Wills Transfer of wealth.docx

I Intro to Wills A Transfer of wealth Why she we allow transfer of wealth at all a Pros i If disallow transfer of wealth have policing problem b c money is fungible ii Unfair to middle class iii It encourages savings iv Provides for dependents v Encourages people to produce wealth increases productivity and wealth maximization vi Charitable work vii Take risks ingenuity viii Real prop has sentimental value ix Incentive for younger generation to care for older generation x Symbolic component b Cons i Goes against egalitarian and equality ideals country founded on ii Breed sloth in children of wealthy Testamentary freedom a Right to dispose of prop is rooted in positive law not a natural right to receive what your parents had so leg can adjust i Transfer of wealth does have some public policy limitations ii Most states say can t totally disinherit spouse idea that families contribute to wealth b US is unique in having testamentary freedom i Can disinherit your kids which you can t do in a lot of other countries ii There is a constant tension between testamentary freedom and norms and values that conflict i e giving prop to domestic partner often these conflicting value judgments are put in law by judges c Limits on testamentary freedom i Shapira v Union National Bank a Father restricts inherited wealth based on whether or not his son marries a Jewish girl son challenges on grounds of Constitutionality that he has Const right to freedom of marriage b Ct says that his father s restriction on his inheritance has nothing to do with his Const freedom to marry who he wants Son can marry whoever he wants he just might not get his inheritance if he does If father had conditioned his inheritance on divorcing his Catholic wife Gov t has PP interest in encouraging marriage this is going to get struck down ii Ford v Ford a Insane daughter murders her mother but she was beneficiary under will brother who was alternate beneficiary wants property b Common law doctrine under Riggs v Palmer that can t profit from your own wrong but majority goes with effectuating intent of the testator trying to deter insane people doesn t seem possible Voluntary manslaughter disqualifies a killer from inheriting involuntary doesn t c UPC - Effect of homicide on intestate succession wills trusts joint assets life insurance and beneficiary designations a Definitions Disposition or appointment of property includes a transfer of an item of property or any other benefit to a beneficiary designated in a governing instrument Governing instrument means a governing instrument executed by the decedent Revocable with respect to a disposition appointment provision or nomination means one under which the decedent at the time of or immediately before death was alone empowered by law or under the governing instrument to cancel the designation in favor of the killer whether or not the decedent was then empowered to designate himself or herself in place of his or her killer and or the decedent then had capacity to exercise the power b Forfeiture of Statutory Benefits An individual who feloniously and intentionally kills the decedent forfeits all benefits under this Article with respect to the decedent s estate including an intestate share an elective share an omitted spouses or child s share a homestead allowance exempt property and a famly allowance If the decedent died intestate the decedent s intestate estate passes as if the killer disclaimed his or her intestate share c Revocation of Benefits Under Governing Instrument The felonious and intentional killing of the decedent revokes and revocable I disposition or appointment of property made by the decedent to the killer in a governing instrument ii provision in a governing instrument conferring a general or non-general power of appointment on the kill and iii nomination of the killer in a governing instrument nominating or appointing the killer to serve in any fiduciary or representative capacity including a personal representative executor trustee or agent and severs the interests of the decedent and killer in property held by them at the time of the killing as joint tenants with right of survivor ship or as community property with the right of survivorship transforming the interests of the decedent and killer into tenancies in common d Effect of Severance A severance under subsection c does not affect and third-party interests in property acquired for value and in good faith reliance on an apparent title by survivorship in the killer unless a writing declaring the severance has been noted registered filed or recorded in records appropriate to the kind and location of the property which are relied upon in the ordinary course of transactions involving such property as evidence of the ownership e Effect of Revocation Provisions of a governing instrument are given effect as if the killer disclaimed all provisions revoked by this section or in the case of a revoked nomination in a fiduciary or representative capacity as if the killer predeceased the decedent f Wrongful Acquisition of Property A wrongful acquisition of property or interest by a killer not covered by this section must be treated in accordance with the principle that a killer cannot profit from his or her wrong g Felonious and Intentional Killing How determined After all right to appeal has been exhausted a judgment of conviction establishing criminal accountability for the felonious and intentional killing of the decedent conclusively establishes the convicted individual as the decedent s killer for purposes of this section In the absence of a conviction the court upon the petition of an interested person must determine whether under the preponderance of evidence standard the individual would be found criminally accountable for the felonious and intentional killing of the decedent If the court determines that under that standard the individual would be found criminally accountable for the felonious and intentional killing of the decedent the determination convulsively establishes that individual as the decedent s killer for purposes of this section B Probate Process a Intestate Die with no will i Personal representative Position that closest relative has to petition the court for if multiple people petition then stat with order of pref ii Orders of intestacy Document that allows personal rep to collect all of the funds of the decedent iii Notice statute Have to give notice to anyone who might have claim to the prop or a creditor have to publish something and personal rep pays state taxes and distributes according to intestate succession stat b Testate i Executor Person named in will to be personal representative ii Executor has to get affidavit that this will is binding and all requisition were met in creating this will iii Have to give notice to potential intestate heirs they have standing to contest the will if they want to c Will contests i Will is defective and can t be recognized as legal document b c a Wasn t property executed will formalities not met b Testator was not capable of forming requisite intent b c Testator lacked capacity OR Unduly influenced ii Construction proceeding Need to have clause construed b c written poorly confusing iii Will is probated where testator was domiciled BUT if own real property have to have nd proceeding to deal with the probate of the real property prob in juris where real prop is located Pros cons of probate a Reasons in favor of probate when it is necessary i Protects the interests of rd parties a If have assets held by an institution bank then need probate to authorized the release of assets b Protects bank other institutions from liability ii Transfers title If real property involved need transfer of title iii Probate solves conflicts up front so they won t come back up later b If out-of-wedlock child has notice and can t come challenge later iv Starts limit of stat of limitations for creditors Easier to pay off all legit creditors which ct can determine and then divide up money If legit creditor not paid then can come after heirs w in stat of limitations and they are personally liable for debt v Gathers assets b Reasons to avoid probate i Can take forever if want bens to have immediate access to than need to avoid probate esp for complex estates ii Very costly iii Wills are public records non-probate documents like ins policies and trusts are private c When is probate NOT necessary i Life insurance policy naming beneficiary ii Real prop held in joint tenancy with right of survivorship then no probate needed for that asset b c ownerships transfers automatically at death of one of joint tenant a Have to have right of survivorship regular joint tenancy has to go through probate b Can make cash a non-probate asset iii Trust assets doesn t matter if revocable or irrevocable iv Payable beneficiaries of investment accts stocks etc POD bonds v Pensions d CANNOT use non-probate mechs to defraud creditors Gifts Gruen v Gruen a Can t just gift all your property out of probate are limitations b Facts Son has letter from dad giving him specific painting not good enough i Ct requires delivery for gift to be effective b c a If no delivery can t be sure that gift was T s final expression b Giver needs to feel wrench of delivery Gifts delivered are irrevocable One exception Gifts causa mortis make gift on deathbed then get better cts say that gift was made in contemplation of death and included implicit condition that the gift would revert back if donor recovered litigator s tool NO use in estate planning ii Ct says that father gave son a remainder interest in the painting and retained the life estate a Transferring painting wouldn t be consistent in this case b Dad did this b c wanted to keep out of probate and not pay taxes but that doesn t work still have to pay taxes on it c Summary To show gift have to demonstrate i Intent on part of donor to make present irrevocable transfer ii Delivery of gift actual or constructive iii Acceptance by donee iv Proponent must prove all by CaC evid Joint Interests with Right of Survivorship a If two people hold prop by joint tenancy with right of survivorship OR tenants of the entirety when the first of the two dies then prop passes automatically to survivor i If more than two parties hold prop in joint tenancy at the death of the first to die the decedent s share is divided equally among surviving joint tenants ii Is non-probate asset iii Not restricted to real property can hold bank accts and brokerage accts in joint tenancy a UPC - authorizes registration of securities in beneficiary form which indicates the intention of the owners regarding the person who will become the owner of the security upon the death of the owner b Franklin v Anna National Bank i Gen rules for joint interest in banking acct a belongs to whoever who deposited it other party can t withdraw until right of survivorship kicks in If either party withdraws more than the proportion they have deposited other party can have a claim against them b In NY if deposit in joint acct then that is a gift and can t revoke it ii Evidence necessary to overcome presumption of intent to pass proceeds to survivor a Clear and convincing standard that depositor created acct only for convenience OR b Revoked survivorship provision during his lifetime iii Joint accts during the depositor s lifetime Different uses a Depositor fears that they will be physically incapable of doing their own banking and for convenience reasons wants someone else s name on acct b Depositor wants to assure the acct passes to joint tenant at depositor s death without going through probate BUT depositor doesn t want to give joint tenant right of withdrawal during depositor s lifetime c Depositor wants to confer on joint tenant all the rights associated with joint tenancy iv POD Payable on Death accounts a Depositor doesn t want to joint tenancy but wants to go to someone at death b Cts typically don t enforce b c not transferring any interest during depositor s life so POD designation is like a will without the formality so won t enforce v UPC - Allows POD or agency designation for one or more people II Intestacy Intro a Intestacy statutes are mechanism that cts use to distribute property when i Decedent dies with no will ii Decedent has executed a will but it fails to make a complete disposition of their property b c a No residual clause not a complete disposition b Residual clause invalid violates rule against perp c Successful will contest and no valid prior will to take effect b Policy objective is effectuating intent of decedent i Ways to achieve this a Hearing to figure out what dec would have wanted what they do in China waste of time and resources b Intestacy statutes give the disposition of assets that we think a majority of people would want ii Why don t we just have policy of escheating to state if no will a Excessively punitive c Basic definitions consistent concepts throughout the states i When decedent leaves suriviving issue nobody but spouse and issue are going to take a Issue Descendants children grandchildren Spouse is not issue ii When decedent leaves no spouse no issue parents grandparents people you are descended from iii Collateral relative people descended from your ancestors siblings nieces nephews iv p table on consanguinity v Only blood relatives and surviving spouse inherit a Laughing heir statutes preclude inheritance by relatives too remote escheats to state b Some domestic partnership statutes UPC p - Intestate Succession a Any part of a decedent s estate not effectively disposed of by will passes