Wills Trusts + Estates

Testamentary Freedom constraints

Elective share

Public Policy

RAP

How to implement testator’s intent

Ask lots of questions

Think of contingencies

Draft unambiguously

Dead hand control

Decedent may condition a beneficiary’s gift on the beneficiary behaving in a certain manner, as long as it doesn’t violate public policy

Ex. of violating public policy (dead hand control)

Restraint on marriage

requiring divorce

destruction of property

Non probate assets definition

Assets that don’t pass through the will

Non probate assets examples

Joint bank account

Joint tenancy with right of survivorship

Life insurance

Pension

Inter Vivos Trust

Probate asset definition

Subject to decedent’s will or intestacy

Hodel + Yupee main conclusions

Legislation cannot completely eliminate right to make a will

But may limit number of devisees

How to waive elective share

Prenup/Postnup

Requirements of waiving elective share

Writing

Notarization

Disclosure of assets

*Consideration is not required

Community Property definition

Property acquired during the marriage

*Surviving spouse gets half

Exceptions to community property

Gift

Inheritance

Property before marriage

Non community property (NY approach)

Surviving spouse can elect to take the greater of

$50,000 or 1/3 of the deceased spouses estate

Non community property (UPC approach)

Entitled to half of the marital property

How to determine marital property (UPC approach)

Sliding scale

Married less than 1 year = 3% (really 1.5%)

Married more than 15 years = 100% (really 50%)

Augmented Estate definition

Total value of decedent’s probate assets and trust assets

*Used solely for purposes of calculating the elective share

Irving Trust v Day Rule

Elective share doesn’t violate due process

Hodel v. Irving Rule

Taking away the right to pass land in a will is a taking under the 5th amendment

Revocable Trust requirement

Assets must be re-titled in the name of the trust/trustee

Testamentary Trust definition

Trust created in a will (created after death)

Inter Vivos Trust definition

Created via inter vivos transfer (created before death)

*Settlor can name themselves as trustee

Requirements for an inter vivos trust

Delivery (funding the trust)

Donative intent (settlor intends to create trust)

Acceptance

Where is inter vivos trust revocable

UTC

Where is inter vivos trust irrevocable

NY EPTL

*If you want revocable must specify in the trust

Pour over provision purpose

provides that overlooked/new assets will be included in trust/given to a beneficiary

Pour over trust example

Rest of my estate goes to x

Probate court determines validity of will and issues

Probate decree

Letters testamentary to executor - documenting their authority

Functions of probate court

Ensure beneficiaries receive what is intended

Enables bank to pay without fear of being sued by another claiming to be a beneficiary

Title for real estate is cleared

Protection for creditors

Where to probate

Where decedent is domiciled

Solemn form probate definition

Requires notice to beneficiary to and to intestate takers

Common form probate definition

No notice is required for probate

UPC: Solemn or common

Gives executor the choice

NY: Solemn or common

Solemn

Florida: Solemn or common

Common

Circumstantial evidence in construction proceedings: Traditional rule

Upon ambiguity in will circumstantial evidence may be introduced, but not direct statements of decedent’s intent or attorney’s notes

Circumstantial evidence in construction proceedings: Emerging rule

Courts are more flexible allowing direct statements, will determine credibility of the statement

Reformation traditional view

Not permissible given the testator’s death

Reformation Emerging view

Permissible if clear and convincing evidence

Possible plaintiff’s in malpractice case

Estate

Beneficiary

Estate as plaintiff in malpractice case

Executor steps into decedents shoes

No privity problem, only damages problem

Beneficiary as plaintiff in malpractice case

Privity problem

NY/Gen rule: Beneficiary can’t sue because no attorney client relationship

New/Simpson view: Beneficiary can sue

NY traditional privity approach

no claim for hard or easy cases

Simpson privity approach

Privity not required for hard or easy cases

NJ privity approach

Privity not required but need clear and convincing evidence for hard cases

Idaho privity approach

No recovery for hard cases but allowed for easy

Example of Easy Privity case

Will was clear and correct but only 1 witness

Example of Hard Privity case

Plaintiff claims attorney negligently omitted a beneficiary

Levels of conflict of interest

Limited

Acute

Intense

Limited conflict of interest definition

Representing multiple clients

*May not result in conflict but can easily shift to acute conflict

Acute conflict of interest definition

Substantial risk the client will be materially and adversely affected by the lawyers representation of another client

*Can be waived with informed consent

Intense conflict of interest definition

Not reasonably likely the lawyer will be able to provide adequate representation to 1 or more clients

*Can’t be waived

Drafting wills for 2 spouses general rule

Doesn’t require informed consent

*Gans says to get it anyway

2 categories of spouse confidentiality

Joint rep- No confidentiality

Separate Rep- Maintains confidentiality

A v. B. Confidentiality rule

NJ Requires lawyers to discuss confidentiality issues between spouses at outset

Intestacy definition

Like a default. Property of the estate will be distributed to relatives pursuant to statute

