DecedentsEstates Outline Summer08

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LIVING VS DEAD WHOS MONEY IS IT? TERMINOLOGY 1. 2. 3. 4. 5. 6. 7. Decedent: the person who has died, sometimes referred to as the "deceased." Testator: person who has written a will Testate: when a person dies w/ a duly executed will. Intestate: a person who dies w/out a will. a. an intestate decedents property passes to that persons heirs. b. heirs are designated by the jurisdictions statute on intestate succession. Devisees: person designated to take the property from a testators will disposes of. Devise: a clause w/in testators will directing disposition of property. Executor: person named in decedents will to administer the decedents estate. a. Responsibilities: (1) collect assets (might involve litigation i.e. clear title of assets); (2) pay off creditors (to best you can w/ assets you have in estate); and (3) distribute remaining assets to beneficiaries. Administrator: person appointed by the state to administer a decedents estate. a. Responsibilities: same as Executor. Personal Representative: generic term for executor or administrator. Issue: lineal descendants of decedent children, grandchildren, etc. Kindred/Kin: ones relatives; family (usu. by blood). Residuary clause: catchall clause regarding where the remainder of the estate goes. Escheat: forfeiture of all property to the state if there are no heirs, descendants or named beneficiaries
to take the property upon the death of the last known owner.
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14. Inter-vivos Gift: an inter-vivos gift is a gift between living persons. TESTATORS CONTROL OVER ESTATE >> Conditional Devise = Constitutional + No Public Policy Violation (Shapira) Facts: Dad (testator) died, left behind a will that contained a clause that stated son (P devisee) must marry a jewish girl w/ jewish parents w/in 7 ys. If the son does not do so, then his share of the estate would go to the state of Israel. P alleged that (1) the condition was unconstitutional, and (2) was contrary to public policy. Public Policy Analysis 1. Partial Restraint on Marriage Rule: a partial restraint of marriage which imposes only reasonable restrictions is valid, and not contrary to public policy. However, a testator may not attach a condition upon inheritance which is in violation of public policy (i.e. see below); the condition is void and need not be fulfilled. 2. Totally precluding marriage Promoting divorce, separation or adultery Promoting or intending to promote illegal activity (depends on given set of facts & current law) Promoting waste of property (i.e. you must tear down house, and only sell land.)
Disinheriting Children Rule: 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 U.S. Constitution. Ohio: it is a fundamental rule of law in Ohio that a testator may legally entirely disinherit his children. Held: the upholding & enforcement of the conditions of the will conditioning the bequests to P upon marrying a Jewish girl does not offend the Constitution of Ohio or of the US.
Unconstitutional Analysis 1. P Arg #1: the condition in the will puts an unconstitutional restriction upon marriage prohibited by the
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14th amendment. Held: the son is free to marry whomever he wants, thus not a restriction on marriage prohibited by the 14th amendment. Rationale: the condition does not seek the aid of the ct to enjoin P from marrying a non-jewish woman. 2. P Arg #2: the condition in the will puts an unconstitutional restriction on worship prohibited by the 14th amendment. Held: the son is free to worship whichever religion he wants, thus not a restriction on worship prohibited by the 14th amendment.
SLAYERS RULE Overview: a slayers rule is when a state a statute and/or court rule disallows one (slayer) to benefit from accelerating the death of a testator (i.e. killing the testator). Rationale: it would never have been the testators intention that a donee who murdered the testator to make the will operative should have any benefit. 1) Maryland Slayer Rule Approach: a person who kills testator intentionally AND feloniously may NOT share in the distribution of the decedents estate as an heir or as a devisee. a) Civil Proceeding: neither conviction (proven beyond reasonable doubt) nor acquittal (not proven beyond reasonable doubt) in a criminal case is final. There must be a civil proceeding to determine if a person killed testator intentionally and feloniously; using the civil proceeding standard (preponderance of the evidence standard).
2) UPC Slayer Rule Approach: a person who kills testator intentionally AND feloniously may NOT share in the distribution of the decedents estate as an heir or as a devisee. a) Civil Proceeding: guilt established in criminal trial (proven beyond reasonable doubt) is dispositive no civil proceeding necessary. However, acquittal in criminal trial must have civil proceeding.
3) Effect of Slayers Rule: The property passes as if the slayer had predeceased the victim. 4) Unintentional: A person who unintentionally commits a homicide may share in the distribution of the decedents estate as an heir or devisee. 5) Insanity Felonious: if a slayer (killer) is insane at the time of killing, 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 slayer rule does not apply. >> Slayers Rule Application Maryland Approach (Ford v Ford) Facts: Daughter (beneficiary to mothers will) kills mother by stabbing her 40+ times. Daughter successfully establishes that she was insane at the time of the killing. Son of beneficiary (P) claimed property as alternative beneficiary under victim's will. Held: the slayers rule does not operate to preclude daughter from inheriting under the will of her victim/mother, b/c she was deemed insane at the time of the killing. LAWYER-CLIENT RELATIONSHIP
Downloaded From OutlineDepot.com Overview: a fiduciary relationship exists when someone 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. 1. Beneficiaries Present when Signing Will: beneficiaries should not be present when will is being executed. 1. 2. Exception: a testators spouse is the exception that is, if the spouse is executing at same time. Rationale: having beneficiaries present when a will is being executed could raise a presumption of undue influence (good practice is for no beneficiaries to be in room when will executed).
