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Wills Estates and Trusts Outline and Case Chart

Wills Estates and Trusts Outline and Case Chart

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Published by Michael Mroczka
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Michael Mroczka Wills, Estates, and Trusts Outline1
Chapter 1. Introduction
Section A. The Power to Transmit Property at Death: Justifications and Limitations
1. The Right to Inherit and the Right to Covey
Hodel v. Irving
Whether the original version of the escheat  provision of the Indian Land Consolidation Act of 1983 effected a taking of appellees
decedents’ property without just 
compensation.
Decedents have a right to control disposition of their property at death, and the original provision
of the ―escheat‖ provision of the Indian
Consolidation Act of 1983 effected anunconstitutional taking of their property without just compensation.Shaw Family Archives v.CMG Worldwide
 Marilyn Monroe’s will— 
can govt. increase
 property rights that pass as part of decedent’s
estate? Could MM devise a right to her name,likeness and persona?
MM did not have the testamentary capacity todevise property rights she did not own at the timeof her death. Law of the domicile of the testator at
his death applies to all questions of a will’s
construction (majority rule). California law saidyou could but not retroactive. Then amended tomake retroactive (notes).
3. The Problem of the Dead Hand
 
To what extent should a person be able to use wealth to influence behavior after death?
 
Restatement: ―The donor’s intention is given effect to the maximum extent allowed by law.‖ ―American law does not grantcourts any general authority to question the wisdom, fairness, or reasonableness of the donor’s decisions about how to alloca
tehis or her property.Shapira v. Union NationalBank 
Testator, conditioned his son
’s
 ,
 P’s,
 inheritance under his will upon P being married to, or marrying within seven years of 
T’s
death, a Jewish girl with two Jewish parents. P filed suit alleging that such acondition was unconstitutional based upon the premise that the right to marry is protected bythe 14
th
AMD.
The conditions contained in decedent’s will are
reasonable restrictions. His unmistakabletestamentary plan was for his possessions to beused to encourage the preservation of the Jewishfaith. The condition did not pressure plaintiff intomarriage by the reward of money because theseven year time limit is a reasonable grace period,which would give plaintiff ample time for reflection and fulfillment of the condition withoutconstraint or oppression.
 
Restatement: a restraint to induce a person to marry within a religious faith is valid if, and only if, under the circumstances, the
restraint does not unreasonably limit the transferee’s opportunity to marry. The restrained unreasonably limits the transferee’s
opportunity to marry if a marriage permitted by the restraint is not likely to occur.
 
A will or trust provision is ordinarily invalid if it is intended or tends to encourage disruption of a family relationship. Thus, provisions encouraging separation or divorce have usually been held invalid, unless the dominant motive of the testator is to provide support in the event of separation or divorce.
Section B. Transfer of the Decedent’s Estate
 
1. Probate and Nonprobate Property
 
Probate
 —property that passes under the decedent’s will or by intestacy
 
o
 
Distribution of probate assets under a will or to interstate successors may require a court proceeding involving probateof a will or a finding of intestacy followed by appointment of a
 
 personal representative to settle the probate estate.
 
 
 Nonprobate
 — 
 property passing under an instrument other than a will, which became
 
effective before death.
 
 
Most property is passed outside of probate
 
o
 
Nonprobate Property
 
Joint tenancy
 — 
 both real and personal
 
 
Decedent’s interest vanishes at death— 
nothing passes to survivor at death, they just have it.
 
 
Life insurance
 — 
 paid to the beneficiary named in the K 
 
 
Contracts with payable on death provisions
 
 
Interests in trust
 
 
Property held in a testamentary trust created under decedent’s will goes through probat
 
 
Inter vivos (put in during decedent’s lifetime) does not.
 2. Administration of Probate Estates
a. The Functions of Probate
 
Probate is intended to: (1) provide evidence of transfer of title to the new owners (2) protects creditors by requiring the payment
of debts; and (3) it distributes the decedent’s property to those intended after the creditors are paid.
  b. Probate Terminology and History
 
When a person dies and probate is necessary, the first step is the appointment of a
 personal representative
to oversee the
winding up of the decedent’s affairs
 
 
Michael Mroczka Wills, Estates, and Trusts Outline2
o
 
Inventory and collect the assets
 
o
 
Manage the assets during the administration
 
o
 
Receive and pay the claims of creditors and tax collectors
 
o
 
Clear any titles to cars, real estate, or other assets and
o
 
Distribute the remaining assets to those entitled.
 
