Wills, Trusts


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Wills, Trusts

  1. 1. Wills Outline Complete I. The Living and the Dead: Whose Money Is It? A. Introduction Shapira v. Union National Bank—Ohio Common Pleas Court, 1974 Issue: Whether a will that requires a son, in order to recover his portion of the estate, to marry a woman with two Jewish parents within 7 years of the testator’s death violates either the federal Constitution or the public policy of the State of Ohio? NO Holding: “[P]ublic policy should not, and does not preclude the fulfillment of Dr. Shapira’s purpose, and that in accordance with the weight of authority in this country, the conditions contained in his will are reasonable restrictions upon marriage, and valid.”-7 Rule: “Basically, the right to receive property by will is a creature of the law, and is not a natural right or one guaranteed or protected by either the Ohio or the United States Constitution.”-4 “[A] testator may legally entirely disinherit his children.”-4 “The great weight of authority in the United States is that gifts conditioned upon the beneficiary’s marrying within a particular religious class or faith are reasonable.”-4 1. Note on Terminology a. “A testator is a person who has written a will. A person who dies with a duly executed will dies testate. A person who dies without a will dies intestate. An intestate decedent’s property passes to that person’s heirs, who are designated by the jurisdiction’s statute on intestate succession.”-7 b. “[W]hen testator’s will disposes of property, the persons designated to take that property are not called heirs, but devisees (or sometimes legatees). A clause directing disposition of property is called a devise, a legacy, or a bequest. Historically, the word ‘devise’ was used to describe a disposition of money, and ‘bequest’ was used to describe a disposition of personal property other than money. Today, the terms are often used interchangeably.”-7 B. Inheritance Rights More Generally 1. The term “escheats” means “passes to.”-9 2. In Hodel v. Irving, “Congress had enacted the ‘Indian Land Consolidation Act,’ which provided that undivided fractional interests in tracts of land within a reservation would escheat if the interest represented two percent or less of the total acreage in the tract and if the interest earned its owner less than $100 in the year before it was due to escheat. [Justice O’Connor, writing for the majority, held] ‘[T]he regulation here amounts to virtually the abrogation of the right to pass on a certain type of property – the small undivided interest – to one’s heirs. . . . Since the escheatable interests are not, as the United States argues, necessarily de minimis, . . . a total abrogation of these rights cannot be upheld. . . . The difference in this case is the fact that both descent and devise are completely abolished.’”-9 3. Mark L. Ascher, Curtailing Inherited Wealth a. “My major premise is that all property owned at death, after payment of debts and administration expenses, should be sold and the proceeds paid to the United States government.”-10 4. Adam J. Hirsch & William Wang, A Qualitative Theory of the Dead Hand a. “The traditional rationales for testamentary freedom are as varied as they are controversial. Perhaps oldest is the notion that testators have a natural right to bequeath.”-12 b. “Another argument for freedom of testation, also premised upon the goal of wealth enhancement, is that such freedom supports, as it were, a market for the provision of social services.”-12
  2. 2. 2 c. “A secondary justification for the right of testation is that it would in practice be difficult to curtail.”-13 d. “A final justification for freedom of testation, formulated with disarming unaffectedness by Professor Simes, is simply that the power to bequeath comports with political preferences . . . .”-13 5. Miscellaneous a. “In every state, the Statute of Wills permits a decedent to write a will disposing of his property at death.”-15 b. “The Shapira case indicates that courts typically give effect to testators’ stated preferences, even when those preferences might be offensive to others.”-16 c. In Riggs v. Palmer, the court held: “It was the intention of the law-makers that the donees in a will should have the property given to them. But it never could have been their intention that a donee who murdered the testator to make the will operative should have any benefit under it. . . . No one shall be permitted to profit by his own fraud, or to take advantage of his own wrong, or to found any claim upon his own iniquity, or to acquire property by his own crime.”-16 Ford v. Ford—Ct. of App. of Md., 1986 Issue: Whether a legatee who intentionally murders the testator while insane may recover property under the will of the victim? YES Holding: “[T]he slayer’s rule is simply not applicable when the killer was not criminally responsible at the time he committed the homicide.”-21 “We hold that the slayer’s rule does not operate to preclude Pearl Rose Ford from inheriting under the will of her victim.”-21 Rule: “We believe that for a homicide to be ‘felonious’ in the context of the slayer’s rule, it must be a felony for which the killer is criminally responsible under Maryland’s criminal insanity test. Therefore, if a killer is ‘insane’ at the time he killed, the killing is not felonious in the contemplation of the slayer’s rule. If the killing is not felonious, even though it may be intentional, the rule does not apply.”-21 C. Slayer Statutes and the Uniform Probate Code 1. “Most states have enacted statutes to deal with the slayer-heir.”-24 2. “Perhaps the most comprehensive slayer statute is the one included in the Uniform Probate Code (“UPC” or “the Code”).”-24 3. “The Uniform Probate Code was approved by NCCUSL in 1969, and a number of states enacted probate codes based in part or in whole on the UPC.”-24 4. The Joint Editorial Board’s “efforts resulted in a number of amendments, and, in 1990, in a wholesale revision of Article II of the Code, which deals with ‘Intestacy, Wills, and Donative Transfers.’ . . . A number of state legislatures have adopted the 1990 version of the Code, a number have retained their 1969 versions, and in other states, the Code has not been adopted, but has had a discernible impact on state legislation or case law.”-25 5. UPC § 2-803 a. The term “‘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 in place of his killer, and or the decedent then had capacity to exercise the power.”-25 b. Subsection (b) provides in summary: A person who “feloniously and intentionally” kills the decedent forfeits all benefits under a will, and if the decedent dies intestate, the decedent’s intestate estate passes as if the killer disclaimed his share.-25
  3. 3. 3 c. Subsection (c) provides in summary: A person who meets the above standards revokes any revocable disposition of property in a governing instrument. Such a person also severs the interests of the decedent and killer in property jointly held at the time of death.-26 d. Subsection (g) provides in summary: A conviction for intentional murder conclusively establishes that the killer meets the requirements of this section. In the absence of a conviction, the court must determine, under the preponderance of the evidence standard, whether the killer would be criminally accountable for the felonious and intentional killing.-26 II. The Role of the Lawyer, and the Lawyer-Client Relationship A. Introduction 1. “First, estates lawyers are sometimes litigators, representing clients with claims to a decedent’s estate. . . . Second, estates lawyers are sometimes policymakers – devising and evaluating rules for transmission of wealth from one generation to the next.”-27 2. “Perhaps the most important role of the estates lawyer, however, is the role of planner. Clients come to lawyers with objectives in mind: they want to assure that their property reaches its intended beneficiaries; they want to minimize their taxes; they want to protect beneficiaries from creditor claims.”-27 3. “Litigation is the estate planner’s enemy. In most cases, if a lawyer drafts a document that results in litigation, the lawyer has not done her job – even if the document is ultimately upheld and construed as the lawyer intended it to be construed.”-28 Hotz v. Minyard—S. Ct. of S.C., 1991 Issue: Whether a genuine issue of material fact exists regarding whether Dobson breached his fiduciary duty to Judy by misrepresenting her father’s will, where Dobson had been a family attorney and accountant for 20 years, and had represented Judy in the past, but was technically representing only her father with respect to the will? YES Holding: “We find the evidence indicates a factual issue whether Dobson breached a fiduciary duty to Judy when she went to his office seeking legal advice about the effect of her father’s will.”-30 “Similarly, we find evidence to present a jury issue whether Law Firm should be held vicariously liable for Dobson’s conduct since Dobson was acting in his capacity as a lawyer when he met with Judy to discuss the will in January 1985.”-31 Rule: “A fiduciary relationship exists when one has a special confidence in another so that the latter, in equity and good conscience, is bound to act in good faith. . . . An attorney/client relationship is by nature a fiduciary one.”-30 4. Notes a. Rule 1.6 of the MRPC provides that a lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for a few exceptions. b. Rule 1.7 provides that a lawyer shall not represent a client if representation of that client will be directly adverse to another client, unless the lawyer reasonably believes that the representation will not adversely affect the interest of the other client, and each client consults after consultation.-32 Barcelo v. Elliott—S. Ct. of TX, 1996 Issue: Whether “an attorney who negligently drafts a will or trust agreement owes a duty of care to persons intended to benefit under the will or trust, even though the attorney never represented the intended beneficiaries”? NO Rule: “At common law, an attorney owes a duty of care only to his or her client, not to third parties who may have been damaged by the attorney’s negligent representation of the client.”-35