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How to Keep Will Contents Confidential: keeping the contents of a will confidential is fine, but the attorney should tell the client that if they are asked about the contents of the will from anyone, they will direct them to the client. Further, if they want to know why, they will tell them to talk to you. Conflicts of Interest: What should a lawyer presented w/ a conflict of interest do? Lay ground rules up front 1. Tell both parties up front that either can change their will at any time and lawyer is not bound to tell the other. 2. Tell both parties up front that you are representing them both and will tell the other anything that is relevant to the others representation. 3. If parties do not agree to either of the above tell them to find separate representation. Always Talk to Counsel Not Client: this is bad! A lawyer should always talk to the other partys lawyers (not the party themselves) especially if they know the other party is represented by council. A lawyer can get disbarred for this.
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>> Lawyer-Client Relationship Example Case (Hotz v Minyard) Facts: Pops had 2 car dealerships. Son ran 1, daughter was VP of other. Pop sees his lawyer, and brings son, wife, and secretary w/ him to execute his will (issue). Pop goes back to his lawyer after will is executed and asks to chg the will, giving his son the land which the dealership resides on and instructs lawyer not to tell daughter about this chg (issue). Daughter calls Pops lawyer, asking about the will signed that morning so lawyer shows her the 1st will (not the current will), but does not tell her its not the current will. However, the daughter also had an on-going atty/client relationship w/ Pops lawyer (he did her taxes, etc.)(issue). Pop gets sick, daughter takes care of Pop, all while son runs dealership into ground, and also fires daughter from her VP position. Daughter hired lawyers, and Pops lawyer talks to daughter directly, and tells her that if she fires her lawyers, she will be put back in will (issue). Daughter brings action against lawyer for breach of fiduciary duty for misrepresenting about pops current will. ATTORNEY LIABILITY FOR ESTATE PLANNING MALPRACTICE 1. Minority approach (OH): in order to sue a lawyer for malpractice in estate planning, you must be in privity w/ the contract (thus, beneficiaries cannot sue b/c they are not in privity to the contract). a. 2. Who Can Sue? Executor / Administrators can sue!
Majority approach: the intended beneficiary(s) can sue the attorney for malpractice in estate planning.
PROBATE vs. NON-PROBATE TRANSFERS Probate Overview: if a decedent leaves a will, the decedents personal representative (executor) will offer the will for probate. This requires the decedents personal rep bears to:
1. Collect: collect all the decedents assets; 2. Pay: pay any taxes, creditors claims and expenses of administering the estate; --AND-3. Distribute: distribute the decedents assets to the beneficiaries named in the will. Rationale: probate is needed to clear title to real property; to take care of any claims to creditors; for banks to release funds; etc AVOIDING THE PROBATE PROCESS Overview: many testators seek to avoid the probate process b/c of its reputation for delay and expense. Individuals who wan to transfer wealth outside of the probate system can select from a wide variety of options (i.e. inter-vivos gifts, joint interests w/ right of survivorship) 1. Inter-vivos Gifts
Overview: if a testator makes an inter-vivos gift, that gift will not be part of the testators probate estate. >> Elements of Inter-vivos Gift (Gruen) Facts: Pop bought a painting for $8000, and the painting severely increased in value over time. Pop writes a letter to his son saying hed like to give the painting to his son for his birthday, but wanted to retain possession of the painting for his lifetime. Pop writes a 2nd letter, saying to destroy the 1st letter. Finally, Pop writes 3rd letter, which says that hes giving his son the painting for his birthday, and makes no mention of retaining possession of the painting for his lifetime (note). Main Rule Making an Inter-vivos Gift: to make a valid inter-vivos gift, there must be: 1. intent on the part of the donor to make a present transfer; the donors intent must be to make an irrevocable present transfer of the interest. if the donors intention is to make a testamentary disposition effective only after death the gift is invalid, unless made by will. note: gifts are irrevocable; testamentary dispositions are freely revocable. 2. delivery of the gift, either actual or constructive to the donee; --AND-3. acceptance by the donee. Note: what lawyer should have done after Pops 1st letter: 1. Letters: have Pop write a 2nd letter to his son saying that hes reconsidered, and that he would like to give his son an outright gift. Then, have the son write a responding letter saying he appreciates the gift, but at the present time, has no place to keep the painting could he hang onto it for him? 2. Rent: he could have kept the painting, passed the title to the painting to his son, then pay rent to his son. Joint Interests w/ Right of Survivorship
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Overview: a joint interest w/ right of survivorship is when 2+ people have a single interest in a particular piece of property; and when one joint tenant dies, her interest simply disappears, automatically leaving the surviving joint tenant(s) owning the whole (if more than one surviving joint tenant, decedents share is divided equally among the surviving joint tenants). Instrument Creates Right: The surviving joint tenant takes the property not as the decedents heir or by the terms of the decedents will, but by the terms of the instrument that created the joint tenancy Joint bank accounts: a joint bank account gives each party the power to withdraw all of the money in the accounts (that is, the bank will not be liable for paying money to either account-holder), if either party withdraws, w/o permission, more than the proportion he has deposited, the other party has a claim against him (not the bank).
Failure to Advance Claim = Ratification: failure to advance claim constitutes approval of the withdrawal.
