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Chapter 1: Introduction: Freedom of Disposition---Succession - the transfer of property at death.
Intestate succession - the rules of law that take hold if there is no will upon death. Gives decedent an estate plan by default.
"dead hand" control - a person has wide latitude, in American law, to control the disposition of their property.
American law of succession is organized around donor's freedom of disposition.
A donee's interest in a future inheritance is a mere expectancy, one that arises from the donor's freedom of disposition and that remains subject to the donor's change of mind.
Incentive trust - typical way a conditional bequest is made.
Three categories of conditions that incentive trusts might impose:
o Those that encourage the beneficiaries to pursue an education.
o Those that provide a moral incentive (incentives that reflect the settlor's moral or religious outlook or promote a particular way of living).
o Those designed to encourage the beneficiaries to have a productive career.
o Courts enforce incentives as long as they don't violate public policy.
Total or General restraint on marriage - weight of authority holds that these, along with provisions encouraging divorce are void as contrary to public policy unless the donor's dominant purpose was to provide support until marriage or in the event of divorce.
Partial restraint on marriage - prevailing rule is that the restraint is invalid as unreasonable "if a marriage permitted by the restraint is not likely to occur." Likelihood of marriage is a factual question, to be answered from the circumstances of the particular case.
Circumstances in which a court may not privilege a donative intent:
o Imperfect information
Forced Succession - decedent's property could pass by mandatory or forced succession,
such as a rule that provides for primogeniture or succession to a spouse, children, or other dependents or kin.
Freedom of disposition - decedent's property could pass in accordance with the decedent's declared wishes if they are reliably preserved, or if not, then in accordance with a default system of succession that tracks the probable intent of a typical decedent.
Confiscation by the state - Decedent's property could be confiscated by the state on the theory that the decedent's property rights terminate on death.
Estate Tax - a tax levied on the transferor's estate that is paid before any transfers are made.
Gift tax - added to prevent avoidance of the estate tax (and the income tax) through inter vivos transfers to children and others.
Generation-skipping transfer tax - to ensure a wealth transfer tax at each generation. ----
Forced share - given to the surviving spouse; enacted by statute; typically, 1/3 of decedent's estate. Found in separate property states (mostly).
T dies owning Blackacre. T has one intestate heir, X, but before dying T executed a will giving all of T's property to Y. Blackacre will pass under the will to Y. Two years later, A
dies, leaving Whiteacre "to T if T survives me, but if T does not survive me, then to T's estate." Who takes Whiteacre, X or Y ?
o The issue is whether T's will controls the disposition of property not owned by T
at death but subsequently acquired by T's estate. If T's will controls, Y takes as the residuary beneficiary under the will. If not, X takes as T's intestate heir.
UPC view on property owned at death:
o All property owned at death as well as "all property acquired by the estate after the testator's death" pass under the testator's will. Subsequent administration if additional property of the estate is discovered after probate has closed.
What state law governs disposition of property?
o Law of the state where decedent was domiciled at death governs the disposition of personal property (primary or domiciliary jurisdiction), and the law of the state where the decedent's real property is located governs the disposition of real property (ancillary probate).
Nonprobate property - property that passes by will substitute outside of probate.
Inter vivos trust - trustee holds legal title to the trust property creating no need to change title by probate administration upon the death of the settlor.
Pay/Transfer-on-death Contracts - account custodian distributes the property at the decedent's death to the named beneficiary. Bank, brokerage, mutual fund, and pension and other retirement accounts commonly allow. To collect all beneficiary needs to do is file a death certificate with custodian.
Life Insurance - paid by the insurance company to the beneficiary named in the insurance contract. Company pays upon receipt of a death certificate of the insured.
Joint Tenancy - decedent's interest vanishes at death. Survivor owns the whole property free of decedent's interest.
Personal representative - first step is appointment to wind up the decedent's affairs. A
fiduciary who collects and inventories the property of the decedent; manages and protects the property during the administration of the estate; processes the claims of creditors and files federal and state tax returns; and distribute property to those entitled.
Executor - person named by decedent who is to execute (carry out the terms of) the will and administer the probate estate.
Administrator - if will does not name executor, if executor is unable/unwilling to serve,
or decedent dies intestate, the court will name a personal representative referred to as this. Usually selected from a statutory list of persons who are given preference, typically in the following order: surviving spouse, children, parents, siblings, and creditors.
Devise and Bequest - devise refers to land; bequest refers to personal property.
Statute od descent and distribution - governs intestacy in almost all states making the same persons intestate successors to both real and personal property. ---Three core functions of probate: (1) evidence of transfer of title, (2) protects creditors,
and (3) distribution of decedent's property.
UPC Informal Probate - representative petitions for appointment without giving notice;
petition must contain pertinent information about decedent and names and addresses of the spouse, the children, or other heirs, and if a will is involved, the devisees. Original will must accompany the petition. A will that appears to have the required signatures and an attestation clause showing requirements of execution have been met is probated. Within 30 days the personal representative must mail notice to every interested party, including heirs apparently disinherited by the will. Any party may file petition for formal probate.
