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Wills Trusts Estates Outline Clipan

Wills Trusts Estates Outline Clipan

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Published by mkelly1021

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Published by: mkelly1021 on Sep 27, 2012
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07/23/2013

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W
ILLS
, T
RUSTS
& E
STATES
O
UTLINE
W
ILLS
W
EALTH
T
RANSFER 
U
PON
D
EATH
: T
HE
F
UNDAMENTALS
 
I.The Economics Of Inheritance
Justifications for passing wealth at deathArguments against passing wealth at death
Society based on private property – this is leastobjectionable way to deal with property atowner’s deathTransfer of fortunes perpetuates widedisparities in the distribution of wealth,concentrates inherited economic power in thehands of a few, and denies equality of opportunity to the poor.Incentive for recipients to do certain things(take care of parents, grandparents, so theywill get)Danger - inherited wealth becoming the basisof enduring privilegeAllows for the taking care of dependents(rather than State having to)Encourages productivity and control (work hard so children can have better life)Tends to reward chance of fortunate birth,rather than merit or productivityEncourages earnings and savings (b/c youknow it will pass to children, so no wasting)Accumulation of wealth, rather thanconsuming it (which is better for society)
II.Freedom of Testation: Limited
a)Rest. (3d) Prop. Donative Transfers § 10.1.
The controlling consideration in determining themeaning of a donative document is the donor’s intention, which is given effect to the maximumextent allowed by law.
i)Rationale: freedom of disposition – property owners have the nearly unrestricted right to disposeof their property as they please.ii)Effect: donor’s intention not only determines the meaning, but also the effect of a donativedocument
B
)
T
HE
 
RIGHT
 
TO
 
DISPOSE
 
OF
 
PROPERTY
 
BY
 
WILL
 
IS
 
CONFERRED
 
AND
 
REGULATED
 
BY
 
STATUTE
.
i)
Wescott v. Robbins
 (1946)(1)Facts : Soldier sent letter to bank saying he wanted to open an account to deposit money, andmade it “in trust” so only he could withdraw. Also said if he died, he wanted grandpa to be beneficiary. Letter to grandpa he planned on using money for business when he got back from war. Letters typewritten and signed only by soldier.(2)Holding : The right to dispose of property by will is conferred and regulated by statute; theletters did not conform to what statute prescribed as to constitute a valid disposition of the property. Proper form is for will to be signed, witnessed, notarized, or holographic – otherwise, could be fraud. Not a trust b/c no trust property created – never set it up.
 
c)
T
HE
D
EAD
H
AND
L
IMIT
: R 
ESTRICTIONS
 
ON
 
INHERITANCE
 
PERMITTED
 
IF
 
NOT
 
ILLEGAL
,
AND
 
IN
 
ACCORDANCE
 
WITH
 
PUBLIC
 
POLICY
.
i)Rest. (2d) of Prop. Donative Transfers § 6.2:(1)Restraint on marriage must be reasonable and must not interfere with marriage (i.e., lastname provisions, encourage divorce)(2)Restraints may not promote destruction of property.
 