by intestate succession to the decedent s heirs as prescribed in this Code except as modified by the decedent s will b A decedent by will may expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession If that individual or a member of that class survives the decedent the share of the decedent s intestate estate to which that individual or class would have succeeded passes as if that individual or each member of that class has disclaimed his or her intestate share - Share of Spouse The intestate share of a decedent s surviving spouse is the entire estate if i no descendant or parent of the decedent survives the decedent or ii all of the decedent s surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent the first plus of any balance of the intestate estate if no descendant of the decedent survives the decedent but a parent of the decedent survives the decedent the first K plus of any balance of the intestate estate if all of the decedent s surviving descendants are also descendants of the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent the first K plus of any balance of the intestate estate if one or more of the decedent s surviving descendants are not descendants of the surviving spouse - Share of Heirs other than Surviving Spouse Any part of the intestate estate not passing to the decedent s surviving spouse under - or the entire intestate estate if there is no surviving spouse passes in the following order to the individuals designated below who survive the decedent to the decedent s descendants by representation if there is no surviving descendant to the decedent s parents equally if both survive or to the surviving parent if there is no surviving descendant or parent to the descendants of the decedent s parents or either of them by representation if there is no surviving descendant parent or descendant of a parent but the decedent is survived by one or more grandparents or descendants of grandparents half of the estate passes to the decedent s paternal grandparents equally if both surviving or the surviving paternal grandparent or to the descendants of the decedent s paternal grandparents or either of them if both are deceased to the descendants taking by representation and the other half passes to the decedent maternal relatives in the same manner but if there is no surviving grandparent or descendant of a grandparent on either the paternal or the maternal side the entire estate passes to the decedent relatives on the other side in the same manner as the half Review problems on p p problems share of spouse Problem which stat language gets you to answer NY If spouse and no issue entire estate goes to spouse - a UPC Everything goes to spouse - no descendent or spouse and all of descendant s surviving descendants are dead If Charles survived by mom Bea UPC - - if no descendent of dc survives but parent does spouse gets first K of balance so Candace gets K Mom gets K NY Fact that parent survives doesn t make a difference Spouse gets all - a Problem If Marla and Norman have no other kids besides Olive UPC if Olive only child then N gets everything - ii Why did they decided that if dc dies leaving issue that are also descendents of surviving spouse spouse NY a N gets K of residue and rest goes to issue Olive N gets K O gets K What happens if O is minor Child has to have guardian of her prop sometimes parent sometimes other party parent has to account for how to spend Olive s so in NY question as to whether this stat honors what dc wants def need a will if have minor kids in NY If Marla had son Peter by a prior marriage UPC - N gets K balance of estate if or more of dc s surviving descendants are not also descendants of surviving spouse N gets K O and P are going to share remaining K How do we know to divide b tw O P - In NY K thing N still gets K How do we split rest of by representation O P each get If Norman had son Q from previous marriage UPC - - N gets first K estate if all of dc s surviving descendants are also descendants of surviving spouse and surviving spouse also has descendants not of dc N gets K O gets K Q gets nothing if not related by blood or adoption you have no inheritance rights This goes with in-laws and nieces and nephews that aren t blood related so have to right will if want to give to these people NY N gets K estate K K to O If M has P and N has Q UPC - why is it and not b c allows P to come into equation not b c requires that all of dc s descendants are also descendants of surviving spouse or more of surviving spouse descendants not dc descendants N gets K O P each get NY Share of surviving spouse a Estate of Goick i Family of decedent is contesting wife s almost ex-wife there was no final decree of divorce appointment as personal representative ii Mom has standing to object to wife s appointment b c is creditor of the estate a To establish standing have to show that could have been PR creditor named in statute as someone who could have been appointed PR b Don t allow siblings family to have standing b c if allow standing for emotional reasons then open floodgates for litigation c Creditor doesn t have standing to object to distribution agreement b c her interests are already protected by statute d Ct allows wife to be PR under statute formalism over substance b c if had final decree of divorce would have gotten property ct doesn t want to punish her for lack of divorce decree b UPC - Provides that a person whose marriage has been terminated by divorce or annulment does not qualify as a surviving spouse and that a spouse does not include an individual who was a party to a valid proceeding concluded by an order purporting to terminate all marital right c NY failure to comply with an obligation to support a spouse terminates the right to take by intestate succession B Share of Lineal Descendants X Kids A B C D Grandkids E F G H I J K L Great grandkids M N O P Q U Terms and Basic principles a Any living descendant of the decedent cuts off the right of the descendant s own children to inherit b If one child predeceases T then the issue if any of the child who predeceases get their parents share c Strict per stirpes distribution i Divide estate into fractional shares in the generation that is closest to decedent even if no one is alive in this generation ii So kids get their parents share a E F G divide A s share b H gets c I J K divide C s share d L gets D s iii Pro Descendants get same shares they would have received if the order of deaths was normal iv Cons There is no such thing as normal death order X s children could have consumed their inheritance during their own lives leaving nothing left for their kids OR not leave anything to their kids d Modern per stirpes distribution i What majority of juris mean when they say per stirpes ii Divide up shares at first generation in which there is a descendant living iii If A B C D predecease X then divide up at grandkid level so have shares and each grandkid gets e UPC i Is called representation or per capita at each generation each person takes a share in her own right not as a representative of her parents ii - Representation a Definitions Deceased descendant deceased parent or deceased grandparent means a descendant parent or grandparent who either predeceased the decedent or is deemed to have predeceased the decedent under - Surviving descendant means a descendant who neither predeceased the decedent nor is deemed to have predeceased the decedent under - b Decedent s Descendants If under - a decedent s intestate estate or a part thereof passes by representation to the decedent s descendants the estate or part thereof is divided into as many equal shares as there are i surviving descendants in the generation nearest to the decedent which contains one or more surviving descendants and ii deceased descendants in the same generation who left surviving descendants if any Each surviving descendant in the nearest generation is allocated one share The remaining shares if any are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent c Descendants of Parents or Grandparents If under - or a decedent s intestate estate or a part thereof passes by representation to the descendants of the decedent s deceased parents or either of them or the descendants of the decedent s deceased paternal or maternal grandparents or either of them the estate or part thereof is divided into as many equal shares as there are i surviving descendants in the generation nearest the deceased parents or either of them or the deceased grandparents or either of them that contains one or more surviving descendants and ii deceased descendants in the same generation who left surviving descendants if any Each surviving descendant in the nearest generation is allocated one share The remaining shares if any are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the decedent Problem p X Kids A B C D Grandkids E F G H I J K L Great grandkids M N O P Q U i If C D were dead a UPC Divide into shares for living for deceased with issue A B get shares Recombine so have and divide equally between I J K L each b NY Statute in st syllabus - Says by representation can mean modern per stirpes but does mean the same thing as the UPC - modern per stirpes so for wills executed before that use phrase by representation or per stirpes mean modern per stirpes Divided same way as in UPC ii A B C D G L predecease X X A B C D E F G H I J K L M N O P Q U a Modern per stirpes MPS Divide in closest generation with living descendant Grandkid generation so divide into shares E F H I J K get N O divide G s Q U divide L s each get b NY UPC Divide into shares E F H I J K each get combine G L s and distribute equally between N O Q U each get So same result but have to think about it different conceptually iii A E F G have died before X estate of K X A B C D E F G H I J K L M N O P Q U a MPS B C D each get K share that would have gone to A split between E G not F b c F has no descendants of X DOES NOT go to his estate so M gets K N O get b NY UPC B C D each get K M N O equally split A s K so each get K iv A B C G H have died before X X A B C D E F G H I J K L M N O P Q U a MPS D gets K E F get K N O split G s K K each B s share K goes to P I J K split C s share K each b NY UPC D gets K Recombine rest of estate K and go to next generation and split in shares living dead with issue so E F I J K get of K recombined and split evenly between N O P v A B C D F H and P have died before X X A B C D E F G H I J K L M N O P Q U a MPS Go to nearest generation with survivors grandkids and split into shares don t count F b c dead with no issue and don t count H b c no issue living E G I J K L each get share b NY UPC Exactly the same as MPS E G I J K L each get share Distribution among collateral relatives no one in direct line of descent is alive a Basic approach is that issue of parents brothers sisters nieces nephews take to exclusion of issue of grandparents aunts uncles cousins b Degree of relationship approach Table of consanguinity c Problem p A-B C D X E F G H I J K i MPS a Divide into b D gets c F G split C s each I J K split E s each ii UPC NY a D gets b Recombine C E shares to get and split equally between F G I J K d Difference b tw UPC and NY i NY has laughing heir provision - Issue of grandparents that can inherit shall not include anyone more remote than grandchildren ii NY does this b c a Concept that family contributes to wealth these people too remote to contribute b Admin convenience don t want to have to go find them if going to inherit should know relative is dead e Problems p i Problem A-R F-Q B C D-------------------E P M K X H N O L I J a UPC J gets it all b c - descendants of decedents parents b NY - issue of decedents parents J gets it all ii Problem J all predeceases X A-R F-Q B C D-------------------E P M K X H N O L I J a UPC - P gets and N O L split Divide equally b tw descendants of maternal and paternal grandparents b NY Laughing heir provision kicks in N O L can t inherit b c are great-grandkids of X s grandparents P inherits all iii Problem J and P both dead A-R F-Q B C D-------------------E P M K X H N O L I J a UPC N O L each get If no living relatives on one side maternal paternal then all passes to other side b NY - kicks in only survived by great-grandkids of grandparents so they get it per capita so count up how many great-grandkids and give to them their issue don t take anything N O L each get Laughing heir limitation in - doesn t apply b c are in subparagraph so laughing heir limitation only applies if any grandkids of grandparents are alive C Modern Families Halfbloods Adoption and non-Marital Children Step-families a States have taken totally different approaches to this topic b UPC - p Relatives of the half-blood inherit the same share they would inherit if they were of the whole blood c Problem p B is decedent W-H -------W A B C D E F G i UPC a E F G would share equally b This is the modern trend ii Oklahoma a common ancestor so half-bloods inherit as if they were full-bloods b E F G split iii Florida a If blood then get as much strict per stirpes b E gets F G split iv Mississippi a Half-bloods don t get anything b Everything goes to E v NY - b same as UPC Adoption a Estates of Donnelly a Issue Can an adopted child inherit from her natural grandparents b Statutory language a Says you can t adopt from biological parents doesn t say anything about grandparents b This was a step-parent adoption so not the kind of adoption that the drafters of the statute were contemplating c Leg policy was to create a clean slate for adopted children d Ct says that granddaughter can t inherit