General Rule Joint Account as Death: cts generally enforce survivorship provisions in joint bank accounts assuming: o (1) Not Revoked: the depositor did not revoke the survivorship provision during his lifetime; o (2) No Evidence: decedents estate does not introduce clear and convincing evidence that the now deceased depositor established the joint account only for convenience. Joint Bank Accounts Purpose: there are different purposes for which a depositor might establish a joint account. o o Agency: depositor (esp. the aging) fears that he/she will be physically unable to do his own banking, and wants another persons name on the account. P.O.D.: depositor wants to assure that the account passes to the joint account holder at depositors death w/o the need to go through probate; depositor does not, however, want to confer on the joint account-holder any right to the money during depositors lifetime. Joint Tenancy: depositor wants to confer on the joint-account holder all of the rights associated with joint ownership incl. the unlimited right to withdraw and use the money on deposit.
>> Joint Bank Account + Intent (Franklin) Main Rule Joint Account as Death: cts generally enforce survivorship provisions in joint bank accounts assuming: 1) Not Revoked: the depositor did not revoke the survivorship provision during his lifetime; 2) No Evidence: decedents estate does not introduce clear and convincing evidence that the now deceased depositor established the joint account only for convenience. How Surrounding Circumstances: to determine what the decedent intended, one must consider the surrounding circumstances ask did the decedent actually intend to transfer an interest in the account to the surviving tenant? TODAY (Ohio): b/c of the uncertainty created when parties seek to introduce extrinsic evidence about the intent of the deceased depositor, some states have adopted a hard-and-fast rule barring this extrinsic evidence to show that the depositor created a joint account. rationale: since most banks now have explicit check the box options on their joint account cards (i.e. I intend for this account to be), it is assumed whatever box the decedent checked is what was intended.
INTESTATE SUCCESSION Overview: a person dies intestate when the die w/o a valid will. Property may pass by intestate succession where: 1. The decedent dies w/out having made a will (intestate) 2. An executed will is denied probate. 3. The will does not dispose of all the decedents property (partial intestacy). 4. The will makes a reference to the heirs of a particular person; heirs are those who would succeed to that persons estate by intestate succession. FUNDAMENTALS: INTESTATE SUCCESSION
Overview: the Representative statute determines how decedents property is distributed. 1) Decedent with Surviving Spouse: share of the surviving spouse (overview): a) Majority Approach: if the decedent is survived by a spouse, the spouse usually takes the entire estate.
b) Children: the assumption is the spouse is likely to provide for his/her own children upon the spouses death. Further, if the children are minor, the money is best in the surviving spouses hands b/c the minor children are not capable of dealing with the money own their own (and having a guardian for the children would usu. lead to unnecessary costs and friction). 2) No Spouse + Issue: if the decedent has no surviving spouse, the decedents direct lineal descendants take to the exclusion of collateral relatives. That is, so long as a decedent has children, grandchildren, great grandchildren, virtually all intestate succession statutes preclude decedents siblings or any more distant relatives from inheriting. a) Direct Lineal Descendants (aka issues): children, grand-children, great grand-children, etc.
b) Collateral Relatives: brothers, sisters, nieces, nephews, cousins, and all other relatives who are not direct lineal descendants or ancestors. 3) No Spouse + No Issue + Collateral Relatives: when decedent has no spouse, nor direct lineal descendants, decedents collateral relatives will inherit. a) Parents: if one or both of the decedents parents are still alive, they generally take to the exclusion of other relatives.
b) Parents Dead: if the decedents parents are dead, look to the applicable statute to determine who inherits what. i) Ex. most intestate statutes hold that descendants or decedents parents inherit to the exclusion of relatives who are descended from decedents grandparents, but not decedents parents. Thus, decedents brothers and sisters (or nieces and nephews) all of whom are descendants of decedents parents would inherit to the exclusion of decedents aunts, uncles, and 1st cousins all of whom are descendants of decedents grandparents. 4) Laughing Heirs: many states have enacted what are called laughing heir statutes statutes which preclude inheritance by relatives too remote from decedent. 5) Blood Relatives Only: virtually all intestate succession statutes exclude relatives by marriage, other than decedents own spouse. In other words, decedent may refer to his wifes sisters children as nephews and nieces BUT for intestate succession, they would not be entitled to inherit unless decedent wrote a will including them. a) Ex: nieces/nephews from spouses side, brother and sister-in-laws, stepchildren. 1) OHIO: under Ohio law, you can designate someone as your heir to take under an intestacy statute w/out writing a will. SHARE OF SURVIVING SPOUSE
UPC Share of Surviving Spouse. The intestate share of a decedent's surviving spouse is: (1) the entire intestate estate IF:
(i) NO descendant (kids/grandkids) or NO parent survives decedent survives decedent (translation: no kids or parents); --OR-(ii) all of the decedent's surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent (translation: the perfect family); (2) the first [$200,000], plus 3/4 of any balance of the intestate estate, if no descendant (kids/grandkids) of decedent survives decedent, but a parent of the decedent survives the decedent (translation: no kids, but parent); (3) the first [$150,000], plus of any balance of the intestate estate, if all of the decedent's surviving descendants are also descendants of the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent (translation: kids w/ spouse, and spouse has kids from other relationship); (4) the first [$100,000], plus of any balance of the intestate estate, if one or more of the decedent's surviving descendants are not descendants of the surviving spouse (translation: kids w/ spouse, and kids from other relationship). Traditional Share of Surviving Spouse (traditional) 1. 2. 3. 4. If the decedent leaves kindred (family) but no children/grandchildren, AND whole estate is less than $200,000. a. The surviving spouse takes all. If the decedent leaves family but no children/grandchildren, AND whole estate is greater than $200,000. a. The surviving spouse takes half remainder to kindred. If the decedent leaves both spouse and children/grandchildren. a. The surviving spouse takes half remainder to children/grandchildren. If the decedent leaves spouse, but no children or other family. a. The surviving spouse takes all.