If there is a will, and it names a personal representative, this person is the
executor 
 
 
If there is no will or no person named, the person appointed by the probate court is called the
administrator.
 
Most wills waive bond; But, if there is no will or bond is not waived in the will, the personal representative must post bond
 
 
In England various courts dealt with these issues; in the U.S. there is one court in each county.
 
There is complication because there are different words that refer to personal and real property. For example, a will disposed of real property and a testament disposed or personal property. Thus, an instrument that disposed of both was both a will andtestament.
 
 
A person dying testate
devises
real property to
devisees
and
bequeaths
personal property to
legatees.
 
Real property
descends to heirs
; Personal property is
distributed to next-of-kin
.
o
 
Today, a single statute usually outlines the descent for both real and personal property
 
c. A Summary of Probate Procedure(1) Opening Probate
 
Administration should be sought in the jurisdiction in which the decedent was domiciled at the time of his death.
o
 
If real property is located in another jurisdiction, an ancillary administration is required.(2) Formal versus Informal Probate
 
There are formal and informal probate
 — 
in formal, notice is given to beneficiaries and heirs.(3) Barring Creditors of the Decedent
 
Every state has a statute requiring creditors to file claims within a specified period of time; claims filed thereafter are barred.These are known as non-claim statutes.
o
 
They either (1) bar claims within a short period after probate begins (2-6 months) or (2) whether or not probate
 proceedings are commenced, they bar claims not filed within a longer period after the decedent’s death, generally 1
-5years (1 year under the UPC).
 
The Supreme Court has held that known or reasonably ascertainable creditors must be give actual notice before they are barred by a short-term statute running from the commencement of probate proceedings.
o
 
1yr SOL is believed to be constitutional even w/o notice.(4) Closing the Estate
 
Creditors must be paid, titles must be cleared. Taxes must be paid and tax returns audited and accepted by tax authorities. Realestate or sole proprietorship may have to be sold.
 
Judicial approval of the personal reps action is required to relieve the rep from liability, unless some SOL runs upon a cause of action against the rep. The rep is not discharged from fid. Resp. until the court grants discharge.d. The Cost of Probate
 
Why is probate bad? Court delays, court costs, it’s a public record (both good or bad)
 
 
Why is it good to have a will? Provide for alternative takers in case the state laws are not what the individual wants, nameexecutor and successor executor, name guardian for the children (this is usually the biggest deal for many people).e. Is Probate Necessary?
 
With the rising popularity of Nonprobate modes of transfer, the ready availability of summary or affidavit administration for small estates, and special provisions for transfer of automobiles and other items with formal title registration, increasingly probate is necessary only for very large estates to clear title to real property.
Section D. Professional Responsibility
1. Duties to Intended Beneficiaries
Simpson v. Calivas
Whether an attorney who drafts a testator’s will owes a duty of reasonable care to
intended beneficiaries?
 -A drafting attorney owes a duty of care to an intended beneficiary, notwithstanding lack of privity,due to the foreseeability of injury to the intended beneficiary. After the testator's death, the failure of his testamentary scheme works only to deprive his intended beneficiaries of the intended bequests. If a testator contracts with an attorney to draft a will and has identified those to whom he wishes hisestate to pass, the identified beneficiaries may enforce the contract as third-party beneficiaries.-
Where the terms of the will are ambiguous, extrinsic evidence of the testator's intent may beadmitted to probate proceedings to the extent that it does not contradict the express terms of the will.
 While both the probate court and the superior court are competent to consider the same evidence onthe issue of T's intent, that is not dispositive of an identity of issues. The probate court's role is todetermine the testator's intent expressed in the language of the will. Direct declarations of thetestator's intent are generally inadmissible in probate proceedings. A finding of actual intent is notnecessary (or essential) to that judgment. Even an explicit finding of actual intent by a probate courtcannot be the basis of collateral estoppel. Collateral estoppel is only applicable if the finding in the
 