  4. 4. 4 “We believe the greater good is served by preserving a bright-line privity rule which denies a cause of action to all beneficiaries whom the attorney did not represent.”-37 “[A]n attorney retained by a testator or settlor to draft a will or trust owes no professional duty of care to persons named as beneficiaries under the will or trust.”-38 5. Notes a. “The malpractice ‘revolution’ of the last several decades has, in the vast majority of states, displaced the privity rule endorsed in Barcelo v. Elliott.”-40 6. Martin D. Begleiter, Attorney Malpractice in Estate Planning – You’ve Got to Know When to Hold Up, Know When to Fold Up a. “If the attorney’s negligence in estate planning causes loss to a beneficiary, the attorney shall make good that loss. That is not to say that attorneys should make good all ‘losses’ to beneficiaries in wills they drafted . . . . Many acts or omissions do not constitute negligence, and the attorney is required only to use the degree of care and skill of reasonable lawyers under comparable circumstances.”-41 III. Probate and Non-Probate Transfers A. Probate: What Is It, and Who Needs It? 1. “[D]eath is the focal point for most gratuitous transfers of wealth.”-43 2. “If Jane Doe has not left a will, her closest relative, or one of her closest relatives, will generally petition for an appointment as her personal representative (traditionally called her administrator). When more than one person is interested in becoming administrator, local statutes will generally prescribe priority among the applicants. If Jane Doe has left a will naming an executor, the executor will generally petition for ‘letters testamentary,’ which entitle the executor to serve as Jane’s personal representative. The personal representative then bears responsibility for collecting all of Jane’s assets. Because the personal representative has legal authority to act on behalf of Jane’s estate, a purchaser can rely on a deed executed by the personal representative, and a bank will be protected if the bank releases funds to the personal representative.”-44 3. “If Jane has left a will, the personal representative will offer the will for probate; she will have to prove that the will was properly executed, and she will provide notice to persons who might have reason to contest the will. If probate is uncontested, or if the personal representative overcomes any challenges to the will’s probate, the personal representative will distribute Jane’s assets to the persons named in the will – after paying taxes, creditor claims, and expenses of administering the estate. . . . That, in a nutshell, is the probate process.”-44 4. “If the property is not part of Jane’s estate, the property does not pass through probate.” B. Gifts Gruen v. Gruen—Ct. of App. of N.Y., 1986 Issue: Whether “a valid inter vivos gift of a chattel may be made where the donor has reserved a life estate in the chattel and the donee never has had physical possession of it before the donor’s death”? Y Rule: “[T]o make a valid inter vivos gift there must exist the intent on the part of the donor to make a present transfer; delivery of the gift, either actual or constructive to the donee; and acceptance by the donee.”-46 “[T]he proponent of a gift has the burden of proving each of these elements by clear and convincing evidence.”-47 “An inter vivos gift requires that the donor intend to make an irrevocable present transfer of ownership; if the intention is to make a testamentary disposition effective only after death, the gift is invalid unless made by will.”-47
  5. 5. 5 “[T]he requirement of delivery is not rigid or inflexible, but is to be applied in light of its purpose to avoid mistakes by donors and fraudulent claims by donees.”-48 “Accordingly, what is sufficient to constitute delivery ‘must be tailored to suit the circumstances of the case.’”-48 “The rule requires that the delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit.”-49 “Acceptance by the donee is essential to the validity of an inter vivos gift, but when a gift is of value to the donee . . . the law will presume an acceptance on his part.”-49 1. Notes a. “Ordinarily, gifts are irrevocable – even if made on one’s deathbed. . . . But suppose John unexpectedly recovers. Can he take the car back? Many courts would say yes. They would reason that John’s gift was made in contemplation of death, and included an implicit condition that the care would revert to John, if he recovered from the illness. Courts have labeled gifts like this one gifts causa mortis.”-50 C. Joint Interests With Right of Survivorship 1. “Lifetime gifts are the most obvious sort of non-probate transfer.”-50 2. “[I]f two parties hold property as joint tenants with right of survivorship (or, in the case of married couples, as tenants by the entirety), when the first of the two dies, the decedent’s share passes automatically to the survivor – that is the meaning of the words ‘with right of survivorship.’ If more than two parties share a joint tenancy with right of survivorship, at the death of the first to die, the decedent’s share is divided equally among the surviving joint tenants.”-51 3. “Many people – especially but not exclusively married couples – hold property in joint tenancies.”-51 4. “When a joint tenant or a tenant by the entirety dies, the transfer of property that occurs is a non-probate transfer.”-51 5. “Joint tenancies and tenancies by the entirety are not restricted to real property; many people hold bank accounts and brokerage accounts as joint tenants with right of survivorship. All joint tenancies – but particularly those in bank accounts – raise questions about the intent of the joint tenants.”-51 Franklin v. Anna National Bank—App. Ct. of Ill., 1986 Issue: Whether the trial court erred in finding that Mrs. Goddard was the sole owner of the funds in a savings account in which she was a joint tenant where the decedent original owner of the account asked Mrs. Goddard to be a joint owner to help him, he evidenced an intent to remove her as joint tenant, Mrs. Goddard failed to contribute or remove money from the account, and the decedent did not give Mrs. Goddard any money while he was alive? YES Holding: “The money in account No. 3816 should have been found to be the property of the estate [of the decedent].”-54 Rule: “The instrument creating a joint tenancy account presumably speaks the whole truth. In order to go behind the terms of the agreement, the one claiming adversely thereto has the burden of establishing by clear and convincing evidence that a gift was not intended. . . . Each case involving a joint tenancy account must be evaluated on its own facts and circumstances. . . . The form of the agreement is not conclusive regarding the intention of the depositors between themselves. . . . Evidence of lack of donative intent must relate back to the time of creation of the joint tenancy. . . . The decision of the donor, made subsequent to the creation of the joint tenancy, that he did not want the proceeds to pass to the survivor, would not, in itself, be sufficient to sever the tenancy. . . . However, it is proper to consider events occurring after creation of the joint account in determining
  6. 6. 6 whether the donor actually intended to transfer his interest in the account at his death to the surviving joint tenant.”-53 6. Notes a. Reasons for joint accounts: (i) “Depositor – especially an elderly or incapacitated depositor – fears that he or she will be physically unable to do his own banking, and, for reasons of convenience, wants another person’s name on the account.”-55 (ii) “Depositor wants to assure that the account passes to the joint account- holder at depositor’s death without the need to go through probate; depositor does not, however, want to confer on the joint account-holder any right to the money during depositor’s lifetime.”-55 (iii) “Depositor wants to confer on the joint-account holder all of the rights associated with joint ownership – including the unlimited right to withdraw and use the money on deposit.”-55 b. “Courts have traditionally treated joint accounts as giving each party a right only to the money he or she deposited in the account. . . . [I]f either party withdraws, without permission, more than the proportion he has deposited, the other party has a claim against her. Failure to advance the claim, however, would constitute ratification of the withdrawal.”-55 c. “Courts generally enforce survivorship provisions in joint bank accounts – assuming (1) that the depositor did not revoke the survivorship provision during his lifetime, as Mr. Whitehead did in Franklin . . . ; and (2) that decedent’s estate does not introduce clear evidence that the now-deceased depositor established the joint account only for convenience.”-56 d. “Courts reasoned that a [payable on death or POD] account did not transfer any interest to the beneficiary during the depositor’s lifetime. As a result, courts treated the designation as equivalent to a will – which becomes effective only at the property owner’s death. As we shall see, however, a will is valid only if executed in accordance with testamentary formalities. Since the depositor does not typically comply with those formalities when making a POD designation, courts often held the designation invalid.”-56 7. The Uniform Probate Code, Joint Accounts, and POD Accounts a. “The Uniform Probate Code provides that depositors may open either single-party or multiple-party accounts, and provides that either type of account may have a POD designation, an agency designation, or both.”-57 See § 6-203 8. Beyond Bank Accounts: TOD Designations in Securities Registration a. “UPC Section 6-302 authorizes registration of securities ‘in beneficiary form’ whenever a security is owned by one individual or by two or more individuals with right of survivorship. ‘Beneficiary form’ is defined as a registration which indicates ‘the intention of the owner regarding the person who will become the owner of the security upon the death of the owner.’”-57 9. Uniform Probate Code a. UPC § 6-305 provides that “Registration in beneficiary form may be shown by the words ‘transfer on death’ or the abbreviation ‘TOD,’ or by the words ‘pay on death’ or the abbreviation ‘POD,’ after the name of the registered owner and before the name of a beneficiary.”-57 b. UPC § 6-306 provides that “The designation of a TOD beneficiary on a registration in beneficiary form has no effect on ownership until the owner’s death. A registration of a security in beneficiary form may be canceled or changed at any time by the sole owner or all then surviving owners without the consent of the beneficiary.”-58