from grandparents b UPC - Parent and Child Relationship a Except as provided in subsections b and c for purposes of intestate succession by through or from a person an individual is the child of his or her natural parents regardless of their marital status The parent and child relationship may be established under the Uniform Parentage Act applicable state law b An adopted individual is the child of his or her adopting parent or parents and not of his or her natural parents but adoption of a child by the spouse of either natural parent has no effect on i the relationship between the child and that natural parent or ii the right of the child or a descendant of the child to inherit from or through the other natural parent c Inheritance from or through a child by either natural parent or his or her kindred is precluded unless that natural parent has openly treated the child as his or hers and has not refused to support the child c UPC policy i Doesn t want to discourage step-parent adoption when one parent is deceased or force child to give up relationship with parents of deceased parent grandparents still want this kid to be treated like their own ii Better to have rule that doesn t let child inherit from parent but does from collateral relatives who maybe didn t want to parent to relinquish parental rights iii Issue Can a child have more than one parent a YES why not facilitate as many loving relationships as possible b NO having more than parents creates problems should have total transplant iv Child is treated as part of stepparents natural family for intestate succession purposes a If stepparent doesn t adopt but treats the child as its own NOT entitled to inherit under intestacy statutes generally b See California Probate Code allows intestate succession for child of stepparent that wasn t legally adopted if stepparent relationship began when child was a minor and continued throughout lives of stepparent and child AND established by clear and convincing evidence that stepparent would have adopted but for some legal barrier usually natural parent refusing to give up parental rights If when kid reaches majority and doesn t let stepparent adopt then no longer a legal barrier so no intestate succession d UPC - Individuals Related to Decedent Through Two Lines An individual who is related to the decedent through two lines of relationship if brother of deceased parent marries brother s widow and adopts daughter so is both dad and uncle is entitled to only a single share based on the relationship that would entitle the individual to the larger share e Adult adoptions i For intestacy purpose cts are very leery to interpret as able to inherit b c of change of undue influence and fraud D Simultaneous Death Problems that simultaneous or near in time deaths create a If die w in short amt of time then bulk of one spouses estate could be going to the collateral relatives of the other spouse to the exclusion of his relatives b Could be frustrating intent of one spouse c How do you prove death i There are many different ways to define it huge evidentiary problem ii Spend lots of litigation this issues Estate of Villwock a Wisconsin statute that says have to prove that there is no sufficient evidence that spouses died other than simultaneously b There was a death certificate saying husband died first so he predeceased wife and all his property goes to her and then to her relatives UPC - Requirement that Heir Survive Decedent for Hours An individual who fails to survive the decedent by hours is deemed to have predeceased the decedent for purposes of homestead allowance exempt property an intestate succession and the decedent s heirs are determined accordingly If it is not established by clear and convincing evidence that an individual who would otherwise be an heir survived by hours it is deemed that the individual failed to survive for the required period This section is not to be applied if its application would result in a taking of intestate estate by the state under - a This gives a day window so clears up a lot of car crash case and cuts down on litigation BUT every well drafted will needs to have a stipulation about what happens if primary beneficiary dies w in short period of time b Don t use common disaster language same prob with death what is a common disaster c Need to think about what a reasonable period of time is probably longer than days under UPC d Failure to put in simultaneous death provision could be malpractice e Even if primary beneficiary of husband is wife and wife s beneficiary is their daughter they could all die together ALWAYS put in simultaneous death provision E Disclaimer Disclaimer is when someone who inherits under a will disclaims their portion of the estate for distribution purposes it is treated as if disclaimer predeceased testator a People gen do this for tax purposes skip generation at a high bracket i Drye v United States a If execute disclaimer to avoid a federal tax lien not going to allow ii If beneficiary s children are in lower bracket and execute a disclaimer can reduce tax that family will have to pay a Has to be a qualified disclaimer disclaimant can t have accepted the disclaimed interest or any of its benefits and the disclaimer must be irrevocable and unqualified b Estate of Baird i Disclaimer is in jail b c he beat his nd wife so bad that she was permanently disfigured he is trying to disclaim his interest in mother s estate in order to prevent her from inheriting the property she has a mil judgment against him so his interest is encumbered and to let it pass to his kids ii Problem is that he disclaimed before mother died and you can t do that b c don t have a future interest only have a mere expectancy iii Even if don t do this most courts aren t going to let people escape paying their debts through legal fiction of relating back in cases where behavior this egregious use equitable doctrine to force disclaimer to pay creditor a Relation back theory If an estate beneficiary executes a disclaimer the beneficiary s interest is treated as if the beneficiary never received the interest As a result the interest is beyond the reach of the beneficiary s creditors b Most cts allow this c Bankruptcy i If beneficiary executes disclaimer before file for bankruptcy is that valid to keep inheritance out of control of bankruptcy trustee Circuit split some say yes some say no d Disclaimer in order to qualify for Medicare Medicaid i Money that you would have inherited is counted towards eligibility ii Are allowing policy to trump intent UPC - Disclaimer of Property Interests a Right to Disclaim Interest in Property A person or the representative of a person to whom an interest in or with respect to property or an interest therein devolves by whatever means may disclaim it in whole or in part by delivering or filing awritten disclaimer under this section The right to disclaim exists notwithstanding i any limitation on the interest of the disclaimant in the nature of a spendthrift provision or similar restriction or ii any restriction or limitation on the right to disclaim contained in the governing instrument For purposes of this subsection the representative of a person includes a personal representative of a decedent a conservator of a disabled person a guardian of a minor or incapacitated person and an agent acting on behalf of the person within the authority of a power of attorney b Time of Disclaimer The following rules govern the time when a disclaimer must be filed or delivered If the property or interest has devolved to the disclaimant under a testamentary instrument or by the laws of intestacy the disclaimer must be filed if of a present interest not later than nine months after the death of the deceased owner or deceased donee of a power of appointment and if of a future interest not later than nine months after the event determining that the taker of the property or interest is finally ascertained and his or her interest is indefeasibly vested The disclaimer must be filed in the probate court of the county in which proceedings for the administration of the estate of the deceased owner or deceased donee of the power have been commenced A copy of the disclaimer must be delivered in person or mailed by registered or certified mail return receipt requested to any personal representative or other fiduciary of the decedent or donee of the power If a property or interest has devolved to the disclaimant under a nontestamentary instrument or contract the disclaimer must be delivered or filed if of a present interest not later than nine months after the effective date of the nontestamenatry instrument or contract and if of a future interest not later than none nine months after the event determining that the taker of the property or interest is finally ascertained and his or her interest is indefeasibly vested If the person entitled to disclaim does not know of the existence of the interest eth disclaimer must be delivered or filed not later than nine months after the person learns of the existence of the interest The effective date of a revocable instrument or contract is the date on which the maker no longer has power to revoke it or to transfer to himself or herself or another the entire legal and equitable ownership of the interest The disclaimer or a copy thereof must be delivered in person or mailed by registered or certified mail return receipt requested to the person who has legal title to or possession of the interest disclaimed months to disclaim interest in probate court and deliver a copy of disclaimer to personal rep or executor of estate F Advancements Common law a Presumption in favor of the advancement gifts made to children during lifetime of decedent were an advancement on the estate b So add value of advancement to estate and divide up and then subtract amt of advancement that kids already received from the total amt they should get UPC - Advancements a If an individual dies intestate as to all or a portion of his or her estate property the decedent gave during the decedent s lifetime to an individual who at the decedent s death is an heir is treated as an advancement against the heir s intestate share only if i the decedent declared in a contemporaneous writing or the heir acknowledged in writing that the gift is an advancement or ii the decedent s contemporaneous writing or the heir s written acknowledgement otherwise indicates that the gift is to be taken into account in computing the division and distribution of the decedent s intestate estate b For purposes of subsection a property advanced is valued as of the time the heir came into possession or enjoyment of the property or as of the time of decedent s death whichever first occurs c If the recipient of the property fails to survive the decedent the property is not taken into account in computing the division and distribution of the decedent s intestate estate unless the decedent s contemporaneous writing provides otherwise Reverses common law presumption that a lifetime gift should be treated as an advancement requires words of absolute intent to treat gift as an advancement Insufficient estates a Problem on p G is married to H G has kids A B C who are not related to H G advances K to A K to B each memorialized by writing that gift should be treated as an advancement estate is valued at K how do you distribute it under UPC i Add K back in total estate now K ii Determine how much goes to H K balance of estate K iii K left distribute K to A B C a Problem is A already got K b Recompute the estate only add B s gift so total estate is now K iv If K a H gets K b K b tw B C K each BUT B already got so subtract that from how much left so have K to split so he gets K and C gets K III Will execution A Formalities Functions of will formalities a Evidentiary i Gives a physical records of T s wishes ii Written will creates a piece of physical evidence iii Witnesses can testify about that evidence and T b Ritualistic i Make sure that will is final expression of testator ii Formalities make him realize the seriousness of what he is doing c Protective i Protect testator against fraud undue influence mistake fraudulent suppression of a valid will ii Presence of witnesses make defrauders think twice d Channeling i Formalizes standards of what constitutes a will in our society common cultural understanding ii Formalities guarantee swift passage through legal system Criticisms of formalities a Sometimes frustrate intent of T a Texas statute and excessive protections p b UPC - Execution Witnesses Wills Holographic Wills a Except as provided a will must be In writing 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 signed by at least two individuals each of whom signed within a reasonable time after he or she witnesses either the signing of the will as described in paragraph or the testator s acknowledgement of that signature or acknowledgement of the will i Loosens formalities a Have to witness signing OR T has to acknowledge signing to witness b Problems Have to sign after acknowledgment Witness doesn t know for sure that what they are signing is what the T acknowledged What does witness mean visual What should good drafter require a Have testator sign every page b Number pages of of etc c Attestation clause i Attestation clause says that T had capacity and was free from undue influence ii Creates presumption that will was duly executed d Affidavit of due execution i Can be used in evidence to say ii Self-proving affidavit p don t have to dig up witnesses e Choice of witnesses i Don t use beneficiary interested witness a In NY if use