>> No Divorce Decree = No Divorce for Intestate Succession (Estate of Goick) Facts: H & W were married in 1981, and they had 3 kids. In 1990, H filed for divorce. At hearing, H & W agreed to everything but household goods. Following the hearing, the judge was asked if H & W were divorced, and he responded that they were. W motioned to divide personal property of the marriage, and stated that it was her understanding that their marriage was dissolved. Judge responded by stating this was not his understanding, b/c they refused to sign the settlement agreement regarding household goods. No further proceedings occurred in the divorce action and H died. 2 days after Hs death, W moved to dismiss the divorce proceeding b/c H was dead. W then petitioned to be PR of Hs estate as the surviving spouse (issue #2). Hs mom, bro, and sis (P) filed a motion objecting to the petition, claiming that W was the ex-wife of H (issue #1). Further, the ct appointed a guardian ad litem for H & Ws 3 children and a distribution agreement was reached between W and the children through the guardian ad litem (1/3 for W, 2/3 for kids). A notice of distribution was filed, and Ps objected. Finally, Hs mother filed a creditors claim against Hs estate. Montana Statute: the Montana statute lays out the following hierarchy for who can be a PR for an estate: (1) the surviving spouse; (2) children (if eligible i.e. non-minors); then (3) creditors. Issue #1: did the Hs mom, bro, and sis have standing to appeal? Main Rule: a party has standing when they have a personal stake in the outcome of the controversy (i.e. a creditor, legal interests, successor to the estate). Held: Hs mom filed a creditors claim against Hs estate, thus she has standing to appeal the appointment. However, Hs bro and sis are neither creditors or heirs to the estate, therefore, they have no standing.
Issue #2: Was W the surviving spouse of H for purposes of intestate succession? Main Rule: a divorce decree cannot be based on an oral agreement it is not binding on a judge. Held: there was no divorce decree, order issued, or final settlement reached btn H & W thus, W is Hs surviving spouse for purposes of intestate succession. Guardian Ad Litem: a guardian, usu. a lawyer, appointed by the court to appear in a lawsuit on behalf of an incompetent or minor party. SHARE OF LINEAL DESCENDANTS Overview: when an intestate decedent is not survived by a spouse, decedents 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. Living Descendant = Cutoff: any living descendant of the decedent cuts off the right of the descendants own children to inherit. Traditional/Strict (Per Stirpes) Representation: decedents of Xs estate is divided at the generation of children the generation closest to X whether or not any children were actually living at the decedents death. Then the descendants of Xs children would take their parents share by stocks or per stirpes. Modern (Per Stirpes Old UPC) Representation: Xs estate is divided at the closest generation to X in which there is at least one descendant living. Each living descendant takes a share and the share of each deceased descendant passes to his/her issue. Per Capita (New UPC) Representation: initial division of shares is made at the first generational level at which there are living takers, BUT the shares of deceased descendants at that level are combined and then divided equally among the takers at the next level.
ADOPTION OF MINOR CHILDREN Adopting Family: the adopted child is treated the same as the natural child of the adopting parents. o Effect: adopted child can inherit from/through adopted parents and the adopting parents/kin can inherit from/through the adopted child.
Natural Parents: the adopted childrens inheritance rights cut off from their natural parents. o Effect: adopted child cannot inherit from/through the natural parents and the natural parents/kin cannot inherit from/through the child.
Step-Child Adoption Exception o Majority approach: adoption by the spouse of a natural parent has no effect on inheritance rights between the child and the (newly remarried) natural parent or his/her family. However, inheritance rights concerning the other (divorced/dead) natural parent are severed. UPC approach: if a child is adopted by natural parents new spouse, child can inherit through the adopted parent, and both natural parents. This applies if the natural parents separation is the result of divorce OR death of the other natural parent. OHIO: if a child is adopted by natural parents new spouse, child can inherit through adopted parent, and both natural parents. However, this only applies if the natural parents separation is the result of death of the other natural parent..
Inheritance consequences of same-sex adoptions: an increasing number of jurisdictions permit adoption by same sex partners of a biological parent. o UPC: Under the UPC a child can have only one mother.