  7. 7. 7 D. The Nonprobate Revolution: Scope and Reasons 1. Langbein, The Nonprobate Revolution and the Future of the Law of Succession – “The probate system has earned lamentable reputation for expense, delay, clumsiness, makework, and worse.”-58 2. Notes a. “Although tax considerations remain paramount in the estate plans of many wealthy individuals, tax considerations play little role in the decision to avoid the probate system.”-60 IV. Intestate Succession A. Introduction and Representative Statutes 1. “[T]he property of a person who dies without a valid will – that is, a person who dies intestate – will be distributed in accordance with the intestate succession statutes in effect in the jurisdiction.”-61 2. “[A]ll intestate succession statutes provide for distribution of an intestate decedent’s assets to close family members.”-62 3. “Still another factor dictates that intestate succession statutes should distribute property to close family members: administrative convenience.”-62 4. The Importance of Intestate Succession a. “First, . . . some people execute wills that are wholly invalid, or that dispose of only part of decedent’s property. How is the remainder of decedent’s property to be distributed? By intestate succession.”-63 b. “Second, on many occasions, a will makes reference to the ‘heirs’ of a particular person – either the heirs of the testator himself, or the heirs of some other person. Who are a person’s heirs? The people who would succeed to that person’s estate by intestate succession.”-63 c. “Third, intestate succession is often important for determining who has standing to contest a will.”-63 d. “If the contestant would be entitled to take part of the estate by intestate succession, the contestant would have standing to contest. Otherwise, the contestant would have standing only if he had been the beneficiary of a prior will.”-63 e. In re Wendell’s Will – “More than 1,600 claimants sought to challenge the will. There were numerous disputes about the relationships between Ella Wendel and the various claimants. The Surrogate adopted a procedure which required those contending to be in the nearest degree of kinship to Ella Wendel to prove their claims first, because once the claim of a close relative was established, none of the more distant claimants would have standing to contest. The will contest was eventually settled upon payment of a sum to Ella Wendell’s closest relatives.”-63 5. Fundamentals of Intestate Succession a. The Share of the Surviving Spouse (i) “The common law developed different rules for intestate succession to real property (often called rules of ‘descent’) and intestate succession to personal property (often called rules of ‘distribution’). The surviving spouse was not an ‘heir’ of decedent’s real property; instead, the spouse had ‘dower’ or ‘curtesy’ rights – lifetime interests – in decedent’s real property. By contrast, the surviving spouse was generally entitled to share in distribution of decedent’s personal property.”-64 (ii) “Today, most states apply the same rules to ‘descent’ of real property and ‘distribution’ of personal property.”-64 (iii) “In most states, the statutory trend has been to treat the surviving spouse more generously than at common law. Indeed, as we shall see, in some states, the
  8. 8. 8 surviving spouse now takes the entire estate unless the decedent – or the surviving spouse – has children from outside the marriage.”-64 b. ‘Descendants’ Take to the Exclusion of ‘Collaterals’ (i) “Another nearly universal feature of intestate succession statutes is that decedent’s direct lineal descendants take to the exclusion of collateral relatives. Collateral relatives include brothers and sisters, nieces and nephews, cousins and all other relatives who are not direct lineal descendants.”-64 (ii) “[T]he established legal meaning of ‘issue’ includes more remote lineal descendants, including grandchildren and great-grandchildren.”-65 c. Distribution Among Collaterals (i) “If one or both of decedent’s parents are still alive, they generally take to the exclusion of other relatives.”-65 (ii) “If decedent’s parents are dead, which collateral relatives take? Two factors are important. First, who is the common ancestor of the decedent and the collateral relative? Most intestate succession statutes hold that descendants of decedent’s parents inherit to the exclusion of relatives who are descended from decedent’s grandparents, but not decedent’s parents.”-65 (iii) “Whenever a statute refers to degrees of kinship, the statute is referring to the ‘Table of Consanguinity.’ . . . To determine how many degrees of kinship separate decedent and a particular relative, we must count ‘up’ from the decedent to the common ancestor, and then ‘down’ to the relative in question.”-65 (iv) “Many states . . . have enacted what are called ‘laughing heir’ statutes – statutes which preclude inheritance by relatives too remote from decedent.” d. Only Blood Relatives (and the Surviving Spouse) Inherit (i) “Virtually all intestate succession statutes exclude relatives by marriage, other than decedent’s own spouse.”-66 e. A Bit More Terminology (i) At common law, “[t]he persons entitled to take decedent’s real property were referred to as his heirs at law. The persons entitled to take his personal property were referred to as his next of kin. Today, the two terms are largely synonomous.”-67 6. Massachusetts General Laws, Ch. 190 – Intestate Succession Statute a. Section 1 provides that, after all debts and charges have been paid, and the estate has been settled, the surviving husband or wife shall recover the following real and personal property not disposed of by will – (1) If the decedent left no issue, the surviving spouse takes up to $200,000, plus one-half of the remaining property; (2) if the decedent leaves issue, the surviving spouse shall take one-half of the personal and real property; (3) if the decedent leaves no issue and no kindred, the surviving spouse shall take the whole. b. Section 2 provides that personal property shall be distributed in accordance with the sections distributing real property. c. Section 3 provides that real property shall be divided: (1) in equal shares to his children and to the issue of the deceased child by right of representation, and if there is no surviving child, then to all other lineal descendants. If such descendants are in the same degree of kinship, they receive equal shares; otherwise, they take according to their right of representation; (2) if decedent leaves no issue, the property goes in equal shares to the mother and father; (3) if he leaves no issue or mother, then to his father; (4) if he leaves no issue or father, then to his mother; (5) if he leaves no issue
  9. 9. 9 or parents, to his brothers and sister and their issue by right of representation; and if there are no surviving siblings, to the issue of deceased brothers and sisters; (6) if he leaves no issue, parents, siblings, or issue of siblings, then to his next of kin in equal degree; (7) if he leaves no kindred, widow or husband, his estate shall escheat to the commonwealth. d. Section 8 provides that inheritance or right of representation is the taking by the descendants of a deceased heir of the same share or right in the estate of another person as their parent would have taken if living.-69 7. Uniform Probate Code a. Section 2-101(a) provides that any part of the decedent’s property not provided for in a will passes to the decedent’s heirs as prescribed in the Code. b. Subsection (b) provides that a decedent by will may expressly exclude or limit an individual’s right to recover by intestate succession. c. Section 2-102(1) provides that a surviving spouse will recover the entire estate if: there is no surviving descendant OR parent of the decedent; OR all of the decedent’s surviving descendants are also descendants of the surviving spouse and there is no descendant of the surviving spouse who survives the decedent. d. Subsection (2) provides that the surviving spouse recovers the first $200,000 plus ¾ of any balance of the intestate estate if ONLY a parent survives the decedent. e. Subsection (3) provides that the surviving spouse recovers the first $150,000 plus ½ of the balance if the decedent leaves children and his spouse leaves children from a previous marriage. f. Subsection (4) provides that the surviving spouse recovers the first $100,000 plus ½ of the balance if one or more of the decedent’s surviving descendants are not descendants of the surviving spouse. g. Section 2-103 provides that if there is no surviving spouse, the following order of individuals is established: (1) to the decedent’s descendants by representation; (2) if there is no surviving descendant, then to the decedent’s parents or parent; (3) if there is no surviving descendant or parent, then to the decedent’s siblings by representation; (4) if there is no surviving descendant, parent, or sibling, half of the estate passes to the decedent’s paternal, and half to his maternal, relatives through his grandparents. h. Section 2-105 provides that if there is no taker, the estate passes to the state.-70 V. The Share of the Surviving Spouse A. Introduction Estate of Goick—S. Ct. of Montana, 1996 Issue: Whether all or any of the decedent’s mother, sister, and brother lack standing to challenge the appointment of his not-quite ex-wife as personal representative? Sister and brother lack standing. Whether the lower court erred in granting summary judgment against the decedent’s mother on the ground that his not-quite ex-wife was the surviving spouse for intestate succession purposes? NO Whether the lower court erred in appointing the decedent’s not-quite ex-wife as his personal representative? NO Holding: “Wanda objected to Barbara’s appointment as PR, and for that reason she has standing to appeal the appointment. Michael’s brother and sister are neither creditors nor heirs of the estate, and therefore, they have no standing to appeal her appointment as PR.”-74
