren” include Andy

   3. Trust provision: Candace can’t be trustee

   4. We can also get a living trust and put the above information in a living trust to avoid putting them in a public record

Professional responsibility

10. Duties to intended beneficiaries

    1. Protection against reasonably foreseeable harm

11. Conflicts of interests

    1. An attorney, on commencing joint representation of co-clients,...

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