>> Adopted Childs Inheritance of Deceased Parents Parent = No Rights (Estates of Donnelly) Facts: John Sr. married Lilly. They had two children; Kathleen and John Jr. John Jr married Faith, and had a daughter, Jean. John Jr died, and his wife re-married to a man named Richard. Richard adopts Jean. John Sr and Lilly died. John Sr.s will was 38 yrs old, and left everything to Lilly (his wife), and left nothing to his children (even though children were born). Kathleen was appointed that PR of the estate, and brought a petition declaring that she is the sole heir, and that Jean take nothing. Main Rule (majority approach): adoption by the spouse of a natural parent has no effect on inheritance rights between the child and that natural parent or his family. However, inheritance rights concerning the other natural parent (who is either dead or divorced) are severed. Held: if Jean cannot take from her natural farther, she should not represent him and take from his father. ADOPTION OF ADULTS Overview: in some cases, adults have adopted an adult for the purpose of permitting them to inherit generally not from the adoptive parent, but from some relative of the adoptive parent. Particularly, the situation arises were a long-dead relative created a future interest in the children of a named person. >> Adopted Adults Children = Grandchildren of Adopting Parent (Estate of Brittan) Facts: Stephen married Estelle. They had 1 child together, Mary Ann. Estelle had a child from a previous relationship, William (note: William was 3 yrs old when Stephen and Estelle got married ). Stephen never adopted William as a child. William eventually had 5 kids of his own (who are the petitioners in this case). Estelle dies, and Stephen adopts William, when William is 46 yrs old. William dies soon after the adoption, but before Stephen. Stephen then dies intestate, leaving Mary Ann, his natural daughter, and his adopted son Williams 5 kids as his heirs. Issue: are the natural children of an adult adoptee descendants of the adopting parent? Main Rule: as with natural children, the children of the adoptee, by virtue of the adoption, become the grandchildren of the adopting parent, thereby creating a grandparent-grandchild relationship. Effect: Thus, for purposes of inheritance, the children of the adopted adult are also descendants and can take as grandchildren of the decedent. o Accordingly, if the adopted child predeceases the adopting parent, leaving children, those children, as grandchildren of the adopting parent, are entitled to represent their deceased parent and to receive from the adopting parents estate the share to which the adopted child would have been entitled to receive had he survived the adopting parent. Adult adoption of Same-sex partners: smart option to give the partner standing if will provision were challenged by another family member of the decedent.
SIMULTANEOUS DEATH Overview: a person cannot take as an heir or will beneficiary unless he/she survives the decedent b/c property cannot pass to a dead person. If it cannot be determined who died first (and simultaneous death is not provided for in the will) a simultaneous death statute controls. UPC Approach: an individual who fails to survive the decedent by 120 hrs (5 days) is deemed to have predeceased the decedent.
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Downloaded From OutlineDepot.com Ex. H & W die in plane crash. H & W die minutes apart. H would have been deemed to predecease W, and W would have been deemed to have predeceased H. Applies to wills & intestacy. Does not apply for joint tenancy w/ right of survivorship.
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Ohio Approach: same as UPC, except that it also applies to joint tenancy w/ right of survivorship. Note: Some statutes impose a 30 day survival requirement. Testator Can Change Time Limit: you can always change the time period for pass between death by will (i.e. every beneficiary must survive me by a period of 60 days to take).
>> Traditional Simultaneous Death Statute = Determining Who Died First (Estate of Villwock) Facts: Dad has a kid from previous marriage, Mary (P). Dad re-marries a woman named June. Dad and June get in a horrible car crash. Wife was announced dead at 8:30, and dad was announced dead at 8:32. However, medical records say that the dad was officially dead in the ambulance, and wife officially died later at the hospital. Thus, dad really died first, and the wife died second (issue). Dad died intestate. Per the state statute, if a spouse dies intestate, the surviving spouse gets the entire estate. P argues that the dad died either second, not first. The reason she is arguing this is that if the dad dies first, his entire estate passes to his wife, who is not Ps mother. Then, when wife dies, her estate will pass to her children (or parents). Thus, P would get nothing. Issue: who died first? Main Rule: if all the evidence establishes that both decedents died simultaneously, each is deemed to have survived the other. Otherwise, if the evidence establishes who died first, then the decedent who died first should be deemed to have died first (obviously). Held: dad and wife did not die simultaneously dad died first, and wife died second. DISCLAIMERS ************** Overview: at common law, an heir was not entitled to renounce or disclaim property inherited by intestate succession; title vested automatically at the intestates death. However, many states have adopted disclaimer statutes allowing heirs to disclaim interest through intestate succession. Defined: disclaimers are any writings which declines, refuses, renounces, or disclaims any interest that would otherwise be taken by a beneficiary/heir. Can Only Disclaim: a beneficiary who disclaims property inherited by intestate succession cannot say where the disclaimed property should go they can simply renounce the inherited property. Relation Back: so long as a disclaimer is properly executed & timely delivered, relation back treats the beneficiarys interest as having never passed to the intended beneficiary or heir at law. o o o Properly Executed: an intestate interest is not created until the death of the creator/transferor. Timely Delivered: the state statute held that a disclaimer shall be delivered at any time after the date of the transfer (usu. the death of the creator/transferor), up to 9 mos.\ Disclaimer Effect: beneficiary does not accept property from decedent (by will or intestacy), and as a result, property transfers to the next person in line (as if the beneficiary died). Ex. Mom Son (disclaimed) Hunter / Jayme
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Time Limits: time limits placed on disclaimers is generally governed by the IRC; usu. 9 mos. of date transfer/death. o Exception = Minor: minors have 9 mos. from the date they turn 21 yrs old. Receive Any Benefit Disclaimer: a disclaimer cannot be executed if beneficiary has accepted any of the benefits from it. o Ex. X receives house from Y via intestate succession and X uses house for a few months, but decides to disclaim. This is not valid. Conditioning Disclaimer = Accepting Benefit: conditioning a disclaimer is the equivalent of accepting the benefit, and then transferring the benefit. In other words, it is not a valid disclaimer if you condition the disclaimed benefit. o Ex. X disclaims his interest in Ys estate in return for an agreement by his children that they would pay for his new house. Creditors Claims: some people use disclaimers to defeat creditors claims against the estate. o Majority Approach: if an estate beneficiary properly executes a disclaimer, the beneficiarys interest is treated as if the beneficiary never received the interest. As a result, the interest is beyond the reach of the beneficiaries creditors. Minority (Ohio) Approach: disclaimers cannot defeat an existing creditors interest. Ohio has adopted this approach: it is a fraudulent conveyance to disclaim an interest in order to avoid a reasonably expected creditor.