Michael Mroczka Wills, Estates, and Trusts Outline3
first proceeding was essential to the judgment of that court.
2. Conflicts of Interest
A. v. B.
 Law firm, represented both husband, H,respondent, and wife, W. Both executed mutual wills transfer all the property to the survivor with the reasonable expectation that eachwould provide for their children. Meanwhile,the firm mistakenly took on another client, awoman who sued H for paternity. Theexistence of the additional child was vital to
 H’s
 
and W’s estate plan. The firm withdrew
 from representation in the paternity suit and ordered H to tell W of his other child or the firm would. H sued firm to prevent disclosure.
A firm that represents a husband and wife mayonly disclose to the wife the fact that the husbandhad fathered another child but may not disclose theidentity of the other woman or the child. The Courtwill allow the firm to tell the wife that her husbandhas a child by another woman because it is crucialto her needs in her won estate planning. However itmust protect the confidentiality of its client, theother woman, because it also owes her a duty because they had formerly represented her.
Chapter 2. Intestacy: An Estate Plan by Default
Section A. The Basic Scheme
1. Introduction
 
Probate property of a person who dies w/o a will is governed by the state’s statute of descent and distribution.
 
 
If a will disposes of only part of the probate estate, then the result is a partial intestacy.UPC Intestacy Statutes
 
UPC §2-101: Intestate Estate
o
 
(a)
Any part of estate not effectively disposed of by will passes by intestate succession to the decedent’s heirs as
 prescribed, except as modified by the will.
o
 
(b) Decedent may expressly exclude or limit the right of an individual or class to succeed to property of the
decedent passing by intestate succession…Passes as if that individual or class had disclaimed his intestate share.
 
 
UPC §2-102: Share of Spouse
 
o
 
Spouse inherits whol
e estate if no descendant or parent survives the decedent OR all of the decedent’s
descendants are also descendants of the surviving spouse. Outlines shares if there are some other descendants.
 
UPC §2-103: Share of Heirs Other Than Surviving Spouse
 
o
 
Any part of the estate that does not pass to the surviving spouse, descends in this order. Children
 – 
grandchildren
 – 
surviving parent(s)
 – 
 
descendants of one’s parent
s
 
UPC §2-105: No Taker
 
o
 
If there is no taker under these provisions, the estate passes to the state.Meaning of Heirs and the Transfer of an Expectancy
 
Under law, a living person does not have heirs. They are called
heirs apparent
.
This is so because they have no interest atall
 — 
they have an expectancy, but that can be altered by will or deed.
 
Because it is not an interest, an expectancy may not be transferred. However, under equity, such an interest may be granted bythe court where it is just under the circumstances.
2. Share of Surviving Spouses
 
In designing an intestacy statute, the primary policy is to carry out the probable intent of the average intestate decedent.
 
Studies show that when there are no children from a prior marriage, most persons want everything to go to the surviving spouse,thus excluding parent and siblings
 — 
and children.
 
Under the current intestacy laws in most states, the surviving spouse usually receives at least one-
half share of the decedent’s
estate.
 
If there is no descendant, nearly half of the states provide, as does the UPC, that the spouse share with the decedents parents, if any.
 
Simultaneous Death:
A person succeeds to the property of a decedent only if the person survives the decedent for an instant of time.
 
It is presumed that the beneficiary died first and thus, neither inherits from the other. If two joint- tenants die together, each getstheir half to transmit. Same applies to property held in tenancy by the entirety or community property.Janus v. Tarasewicz
This declaratory judgment action arose out of the deaths of a husband and wife who died after ingesting Tylenol capsules laced withcyanide. H was pronounced dead shortly after he was admitted to the hospital. However, W was placed on life support systems for almost two days before being pronounced dead.Claiming that there was not sufficient evidencethat W survived H, P brought this action for 
In Illinois, if the title to property depends on the
 priority of death and there’s no sufficient evidence
that the persons have died otherwise thansimultaneously and there are no other provisions intestamentary or other governing instruments for distribution of the property, the property of each person shall be disposed of as if he had survived. Itwas not necessary to determine by how longTheresa survived Stanley. After viewing the record

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