beneficiary as witness and beneficiary s testimony necessary to prove will than beneficiary doesn t get to take under will p NY EPTL - b Even if will invalid only can take as much as would have under will no intestacy distribution for that witness Enforcing will formalities a Morris v West i Secretaries were witnesses didn t actually sign will in front of T Texas law very strict and says that witnesses have to sign in T s presence trying to protect against fraud will switching ii This will disinherits daughter cts blindly apply formalities in order to invalidate will a Court says its doing this to force lawyers to be more careful b BUT in Texas need privity to sue lawyer for malpractice only person that has privity is T and he is dead so that s not real story iii If cts don t like will then will strictly enforce formalities to invalidate if want will to go through will use doctrine of substantial compliance and approve it b In re Alleged Will of Ranney i Witnesses signed self-proving affidavit but didn t sign actual will ct invokes doctrine of strict compliance to allow will to be probated ii UPC - version Although a document was not executed in compliance with - enumerating the wills formalities the document is treated as if it had been executed in compliance with that section if the proponent of the document establishes by clear and convincing evidence that the decedent intended the document to constitute the decedent s will Gives courts a dispensing power Judicial power to admit a document to probate even when the document lacks even the basic formalities required by UPC - don t need any compliance with formalities for cts to give effect under this section iii Purpose of formalities is to insure T s intent is being complied with so if there is evidence that will that doesn t conform with formalities does express T s intent should we give it expression iv NJ s doctrine of substantial compliance doesn t give ct dispensing power have to have some compliance with formalities UPC you don t a Under UPC don t even need T s signature b UPC and dispensing power open the door for disinherited disgruntled heirs to bring suit v ML doesn t think dispensing power works cts are going to do what they want based on the facts c competing norms in validating wills i Testamentary freedom AND ii Family obligation a Only in US do we say this doesn t matter although a lot of cts apparently think it does B Capacity Intro a Why require capacity i If we enforce K s when people are incompetent going to hurt themselves a paternalistic notion b c T not hurting himself with disposition that we think he wouldn t have wanted b Is really about protecting family members idea that family creates wealth Family members relied on expected inheritance They shouldn t be disappointed unless T has rationale basis for disinheriting if they acted as they should have then they should get inheritance ii Only give expression to true intent a If someone so far gone that can t form true intent then shouldn t give effect b Finding true intent is hard b c what someone ones and what someone else thinks they should want can be very different things b Standard for Capacity i West Virginia p a T understands he is making a will b T knows what his property is c T knows who the object of his bounty issue spouse are d Does T understand who he wants to dispose his property to ii In general standard for capacity in making will is much lower than capacity standard required to enter into binding K iii Testamentary capacity is a legal concept not a medical one a Expert testimony Testimony by physicians who examined T If examined close to the time of will execution always relevant and admissible If diagnosis was degenerative disease like manic depressive psychosis then can probably admit b c not likely that disease got better Testimony by physicians who didn t examine T If only this testimony is the only evidence to support lack of capacity not going to overcome presumption of capacity Can base their opinion on testimony of lay witnesses b Lay witness testimony In order to state an opinion about T s capacity have to relate the facts on which the conclusion is based so factfinder can evaluate whether there opinion is justified in light of all the fact This evidence is routinely admitted iv Burden of proof a UPC - Contestants have both the initial burden of proof and the ultimate burden of persuasion on issues of capacity Have to prove incapacity Presumption of capacity in place probably b Other states hold that proponents of the will bear burden of proving capacity c Standing to contest will b c of lack of capacity i Any heirs or beneficiaries who would take larger amounts under prior wills have standing to contest ii Trustees under prior wills iii Creditors no standing b c usually statutes to protect their interests iv Juris split on whether creditors of heirs have standing to challenge d What should lawyer do to prevent will contest based on undue influence i Find out if he has capacity before draft will if he doesn t then don t draft ii Bring in expert to examine T and ask if he has testamentary capacity Cases a Barnes v Marshall i T was manic depressive but no real evidence that he lacked testamentary capacity ii Jury judge seem to think that b c he wasn t rational didn t have capacity BUT prob is that capacity is not about rationality iii In this case daughter getting disinherited ct didn t like it so through will out on lack of capacity b In re Hargove s Will i T was successful businessman who didn t leave kids inheritance b c he didn t think that kids were his wife was running around ii No evidence that he lacked testamentary capacity but tried to argue that his belief that kids weren t his was an insane delusion a Persist in believing fact is true even though prevented with evidence to the contrary b This is basically law creating is on mental illness to throw out a will when they don t like it c To rise to insane delusion need to show that T has sufficient proof that he should have believed the truth i e DNA tests that showed kids were his iii Appeals court overturns jury decision saying that as long as there was rationale basis for thinking that wife may have been routinely unfaithful will OK as is a Appellate cts are check on juries throwing out will b c of lack of capacity b He is free to disinherit kids If you are drafting will where someone like kid is being disinherited then need to have intention in writing then have no argument of insane delusion C Undue Influence Intro a Undue influence beneficiary has influenced testator in an inappropriate manner and as a result the will reflects the wishes of beneficiary not true intent of T b Not necessarily related to capacity but often make arguments of undue influence and lack of capacity together c If elderly woman making disposition to her nurse and cutting out her family undue influence i Ct is going to look at quality of relationship b tw relatives and T ii Cts should be interfering only when it is clear that coercive influence made them unable to exert free choice Presumption of undue influence and Professional Responsibility a Haynes v First National State Bank of NJ i Facts So Mom Dorcas lived with D and her sons for a long time when D dies moves in with D and disinherits D s sons and D s lawyer takes over mom s estate a Sudden formation of relationship with rapid change of will disinheriting someone strong sign of UI ii Presumption of undue influence a Normally contestant has burden of proof production but presumption can switch burden to proponent of will b For the presumption to kick in need factors Confidential relationship AND Suspicious circumstances c Rebutting the presumption SC rules that require clear and convincing evidence to rebut TC had used prepond standard and said presumption was rebutted b c grandma angry with D s sons for leaving the house at age of b Professional Responsibility of estate lawyer i NJ Professional Responsibility statute FN p a Subsection C Subjective test whether or not atty thinks he can represent clients with potentially conflicting interests If he does then he has Make full disclosure Get consent from both clients b Ct says that don t have to make full disclosure until latent conflict of interest becomes actual Problem with getting consent is that if think that daughter is UI mom then what makes ct think that waiver is not also unduly influenced ii Even if don t technically violate ethical rules is it a good idea to represent T and beneficiary a NO b c presumption of undue influence will arise so lawyer will give will contestants enough evid to get pass summary judgment b If represent husband and wife when should lawyer advise separate council Kids from previous marriage T might want to favor kids over spouse but not want to say it in front of spouse Minute their interest diverge at all iii ABA Rule c a Requires objective reasonable belief as opposed to NJ subjective that he can represent both clients b When is it okay to prepare will and also be a devisee Have to be related to T When is it a good idea Only child OR Totally equal distribution to children c Confidential relationship and suspicious circumstances i Confidential relationship a Absence of entirely arms-length relationship b Where trust is reposed by reason of the T s weakness or dependence or where the parties occupied relations in which reliance is naturally inspired or in fact exists ii Suspicious circumstances a Confidential relationship alone doesn t give rise to presumption of undue influence need suspicious circumstances b What are suspicious circumstances After relationship arises change in disposition of will How much is beneficiary involved in procuring the will Did they get atty Were they present at will execution If disposition is made to person who is not natural bounty of T d Weakened mental state cts often require finding of weakened dependent T before will sustain a finding of UI Suspicious circumstances involving non-spouse non-relatives a Will of Moses i T has relationship with lawyer lover and makes him primary beneficiary under her will ii Majority says that confidential relationship she trusted him suspicious circumstances fact that she made disposition to non-spouse non-relative under to give rise to UI iii Dissent a Doesn t think that there were suspicious circumstances T had relationship with guy for years and atty ascertained she had capacity found out who her bounty was found out her intentions toward them and she seemed to know what her prop was b c changed will when it described it wrong and lawyer had nothing to do with drafting of will b Think maj is doing nothing more than making value judgment about the fact that they were unmarried and he was younger Cts rarely find UI where marital relationship and substantial devise to spouse to exclusion of family member iv Take home Ct is going to interpret the facts in accordance with their own values and often frustrate intent in the process nothing this lawyer could have done a Cts are very suspicious when there is a devise to a lawyer even if lawyer didn t draft it generally confidential relationship b tw client and lawyer and suspicious circumstance of lawyer being a beneficiary enough to give rise of presumption of UI that lawyer not going to be able to overcome easily if at all b Spiritual advisors Cts suspicious of devises to religious advisors mortmain statues prohibit in some places c Nursing home operators disposition to operator or caretaker in nursing home inherently suspicious and going to give rise to presumption of UI b Rebutting If T acted after obtaining counsel of persons independent of alleged influencer then probably going to be enough to rebut presumption of UI c Criticism of doctrine A lot of scholars question whether it was a doctrine designed to protect the T or whether it was designed to enforce the norm that T s should provide for close fam members and adhere to societal norms about how they live their life i e be heterosexual not homosexual d Will of Kaufman i T is leaving sizeable estate including shares in fam bus to his homosexual partner ii T s family claimed UI that partner was controlling read his mail etc iii If T had been a women would have been no problem iv When have homosexual T making disposition to his partner need to be extra careful Transgendered couples marriage cert might not be enough b c marriage statutes define marriage as between a man and a woman D Planning for Will Contests If you get a high profile client with lots of cash who wants to disinherit intestate heirs or other indicia of potential contest like homosexuality what precautions can you take a Atty should NOT represent decedent and estate heir i e Nina Zagat being executor and representing Basia b Letter explaining disposition i e Kaufman i Not really a good idea b c can be used as further evidence of UI ii Need more than just letter c Evidence of capacity i Have T explain why they are disinheriting intestate heirs ii Videotape will execution a Only a good idea if sure that T is going to come off well don t want him to appear weak or disorientated iii Be involved with nurses doctors know what chart says on day of execution and make sure he is having a good day iv Medical experts a Can establish lucidity b Can ask questions to establish capacity v Witness choice a Need to have someone with no stake in the proceedings Zagat brought associates from Shearman not a good plan b c she works with them and she and firm are making lots of of will b Only technically need witnesses but should have more c Prominent witnesses d Witnesses who knew T