Fractional Disclaimers: a beneficiary can execute fractional or percentage disclaimers. Federal Tax Lien: a disclaimer cannot be used to defeat a federal tax lien. Bankruptcy Proceedings: a properly executed disclaimer before the disclaiming heir petitions for bankruptcy IS effective to cut off any rights of the bankruptcy trustee. Whether a disclaimer executed after the heir has petitioned for bankruptcy is effective to cut off the rights of the bankruptcy trustee is an open question. PR Disclaiming on Behalf of Deceased: o No Creditors: Under the UPC, a PR can disclaim on behalf of a deceased person if w/in valid time a deceased person can disclaim. Under common law, the PR can always disclaim for a deceased person. Creditors: a PR may not disclaim on behalf of a deceased person who has creditors the deceased could have disclaimed while he was alive, so the PR cant. The rationale is that the PR has a fiduciary duty to pay off creditors.
Why Disclaim: o o Funnel Assets: by disclaiming assets, a beneficiary may be able to funnel assets to his own children w/out paying estate taxes. Reduce Income Tax Burden: if the beneficiarys children are in a lower income tax bracket, the disclaiming beneficiary may be able to reduce his familys income tax burden.
>> Disclaimer Example (Estate of Baird)
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Facts: James (son) married Cheryl, and they had 2 kids (Hunter/Jayme). They divorce, and son remarries moms caretaker, Susan. Son beats the junk out of Susan, and he gets 20 yrs in prison for assault. A couple days later, he executes an instrument purporting to disclaim any and all interest he may have in his mothers estate although his mother is alive at the time he executes this instrument ( issue #1). Susan brings a personal injury action against son, in which she wins, and was awarded a judgment of $2.75mil. One week later, son files for bankruptcy (issue #2). Some time later, sons mom dies intestate and her estate is totaled at $500,000 in which son is entitled to 60% ($300,000). Issue #1: is an anticipatory disclaimer of an expectancy interest valid and effective? Held: the disclaimer was not properly executed (the mother was not dead when he executed the disclaimer thus, he had no interest when he executed the disclaimer ), --AND-- it was also not timely delivered (son delivered it b/f the transfer of the interest, not after ). Issue #2: Does sons disclaimer prevent sons interest in moms estate from becoming an asset of sons bankruptcy estate? Held applied minority approach: seeing the ct found this to be a valid disclaimer, they never really resolved this. But, if it were a valid disclaimer, they would have held that sons interest in moms estate becomes an asset of sons bankruptcy estate even though he disclaimed. ASSIGNMENT OF EXPECTANCY INTEREST General Rule: an assignment of an expectancy interest is generally unenforceable b/c an heir has no property interest in the decedents estate before the decedents death; theyre only an heir apparent. Possible Exception Receiving Consideration: when an heir apparent (or will beneficiary) receives consideration for an assignment of an expectancy, the courts may treat the assignment as a K to transfer decedents property when the property passes to the heir and may enforce the K in equity. o Ex. A and B divorce, and B accepts less in settlement for assignment of expectancy to C (daughter). Less settlement is the consideration and the cts may enforce the K in equity.
Testator Can Be Clueless of Assignment: the testator does not need to know that the assignment took place in order for the assignment to be considered valid. Wing and a Prayer: an assignment of expectancy interest is a wing and a prayer b/c theres nothing stopping the testator from changing their will. o Ex. A and B divorce, and B accepts less in settlement for assignment of expectancy to C (daughter). Less settlement is the consideration. However, after the assignment, As father changes will to leave out A. Now, As screwed b/c hes essentially assigned nothing to C.
ADVANCEMENTS Overview: supposed that, during decedents life, he gave substantial sums of money to his daughter to enable her to buy a home; decedent then dies intestate. Decedents son contends that the sums advanced to the daughter should be counted against the daughters share of the estate. There are two approaches to this problem. 1. Common Law Approach: a substantial gift to a child by a parent raised a presumption that the gift was an advancement of the childs inheritance, and that gift should be charged against the childs intestate share.
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Downloaded From OutlineDepot.com a. 2. Presumption = Rebuttable: the presumption was rebuttable, but the burden of proof was on the child to demonstrate that the parent did not intend advancement.