UPC Formal Probate - litigated judicial determination after notice to interested parties.
A formal proceeding may be used to probate a will, to block an informal proceeding, or to secure a declaratory judgment for intestacy. Formal proceedings become final judgments if not appealed.
Supervised Administration UPC - personal representative is empowered to act without interim court approvals, but she cannot make a distribution to the beneficiaries without approval from the court.
Unsupervised Administration - representative has the broad powers of a trustee in dealing with the estate property and may collect assets, clear titles, sell property, invest in other assets, pay creditors, continue any business of the decedent, and distribute the estate - without court approval.
Nonclaim statutes - require creditors to file claims within a specified time period. Claims filed thereafter are barred.
o UPC two forms: bar claims not filed within a relatively short period after notice is given that probate proceedings have commenced, generally 2-6 months; or
Bar claims not filed within a longer period after the decedent's death, generally one to five years.
UPC Universal Succession - offered as an alternative to probate. Heirs of the residuary devisees may petition the court for this. If court ascertains that the necessary parties are included and the estate is not subject to any current contest or difficulty, it issues a written statement of universal succession. Successors then have full power of ownership to deal with estate assets. They assume liabilities of the decedent to creditors, including tax liability. Successors are personally liable to other heirs omitted from petition or to other devisees for the amount of property due them.
Chapter 2: Intestacy: An Estate Plan By DefaultPartial intestacy: probate property not disposed of by the will passes by intestacy.
Escheat - if there is no surviving relations within the degree of kinship specified by the intestacy statute, property reverts to the state. UPC "No Taker" Rule.
UPC Intestate Estate: anything not disposed of by will passes by intestate succession to heirs. A decedent can expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession. If an individual or ---member of that class survives the decedent, the share of the decedent's intestate estate passes as if the individual or member disclaimed the intestate share.
UPC Share of Spouse: Intestate share of spouse is the entire estate if no descendant or parent of the decedent survives them or the descendants are shared between the couple. If there is a parent but no descendant, spouse gets first $300,000 plus ¾ of any balance of intestate estate. If there are any surviving descendant's both of and not of the spouse, spouse gets first $225,000 plus ½ of any balance of intestate estate. If one or more of decedent's descendants are not of the surviving spouse, then the first
$150,000 plus one-half of any balance of intestate estate.
UPC Share of Heirs Other Than Surviving Spouse: If there is no spouse, then in the following order - descendants, parents equally if both or all to one if only one parent,
siblings, grandparents of decedent (half to paternal and half to maternal grandparents),
then the extended family on the side that has more living relatives, then, if there is a deceased spouse who has descendants, to them.
UPC Simultaneous Death: claimant must establish survivorship by 120 hours by clear and convincing evidence.
When one of several children dies before a decedent leaving descendants…
o All states provide that the child's descendants represent the dead child and divide the child's share among themselves.
Primary share generation: generation at which the 'stocks' or 'roots' are determined.
English Per Stirpes: about 1/3 of states follow; aka strict per stirpes; treats each line of descent equally.
o Property divided into as many shares as there are living children of the designated person and deceased children who have descendants living.
o The living children of each deceased descendant represent their deceased parent and are moved into their parent's position beginning at the first generation below the designated person.
o Ensures vertical equality, parity across lines of descent, but at the expense of horizontal equality in the form of equal shares for each taker of equal degree of kinship to the donor.
Modern Per Stirpes: nearly half of the states follow this; aka per capita with representation.
o First look to see if any children survived the decedent.
o If yes, the same system as English per stirpes.
o If no, estate is divided equally (per capita) at the first generation in which there are living takers, usually the generation of the decedent's grandchildren.
o Vertical equality with horizontal equality at the closest living generation.
UPC - Per Capita at Each Generation: remaining states (about a dozen) follow this:
o Divided into as many equal shares as there are (i) surviving descendants in the generation nearest to the decedent which contains on or more surviving descendants and (ii) deceased descendants in the same generation who left surviving descendants, if any.
o Each surviving descendant in the nearest generation is allocated one share.
Remaining shares, if any, are combined and divided in the same way among the surviving descendants of the deceased descendants as if the surviving who were allocated a share and their surviving had predeceased the decedent.
o Shares of deceased persons on that level are treated as one pot and are dropped down and divided equally among the representatives in the next generation.
o "equally near, equally dear"--
Collateral kindred: all persons who are related by blood to the decedent but who are not descendants or ancestors.
First-line collaterals: descendants of the decedent's parents, other than the decedent and their descendants.
Second-Line Collaterals: descendants of the decedent's grandparents (other than decedent's parents).
If decedent is not survived by a spouse, descendant, or parent, in all jurisdictions intestate property passes to:
o Brothers and sisters and their descendants.
o The descendants of any deceased brothers and sisters (i.e. nieces and nephews)
take by representation.
Parentelic system: majority view; intestate estate passes to grandparents and their descendants, and if none to great-grandparents and their descendants, and if non to great-great-grandparents and their descendants, and so on down each line (parentela)
descended from an ancestor until an heir is found.
