Ch17 Family Law Wills and Estates.docx

Chapter 17—Family Law, Wills, and Estates A. Chapter Introduction This chapter introduces student to the law associated with domestic relations, wills, and estates. A large body of law has been developed concerning the family unit and its members. Most notable is the law of divorce and its related issues of property distribution, child custody, and payment of alimony. The primary object of the laws governing estates is the disposition of property upon the death of the owner. Wills and trusts are both tools of estate planning and the transfer of property. Wills transfer property upon a person’s death. Trusts are used to transfer property to be held and managed for the benefit of another person. Trusts may become effective during the maker’s life, or after the maker’s death. Many lawyers’ practices consist of representing clients in divorce and family law matters, drafting wills and trust agreements, and handling estates. Many paralegals practice in the family law and the estates areas of the law. At the conclusion of this chapter, the student will be able to: Describe family law and the issues pertaining thereto. Explain the process of obtaining a legal divorce. List and describe the requirements for making a valid will. Describe how a will can be changed and revoked. Define and apply the legal concepts of ademption and abatement. Identify how property is distributed under intestacy statutes. Describe the process of probate. Define trust and identify the parties to a trust. B. Instructional Ideas Attend hearings in family court or probate court or both. Have student research the statutes governing probate and domestic relations in your state. C. Lecture and Class Discussion Outline Family Law—A practice of law concerning marriages, divorce, distribution of property upon divorce, and child support, and custody and parenting time. Marriage ? A legal agreement between a man and a woman to become husband and wife is in effect where a marriage license is issued. It is generally treated under the law as a civil contract. ? Some states recognize common-law marriage, in which a marriage license between the two parties is not required, akin to an implied contract. Divorce—A legal proceeding whereby a married couple legally dissolve the marriage contract. Issues Property distribution—Upon divorce, the property of the divorcing couple is distributed to the parties based on legal principles set by the state. Child custody, visitation, and support—The court will order child custody, visitation, and financial support of the children of the marriage based on the law of the state and facts of the case. Wills—A declaration of how a person wants his or her property to be distributed upon his or her death. Parties to a Will Testator or testatrix—A person who makes a will. A testator is a male who makes a will. A testatrix is a female who makes a will. Beneficiary—A person designated in the will to receive the testator’s property. There may be multiple beneficiaries. They may also be known as devisees, legatees, or bequestees. Executor or executrix—A person named in a will to administer the testator’s estate during settlement of the estate. They are also known as a Personal Representative. Requirements for Making a Will—Are governed by state statute. The requirements typically include: Testamentary capacity—Generally means being of legal age (18 or older) and of sound mind. Soundness of mind requires that at the time of the will execution, the testate knew the object of their bounty (the nature and extent of their property) and the effect of the will on the disposition of that property. In writing—A nuncupative will or oral will can be valid under certain defined circumstances. Testator’s signature—The testate is generally required to sign their will. Attestation by witnesses—The will generally needs to be signed before two or three disinterested witnesses. Changing a Will—Is generally validly done by a codicil (amendment) and must be executed with the same formalities as a will. Special Types of Wills Holographic Will—A will that is entirely handwritten and signed by the testate. Most states recognize the validity of these wills even though they are not witnessed. Nuncupative Will—An oral will made by dying persons before witnesses. Many states recognize these oral wills under certain defined circumstances. Types of Testamentary Gifts Specific Devise—A gift of a specifically mentioned piece of property, e.g. a ring. General Devise—A gift that does not identify the specific property from which the gift is to be made, e.g. a gift of cash. Residuary Gift—A gift of the remainder of the testator’s estate after the debts, taxes, and specific and general gifts have been paid. Ademption—If a testate leaves a specific gift, but the property is no longer in the estate when the testator dies, the beneficiary of that gift receives nothing. Abatement—If the testator’s estate is insufficient to pay the stated gifts, the gifts are abated or reduced in the following order: (1) residuary devises, then (2) general devises, then (3) specific devises. Per-Stirpes and Per-Capita Distribution Per-stirpes Distribution—Lineal descendants inherit by representation of their parent, i.e., they split that which their deceased parent would have received. Per-capita Distribution—Lineal descendants equally share the property of the estate without regard to degree. Special Issues Concerning Wills Simultaneous Deaths—The Uniform Simultaneous Death Act provides that if people who would inherit property from each other die simultaneously, each deceased person’s property is distributed as if he or she had survived. This eliminates litigation concerning the surviving spouses share, homestead, and exempt property claims. Joint Will—Two or more testators execute the same instrument as their will. Mutual or Reciprocal Will—Two or more testators execute separate wills that leave property in favor of the other on condition that the survivor leave the remaining property upon his or her death as agreed by the testators. Undue Influence—A will may be found to be invalid if it was made under undue influence, in which one person takes advantage of another person’s mental, emotional, or physical weakness and unduly persuades that person to make a will. Slayer Statute—A person who murders another