  10. 10. 10 “We therefore conclude that the District Court did not err in holding that Barbara was the surviving spouse for purposes of intestate succession and granting summary judgment in her favor.”-76 Rule: If a surviving spouse is ineligible, a creditor has priority for appointment as personal representative.-73-74 Creditors may object to the appointment of a personal representative.-74 An oral agreement to divorce is not binding on a judge.-75 Equitable estoppel requires detrimental reliance, and the maker of the representation must have intended the injured party to rely on the representation. “If a PR has not been named under will and there are no devisees, the decedent’s surviving spouse has priority for appointment.”-76 1. Notes a. “Uniform Probate Code section 2-802 provides that a person whose marriage has been terminated by divorce or annulment does not qualify as a surviving spouse, and also provides that a surviving spouse does not include ‘an individual who was a party to a valid proceeding concluded by an order purporting to terminate all marital property rights.’”-77 b. “Generally, a personal representative is appointed to administer the estate – to collect assets, to pay debts and expenses, and to distribute the estate.”-77 c. “When a decedent leaves a will, the will generally appoints an ‘executor’ to perform these functions. When decedent dies intestate, a court will generally appoint a personal representative, often called an ‘administrator’ to perform the same functions.”-77 d. “[I]n most jurisdictions the personal representative is entitled to compensation out of the estate. In a large estate, the compensation can be quite significant.” VI. The Share of Lineal Descendants A. Introduction 1. “When an intestate decedent is not survived by a spouse, decedent’s lineal descendants (assuming decedent has lineal descendants) generally succeed to the entire estate. When an intestate decedent is survived by a spouse, the lineal descendants succeed to that portion of the estate which does not pass to the surviving spouse.”-78 2. “A first principle of intestate succession is that any living descendant of the decedent cuts off the right of the descendant’s own children to inherit.”-79 3. “Suppose, however, one of the decedent’s children – let’s say D – has died before X. How should X’s estate now be distributed? Under virtually any intestate succession scheme, D’s child, here L, would succeed to D’s share.”-79 4. “Suppose now that X survived not only D, but all of his children. How should X’s estate now be distributed? At this point, statutes differ significantly in their approach. There are two alternatives: a. Strict ‘Per Stirpes’ Distribution – “The approach taken by the English Statute of Distributions would divide X’s estate at the generation of children – the generation closest to the decedent – whether or not any children were actually living at X’s death. Then, the descendants of X’s children would take their parents share ‘by stocks,’ or ‘per stirpes.’ . . . [T]he case for a strict per stirpes distribution rests on a number of questionable assumptions: first, that there is a ‘normal’ death order; second, that X’s children would not consume their share of X’s estate during their own lifetimes, and third, that the children would in fact leave their shares of X’s estate to their own children.”-79 b. Modern ‘Per Stirpes’ Distribution – “The vast majority of American states have abandoned the strict per stirpes distribution in favor of what has sometimes been
  11. 11. 11 called a ‘modern’ per stirpes distribution. These states divide decedent’s property at the closest generation to the decedent in which there is at least one descendant living.”-80 5. Questions a. In Professor Lawrence Waggoner’s “view, all grandchildren who are entitled to share in X’s estate (those whose parents died before X) should take the same share. The 1990 version of the Uniform Probate Code endorsed Waggoner’s approach, which is embodied in section 2-106 [of the UPC].”-81 b. “The UPC’s representation scheme – although a significant break with tradition – has gained adherents even among states which have not adopted the Code wholesale.”-82 VII. The Share of Ancestors and Collateral Heirs A. Introduction 1. “As we have seen, when an intestate decedent has surviving descendants, those descendants almost always take to the exclusion of ancestors and collateral heirs. Many decedents, however, die without surviving descendants.”-83 2. “Most intestate succession statutes give preference to decedent’s parents over collateral relatives.”-83 3. “Generally, . . . descendants of parents (brothers, sisters, and their descendants) take to the exclusion of other collateral relatives. If there are no descendants of parents, descendants of grandparents (uncles, aunts, first cousins, and their descendants) take to the exclusion of descendants of more remote ancestors.”-83 4. “[W]hen decedent is survived by descendants, issue of deceased descendants always take, no matter how many generations remote from testator. With collateral descendants, however, many statutes cut off the right to take by stocks at some point.”-84 In re Estate of Martineau—S. Ct. of N.H., 1985 Issue: Whether the trial court erred in interpreting § 561:3 to mean that any collaterals up to the fourth degree of kinship may take by representation where the statute provided that no representation shall be allowed among collaterals beyond the degree of brothers’ and sisters’ grandchildren, but there are no brothers’ or sisters’ grandchildren? NO Holding: “We conclude that all of the appellant’s arguments are unavailing, and we hold that the probate judge was correct in his decree that the first cousins were entitled to share in the paternal moiety by right of representation.”-87 5. Notes a. “The New Hampshire intestate succession statute, like many but not all intestate succession statutes, provided that when a decedent is survived only by grandparents or descendants of grandparents, half of the estate passes to the issue of paternal grandparents and the other half passes to the issue of maternal grandparents.”-88 b. “Note that in most states, if the intestate succession statute precludes representation, it does so only with respect to more distant collateral relatives.”-89 6. Note on Escheat a. “When decedent dies intestate and without heirs, the estate typically escheats to the state, or to a governmental entity designated by statute.”-90 b. “Courts often strain to avoid escheat – despite the advent of ‘laughing heir’ statutes.” c. In Estate of Brunel, “[t]he court held that because second cousins had been entitled to inherit before introduction of the UPC provision, they still qualified as ‘heirs.’”-90 VIII. Defining the Modern Family: Halfbloods, Adoptees, and Non- Marital Children A. Halfbloods 1. “Suppose two people share one parent, but not the other. The two are ‘halfbloods.’”-91
  12. 12. 12 2. “The modern trend is to treat halfbloods equally with wholebloods.”-91 3. UPC § 2-107 provides that “Relatives of the half-blood inherit the same share they would inherit if they were of the whole blood.”-91 4. “In a number of states, if decedent is survived by relatives of the half-blood and relatives of the whole-blood in the same degree, the relatives of the half-blood take half as much as the relatives of the whole blood.”-91 5. “In still other jurisdictions, halfbloods take equally with wholebloods ‘unless the inheritance come to the intestate by descent, devise or gift of some one of his ancestors, in which case all those who are not of the blood of such ancestors must be excluded from such inheritance.”-92 B. Adoption Estates of Donnelly—S. Ct. of Wash., 1972 Issue: May an adopted child inherit from her natural grandparents where the adoptor was the natural mother’s second husband? NO Holding: “The chain of inheritance was broken by respondent’s adoption.”-95 Rule: Adopted children may not inherit from their natural parents or any other ancestors in their natural family by operation of law. 1. UPC a. Section 2-114(a) provides that a person is a child of his or her natural parents regardless of their marital status. Subsection (b) provides that an adopted person is the child of his or her adopted parents, and not his or her natural parents; but the adoption of the child by the spouse of his or her natural parent has no effect on the child’s ability to inherit by intestate succession.-97 b. Section 2-113 provides that a person related to the decedent through two lines of relationship is entitled to only one share based on the relationship that would entitle the individual to a larger share.-97 2. Inheritance From Stepparents and Foster Parents a. “We have seen that if a stepparent adopts her spouse’s child, the child is treated as part of the stepparent’s natural family for intestate succession purposes. Suppose, however, the stepparent does not adopt the child, but otherwise treats the child as her own. Can the child inherit from the stepparent? The answer is generally no.” b. “[V]irtually all states give stepchildren no right to inherit from stepparents. California is an important exception.”-98 c. California Probate Code § 6454 provides that children may inherit through a foster or stepparent if both: (1) the relationship began during the child’s minority and continued throughout the joint lifetime of the parties; and (2) it is established by clear and convincing evidence that the foster parent or stepparent would have adopted but for a legal barrier.-98 Estate of Brittin—App. Ct. of Ill., 1996 Issue: Whether the natural children of an adult adoptee are descendants of the adopting parent for purposes of intestate succession? YES Whether the legislature, in enacting the statute granting an adopted child the status of a descendant of the adopting parent, intended to limit succession rights of the adoptee’s children to the natural children of a child adopted as a minor and to exclude the natural children born to the adult adoptee prior to his adoption by the adopting parent? NO Holding: “[T]he plain language of the statute indicates that the legislature intended to use the word ‘child’ in its relational sense; referring to the parent-