Degree of relationship system: minority view; intestate estate passes to the closest of kin, counting degrees of kinship.
o To get the degree you count the steps (counting one for each generation) up from the decedent to the nearest common ancestor, and then count down from the common ancestor to the claimant. Total number of steps is the degree of relationship.
UPC Stepchildren: take if there are no surviving grandparents or descendants of grandparents or more closely related kin.
UPC/Majority View Half-Relatives: a relative of the half-blood is treated the same as a relative of the whole-blood.
Florida Half-Relatives: half-bloods only take a one-half share.
Negative Will UPC: authorizes one by way of an express disinheritance provision. The barred heir is treated as if he disclaims his share; aka as if he died before the decedent.
Majority/UPC Adopted Children: parent-child relationship exists between an adopted and the adoptive parent, but not between an adopted child and the child's genetic parents.
o 2008 Amendment to UPC added key determination of parent-child relationship. -----
Standing to Challenge: the only persons who have standing to challenge the validity of a will are those who would take if the will were not valid. To gain standing, the decedent's collateral relatives must first overturn any adoption by the decedent.
stranger-to-the-adoption rule: The adopted child is presumptively barred, whatever generic word is used, if the donor was not the adoptive parent. This was a rule of construction that could be overcome by evidence that the donor did intend to include persons adopted by others.
courts carved exceptions to the stranger-to-the-adoption rule: An adopted child might be permitted to take if adopted before, but not after, the donor's death, on the theory that the donor knew of this child and must have contemplated the child's inclusion.
Equitable Adoption Doctrine: Under the equitable adoption doctrine, an oral agreement to adopt A between H and W and A's genetic parents is inferred if H and W take baby A
into their home and raise A as their child.
o They are estopped to deny a formal adoption took place.
o Equitable adoption is recognized in a majority of states.
Nonmarital Children: All states today permit inheritance by a nonmarital child from the child's mother. The rules respecting inheritance from the father vary.
Intended Parent: a person who entered into an agreement with the surrogate stating that the person would be the parent of the child, has a parent-child relationship with the child if the person functioned as a parent of the child within two years of the child's birth.
Conservatorship: given "title as trustee" to the protected persons property along with investment powers similar to those of trustee. Appointment and supervision by court required. Terminates when minor reaches age of majority or dies.
Custodianship: person given property to hold for the benefit of a minor under Uniform
Transfer to Minors Act. Has power to expend, for the minor's benefit, so much of the custodial property as custodian considers advisable for use and benefit of the minor. Do not need court order and no regard to duty of custodian personally or anyone else to support the minor, and any other property or income of the minor which may be applicable/available for that purpose.
Trusteeship: most flexible of all property arrangements; trust can postpone possession until donor thinks child is competent to manage property - or can postpone possession entirely, requiring some or all of the property remain in trust for generations.
Disclaimer: an heir or devisee declines to take the property offered through inheritance.
Chapter 3: Wills: Formalities and FormsAttested wills:
o Three core formalities for the making of an attested will: (1) writing, (2)
signature, and (3) attestation.
o Wills Act reduced the number of necessary witnesses to two, but it required that they both be present when they signed or acknowledged. ---o Wills Act also required will to be signed "at the foot or end thereof" aka subscription.
UPC Execution; Witnessed or Notarized Wills; Holographic Wills
Except as otherwise provided a will must be:
(1) in writing;
(2) signed by the testator or in the testator's name by some other individual in the testator's conscious presence and by the testator's direction; and
(A) signed by at least two individuals, each of whom signed within a reasonable time after the individual witnessed either the signing of the will as described in paragraph (2) or the testator's acknowledgment of that signature or acknowledgment of the will;
(B) acknowledged by the testator before a notary public or other individual authorized by law to take acknowledgments.
o (b) [Holographic Wills.] A will that does not comply with subsection (a) is valid as a holographic will, whether or not witnessed, if the signature and material portions of the document are in the testator's handwriting.
o (c) [Extrinsic Evidence.] Intent that a document constitutes the testator's will can be established by extrinsic evidence, including, for holographic wills, portions of the document that are not in the testator's handwriting.
Primary purpose of the Wills Act has always been to provide the court with reliable evidence of testamentary intent and of the terms of the will; virtually all formalities serve as "probative safeguards."
Compliance with the Wills Act formalities for executing witnessed wills results in considerable uniformity in the organization, language, and content of most wills.
Channeling function helps with clarity as to whether or not the document is meant to be a will.
A will is said to be revocable and ambulatory, meaning that it becomes operative only on death. Many of the forms impress the testator with the seriousness of the testament, and thereby assure the court that the statements of the transferor were deliberately intended to effectuate a transfer.
Courts traditionally attributed to the Wills Act the object of protecting the testator against imposition at the time of execution. Made in the presence of the testator to prevent the substitution of a surreptitious will. Witness should be disinterested, hence not motivated to coerce or deceive the testator.
Strict Compliance Rule
Rule guards against a spurious finding of authenticity - a false positive.
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