can testify he wasn t weak fading e Someone who doesn t have standing d No contest clause i No contest clause gives a bequest to heir and conditions it on their not challenging will ii UPC - Penalty Clause for Contest A provision in a will purporting to penalize any interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable if probable cause exists for instituting proceedings iii Problems with this approach a If kids rich or estate worth a lot have to give them enough money to make it worth their while and T might now want to do that b A lot of times this is more about principle esp if homosexual relationship don t want to validate relationship c UPC Written this way b c if there is undue influence want people to challenge it Gives heirs room to maneuver BUT makes it hard for estate planner to use no contest clause that work Not yet won general acceptance e Take property out of probate estate i Joint accts ii Prop in joint tenancy iii Insurance iv Life-time revocable trusts v Inter-vivos transfers BUT these can be challenged on lack of capacity and UI as well vi Payable on death accounts vii Create charitable remainder trusts Give life-partner lifetime interest in trust and give remainder to charity Advantage to doing this if that if it is challenged not just beneficiary arguing for will s validity but charity and AG AG argues on behalf of charity Has to be a lot of to do this f Adoption i Mostly only see this with gay couples ii Usually not successful iii Advantage of this is that it cuts of standing of collateral relatives g T can enter into K with his family to cut of their rights to challenge T s will Ante-mortem probate a Move in s to have system of ante-mortem probate where will probated before T s death b Statues infrequently used and doesn t help people who die suddenly accidentally c Costs of ante-mortem probate high have to physical mental exams pay atty fees risk of family disharmony IV What Constitutes a Will - A Integration and Incorporation by Reference Intro a Integration i For integration to work need every piece of paper intending to be part of will present and together in front of T and attached at execution ceremony b Incorporation by reference Permits a ct to give effect to a will which disposes of property in accordance with an unattested document i Requirements a Document was in existence at the time the will was executed AND b Document is sufficiently identified in the will ii - Incorporation by Reference A writing in existence when a will is executed may be incorporated by reference if the language of the will manifests this intent and describes the writing sufficiently to permit its identification c Cts have these two doctrines in order to try to give same protection as formalities Cases a Estate of Norton i Facts Will not executed but there was codicil stapled to will that was executed but codicil doesn t refer back to original will ii Can t use incorporation by ref b c codicil doesn t reference will iii Integration a Don t know if codicil was attached to will at time it was executed b Don t know for sure who stapled will and codicil together and when b Clark v Greenhalge i Facts T executes will making Greenhalge the executor and primary beneficiary of her estate giving him all tangible personally prop except for what she designates by a memorandum left by her and known to Greenhalge T leaves memo giving painting to Clark She makes memo kept in her drawer in will executed in ii Ct finds that incorporation by reference gets the document in a Could argue that this is stretching incorporation by reference too far b Couldn t didn t like this guy he is being greedy c Dispensing power of UPC - Although a document was not executed in compliance with - enumerating the wills formalities the document is treated as if it had been executed in compliance with that section if the proponent of the document establishes by clear and convincing evidence that the decedent intended the document to constitute the decedent s will Cts didn t have this doctrine so are stretching incorporation by reference in order to effectuate T s intent whenever clear c What if had client with hummel collection who wanted to give each piece to someone different want separate document that allows T to change her mind about hummel disposition i Incorporation by reference won t work because document needs to be in existence at time will is executed ii Jackie O gave personal items to her partner to distribute with due regard for kids wishes a He had relationship of trust and confidence and was indep wealthy b Kids don t have any legal way to challenge his discretion iii - Separate writing identifying devise of certain types of tangible personal property Whether or not the provisions relation to holographic wills apply will may refer to a written statement or list to dispose of items of tangible personal property not otherwise specifically disposed of by the will other than money To be admissible under this section as evidence of the intended disposition the writing must be signed by the T and must describe the items and the devisees with reasonable certainty The writing may be referred to as one to be in existence at the testator s death it may be prepared before or after the execution of the will it may be altered by the testator after its preparation and it may be a writing that has no significance apart from its effects on the dispositions made by the will a Writing has to be signed by T so in Greenhalge wouldn t work b c memo not signed b Describe each item clearly and sign each entry c Can t use for stocks and bonds only tangible personal prop B Facts of Independent Significance Intro a UPC - Events of Independent Significance A will may dispose of property by reference to acts and events that have significance apart from their effect upon the disposition made by the will whether they occur before or after the execution of the will or before or after T s death The execution or revocation of another individual s will is such an event b Relevant in kinds of cases i When T s will makes reference to facts or events of indep sig to determine the beneficiaries of the will ii When T s will makes reference to facts or events of indep sig to determine the property that an ascertained beneficiary will receive c Problems p T s will leaves prop to i oldest of my sisters living at the time of my death a At time of execution oldest sister still alive if she dies before probate another sister is now oldest so there is a change in disposition w out formalities so need a theory to give effect to the will notwithstanding the changes b Facts of indep legal leg if act or event that is changing testamentary disposition has indep lifetime motive purpose or significance if it is happening for some other reason than to change will disposition then will give effect to the changes Sister didn t die to change will disposition ii all of the cash and securities in my brokerage account at Merrill Lynch to my daughter Barbara a Problem is that amt value types of securities and cash could change w out formalities b T has indep reason to manage this acct bad stocks need cash for something else Not worried about UI b c other reason to change Ct is not undermining protections of formalities iii all of the cash and securities found in my kitchen drawer to my son Charles a Not a whole lot of indep legal sig of cash in the kitchen b Primary purpose of removing cash would be to change the distribution of her will c Someone else could have access to kitchen are worried about fraud d Could argue that cash is slush fund so have indep leg sig to remove but since securities in their too this argument doesn t really follow iv all of the stocks and bonds found in my safe deposit box to the persons designated on the envelope in which those stocks and bonds are found a Strict application of facts of indep legal sig not going to let you bring this in b c no legal sig to changes contents of safe-deposit box b Incorporation by ref not going to work b c Need evid that envelope was in safe deposit box before will execution Final version is finished and in existence at the time she executed the will if don t have proof of this can t get it in v K to each of the persons who shall be employed by my co at the time of my death a The problem is are going to hire fire people causing a change in testamentary disposition w out formalities b Hiring firing is act of indep legal sig so most cts will let in unless find evid that hired fired in order to change testamentary disposition Problem with this doctrine is it doesn t always capture evid of coercion or overreaching vi the residue of my estate to the Houston Foundation but if at my death my brother shall have died leaving a will creating a trust with charitable beneficiaries I leave the residue of my estate to the trust created in my brother s last will a Would want a clearer ref to brother s will b ct will probably enforce though b c brother creating his own will is act of indep legal sig and brother has to go through formalities In re Tipler s Will a Provision in T s will that if she predeceases husband she wants her assets distributed according to his will so her goes to his family b Her families argument i His will wasn t in existence so incorporation by reference not going to work ii This is a holographic codicil that isn t entirely in her handwriting b c husband s will is in his a Requiring holographic will to be in T s handwriting is a substitution for formalities no witnesses but T s handwriting sufficient evid of intent c Facts of indep legal sig gets this provision in b c indep fact of husband creating his own will w formalities d If his will had left his estate to his mistress ct probably wouldn t enforce b c her intent was to distribute to his family not his mistress V Abatement ademption Lapse - A Abatement What is it a Abatement rules determine the order of priority among various devisees when the value of the estate is insufficient to satisfy all of the devises in the will b Types of devises i Specific devise A gift by will or property which is particularly designated and which is to be satisfied only by the receipt of the particular property a Last to abate ii General devise May be satisfied out of the general assets of the T s estate instead of from any specific fund thing or things a Can be either money or personal property b General devises abate before specific devise iii Residual devise Not a specific not a general the rest of the prop catch-all any good drafter should include one a Is first to abate but this doesn t really make that much sense anymore b c people likely to give residuary in estate to someone close to them b Historical explanation wealth held in personal prop so made sense to have residuary go b c it mostly consisted of furniture etc c Abates first iv Demonstrative devise A devise of a particular amt of money to be drawn from a specified fund a Treated as a specific devise up to the value of the item to be sold to satisfy and a general devise for the balance Cases and Problems a In re Estate of Potter i Mom left house to daughter and equivalent amt to son in cash but at time of her death not enough cash to pay him how much house was worth ii Trial court wanted to sell house and treat kids equally appellate ct said that have to keep specific legacy a Specific legacy house to daughter stays b General legacy to son so gets rest of estate but not equal amt to specific devise c Residuary gets nothing iii Statute on order of abatement is going to frustrate intent of T if have a decline in fortune a Could expressly change order of abatement so statute is like UCC b Include language requiring equal gifts and if possible to give D house otherwise sell and give equal inheritances b UPC - Distribution Order in Which Assets Appropriated Abatement a Except as provided in subsection b and except as provided in connection with the share of the surviving spouse who elects to take an elective share shares of distributes abate without any preference or priority as between real and personal property in the following order property not disposed of by the will residuary devises general devises specific devises For purposes of abatement a general devise charged on any specific property or fund is a specific devise to the extent of the value of the property on which it is charged and upon the failure or insufficiency of the property on which it is charged a general devise to the extent of the failure or insufficiency Abatement within each classification is in proportion to the amounts of the property each of the beneficiaries would have received if full distribution of the property had been made in accordance with the terms of the will b If the will expresses an order of abatement or if the testamentary plan or the express or implied purpose of the devise would be defeated by the order of abatement stated in subsection a the shares of the distributes abate as may be found necessary to give effect to the intention of the testator This is trying to give cts an escape valve to effectuate intent if contestant argues that order of abatement frustrates intent of T c If the subject of a preferred devise is sold or used incident to administration abatement shall be achieved by appropriate adjustments in or contribution from other interests in the remaining assets c Problems i Problem pg a I leave the house at Sunset Lane to my daughter Helen specific devise b I leave to my son Edwin in cash an amount equivalent to the value of my house at Sunset Lane general devise c I leave the remainder of my estate to my beloved daughter