Modern (UPC OH) Approach: the exact opposite of the common law approach. The presumption is that a lifetime gift is NOT an advancement. a. Presumption = Rebuttable: the presumption was rebuttable, and written evidence is required to rebut this presumption (i.e. written evidence showing testator meant the gift to be an advancement). Calculating Advancements: a. b. c. Step #1 Add Advancements: all of the money distributed to heirs as advancements should be added to decedents net estate to get the total amount (hotchpot). Step #2 Calculate Entitlements: the total amount (hotchpot) should then be divided among the heirs in accordance w/ the provisions of the intestate succession statute. Step #3 Adjust Entitlements: subtract the gift from the beneficiaries share. NOTE: If a beneficiarys entitlement is smaller than the advancement, the doctrine does not require the beneficiary to give back any of the advancement (they just get nothing).
Example Advancement Smaller than Beneficiary Share: Decedent was survived by her 3 children; A, B, and C. Decedent advances $30,000 to A during decedents lifetime, and memorialized (i.e. put in writing) the transfer as an advancement against As intestate share. 3 years later, decedent dies intestate w/ an estate worth $90,000. Distribution: Step #1 Add Advancement to Net Estate: add the $30,000 advancement to the decedents net estate ($90,000 + $30,000 = $120,000) Step #2 Calculate Entitlements: Divide total by 3 = $120,000 / 3 = $40,000/child. Step #3 Adjust: Adjust As entitlement = $40,000 $30,000 (advancement) = $10,000. Step #4 Answer: Both B and C are entitled to $40,000, and A is entitled to $10,000 ($40K+$40K+ $10K = $90K). Example Advancement Larger than Beneficiary Share: Decedent was survived by her 3 children; A, B, and C. Decedent advances $50,000 to A during decedents lifetime, and memorialized (i.e. put in writing) the transfer as an advancement against As intestate share. 3 years later, decedent dies intestate w/ an estate worth $90,000. Distribution: Step #1 Add Advancement to Net Estate: add the $50,000 advancement to the decedents net estate ($90,000 + $50,000 = $140,000) Step #2 Calculate Entitlements: Divide total by 3 = $140,000 / 3 = $46,667/child. Step #3 Adjust: Adjust As entitlement = $46,667 $50,000 (advancement) = -$3,333. Thus, A is entitled to nothing but would not have to give anything back. Step #4 Answer: B/c A is entitled to nothing, $90,000 split between B and C ($45K). PROTECTION OF THE FAMILY DISINHERITANCE: SPOUSAL PROTECTION Overview: virtually every state protects a surviving spouse against disinheritance. Common law states allows spouses a fixed share of the decedent spouses estate. Community property states provide even more protection for the surviving spouse.
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Common Law Property States: most states are common law property states. Common law property states treat property as individually owned, unless husband and wife took title as tenants by the entirety or as joint tenants. o Protection: most common law states protect the surviving spouse by allowing them a fixed elective share (generally 1/3) of the decedent spouses estate, even if the decedent spouse tried to limit the surviving spouse to a smaller share in their will . Problems with Common Law Property Approach: No Time Minimum of Marriage: if someone was married for 5 seconds, they were automatically entitled to 1/3 of spouses probate estate. Didnt Account for Gifts: the Common Law Property Approach didnt take into account assets spouse had already given to you.
Elective Share Statutes: elective share statutes apply ONLY in common law property states if the decedents estate consists entirely of separate property, the surviving spouse is dependent upon whatever the decedent wants to give him/her.
Community Property States: few states are community property states. Community property states treat all property acquired by either spouse during the marriage as the product of the joint efforts of the husband and wife; husband and wife each enjoy a share in the community property. o Protection: Each spouse has right to dispose by will of only one-half of the community property; the other half automatically belongs to the surviving spouse.
ELECTIVE SHARE STATUTES Main Rule: under any elective share statute, the living spouse has the option to: 1) take the amount given to surviving spouse in the will; OR 2) make a statutory election to waive her deceased spouses will, and take the amount of the deceased spouses property (real & personal) allowed under the statute, as if the deceased spouse died intestate. TRADITIONAL Elective Share Statute: under a traditional elective share statute, if the surviving spouse opts to make a statutory election, they may take 1/3 the deceased spouses probate estate, as if the deceased spouse died intestate. Determining the Decedents Probate Estate 1) Kerwin vs. Donaghy (Traditional): the deceased spouses probate estate does not include personal property that the deceased spouse conveyed in his/her lifetime (aka non-probate form). a) Effect: a H/W can dispose of all of his/her personal property in his/her lifetime, w/o the knowledge or consent of his/her spouse, with the result that it will not form part of his/her probate estate for him/her to share under an elective share. That is true even though his purpose was to disinherit him/her. b) Ohio follows this rule for now (but its likely to change soon). 2) New Rule: if, during the marriage, the deceased spouse created an inter-vivos trust over which he/she alone retained a general power of appointment, the assets in the trust would be subject to spousal election. a) Rationale: if H & W get divorced, the likely property settlements would be H gets 50% of everything, and W gets 50% of everything. Thus, its not fair that a faithful spouse could get treated worse than a divorced spouse, i.e., by the deceased spouse completely disinheriting. Therefore, a faithful spouse (who hung in there) should get treated at least as well as those who
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have gotten divorced. Problems with Traditional Elective Share Statute: any crafty testator who wished to disinherit his/her spouse could find an easy way around the elective share statute: o o (1) Place Assets in Trust: income to self for life, remainder to someone other than spouse (see Sullivan v Burkin below) (2) Transfer all assets before death (i.e. inter-vivos gifts).