When does intestacy kick in

Decedent dies without a will or will is invalid

When does intestacy apply

When there is not a valid and full disposition in the will

Ex: Not fully witnessed or incomplete disposition

Example of an incomplete disposition of a will

Properly executed but fails to dispose of some of the probate estate (this is why you want a residuary clause)

Example of residuary clause

I give, devise, and bequeath all the rest, residual and remainder of my property to X

2 conditions to be intestate taker

1. Survive the decedent

2. generally must be a relative of deccedent

Standing for intestacy

Need to be an intestate taker, person in prior will or new will, that cuts back in order to challenge probate

Choice of law for intestacy

Personal property - Statute of state of domicile applies

Real property - State where property is located

Laughing Heirs definition

Distant related heirs that will receive the estate because of failure to reach an issue

*important for Solemn approach

Intestacy approaches

1. Per Capita

2. Classic Per Stirpes

3. Modern Per Stirpes

4. Representation

Per Capita intestacy approach definition

Each person gets an equal share

Classic Per Stirpes intestacy approach

Permits discrimination and starts counting at the 1st generation (UPC)

Modern Per Stirpes definition

No discrimination and starts counting at the 1st alive generation (NY)

Representation intestacy takers definition

Each generation gets an equal share

Illegitimate Children in NY

Non marital children can take so long as there is clear and convincing evidence to establish paternity

How to establish paternity in NY for illegitimate children

• DNA test during fathers lifetime

• Court decree

• Father acknowledges it

• Affiliation decree

Power of appointment definition

Allowing a person to have control of where the trust goes after they die

Example of a limited power of appointment

“upon my son’s death, the remainder shall be distributed to such of my sons descendants as he may select in his will”

Subterfuge

Adoption of a spouse is not recognized or respected (Minary)

• Rejected in Georgia

Equitable adoption

Like common law adoption

Severance and termination of parental rights

UPC and Virginia allow child to take despite termination, but parent can’t take if child dies intestate

Posthumous children - Conceived before but born after

Child is deemed to have survived parent, becomes intestate taker

Posthumous children - Conceived after death

Look to state intestacy statute

Non relatives and intestacy

• generally only relatives may take intestate - not in laws, step parents or step children

• half siblings are full siblings in NY and the UPC

UPC Exception for step children

If decedent only has laughing heirs step children can take

Survivorship under Janus

All you need is a moment

Survivorship under the revised uniform simultaneous death act

Must survive by 120 hours

Survivorship in NY

Must survive by 120 hours and provide clear and convincing evidence

Survivorship under the UPC

If heir is last surviving heir before escheats to state, don’t need to survive by 120 hours

Adoption and severance

When adoption occurs child is an intestate taker and severed from biological family

Adult adoption

Generally accepted and respected but not in some states

Adoption in 3rd party context

• default rule: adopted child included in residuary to descendants

• but if adopted adult: 

  • UPC: not included, unless X acted as parent to adopted adult before they were 18

  • NY: included

Advancement definition

Advance on intestate share

How advancement comes up

Father dies intestate, has 2 kids, during lifetime gave gift to 1 kid and not the other

Advancement under common law

• equal treatment of children

• apply non discrimination principle

• rebuttable presumption that I.V. gift was intended as advancement

Advancement under the UPC and NY

• treated as advancement only if:

  • contemporaneous writing by decedent saying so, or that it should be taken into account when determining distribution under intestacy, OR

  • donee acknowledged it in writing that it’s an advancement

• uncommon and litigation is difficult

How satisfaction comes up

Father dies with will, leaves x to kid in will, during fathers lifetime he gives x to kid

Effect of satisfaction

Gift is satisfied upon Father’s death, kid doesn’t get double of x

*Applies to all property

2 ways to address the strict oversight of property for minors with dead parents

1. Uniform transfers to minors act

2. Trusts

Uniform Transfers to Minors Act

• custodianship (kind of statutory trust)

• less supervision than guardianship

• unlike guardianship in NY, creator can choose between gifting at 18 or 21

Trusts for minors with dead parents

• less supervision than guardianship

• testator decides gifting age, age of termination, and times of distribution

Slayer statute

Beneficiary who murders testator will not receive distribution

*Slayer deemed to predecease testator

Slayer statute mens rea

Intentional and felonious

• For reckless homicide NY requires forfeiture, but not the UPC

Defenses to slayer statute

1. insanity

2. self defense

3. mercy killing (Wisconsin only)

Is a conviction required for slayer statute

In some states but not in NY under the UPC

Disclaimers

Refusal to accept distribution