Gertrude residuary devise ii Problem p a I devise my speedboat to my brother Bob specific b I devise K each to my children Cindy Daniel and Edith general c I devise K to my daughter Fran and I direct that my Ford explorer be sold to satisfy this bequest demonstrative d I devise the residue of my estate to my alma mater the University of Pennsylvania residuary e How does ct distribute if at T s death estate consists of boat valued at K Explorer valued at K and K in cash Bob gets K boat Fran gets K from proceeds of Explorer K to divvy up divide up in general devise to C D E of K and K to F Total amt owed is K divide by K Each general devisee takes same amt of hit so each gets of what will says C D E get K and F gets K Abate everyone proportionately d Things to think about when are drafting i Exonerations of liens a Specific devise is entitled to have mtg paid at the expense of residuary estate unless it appears from the will itself or surrounding circumstances that T intended the devisee to take subject to the mtg b However cts have adopted presumption of non-exoneration that specific devisee takes subject to mtg lien unless T s contrary intent appears from the will or surrounding circumstances UPC - Nonexoneration A specific devise passes subject to any mortgage interest existing at the date of death without right of exoneration regardless of a general directive in the will to pay the debts NY has similar provision ii Apportionment of taxes a Common law Taxes come out of residuary estate b Some state leg redraft in Depression so that each beneficiary has to pay their proportionate share of tax liability UPC - Except as provided in subsection i and unless the will otherwise provides the tax shall be apportioned among all persons interested in the estate The apportionment is to be made in the proportion that the value of the interest of each person interested in the estate bears to the total value of the interest of all persons interested in the estate The values used in determining the tax are to be used for that purpose If the decedent s will directs a method of apportionment of tax different from the method described in this Code the method described in the will controls Every state does it different need to law of state Lots of wills have direction against apportionment reinstating common law rule c Base for estate tax includes lifetime transfers d State inheritance taxes are not assessed on size of estate but on size of devise received by each beneficiary unless will directs otherwise B Ademption In general a Doctrine of ademption provides that the specific devisee is entitled to nothing if the specifically devised property is not in T s estate at T s death i Specific devise has been adeemed by T s disposal of the specifically devised prop ii Theory underlying is that by making specific devise T expressed a desire that devisee has particular property not the value of that property b UPC - Nonademption of Specific Devises Unpaid Proceeds of Sale Condemnation or Insurance Sale by Conservator or Agent p a A specific devisee has a right to the specifically devised property in the testator s estate at death and any balance of the purchase price together with any security agreement owning from a purchaser to the testator at death by reason or sale of the property any amount of a condemnation award for the taking of the property unpaid at death any proceeds unpaid at death on fire or casualty insurance on or other recovery for injury to the property property owned by the testator at death and acquired as a result of foreclosure or obtained in lieu of foreclosure of the security interest for a specifically devised obligation real or tangible personal property owned by the testator at death which the testator acquired as a replacement for specifically devised real or tangible personal property and unless the facts and circumstances indicate that ademption of the devise was intended by the testator or ademption of the devise is consistent with the testator s manifested plan of distribution the value of the specifically devised property to the extent the specifically devised property is not in the testator s estate at death and its value or its replacement is not covered by paragraphs through Adopts intent theory of ademption and creates a presumption against ademption unless the facts show that ademption was intended by testator or consistent with testator s plan of distribution a broad and trying to get at involuntary acts by T that might have resultd in ademption b If specifically devised property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal or if a condemnation award insurance proceeds or recovery for injury to the property are paid to a conservator or to an agent acting within the authority of a durable power of attorney for an incapacitated principal the specific devisee has the right to a general pecuniary devise equal to the net sale price the amount of the unpaid loan the condemnation award the insurance proceeds or the recovery c The right of a specific devisee under subsection b is reduced by any right the devisee has under subsection a d For purposes of the references in subsection b to a conservator subsection b does not apply if after the sale mortgage condemnation casualty or recovery it was adjudicated that the testator s incapacity ceased and the testator survived the adjudication by one year e For the purposes of the reference in subsection b to an agent acting within the authority of a durable power of attorney for an incapacitated principal i incapacitated principal means a principal who is an incapacitated person ii no adjudication of incapacity before death is necessary and iii the acts of an agent within the authority of a durable power of attorney are presumed to be for an incapacitated principal c Securities i UPC - Increase in Securities Accessions a If a testator executes a will that devises securities and the testator then owned securities that meet the description in the will the devise includes additional securities owned by the testator at death to the extent the additional securities were acquired by the testator after the will was executed as a result of the testator s ownership of the described securities and are securities of any of the following types securities of the same organization acquired by reason of action initiated by the organization or any successor related or acquiring organization excluding any acquired by exercise of purchase options securities of another organization acquired as a result of a merger consolidation reorganization or other distribution by the organization of any successor related or acquiring organization or securities of the same organization acquired as a result of a plan or reinvestment b Distributions in cash before death with respect to a described security are not part of the devise ii Problem p T s will devises shares of Hi-Flier Corp stock to her sister Ann To what is Ann entitled if two years before T s death a Hi-Flier Corp declared a stock dividend entitling shareholders to one share for each share they previously held Ann gets b c - a securities of the same org b Tip-Top corp acquired Hi-Flier issuing one share of Tip-Top Corp stock for each two shares of Hi-Flier stock Ann gets b c - a securities or another corp as a result of acquisition c Hi-Flier declared a divided of share and offered each SH the opportunity to take on-tenth of a share of stock in lieu of the dividend T took the stock If take cash then not part of specific devise If take stock than it falls under - a d Ademption by satisfaction i - Ademption by Satisfaction a Property a T gave in his or her lifetime to a person is treated as a satisfaction of a devise in whole or in part only if i the will provides for deduction of the gift ii the T declared in a contemporaneous writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise or iii the devisee acknowledged in writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise b For purposes of partial satisfaction property given during lifetime is valued as of the time the devisee came into possession or enjoyment of the property or at the T s death whichever occurs first c If the devisee fails to survive the T the gift is treated as a full or partial satisfaction of the devise as appropriate in applying Sections - an - unless the T s contemporaneous writing provides otherwise ii If devise is specific and prop is given during life time of T then devise is adeemed by satisfaction ii If general gift not going to be adeemed against testamentary devise unless T says it should be Cases and problems a McGee v McGee i Facts T left friend a general bequest of K and then left a specific devise to grandchildren of all the money in the bank after execution son withdraws K from bank and uses it to purchase flower bonds ii Grandkids are arguing substance over form Identity theory argument a Problem is once you open the door to intent you are going to have all sorts of contradictory evidence iii This was atty error if making residuary devise then need to put in order of abatement in order so the residuary abates last b Problem p i Foreclosure of house devised to niece a UPC says that devisee gets it - a condemnation award b No UPC gift is adeemed specifically devised prop is not in the estate at death C Lapse Intro a Lapse What happens if there is a time gap b tw execution of will and death of testator when one of the beneficiaries dies b Common law i General specific devise going to lapse and go through residuary clause ii If residual legatee dies go through intestacy a If one of residual legatees dies then their share of estate goes through intestacy c Anti-lapse statutes i Theory is that when a T leaves a property to a sufficiently close relative T would want the issue of that devisee to take the prop if the devisee predeceases the T a States vary in who the anti-lapse statutes protect b NY - Disposition to issue or brothers or sisters of T not to lapse application to class dispositions a Unless the will whenever executed provides otherwise Instruments executed on or after September Whenever a testamentary disposition is made to the issue or to a brother or sister of the T and such beneficiary dies during the lifetime of T leaving issue surviving such T such disposition does not lapse but vests in such surviving issue by representation The provision of subparagraph applies to a disposition made to issue brothers or sisters as a class as if the disposition were made to the beneficiaries by their individual names except that no benefit shall be conferred hereunder upon the surviving issue of an ancestor who dies before the execution of the will in which the disposition of the class was made c NH The heirs in the descending line of a legatee or devisee deceased before the T shall take the estate bequeathed or devised in the same manner of the legatee or devisee would have taken it if he had survived d VA Protects descendants of grandparents cousins If takers are of unequal degree of kinship those of more remote degree take by representation ii These are default rules that T s can draft around iii If of residual legatees dies then their share goes to living residual legatee d Class gifts i Common law a If a member of the class predeceased T that member s devise lapsed and the remaining members of the class divided the lapsed devise b So doesn t protect issue of class member who predeceased T ii Anti-lapse stats typically protect class gifts the same as gifts to indiv iii Drafters should use multi-generational language include devise to issue of bros and sis unless the T wants to exclude issue of deceased class members from taking e Void devises i Void devise devise to a person who had died before the time of the will execution ii Most anti-lapse statutes protect both lapsed and void devises Sometimes it makes a difference in class gifts NY doesn t protect surviving issue of void devisee Cases and Problems a Problem p T s will says K to sister S K to husband s brother B K to Uncle Jim to brother Carl remainder to my sister s daughter N and husband s daughter D in equal shares At T s death estate is valued at T s husband predeceases and T dies childless Using NY statute what happens if S B J predecease T and i S was survived by her daughter N and her husband T her will left all of her property to T B was survived by his daughter E to whom he left his entire estate J was survived by his son K to whom he left his entire estate a NY Carl gets his N gets S s share b c she is issue of T s sister B s gift B is T s brother-in-law he dies and is survived by his daughter E niece-in-law of T lapses into residuary b c he is not issue of T s brother or sister Anti-lapse doesn t protect in-laws J s gift J is T s uncle he died survived by his son K T s cousin Lapse statute doesn t protect cousins K goes to D and goes to N more goes to N b c she gets her mom s T s sister share b NH Nothing lapses NH has made leg judgment that every gift where devisee predecease T goes to devisee s heirs rare stat c VA Only difference with NY is that K s gift doesn t lapse protects descendants of grandparents This is representative of maj of juris ii Same facts but N also predeceases in NY a Survived be her husband K gift to S lapses b c S s issue N died with no issue this is old insistence on blood relatives All of residuary goes to D N s doesn t go through intestacy or to her estate b Survived by her son V V takes b c is surviving issue of S Statute protects grand-nieces nephews V DOES NOT take N s share under residuary clause b c statute protects surviving issue of T s