  13. 13. 13 child relationship between the adoptee and the adopting parent. The word ‘child’ as used here, cannot be interpreted fairly as meaning a minor . . . .”- Rule: The children of adult adoptees may recover under their adopting parent’s estate. 3. Equitable Adoption a. “The equitable adoption doctrine rests on the fiction that when a caretaker takes a child into her home, she impliedly agrees with the child’s natural parents that she will adopt the child. If the parties rely on that agreement, the child will be entitled to whatever benefits flow from status as the caretaker’s child even if the caretaker never performs the implied ‘agreement.’ Thus, the equitable adoption doctrine would permit the child to succeed to a share of the caretaker’s property by intestate succession.”-104 b. In O’Neal v. Wilkes, “Hattie sought a share of Cook’s estate as an adopted daughter – even though Cook had never taken any formal steps to adopt her. . . . A majority of the Georgia Supreme Court rejected Hattie’s intestate succession claim. Why? Because virtual adoption rests on the theory that the child’s natural parents contracted with the caretaker that the caretaker would adopt the child. For a contract – even an implied contract – to be enforceable, the parties to the contract had to have authority to make it. But who had authority to contract for Hattie’s adoption? Not her mother, who was dead. Not her paternal aunt, who, in the court’s view, had never acquired a relationship as a legal custodian. Since no one had authority to contract with Cook, Cook had not impliedly contracted to adopt Hattie, and Hattie was not entitled to inherit.”-104 c. “In Board of Education of Montgomery County v. Browning, “[t]he court reaffirmed equitable adoption doctrine, but held that the doctrine only permits the adopted child to inherit from the adoptive parent, not through the adoptive parent, from the adoptive parent’s relatives.”-105 d. Notes (i) “By one estimate, nearly one million black children do not live with a biological parent, and few of them have been formally adopted by their caretakers.”-105 (ii) “Even when the court recognizes equitable adoption doctrine, the adoptive ‘parent’ is not entitled to inherit from the adopted ‘child.’”-106 C. Non-Marital Children 1. Trimble v. Gordon—“An Illinois statute provided that a non-marital child could inherit from its father only if the parents had legitimated the child by marrying each other and the father had acknowledged the child during his lifetime. A girl sought to inherit from her intestate father when there had been neither marriage nor acknowledgement. The father had, however, been ordered to support his daughter after a court proceeding in which the court found him to be the girl’s father. The Illinois courts, relying on the state’s statute, held that she was not entitled to inherit from her father. The United States Supreme Court reversed, holding the statute unconstitutional. . . . [T]he Court concluded that the Illinois statute was infirm because it excluded some categories of non-marital children from inheriting even though their inheritance rights could have been recognized without jeopardizing the orderly settlement of estates.”-106 2. “Subsequently, in Lalli v. Lalli, . . . the Supreme Court upheld a New York statute which permitted a non-marital child to inherit from its father only when there had been a declaration of paternity before the father’s death. The Court held that this procedural
  14. 14. 14 requirement bore a substantial relation to the state interest in assuring the orderly settlement of estates.”-107 Wingate v. Estate of Ryan—S. Ct. of N.J., 1997 Issue: Whether the twenty-three year from birth statute of limitations in the Parentage Act precludes the P’s claim to establish heirship? NO Holding: “We hold that N.J.S.A. 3B:23-19 controls and that the 1991 amendment to N.J.S.A. 3B:5-10 did not change the Probate Code’s statute of limitations. That statute allows an out of wedlock child of a deceased parent to file an heirship claim with the personal representative of the decedent’s estate within the time the court has deemed reasonable for the filing of claims.”-114 3. Notes a. “Historically, state statutes often required proof of paternity during the father’s lifetime, and a number of statutes still make it more difficult for a non-marital child to establish paternity if the child made no effort to establish paternity during the father’s lifetime.”-114 b. In New York, § 4-1.2 provides that the only way to establish proof of paternity is through an order of filiation obtained during the father’s lifetime. c. In California, the statute “precludes a child from establishing paternity after the father’s death unless paternity is presumed to exist under the Uniform Parentage Act or one of the following conditions exist: (1) A court order was entered during the father’s lifetime declaring paternity; (2) paternity is established by clear and convincing evidence that the father has openly held out the child as his own; (3) it was impossible for the father to hold out the child as his own and paternity is established by clear and convincing evidence.”-115 d. The Uniform Parentage Act, § 4, provides that a man is presumed to be the natural father if: he and the child’s mother are or have been married and the child is born during the marriage or within 300 days after the marriage is terminated; if before the child’s birth the natural mother and man attempted to marry, etc.-116 e. The Uniform Parentage Act, § 6, provides that a child, his natural mother, or a man presumed to be his father may bring an action at any time for declaring paternity or non-paternity.-117 4. The Presumption of Legitimacy a. “At common law, a man married to a child’s mother at the time of the child’s birth was presumed to be the child’s father. The presumption could be rebutted only by proof of impotence, sterility, or lack of access during the period of gestation. In a number of states, the common law presumption has been explicitly codified. The Uniform Parentage Act codifies the presumption, and makes the presumption conclusive unless, within five years of the child’s birth, the child, the mother, or the mother’s husband brings an action to establish that the husband was not the child’s father.”-118 5. Inheritance From a Non-Marital Child a. Section 6452 of the California Probate Code provides that if a child is born out of wedlock, neither a natural parent nor a relative of that parent inherits from or through the child on the basis of the parent and child relationship unless both: (1) the parent or relative of the parent acknowledged the child; and (2) the parent or relative contributed to the support or care of the child.-119 D. The Impact of Modern Reproductive Technology 1. Introduction a. “The Uniform Probate Code – like other state statutes – announces that every person is a ‘child of his [or her] natural parents, regardless of their marital status.’ . . . But
  15. 15. 15 who is the ‘natural’ parent of a child born when its mother has been artificially inseminated by sperm drawn from a sperm donor.”-121 2. Sperm Donors and Egg Donors a. The UPA, § 5, provides that where a married woman is artificially inseminated, her husband is treated as the natural father of the child even if the sperm is not his. However, the husband must, along with the wife, sign a consent form. Unmarried couples are not entitled to the benefit of this provision. The section goes on to provide that the donor of semen provided to a licensed physician for use in artificial insemination to any married woman other than his wife is treated as if he is not the natural father.-121 b. “The Uniform Status of Children Assisted Conception Act (1988), . . . goes beyond the Uniform Parentage Act, and provides that a donor of an egg or sperm is not the parent of a child conceived through assisted conception. The statute, however, has been enacted only in two states, Virginia and North Dakota.”-123 3. Deceased Donors a. “The common law has always assumed . . . that no additional children could be born to a person after the person’s death. . . . With the advent of frozen sperm, and even frozen embryos, the common law’s assumption is no longer accurate. Should intestate succession law adjust to this new reality? Probably not. If we preserved a share of a decedent’s estate for future children who might be born from decedent’s sperm or egg, we would have to deprive current heirs of the right to enjoy decedent’s estate in the here and now.”-123 Kane v. Superior Court—Ct. of App. of Cal., 1995 Issue: Whether the trial court erred in issuing an order directing the administrator of the decedent’s estate to deliver 3 of the 15 vials of the decedent’s frozen semen to his mistress, where the decedent bequeathed to the mistress all 15 vials of semen, the settlement agreement entered into between the mistress and the decedent’s natural wife did not speak to the distribution of the semen, and the mistress was 40 years old? NO IX. Simultaneous Death A. Introduction Estate of Villwock—Ct. of App. of Wis., 1987 Issue: Whether the trial court erred in finding that Roy died before his wife where Roy’s official time of death is 11 minutes after his wife’s official time of death, but the physician who treated Roy testified that the later time was the result only of a cautionary attempt to exhaust all possibilities of a premature finding of death? NO Whether, in light of the finding that Roy died first, the Simultaneous Death Act is applicable? NO Holding: “Because the trial court found that Roy died before his wife, the provisions of the Uniform Simultaneous Death Act . . . are inapplicable.”-127 1. Uniform Probate Code a. UPC, § 2-104, provides that an individual who fails to survive the decedent by 120 hours is deemed to have predeceased the decedent for purposes of, inter alia, intestate succession. 2. Notes a. “The current version of the Uniform Simultaneous Death Act does not include a 120-hour survivorship requirement. In many states, however, an older version of the statute remains the law.”-131