person cannot inherit the victim’s property. Intestate Succession Intestacy Statute—A state statute that stipulates how a deceased’s property will be distributed if he or she dies without leaving a will or if the will fails for some legal reason. Heirs—Relatives who are entitled to receive property under an intestacy statute. Escheat—If no heirs can be located the decedent’s property goes to the state, under intestacy statutes. Probate—The legal process of settling a deceased person’s estate. Administrator or Administratrix—A person named to administer the estate of a deceased person who dies intestate. An administrator is a male, an administratrix is a female. They may also be referred to as a Personal Representative. Trusts—A legal arrangement whereby one person delivers and transfers legal title to property to another person to be held and used for the benefit of a third person. Trust Corpus—The property that is held in trust; also called trust res. Parties Settlor, Trustor, or Grantor—A person who creates a trust. Trustee—A person to whom legal title of the trust assets is transferred and responsible for managing the trust assets as established by the trust. Beneficiary—A person for whose benefit a trust is created and who holds equitable title to the trust assets. Express Trusts—Voluntarily created by the settlor and expressed in words, usually in writing. Inter vivos trust—Becomes operative while the settlor is alive and is also known as a living trust. Testamentary trust—Becomes operative upon the death of the settlor. Usually stipulated within a clause of a will. Implied Trusts—Imposed by law or from the inferred conduct of the parties. Special Types of Trusts Charitable trust—Created for the benefit of a segment of society or society in general. Spendthrift trust—A trust whereby the creditors of the beneficiary cannot recover trust’s assets to satisfy debts owed to them by the beneficiary. Totten trust—Created when a person deposits money in a bank account in his or her own name and holds it as a trust for the benefit of another person. D. Internet Resources www.law.cornell.edu/uniform/probate www.ssa.gov www.abanet.org/publiced/practical/books/wills/home www.abanet.org/publiced/practical/books/family/home E. Suggested Answers Ethics Questions for Analysis and Discussion Since the interests of the two parties can become adverse, representing both a husband and a wife in a divorce presents a conflict of interest. Yes, so long as the previous representation was in a matter wholly unrelated to the custody or support dispute. Cases for Discussion On appeal the Court of Appeals held that two instruments, neither one of which was attested to by witnesses, did not, when taken together, constitute a valid holographic codicil to will. Upon husband’s death, husband’s brother filed a petition to probate an agreement between husband and wife as husband’s last will and testament. The probate court admitted the agreement to probate as a will, and appointed brother as administrator with the will annexed. An appeal was taken. The Court of Appeals granted summary judgment for brother, and wife appealed. The Supreme Court of Georgia held that the agreement between husband and wife never became operative as a will. Upon personal representative’s request, the probate court interpreted will and inter vivos trust and ordered that testator’s residence be sold and proceeds divided equally between son and daughter. The daughter appealed. The Court of Appeals held that the language of will and inter vivos trust established that trust was incorporated by reference into will, and the will provision awarding house to daughter was a “specific legacy,” and provision of trust granting son equivalent sum of money was a “general legacy” which abated prior to specific legacy when trust had insufficient funds to cover testator’s request, so that daughter was entitled to residence rather than having it sold and the proceeds divided. One heir brought will contest action against other heirs. The probate court found that husband’s and wife’s joint will was contractual and mutual. Heir appealed. The Court of Appeals held that will was joint and mutual and therefore contractual, and wife was not free to alter terms of contract after husband’s death. Case for Briefing By the terms of Ms. Vallerius’ will, the beneficiaries were to be her grandson and murderer Douglas White, and her other grandson Craig White. Douglas murdered his grandmother Ms. Vallerius, while his brother Craig murdered their grandmother’s friend Carroll Pieper. Her two sons, Douglas and Craig White. No. F. Feedback Multiple Choice—Circle the letter immediately to the left of the best answer. 1. In civil law, marriage is considered: a. an indissoluble covenant. b. a criminal contract. c.* a civil contract. d. grounds for mental institutionalization. 2. The law of wills, trusts, and probate is governed by: a. international law. b. federal statute. c.* state statute. d. God. 3. Which of the following is a factor regarding capacity to make a will? a. the age of majority b. soundness of mind c. the bank balance of the testate d.* both a and b e. both a and c 4. The law that governs the making of a will is found in: a. federal statutes. b.* state statutes. c. the Uniform Probate Code. d. case law. 5. Statutes that govern the making of a will generally relate to which of the following? a. capacity b. written form c. signature of testate d. signature of witnesses e.* all of the above f. both a and c only 6. The modification of a will should be done by: a. crossing out the parts of the original will subject to modification. b. handwriting in the margins of the original will the modifications thereto. c.* by codicil that is made, executed, and witnessed in the same manner as a will. d. whiteout. 7. “I hereby give Joe Blow $10,000.00” is an example of: a. a specific devise. b.* a general devise. c. a residual devise. d. an ordinary devise. 8. “I hereby give Joe Blow my diamond ring” is an example of: a.* a specific devise. b. a general devise. c. a residual devise. d. an ordinary devise. 9. In the creation of a trust, the ____________ conveys property to the _____________ to be held for the benefit of _________________. a. Settlor, Beneficiary, Trustee b. Trustee, Settlor, Beneficiary c.* Settlor, Trustee, Beneficiary d. Beneficiary, Trustee, Settlor