brother and sisters NOT surviving issue of nieces and nephews so D gets all of the residuary b Class gift problem p i T s will leaves K to my nieces and the remainder of the estate to the Red Cross T s sibling had children A B C D C predeceased T leaving issue E D predeceases with no issue leaving her estate to husband F a NY Protects issue of brothers and sisters not issue of nieces and nephews so C D gifts lapse b VA I think gift to D lapses Gift to C goes to E but by representation but he is only person in his class so he takes all of C s gift ii If instead of class gift T makes gifts by name to A B C D a NY b VA E is going to get C s gift D s gift going to lapse Big difference b tw using class gifts and indiv gifts is that if gift is described as class gift and there is no subsequent taker gift is going to be shared by the surviving members of the class If gift is made as indiv gift and is general bequest and lapses goes to residuary clause c Estate of Rehwinkel i Washington anti-lapse statute that says that any devise to a relative doesn t lapse T makes devise to niece who predeceases and her issue Fossum is arguing he should take ii Ct decides that because T used survivorship language meant to preclude application of anti-lapse statute iii As a drafter a Need to think through what happens if any of devisee s predecease T b If want devisee s issue to take make provision that says if any of them predecease their issue take d Estate of Ulrikson i T makes specific devise of K to nieces nephews makes general devise of rest of estate to siblings but doesn t make provision for what happens if siblings all predecease ii Nieces nephews of predeceased siblings arguing that since well doesn t make provision go to anti-lapse statute iii Other nieces nephews arguing that she intended gift to class and if all that class dead should go in equal shares to all nieces nephews iv Ct says her intent wasn t clear go to anti-lapse VI Mistake Revocation DRR Joint Wills - A Correcting Mistakes Intro a Mistake when will contains a mistake that does not reflect T s intent that neither T or the lawyer caught b In order to prove mistake need to have i Mistake on the face of the will AND a Judicial economy concern don t want to open floodgates b If could argue intent based solely on facts i e T thought husband was faithful and he wasn t so giving him her estate is frustrating intent then everyone would contest will ii What would have been intent of T but for the mistake a Cts not sure that they can get at intent better then T so if have what she wanted but for mistake than don t have this concern Cases Problems a Gifford v Dyer i Mistake argument very hard to make and they rarely suceed b Knupp v District of Columbia i Scrivener error ii Can only introduce extrinsic evidence i e his testimony of error when a ambiguity in language mistake of face of will b Extrinsic evidence can only be used to interpret something actually on face of will iii Modern trend to allow scrivener to testify and effectuate intent of T a Not worried about floodgates b c not easy to get lawyer to testify to mistake he made unless he really made it b Can come close to proving intent B Revocation Revocation by Physical Act a UPC - Revocation by writing or by act a A will or any part thereof is revoked by executing a subsequent will that revokes the previous will or part expressly or by inconsistency or by performing a revocatory act on the will if the testator performed the act with the intent and for the purpose of revoking the will or part or if another individual performed the act in the testator s conscious presence and by the testator s direction For purposes of this paragraph revocatory act on the will includes burning tearing canceling obliterating or destroying the will or any part of it A burning tearing or canceling is a revocatory act on the will whether or not the burn tear or cancellation touched any of the words on the will b If a subsequent will does not expressly revoke a previous will the execution of the subsequent will wholly revokes the previous will by inconsistency if the testator intended the subsequent will to replace rather than supplement the previous will c The testator is presumed to have intended a subsequent will to replace rather than supplement a previous will if the subsequent will makes a complete disposition of the testator s estate If this presumption arises and is not rebutted by clear and convincing evidence the previous will is revoked only the subsequent will is operative on the testator s death d The testator is presumed to have intended a subsequent will to supplement rather than replace a previous will if the subsequent will does not make a complete disposition of the testator s estate If this presumption arises and is not rebutted buy clear and convincing evidence the subsequent will revokes the previous will only to the extent the subsequent will is inconsistent with the previous will each will is fully operative on the testator s death to the extent they are not inconsistent b First Interstate Bank of Oregon v Henson-Hammer i Ct admitted copy of T s will daughter argues that evid not strong enough to overcome presumption that T destroyed his will with the intention of revoking it ii Presumption of revocation When a will that was last known to be in the custody of the T or in a location to which he had ready access to and cannot be found after his death it is presumed to have been destroyed with the intention of revoking it a Strength of presumption depends on if others had access to will AND b degree of control that decedent possessed over the repository iii Ct finds that presumption rebutted b c T reiterated intent to go along with estate plan and daughter had access to safe-deposit box where T kept will iv Proof of lost wills a If presumption of revocation proponent still has to prove the contents of the missing but not revoked will b NY statute p Proof of lost and destroyed will Lost destroyed will can be admitted to probate if overcome presumption of revocation AND prove execution of will through By copy Or two witnesses always hard to prove this way so make copy v Physical acts of revocation done to a copy of a will are irrelevant vi Loss or destruction of duplicate originals vii Duplicate wills a Duplicate originals When T signs original wills with the exact same terms b If lost duplicate original was the only one in the T s custody cts generally indulge in the presumption that T destroyed the duplicate original and thereby revoked the will viii Proxy revocation by physical act a T must intend a revocation and act must be done by the proxy in the T s presence and by her direction b UPC - authorizes if another person performs act in T s conscience presence Same idea as execution formality Need more than just a letter c Partial revocation by physical at i T crosses out a provision of the will ii Most states allow partial revocation by physical act a UPC - a b Revocation goes to residual clause c In some states can t revoke partially these juris would disregard attempt at revocation d If partial revocation changes the construction of the remainder of a clause or increases a provision made for someone other than the residuary devisee cts will not validate the revocation on the theory that the change constitutes a testamentary transfer that requires formalities iii What if T crosses out section and then writes something in above it a If in a state that recognizes holographic wills could argue devise on that b Counterargument is that have to be able to read entire provision in T s handwriting Revocation by Subsequent Written Instrument a For subsequent will to revoke prior will need i Express revocation clause i e I hereby revoke all wills and codicils at any time heretofore made by me ii Implied revocation if inconsistency between will and will b Wolfe s will i wills both executed with formalities giving house to son and one leaving personal prop to daughter ii Real and personal prop are terms of art so will didn t revoke b c they are both giving away different things iii Ct says effects can mean things and should be able to have trial to determine which one meant here a Everything T owns b Only personal prop Revocation by Operation of Law a UPC - Revocation of Probate and Nonprobate Transfers by Divorce No revocation by other changes of circumstances a Definitions Disposition or appointment of property includes a transfer of an item of property or any other benefit to a beneficiary designated in a governing instrument Divorce or annulment means any divorce or annulment A decree of separation that does not terminate the status of husband and wife is not a divorce for purposes of this section Divorced individual includes an individual whose marriage has been annulled Governing instrument means a governing instrument executed by the divorced individual before the divorce or annulment of his or her marriage to his or her former spouse Relative of the divorced individual s former spouse means an individual who is related to the divorced individual s former spouse by blood adoption or affinity and who after the divorce or annulment is not related to the divorced individual by blood adoption or affinity b Revocation upon Divorce Except as provided by the express terms of a governing instrument a court order or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage divorce or annulment the divorce or annulment of a marriage revokes any revocable i disposition of property made by a divorced individual to his or her former spouse in a governing instrument and any disposition in a governing instrument to a relative of the divorced individual s former spouse iii nomination in a governing instrument nominating a divorced individual s former spouse or a relative of the divorced individual s former spouse to serve in any fiduciary or representative capacity including a personal representative executor trustee conservator agent or guardian d Effect of revocation Provision of a governing instrument that are not revoked by this section are given effect as if the former spouse and relatives of the former spouse disclaimed the revoked provisions or in the case of a revoked nomination in a fiduciary or representative capacity as if the former spouse and relatives of the former spouse died immediately before the divorce or annulment e Revival if Divorce Nullified Provisions revoked solely by this section are revived by the divorced individual s remarriage to the former spouse or by a nullification of the divorce or annulment f No revocation for other change of circumstances No change of circumstances other than as described in this section and in - effects a revocation b Pre- UPC - If after executing a will the testator is divorced or his marriage annulled the divorce or annulment revokes any disposition or appointment of property made by the will to the former spouse any provision conferring a general or special power of appointment on the former spouse and any nomination of the former spouse as executor trustee conservator or guardian unless the will expressly provides otherwise Property prevented from passing to a former spouse because of revocation by divorce or annulment passes as if the former spouse failed to survive the decedent and other provisions conferring some power or office on the formers spouse are interpreted as if the spouse failed to survive the decedent If provisions are revoked solely by this section they are revived by testator s remarriage to the former spouse For purposes of this section divorce or annulment means any divorce or annulment which would exclude the spouse as a surviving spouse within the meaning of - b A decree of separation which does not terminate the status of husband and wife is not a divorce for purposes of this section No change of circumstances other than as described in this section revokes a will c Problem p C and F were married in middle age It was second marriage for both The only children they had wre from prior marriages While married each executed a will leaving all probate property to the other if living and if not living half to one s children and half to the other s children Each nominated the other as executor Thereafter they divorced Charlie died without making a new will survived by Francine her children and his children Who gets his prop i Pre- UPC a to his kids to hers b Could have estate with automatic revocation of gift to a spouse but not to their ex-spouses kids ii Current UPC a His kids get property b Cuts out anything to relative of divorced spouse c This provision very broad includes wills trusts annuities insurance Drafters of ERISA forgot to put in provision of what happened if divorce but no change in beneficiary SC ruled that fed statute pre-empted state laws UPC so no automatic revocation if have ERISA have to change beneficiary if divorce d Pre-marital wills i Will leaving all prop to parents then gets married but never executes new will ii solutions a Marriage revokes the will entirely goes through intestacy b Spouse would be a pretermitted or omitted spouse and will wouldn t be revoked but he would get his omitted spouse s share and then rest of estate would pass through will C Revival and Dependent Relative Revocations a Revocation of T s last will doesn t generally reinstate a prior will i Reinstatement of the prior will would require testamentary formalities and act of revocation usually not accompanied by these formalities ii Common law Common law presumption that wills have no legal effect unless executed and can t revive st one without re-executing it under