  16. 16. 16 b. “By requiring an heir to survive for 120 hours, UPC 2-104 is designed both to effectuate decedent’s intent and to avoid litigation over the precise moment of a decedent’s death.”-131 c. “The Uniform Probate Code, . . . [s]ection 2-702(a), provides that for purposes of the Code itself, a person who is not established to have survived an event by 120 hours is deemed to have predeceased the event.”-131 d. “Section 2-702(c) deals with a comparable problem: how should we decide what to do with property held by co-owners with right of survivorship when survivorship is unclear? The statute provides that, unless there is clear and convincing evidence that one co-owner survived, one-half of the property should be distributed as if each co-owner survived.”-131 e. “Section 2-702(d) provides that survival by 120 hours is not required if ‘the governing instrument contains language dealing explicitly with simultaneous deaths or deaths in a common disaster and that language is operable under the facts of the case.’”-131 X. Disclaimer (Renunciation) A. Introduction Estate of Baird—S. Ct. of Wash., 1997 Issue: Whether an anticipatory disclaimer of an expectancy interest in an estate is valid and effective where the purpose of the disclaimer is to avoid debt obligations in bankruptcy, and to transfer the expectancy interest to one’s heirs? NO Holding: “We hold that as a matter of law the instrument executed by James Baird on March 8, 1994 is invalid . . . because at that time he did not have an ‘interest,’ nor was he a ‘beneficiary.’ In sum, [the statute in question] does not authorize anticipatory disclaimers of expectation interests.”-136 Rule: “The doctrine of relation ‘is a legal fiction invented to promote the ends of justice . . . . It is never allowed to defeat the collateral rights of third persons, lawfully acquired.’”-135 “An intestate interest is created only upon the death of the creator of the interest, i.e., the death of the intestate.”-135 1. Notes a. “Most courts have used the ‘relation back’ theory – discussed in Baird – to permit disclaiming beneficiaries to avoid creditor claims.”-136 b. “Two federal Courts of Appeals have held that a disclaimer executed before the disclaiming heir petitions for bankruptcy is effective to cut off any rights of the bankruptcy trustee.”-137 c. “Many public assistance programs impose eligibility limits. If an applicant for public assistance disclaims an interest in an estate, do the disclaimed assets count toward the eligibility threshold? Courts have almost invariably held that the disclaimed assets do count toward the eligibility threshold.”-137 d. “Most disclaimers today are tax driven. . . . But consider one simple [tax] advantage: by disclaiming assets, a beneficiary may be able to funnel assets to his own children without paying estate taxes. At the same time, if the beneficiary’s children are in a lower income tax bracket, the disclaiming beneficiary may also be able to reduce his family’s income tax burden.”-138 2. The Mechanics of Disclaimer a. UPC § 2-801 provides that a person or the representative of a person to whom an interest in or with respect to property or an interest therein devolves, may disclaim
  17. 17. 17 it in whole or in part by filing a written disclaimer, regardless of any anti- disclaimer provision in the governing instrument. 3. Note on Assignment of Expectancy Interests a. “[A]n heir is not an heir until death, but merely an ‘heir apparent.’ Why? Because events that might occur during decedent’s lifetime could cut off the heir apparent’s interest. For instance, if decedent’s heir apparent is her brother, decedent could give birth to a child who would prevent the brother from ever becoming an heir.”-141 b. “Perhaps more important, courts were unwilling to recognize property interests in heirs apparent because decedent could always write a will cutting out the heir apparent.”-141 c. “[W]hen an heir apparent (or a will beneficiary) receives consideration for assignment of an expectancy, courts may treat the assignment as a contract to transfer decedent’s property when the property passes to the heir, and may enforce the contract in equity.”-142 XI. Advancements A. Introduction 1. “At common law, a substantial gift to a child by a parent raised a presumption that the gift was an advancement of the child’s inheritance, and that the gift should be charged against the child’s intestate share. The presumption was rebuttable, but the burden of proof was on the child to demonstrate that the parent did not intend an advancement.” 2. UPC § 2-109 provides that if an individual dies intestate as to all or a portion of his estate, property that the decedent gave during his or her lifetime to an individual who is an heir, at the time of decedent’s death, is treated as an advancement against the heir’s intestate share ONLY if: (1) the decedent declared that the gift is an advancement in a contemporaneous writing; or (2) the decedent’s contemporaneous writing otherwise indicates that the gift is to be taken into account in computing the division of property. 3. “Note that the UPC (and many state statutes) reverse the common law presumption that a lifetime gift should be treated as an advancement. . . . The UPC requires a writing to establish that a gift is an advancement.”-143 4. Even if the advancement doctrine is applicable, and X is deemed to have received part or all of his estate prior to the death of the decedent, he is NOT required to give back any amount of the advancement above that amount which he would have been entitled to had he not received the advancement.-144 XII. Protection of the Family A. Introduction 1. “A small percentage of testators . . . would prefer to disinherit close family members, and particularly spouses.”-145 2. “Within the United States, virtually every state protects a surviving spouse against disinheritance. In most ‘common law’ states, that protection takes the form of a statutory right to a fixed share of the decedent spouse’s estate.”-145 3. “The protection against disinheritance enjoyed by the surviving spouse does not typically extend to other relatives. . . . As we shall see, however, many states protect children against inadvertent disinheritance.”-145 B. An Introduction to the Elective Share 1. “In most American states, common law concepts of dower and curtesy form the historical basis for modern law protections of the surviving spouse. Dower gave a widow a life interest in one-third of her deceased husband’s lands; curtesy gave the husband a life interest in all of his wife’s lands, but the husband acquired a curtesy interest only if children were born to the marriage.”-145
  18. 18. 18 2. “[M]ost states enacted ‘elective share’ statutes which permitted the surviving spouse to elect to take a statutory percentage (generally one-third) of the decedent spouse’s probate estate even if the decedent spouse tried to limit the surviving spouse to a smaller share. The elective share generally applies to both personal property and land. In most states, the elective share has emerged as a substitute for dower and curtesy, and those common law interests have been abolished.”-146 3. “[E]arly elective share statutes were premised on the notion that the surviving spouse – generally the wife – deserved and needed support from her husband, who was generally the family breadwinner, and who generally held title to most of the couple’s assets. Most recent elective share statutes embrace a conception of marriage as an equal partnership in which each spouse may contribute in different ways, but in which the parties agree to ‘pool their fortunes.’ Equality and sharing – not dependence and need – serve as the foundation for many of the more modern elective share statutes – including the Uniform Probate Code.”-147 4. “The most recent version of the Uniform Probate Code . . . [entitles] the surviving spouse to far less than one-third of the estate when the parties were recently married, and increasing the share of the surviving spouse with each additional year of marriage, until the share reaches a maximum of 50% of the estate when the spouses have been married for at least 15 years. . . . In addition, the Code, like some other state statutes, guarantees the surviving spouse $50,000 even if the elective share percentage would give the surviving spouse a smaller amount.”-147 C. Traditional Elective Share Statutes Sullivan v. Burkin—S. Jud. Ct. of Mass., 1984 Issue: “[W]hether the assets of the decedent’s inter vivos trust are to be considered in determining the ‘portion of the estate of the deceased’ in which Mary A. Sullivan has rights”? NO Holding: “We conclude that, whether or not Ernest G. Sullivan established the inter vivos trust in order to defeat his wife’s right to take her statutory share in the assets placed in the trust and even though he had a general power of appointment over the trust assets, Mary A. Sullivan obtained no right to share in the assets of that trust when she made her election . . . .”-150 Rule: “We conclude that . . . we should adhere to the principles expressed in Kerwin v. Donaghy . . . that deny the surviving spouse any claim against the assets of a valid inter vivos trust created by the deceased spouse, even where the deceased spouse alone retained substantial rights and powers under the trust instrument. For the future, however, as to any inter vivos trust created or amended after the date of this opinion, we announce that the estate of a decedent, for the purposes [of the statute in question] shall include the value of assets held in an inter vivos trust created by the deceased spouse as to which the deceased spouse alone retained the power during his or her life to direct the disposition of those trust assets for his or her benefit, as, for example, by the exercise of a power of appointment or by revocation of the trust.”-149 1. Notes a. Newman v. Dore – In this case, the wife, who was 40 years younger than the octogenarian husband, “before his death, brought a separation action, alleging that his sexual perversions made him impossible to live with. Decedent had responded by bringing an annulment action of his own. As in Sullivan v. Burkin, decedent transferred most of his property into a revocable inter vivos trust. The Court of Appeals held the device ineffective to cut off the wife’s elective share rights.”-152 D. Modern Elective Share Statutes
