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Trust and Estates Outline

Trust and Estates Outline

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Published by Isabella L
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With charts and examples.

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Categories:Types, Business/Law
Published by: Isabella L on Apr 30, 2013
Copyright:Attribution Non-commercial


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Trust and Estates - Ryan (Dukeminier) - Spring 2012
The Right to Inherit and the Right to Convey
a.Legal Institution of inheritance(Donee) – Right to Inherit
(Donor) Right to Convey (transmit)Forced Succession (donor has nofreedom)
 Testamentary freedom (donor gets to dowhat he wants with his property)Right to Disinherit (moving it to spousefrom kids)Natural Right – (Locke)
Civil Right - created by civil or municipallaws (Jefferson and Blackstone)b.
Shaw Family Archives v. CMG Worldwide
- California and Indiana postmortem right of publicity statutes recognize that an individual cannot pass by will a statutory property right thatshe did not possess at the time of her death. Note that: California now recognizes that publicityrights are devisable.2.
The Policy of Passing Wealth at Death
a.Right v. Privilege: A decedent has the right to dispose of his or her property at death. Althoughstates have broad authority to regulate the process states cannot completely abrogate theright.b.Public Policy debate: Some argue the power to transfer wealth at death is natural and good thatit encourages one to save and promote family value while others argue that the power totransfer wealth at death perpetuates economic disparity and unfairly rewards those luckyenough to have been born to rich parents.c.Economics of Inheritance
 Justifications for passing wealth atdeathArguments against passing wealth atdeath
Society based on private property – thisis least objectionable way to deal withproperty at owner’s death Transfer of fortunes perpetuates wide disparitiesin the distribution of wealth, concentratesinherited economic power in the hands of a few,and denies equality of opportunity to the poor.Incentive for recipients to do certainthings (take care of parents,grandparents, so they will get)Danger - inherited wealth becoming the basis of enduring privilegeAllows for the taking care of dependents(rather than State having to)Encourages productivity and control(work hard so children can have betterlife) Tends to reward chance of ficaortunate birth,rather than merit or productivityEncourages earnings and savings (b/cyou know it will pass to children, so nowasting)Accumulation of wealth, rather than consumingit (which is better for society)
3.The Problem of the Dead Hand
“Dead Hand” control defined:
A decedent may condition a beneficiary’s gift on the beneficiarybehaving in a certain manner as long as the condition does not violate public policy.
Dead hand control is generally upheld unless the condition constitutes a completerestraint on marriage, requires a beneficiary to practice a certain religion, encourages divorce orstrife, or directs the destruction of property.a.
Restatement (Third) of Property: Wills and Other Donative Transfers §10.1
- Thecontrolling consideration in determining the meaning of a donative document is the donor’sintention. The donor’s intention is given effect to the maximum extent allowed by law.b.
Shapira v. Union National Bank -
Upholding and enforcing the provisions of the decedent’swill conditioning the bequests to his sons upon their marrying Jewish girls does not offend theConstitution of Ohio or the United States. The conditions contained in decedent’s will arereasonable restrictions. His unmistakable testamentary plan was for his possessions to be usedto encourage the preservation of the Jewish faith. The condition did not pressure plaintiff into1 |Levy
marriage by the reward of money because the seven year time limit is a reasonable graceperiod, which would give plaintiff ample time for reflection and fulfillment of the conditionwithout constraint or oppression.c.
Restatement (Third) Trusts § 29 -
A trust provision is ordinarily invalid if it tends to seriouslyinterfere with or inhibit the exercise of freedom to marry by limiting the beneficiary’s selectionof a spouse.a)Ex: A transfers property to trust for her nephew, N. N’s interest in the trust terminates if “he should marry a person who is not of X religion.
Probate and Nonprobate Property
Probate property
– property that passes through probate under the decedents will or byintestacy.
Non-probate property
– property that passes outside of probate under an instrumentother than a will. No court proceedings – distribution determined by the nonprobatedocumentCommon modes of non-probate transfer:(1) JT property, both real and personal - decedent's interests vanishes at death; survivorhas the whole.(2) Life insurance - proceeds on decedent's life paid to beneficiary named in policy.(3) Contracts with payable on death provisions - Contract can be with employer, bank,etc., to distribute property to name beneficiary upon death (ex: pension plans)(4)Interests in trust - trustee holds the property for the benefit of the named beneficiaries,then distributed per terms of trust.
Administration of Probate Estates
Probate is the default.
The decedent must take affirmative steps (execute a valid will or create avalid non-probate instrument) to avoid having property pass through probate.2 |Levy
The Functions of Probate
a)Provides evidence of transfer of title to the new ownerb)It protects creditors by providing a procedure for payment of debtsc)Distributes the decedent’s property to those intended after the decedent’s creditors arepaidb.
Probate Terminology and History
a)Personal representative – a (appointed) fiduciary who inventories and collects theproperty of the decedent; manages and protects the property during the administrationof the decedent’s estate; processes the claims of creditors and tax collectors; anddistributes the property to those entitles.1)Executor – The person named by the decedent in his will who is to carry out itsterms and administer the probate estate.2)Administrator – If the will does not name an executor, the court names a personalrepresentative.b)Probate court - court that supervises the administration of the probate estate.c)Testate – a person dies testate if he devises real property to devisees and bequeathspersonal property to legateesd)Intestate – Real property descends to heirs, personal property is distributed to next-of-kine)At common law, a surviving spouse was not an heir- he or she had only curtesy or dowerrights which are rights to take a share of some of the decedent spouse’s property.However, today, in all states the statutes of descent and distribution name the spouse asan intestate successor whose share depends upon who else survives.c.
A Summary of Probate Procedure
3 |Levy

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