formalities b UPC - Revival of Revoked Will a If a subsequent will that wholly revoked a previous will is thereafter revoked by a revocatory act under - a the previous will remains revoked unless it is revived The previous will is revived if it is evident from the circumstances of the revocation of the subsequent will or from the T s contemporary or subsequent declarations that the T intended the previous will to take effect as executed b If a subsequent will that partly revoked a previous will is thereafter revoked by a revocatory act under - a a revoked part of the previous will is revived unless it is evident from the testator s contemporary or subsequent declarations that the T did not intend the revoked part to take effect as executed c If a subsequent will that revoked a previous will in whole or in part is thereafter revoked by another later will the previous will remains revoked in whole or in part unless it or its revoked part is revived The previous will or its revoked part is revived to the extent it appears from the terms of the later will that the testator intended the previous will to take effect c Problem p T validly executed will number which left Blackacre to Nephew and T s residuary estate to Yale i T executed will which left Blackacre to Niece and T s residuary estate to Yale T burned will a Common law Burning doesn t revive will Estate passes through intestacy b UPC - Who has standing Niece nephew yes b c could be intestate heir and is mentioned in will or Yale mentioned in will Nieces argument Neither will valid and estate should pass through intestacy Nephews argument If want W to be valid has to convince ct that revocation of W revived W UPC - a Have a presumption against revival but if there is evid i e T s statement that is reviving W or letters to Yale saying intending to give then can rebut ii T executed a codicil to W The codicil provided I leave Blackacre to Niece T later burned the codicil a If argue part revocation puts you in - b Reversal of presumption now have a presumption of revival for the part that was revoked b If T revokes the codicil leaves the will without the revoked codicil intact d Dependent relative revocation i Premise underlying DRR is that T s revocation of his will was based on mistake often a mistake about the revocation and since T was laboring under burden of a mistake when he revoked his will courts ignore the revocation and treat the revoked will as if it were still in effect OR ii T s revocation was conditioned a set of facts that did not occur a Carter v First United Methodist Church of Albany T executed will in and in but will didn t comport with formalities so couldn t probate Ct used DRR in order to probate will b c rather have will probated according to some will rather than through intestacy DRR argument was that revocation of will was dependent on will being properly executed b T gives K bequest to L what would happen if T crosses out K and writes in K and initials it In state that recognizes partial revocation by physical act L going to get b c revocation doesn t meet formalities DRR argument is that the partial revocation was premised on a mistake of law that T could cross out provision and add something new iii Suppose in T executes will W leaving entire estate to T s daughter in T rips up W and executes W and the provisions of W are of estate to D and to S T dies and in a drawer in T s home find W and W both torn in and in a safe deposit box find W written in but not witnessed and giving all of estate to D a Son s argument he wants intestacy W wasn t witnessed so not valid Presumption that W and W torn by revocatory act committed by T no evid to overcome presumption so no will b D s argument she wants W but if not than W or W better than intestacy for her If W in T s handwriting and in state that recognizes holographic wills could try to get it in under that Argue substantial compliance under UPC - ct could use dispensing power CaC evidence that T intended W to function as her will b c put in safe deposit box and pattern of distribution even when T gave S a share of estate didn t give as much as D so wouldn t be effectuating T s intent to give D and S equal shares will No DRR argument Could argue will was revived under - a there is a presumption against revival but it can be rebutted by subsequent declarations that T intended will to be revived language suggest that can only revive W if revocatory act was W no express revocation provision will DRR argument Give effect to will b c T conditioned revocation of will on belief that will sufficient D Joint Wills and Limitations on power to Revoke UPC - Contracts Concerning Succession A contract to make a will or devise or not to revoke a will or devise or to die intestate may be established only by i provisions of a will stating material provisions of the K ii an express reference I a will to a K and extrinsic evidence proving the terms of the K or iii a writing signed by the decedent evidencing the K The execution of a joint will or mutual wills does not create a presumption of a K not to revoke the will or wills Estate of Wiggins a When couples execute joint wills courts often find K obligations even when the language imposing binding obligations is less than clear Illustrative will on p look at it and see how it could be improved VII Intro to Trusts A Trusts - Structure a Trustee holder of legal title to the trust prop i Trustee not beneficiary has right and obligation to manage trust prop in beneficiary s interest ii Trustee to distribute property to beneficiaries iii Trustee owes fiduciary duties to the beneficiary a Big ones are duty of care and duty of loyalty b As fiduciary trustee must act in interests of beneficiaries not in self-interest iv Trust will never fail for trustee a Ct will just appoint one well drafted trust should name contingent trustees if original trustee fails to qualify b Can fail b c Trust instrument doesn t name anyone Trustee named might fail to qualify refusal death incompetence etc Trustee named lacks legal capacity b Beneficiary holder of equitable beneficial title i There equitable interests can be divided up over time ii Historically needed beneficiary in order to enforce fid duties but this condition is being relaxed c Settlor trustor person who creates trust d Types of trusts i Inter vivos trust Settlor makes trust in their life they can be trustee is more like a K a Revocable will substitute b Irrrevocable trust is completed gift ii Testamentary trust trust that is created in will upon death ct actually creates by overseeing transfer of funds to the trustee Creation of Trusts a Trusts minimize inefficiencies i Esp if multi-beneficiaries who want to use trust for same thing ii Can protect beneficiaries from their own spending iii Estate planning tool maintain control and avoid taxes iv Better than creating a life estate with remainderman b c all legal interest is vested in person can sell lease maintain prop life tenant has no incentive to benefit remainderman b Trust law only applies if don t explicitly provide for something else in trust c Merger doctrine i Trust settlor may name the sole trustee one of the beneficiaries of the trust and may name the sole beneficiary one of the trustees more than one person can be trustee BUT settlor CANNOT name same person as sole trustee and sole beneficiary UTC a ii Merger doctrine legal and equitable title merge and the trust fails a This can happen by accident i e if wife names husband as trustee and beneficiary and daughter as beneficiary and daughter dies before husband b When interests merger holds property free of any trust or any trust duties c Can make beneficiary a contingent remainderman and trust still be valid d Can name someone in comatose or vegetative state as beneficiary but have to have guardian appointed d Passive trust trust that imposes no active duties on the trustee invalid i Beneficiary might want to challenge trust as passive simply to avoid paying commissions to named trustee or own prop outright ii Ben might want to challenge as passive to avoid having trust invalidated on some other ground indefiniteness Perp e Beneficiary requirement i Moss v Axford a Construing a section of a will that gives money to lawyer to distribute to person who took care of decedent b Dec s heirs claim that created an express trust w out any ascertainable heir clause void and would go to residuary clause or to intestate succession if no residuary c Ct says not nec to designate beneficiary by name or description enough if T uses lang which is sufficiently clear to identify beneficiary then ct came make ID and give effect to T s intent Usually can t appoint an heir as trustee with discretion b c becomes in their interest that trust should fail If beneficiary is class friends has to be reasonable bounds Friends too far most cts say too vague prob is then goes to heirs which frustrates T s intent If make beneficiary family cts will enforce pref to give to fam d Trustee has to exercise discretion reasonably still has fid duties who has standing to enforce ii Trusts for noncharitable purposes a Restatement p b UTC Noncharitable Trust Without Ascertainable Beneficiary Except as otherwise provided in Section or by another statute the following rules apply A trust may be created for non-charitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee The trust may not be enforced for more than years A trust authorized by this section may be enforced by a person appointed in the terms of the trust or if no person is so appointed by a person appointed by the court Property of a trust authorized by this section may be applied only to its intended use except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use Except as otherwise provided in the terms of the trust property not required for the intended use must be distributed to the settlor if then living otherwise to the settlor s successors in interest c UTS and Restatement are trying to make it easier to validate a trust which creates an indefinite class as a beneficiary but it hasn t been widely adopted Scope of the trustee s authority Power not a duty in Restatement so discretionary not mandatory UPC question whether it is imperative duty or discretionary power Can t pocket the money Who has standing to sue If discretionary power heirs If duty heirs don t have power to sue someone in class does and if too vague than ct can appoint someone to enforce d UPC - UTC Validates trusts which name pets as beneficiary B Trust Formalities - Goodman v Goodman a Facts Son gives bar to mom in trust to give to kids as beneficiaries when they are mature enough but does all this orally Ct validates on oral statements of interested witnesses i Constructive trust resulting trust remedial devise used by cts to achieve results which do not easily fit witin other doctrinal frameworks a Judicial remedy used to correct for fraud or unjust enrichment ii Cts interpret statute of limitations to beneficiaries interest basically starts running when they have notice of trustee s breach here when she decided to keep from bar s sale for herself b Problem is that are creating precedent that validates trust w out any testamentary formalities i Is ct saying that we should fix the way people are allowed to make trusts require trust formalities OR are they saying will and trust formalities are relics of the past a Statute of frauds doesn t apply to trusts devising personal prop no writing requirement b Old English rule is that rule does apply to trust devising real prop Argument for formalities a If not formalities opens the door for non-beneficiaries of will to argue creation of trust where there is no express language of creation b UTC Sanctions oral trusts but requires that the trust s terms be proved by clear and convincing standard higher than most states require c Some states do require writing and other formalities for trusts NY and FL p - i NY statute requires a Signature of settlor AND at least one trustee AND b Either acknowledgement by notary OR signatures of witnesses ii Beginning to look like will formalities d Declarations of trust v transfers in trust i Inter vivos trust trustee can create by declaring that she holds the trust prop as trustee for named beneficiaries OR transfer trust to someone else as trustee a When settlor declares herself as trustee no delivery necessary as long as trust declaration clearly identifies trust assets b Most cts uphold declaration by settlor as trustee even if no document ii Trust document that creates trust and names someone other than settlor as trustee deed of trust a When transfer prop in trust to someone else as trustee must DELIVER trust prop Delivery requirements vary but are designed to insure that settlor truly intended to make the transfer NY EPTL - No trust is created unless and until settlor transfers title to real prop to trustee and re-registers stock in trustees name RTT Delivery of trust document would satisfy Delivery requirement can be convenient way to invalidate trust e Resulting trust when a settlor intends to create a trust but the trust fails for some reason i e if class of beneficiaries to indefinite i Ct says that trustee holds trust prop for benefit of settlor or settlor s successors-in-interest a If express trust fails trustee must transfer prop back to settlor or their heirs b Imp principally as salvage doctrines ii Purchase money resulting trust If someone bought prop for someone else at common law the person who bought prop was said to hold in trust most juris abolish VIII Using Trusts to Avoid Probate - A Avoiding Probate Without the Use of Trusts