  19. 19. 19 1. “The court in Sullivan v. Burkin suggested that the problem of disinheritance by lifetime transfers is best dealt with by legislation. But what sort of legislation? Some states have enacted statutes that focus on the intent of the person making the gift; others focus on the character of the transfer – was it ‘illusory.’ Still others statutes – including the pioneering New York statute and the UPC – take a bright-line approach and simply prescribe a list of inter vivos transfers whose value must be included in the estate for elective share purposes.”-152 2. Statutes that Focus on Fraudulent Intent a. Tennessee Code Ann., § 31-1-105 provides: “Any conveyances made fraudulently to children or others, with an intent to defeat the surviving spouse of his distributive or elective share, is voidable at the election of the surviving spouse.”-153 b. Missouri Revised Statutes, § 474.150 provides: any gift, whether made while testate or intestate, in fraud of the marital rights of the surviving spouse, may be recovered from the donee and treated as a testamentary disposition and applied to the spouse’s share. Any conveyance of real estate made by a married person without the joinder or written express assent of his spouse, is deemed to be in fraud of the marital rights of the spouse. 3. The UPC’s ‘Augmented Estate’ a. New York’s “legislature enacted a statute designed to protect the surviving spouse against specified lifetime transfers, and, at the same time to reduce uncertainty about the validity of other lifetime transfers. The statute required that specified lifetime transfers be added to the value of decedent’s probate estate for purposes of computing the surviving spouse’s elective share.”-156 b. “The drafters of the 1993 version of the UPC attempted to implement the partnership theory of marriage – although some commentators contend that the Code’s principal foundation continues to be support of the surviving spouse.”-156 c. “In general outline, here is how the UPC works: in any marriage that has lasted for at least 15 years, the Code essentially treats all of the property of both spouses (and most of the property either spouse has transferred without consideration) as a pot of resources owned equally by the two spouses. Therefore, once we figure out what is in the pot at the death of the first spouse to die, if the various inter vivos and testamentary transfers have left the surviving spouse with less than half of the pot, the surviving spouse has a right to elect. Thus, if the surviving spouse holds the bulk of the pot as her own assets, she will not generally have a right to elect, even if her spouse left her none of his assets. By contrast, if the surviving spouse held no assets in her own name, she will have a right to elect unless the decedent spouse left her with at least 50% of his own assets.”-156 d. “For shorter marriages, the surviving spouse’s elective share percentage is smaller, and some of the surviving spouse’s own assets are excluded from the elective share calculation.”157 e. “The UPC, by limiting surviving spouse protection until the marriage has endured for a significant period, takes account of a common situation: a late in life marriage between spouses each of whom have had children before entering into the marriage, and each of whom would like those children to be the principal beneficiaries of their respective estates.”-157 f. A Statutory “Roadmap” (i) “In determining whether a surviving spouse has a right to elect, one must start by taking three basic steps: (1) compute the value of the decedent spouse’s ‘augmented estate’: the pot of money the spouses have a right to share; (2) compute the surviving spouse’s elective share (the statutory percentage to
  20. 20. 20 which the spouse is entitled, given the length of the marriage, multiplied by the value of the augmented estate); and (3) determine whether the dispositions already made for the surviving spouse, taken in combination with the spouse’s own assets, were sufficient to eliminate any right to elect.”-157 (ii) Section 2-202(a) of the UPC provides a schedule listing the elective-share percentage based on the number of years that the couple was married. Subsection (b) provides that if the augmented estate amounts to less than $50,000, the surviving spouse is entitled to an additional elective-share amount equal to $50,000, minus the sum of the amounts described in §§ 2-207 and 2-209. Subsection (c) provides that if the right of election is exercised by the surviving spouse, the surviving spouse’s homestead allowance, exempt property, and family allowance, are not charged against it but are in addition to the elective share and supplemental elective share amounts. Subsection (d) provides that the right of a surviving spouse domiciled outside of this state to take an elective share is governed by the domicile of the decedent at the time of his death. (iii) Section 2-203 provides: the value of the augmented estate consists of the sum of the values of all property, real or personal, that constitute the decedent’s net probate estate, the decedent’s nonprobate transfers to others, the decedent’s nonprobate transfers to the surviving spouse, and the surviving spouse’s property and nonprobate transfers to others. (iv) Section 2-204 provides: the value of the decedent’s probate estate is to be reduced by funeral and administration expenses, homestead allowance, family allowances, exempt property, and enforceable claims. (v) Section 2-205 provides: nonprobate transfers made by the decedent include: (1) property owned or owned in substance by the decedent immediately before his death that passed outside probate, including: property over which the decedent held a presently exercisable general power of appointment; the decedent’s fractional interest in property held in joint tenancy with a right of survivorship; ownership interest in accounts or property held in POD, TOD, or co-ownership registration with the right of survivorship; proceeds of insurance on the life of the decedent payable to anyone other than the decedent’s estate or the surviving spouse; (2) property transferred in any of the following forms during marriage: any irrevocable transfer in which the decedent retained the right to the possession or enjoyment, or income from, the property; any transfer in which the decedent created a power over income or property, exercisable by the decedent alone, or in conjunction with any other person, to or for the benefit of the decedent; (3) property passing during marriage and during the two-year period next preceding the decedent’s death as a result of a transfer by the decedent if the transfer was one of the following types: any property passing as a result of the termination of a right or interest in, or power over, property that would have been included in the augmented estate, if the right or interest or power had not terminated until the decedent’s death; any transfer of or relating to an insurance policy on the life of the decedent if the proceeds would have been included in the augmented estate had the transfer not occurred; any transfer of property made to or for the benefit of a person other than the decedent’s surviving spouse.
  21. 21. 21 (vi) Section 2-206 provides: the value of the augmented estate includes all nonprobate transfers made by the decedent to the surviving spouse at his death. (vii) Section 2-207(a) provides: the surviving spouse’s property is included in the augmented estate. Subsection (b) provides that the property included under this section is valued at the time of the decedent’s death. Subsection (c) provides that the value of property under this section is reduced by enforceable claims against the surviving spouse. (viii) Section 2-208(a) provides: the value of the property is excluded from the decedent’s nonprobate transfers to others to the extent that the decedent received full and adequate consideration for the transfer, or the property was transferred with the written joinder of, or written consent of, the surviving spouse. Subsection (b) provides that the value of the property includes any commuted value of any present or future interest. Subsection (c) provides that no property may be included more than once even if it would be included under two or more sections. (ix) Section 2-209(a) provides that the following amounts are applied first to satisfy the elective share amount and to reduce or eliminate any contributions due from the decedent’s probate estate and recipients of the decedent’s nonprobate transfers to others: (1) amounts included in the augmented estate under 2-204 which pass or have passed to the surviving spouse; and (2) amounts included in the augmented estate under 2-207 up to the applicable percentage thereof. The “applicable percentage” is twice the elective share percentage set forth in the schedule in section 2-202(a) appropriate to the length of time the couple was married. g. “Under the UPC, a surviving spouse always has a formal right to take an elective share. If, however, the decedent spouse has provided adequately for the surviving spouse, the surviving spouse will not benefit by electing, and the decedent spouse’s estate plan will remain intact.”-165 4. Note: Protecting the Spouse with Life Interests In Trust (With an Aside on Disclaimer) a. “How does the UPC treat life interests in trust?”-166 b. “[I]t is clear that the drafters intended that if decedent provided for the surviving spouse by creating life interests in trust, the surviving spouse could disclaim those interests. As a result, neither the trust principal nor the present value of the surviving spouse’s income interest would be applied against the elective share. The surviving spouse would be entitled to take the elective share outright. This result is consistent with the ‘partnership’ theory of marriage on which the Code is based.”-167 5. Note: Exercise on Behalf of a Dead or Incapacitated Surviving Spouse a. “UPC section 2-212(a) does permit a conservator, guardian, or agent under the authority of a power of attorney to exercise the power on the incapacitated spouse’s behalf. However, if the election is exercised on behalf of an incapacitated person, the elective share amounts must be placed in a custodial trust for the benefit of the incapacitated person. If the surviving spouse regains capacity, he may terminate the trust and take the property outright. If the spouse does not regain capacity, the trust property must be distributed to the beneficiaries of the decedent spouse’s estate, not the surviving spouse’s estate.”-169 6. Waiver of Elective Share Rights Geddings v. Geddings—S. Ct. of S.C., 1995