ii)
 Shapira v. Union National Bank 
 (1974)(1)Facts : Will disposes property to son only if he marries a Jewish girls whose both parents areJewish within 7 yrs of testator’s death; otherwise goes to state of Israel.(2)Holding : will provision held valid & enforceable – must honor testator’s intent within thelimits of law and public policy.(a)Constitutionality - right to marry, protected by 14
th
amendment, being violated? No. Norestriction on marriage here; Court only asked to enforce the restriction on theinheritance.(i)Note: Cannot restrict ability to get married.(b)Public policy violated?(i)violated b/c free choice of religious practice? No. Son won’t be in contempt for failing to marry a Jewish girl. Just won’t get $.(ii)Violated b/c would encourage marriage just for $, then divorce? No. possibility tooremote, & assumption that son’s motive for marriage is proper.1.Note: Cannot condition bequest on getting a divorce.(c)Unreasonableness – pressure to marry in 7 yrs w/o opportunity for mature reflection & jeopardizes college education? No. 7 yrs reasonable time for exhaustive reflection &fulfillment of condition w/o constraint or oppression.
II.Transfer And Decedent’s Estate
a)
Probate v. Nonprobate
i)Probate - property that passes under the decedent's will or by intestacy(1)Distribution of probate assets under a will or intestacy may require a court proceedinginvolving probate of a will or a finding of intestacy followed by appointment of a personalrepresentative to settle the probate estate.ii)Nonprobate - property passing under an instrument other than a will(1)Nonprobate property includes the following:(a)Joint Tenancy property - decedent's interests vanishes at death; survivor has the whole.(b)Life Insurance - proceeds on decedent's life paid to beneficiary named in policy.(c)Contracts with payable-on-death provisions - Contract can be with employer, bank, etc.,to distribute property to name beneficiary upon death (ex: pension plans)(d)Interests in Trust - trustee holds the property for the benefit of the named beneficiaries,then distributed per terms of trust.(2)No court proceedings – distribution determined by the nonprobate document b)Terminologyi)"go through probate" - to have the estate administered through probate courtsii)Proper to use the word "will" to refer to an instrument disposing of both real and personal propertyiii)A person dying testate devises real property to devisees; bequeaths personal property to legatees."I give" effectively does the job in all circumstancesiv)Real property descends to heirs; personal property is distributed to next-of-kin.c)Administration of Probate Estate2 / 43
 
i)
Personal Representative
– appointment of personal rep necessary to oversee winding of decedent’s affairs. Appointed by, under control of, and accountable to probate court.(1)
Executor
- If the will names the person who is to execute the will & administer probateestate, the personal rep is called an executor (2)
Administrator
- if will doesn’t name the personal rep, then called administrator (a)Selected from a statutory list of persons given preference (usually heirs or creditors)(b)Administrator must give bondii)Four functions of probate:(1)Collection of assets(2)Notifying and paying creditors(3)Paying estate taxes(4)Title clearing & distribution of the assetsiii)Jurisdiction
:
Primary or domiciliary jurisdiction - jurisdiction where decedent domiciled at timeof death. If real property in another jurisdiction, then ancillary administration in the jurisdictionis required.iv)Probating will in common form(1)Ex parte proceeding in which no notice or process issued to any person. Execution of will proved by oath of executor or other witnesses is required. Will admitted to probate at once,letters of testamentary granted, and executor began administration of the estate. If no oneraised objection, then fine. Otherwise, one might compel in solemn form(2)Maj of states don’t permit ex part proceedings, but require prior notice to interested parties before appointment of a personal rep or probate of a will.v)Probating will in solemn form(1)Notice to interested parties given by citation, due execution of will proved by testimony of attesting witnesses, and administration of estate involved more court participationvi)UPC (Uniform Probate Code) - adopted in many states, so representative if statutes regulating probate procedures. Provides for both ex parte probate (informal probate) and notice probate(formal probate)(1)Informal Probate requirements(a)w/o giving notice, rep petitions for appt(b)Petitions contains info on decedent & names/addresses of spouse, children, other heirs; if will, also info on devisees(c)If petition is for probate of a will - original will must be with the petition(d)Executor swears that to best of knowledge, will validly executed (no proof by witnessesreq)(e)Registrar will probate, w/o further proof if will has req signatures and contains attestationclause showing reqs of execution were met(f)Within 30 days after appointment, personal rep has duty of mailing notice to everyinterested party, including apparently disinherited heirs(2)Formal Probate - is a judicial determination
after notice
to interested parties. An interested party can demand formal probate. These are final judgments if not appealed.(3)Statute of limitations to probate is 3 years after date of death. If not within 3 yrs, presumption of intestacy is conclusive.vii)Time for contest - depends on statute; if statute of limitations expires, probate court no longer has jurisdiction to revoke probate, and probate of the will is final.(1)statutes require creditors to file claims within specified period, otherwise barred (nonclaimstatutes).viii)Closing the Estate - Judicial approval of personal rep's actions required to relieve rep oliability. Rep not discharged from fiduciary duties until the court grants discharge.3 / 43

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