  22. 22. 22 Issue: Whether the trial court erred in finding that the decedent did not fully disclose the value of his estate prior to his wife’s signing a “waiver of right to elect and of other rights,” thereby invalidating the waiver? NO Holding: “There was sufficient evidence supporting the factual findings of the probate court concurred in by the circuit court.”-171 Rule: “The right of election of a surviving spouse may be waived by a written contract signed by the party waiving after fair disclosure.”-170 a. UPC § 2-213 provides that the right of election of a surviving spouse may be waived in whole or in part by the surviving spouse by a written agreement, contract, or waiver signed by the surviving spouse. But a waiver is not enforceable if the surviving spouse proves that: she did not execute the waiver voluntarily; or the waiver was unconscionable when executed, and before the execution she was not provided a fair and reasonable disclosure of the property or financial obligations of the decedent; did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the decedent beyond the disclosure provided; and did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the decedent. b. Notes (i) Rule 1.7 of the MRPC provides that a lawyer shall not represent a client if representation of that client will be directly adverse to another client, unless: the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and each client consults after consultation. XIII. Other Protections for the Surviving Spouse A. Homestead Allowance, Exempt Property, and Family Allowance 1. “The debtor’s clothing is often beyond the reach of creditors . . . . Many states also provide a limited exemption for the family homestead . . . . Why? For at least three reasons: (1) to preserve the debtor’s basic human dignity; (2) to relieve taxpayers of the obligation to provide for insolvent debtors; and (3) to promote efficiency: items of personal property are likely to be worth more to the debtor than to anyone else and exempting them from creditor execution assures that they stay with the person who values them most.”-175 2. “The surviving spouse, and often minor children, remain entitled to a homestead exemption, and also remain entitled to keep some personal property away from decedent’s creditors. The form of those exemptions differs significantly from state to state.”-175 3. Section 2-402 of the UPC provides: a decedent’s surviving spouse is entitled to a $15,000 homestead allowance; or, if there is no spouse, the minor children are entitled to the $15,000, divided between the total number of such children. The homestead allowance is exempt from the claims of creditors and has priority over all other claims. The allowance is in addition to any share of the estate passing to the spouse or children by will or by intestate succession or elective share. 4. Section 2-403 of the UPC provides that in addition to the homestead allowance, the surviving spouse is entitled to up to $10,000 in household furniture, automobiles, furnishings, appliances, and personal items. If there is no spouse, the children of the decedent (not necessarily minor) are entitled to the property jointly. These rights are in addition to any share passing to the spouse or children through will, intestate succession, etc. 5. “[T]he UPC’s ‘Homestead Allowance’ is significantly different from the homestead allowance in most other state statutes. The UPC allowance applies even if decedent did
  23. 23. 23 not own a home; it gives the surviving spouse (or a minor child, if there is no surviving spouse) a flat sum of money, exempt from all creditor claims.”-176 6. “Probate is not instantaneous. Estate assets are generally not distributed for months after decedent’s death. For that reason, many lawyers counsel that each spouse should have title to some money so that the survivor will have instant access to funds at decedent’s death.”-177 7. In most states, “the surviving spouse and minor children are entitled to support from the estate during the period of administration.”-177 8. Section 2-404 of the UPC provides that in addition to the rights to a homestead allowance and exempt property, the decedent’s surviving spouse and minor children whom the decedent was obligated to support, and who were in fact being supported, are entitled to a reasonable allowance in money out of the estate for the period of administration, which period may continue for no longer than one year. The money is payable to the surviving spouse, if living; otherwise to the children, for their care and custody. The family allowance is exempt from and has priority over all creditor claims except the homestead allowance. The family allowance is not chargeable against any benefit or share passing to the spouse or children by will, intestate succession, etc. B. Protection Against Inadvertent Disinheritance: The Problem of the Pre-Marital Will 1. “In a few states, legislatures have assumed that testators who fail to change their pre- marital wills do so inadvertently. Statutes in those states provide that marriage automatically revokes a pre-marital will. As a result, decedent dies intestate, and the surviving spouse takes his intestate share. . . . In other states, legislatures have declined to assume that failure to change a pre-marital will is inadvertent, and have left the elective share provisions as the principal protection for the surviving spouse.”-178 2. “The UPC . . . assumes that a pre-marital will does reflect the testator’s intent to the extent that it benefits the testator’s issue from previous relationships. The Code presumes, however, that the testator’s intent to benefit others was negated when she remarried. That presumption is rebuttable.”-178 3. Section 2-301 of the UPC provides: if a testator’s surviving spouse married the testator AFTER the testator executed his or her will, the surviving spouse is entitled to receive, as an intestate share, no less than the value of the share of the estate he or she would have received had the testator died intestate, unless: (1) it appears from the will or other evidence that the will was made in contemplation of the testator’s marriage to the surviving spouse; (2) the will expresses the intention that it is to be in effect notwithstanding any subsequent marriage; or (2) the testator provided for the spouse by transfer outside of the will and the intent of the testator is shown to be that the transfer is made in lieu of a testamentary provision. In satisfying the share provided by this section, devises made by the will to the testator’s surviving spouse, if any, are applied first. XIV. The Community Property System A. Introduction 1. “Eight states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington) have community property laws. Wisconsin has enacted the Uniform Marital Property Act which contains many basic principles of Community Property.”-179 2. In community property states “there is no dower, curtesy or elective share in the probate estate.”-180 3. “The community property system . . . assumes that property acquired during marriage (other than by gift or inheritance) is the product of joint efforts of the husband and wife. Each, therefore, has a half share. Property acquired before marriage or by gift or inheritance is the separate property of the respective spouse. Management of community property varies with each state, but usually is either ‘equal’ . . . or ‘joint.’”-180
  24. 24. 24 4. “Each spouse has a power of testamentary disposition only over his or her half of the community property.”-180 5. “[I]f the money came in before the marriage or by gift or inheritance, the surviving spouse gets nothing – there is no right to separate property.”-180 6. Transmutation is “the power of the husband and wife to change property of one kind into property of another kind (community/separate) by agreement or transfer.”-180 7. “[I]f a husband earns money while the couple is domiciled in a community property state and invests the money in stock in his name, and the couple moves to a common law state where the husband dies, the wife still has an equitable claim to a half interest in the stock as her community property. And, in many common law states, she will also have an elective share in the deceased husband’s half interest! UPC section 2-202 blocks such a double interest.”-180 8. “Quasi-community property” is treated as if it were community property in which each spouse has a one-half interest at the death of the owner even when it was earned in a common law state.-181 9. “The comparable concept under the UMPA section 18, is ‘deferred marital property.’” XV. Protection of Children: Pretermitted Child Statutes A. “[O]nly Louisiana provides children with statutory protection against intentional disinheritance. Most states, however, protect children against unintentional disinheritance. The statutes – often called pretermitted child statutes – fall into two broad categories: those which protect only children born after execution of the testator’s will, and those which protect all children who have been unintentionally disinherited.”-181 Estate of Glomset—S. Ct. of Okla., 1976 Issue: Whether the trial court erred in determining that the decedent’s omission of the appellee from his will was unintentional? NO Whether extrinsic evidence is admissible to determine the testator’s intent? NO Holding: “[W]e must find that Appellee is a pretermitted heir and entitled to inherit her proportionate share of her deceased father’s estate” because her disinheritance was unintentional.-183 Rule: “We have previously held that if there are no uncertainties appearing on the face of the will, extrinsic evidence is not admissible.”-182 Under the statute, where a testator unintentionally disinherits one of his own children by failing to provide for them in his or her will, such children are entitled to receive the same share that they would have received if the testator had died intestate.-182 Dissent: Extrinsic evidence should have been admissible to show that the appellee’s relationship with the decedent was strained. Also, the only child mentioned in the will, since the appellee is permitted to take, will receive nothing. This goes against the testator’s clearly expressed intent.-184 1. Notes a. “Massachusetts-type statutes permit the excluded child to inherit ‘unless it appears that such omission was intentional.’ In most jurisdictions (but not Oklahoma), extrinsic evidence is admissible to prove that the omission was intentional.”-184 b. “By contrast, other jurisdictions have Missouri-type statutes, which permit all children ‘not named or provided for’ in the will to take a share of the deceased parent’s estate. By definition, in states with Missouri-type statutes, extrinsic evidence is not generally available to establish testator’s intent.”-185 c. Section 2-302 of the UPC provides that: if a testator fails to provide in his or her will for any children born or adopted after the execution of the will, the omitted