OLD UPC Elective Share Statute: under the Old UPC elective share statute, if the surviving spouse opts to make a statutory election, they may take 1/3 the deceased spouses augmented estate which expands a decedents estate to include lifetime transfers and property held in trust. Augmented estate = o Decedents net probate estate; o Decedents lifetime transfers to people other than the surviving spouse where the decedent retained a use or interest in the property (a string is attached to the transfer). o Decedents lifetime transfers to the surviving spouse. Calculation: o First: Compute the value of the decedents augmented estate; o Second: Compute the surviving spouses elective share by dividing by 1/3 (the old UPC kept the 1/3 elective share). o Problem w/ Old UPC: (1) contained sexist presumption (that surviving spouse had nothing), and (2) gave surviving spouse 1/3 elective share, regardless of how long they were married.
NEW UPC Approach: the new UPC approach adopts the partnership theory of a marriage. The objective is to provide the surviving spouse w/ a right to receive property w/ sufficient value to result in the surviving spouses having property w/ an equal value to approx. half of the couples marital property, in addition to his/her separate property. It attempts to mirror a community property system no real protection, however, for a short marriage (no time to build up marital assets). Augmented estate = o Decedents net probate estate; o Decedents lifetime transfers to people other than the surviving spouse where the decedent retained a use or interest in the property (a string is attached to the transfer). o Decedents lifetime transfers to the surviving spouse; AND o Surviving spouses own property, together w/ property transferred by the surviving spouse. Partnership Theory: the amount of the elective share increases each year the marriage lasts (designed to take into account late-in-life marriages where there are children from previous marriages/relationships). o KNOW: after 15 yrs of marriage, the surviving spouse is entitled to 50% of the augmented estate.
Calculation: in determining whether a surviving spouse has a right to elect: o First: Compute the value of the decedents augmented estate; o Second: Compute the surviving spouses elective share determined by the length of the marriage (if > 15 yrs = 50%); --AND o Third: Determine whether the dispositions already made for the surviving spouse, taken in combination w/ the spouses own assets, were sufficient to eliminate any right to elect.
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How: if the dispositions already made for the surviving spouse PLUS the spouses own assets ARE GREATER THAN 50% of the augmented estate, the surviving spouse cannot elect.
>> Examples Facts: H dies w/ a probate estate worth $3mil. While alive, H created a living trust in which he put $3mil in, and the principal was to be paid to him for his life, and the remainder to X. H also transferred to W (surviving spouse), while alive, $3mil. Traditional approach o Elective Share = $1mil (1/3 of $3mil in probate estate) + $3mil (transfer from H) = $4mil. Old UPC o Elective Share = $3mil (1/3 of $9mil augmented estate value). o NOTE: W could elect more if she can show that the $3mil was hers to begin with, rather than a transfer. The old UPC just assumes all money is from spouse. New UPC o Elective Share = $4.5mil (50% of $9mil augmented estate value) (assuming theyve been married 15+ yrs)
>> Traditional Elective Share Statute Application Example (Sullivan v Burkin) Facts: Ernie Sullivan (H) created a trust in which he put most his assets in, and the principal was to be paid to him for his life. H dies, and his will explicitly states that he intentionally disinherited W, and that the principal of the trust was to go to Burkin. H and W were separated for many years, but not divorced. W says that the inter-vivos trust was an invalid testamentary disposition, and that the trust assets constitute assets of the estate. In essence, shes saying that b/c of the trust, she gets nothing (theres no probate estate its all in the trust) so the trust should be part of the estate, in which she would get 1/3. Held Traditional Probate Estate: whether or not H established an inter vivos trust in order to defeat W's right to take her statutory share of assets placed in trust and even though H had a general power of appointment over trust assets, W obtained no right to share in assets of that trust when she made her statutory election. Fraudulent Intent Statutes: some states have taken the approach to invalidate fraudulent transfers that seek to avoid the elective share. o Relevant factors for determining fraudulent intent: Whether the transfer was made w/ or w/out consideration; The size of the transfer in relation to the decedents total estate; The time of the transfer between the transfer and the decedents death; Relations which existed between the husband and the wife at the time of the transfer; The source from which the property came; Whether the transfer was illusory; and Whether the surviving spouse was adequately provided for in the will. Ohio approach: Ohio says that the size of the elective share depends upon how many children. o Proposed legislation: no sliding scale depending on the length of the marriage BUT surviving spouse would get the same in an elective share as he/she would in a divorce.
WAIVER OF ELECTIVE SHARE RIGHTS (PRE-NUP) Common Law Waiver Rule: a surviving spouse may waive their elective share rights by a written K signed by the party waiving after fair disclosure.
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Fair Disclosure: fair disclosure is when each spouse is given information, of a general and approx. nature, concerning the net worth of the other spouse. No Fair Disclosure: if a surviving spouse waives their elective share rights by a written K signed by the party waiving w/o fair disclosure, their right to an elective share is restored, and the waiver is deemed void. Fair Disclosure = Fiduciary Duty: fair disclosure is required b/c of a fiduciary duty owed to ones current/future spouse.
>> Pre-Nup Agreement General Rule = Requires Fair Disclosure (Geddings v Geddings) Facts: H & W were married and both had children from former spouses. W signed a document (the pre-nup) presented to her by H in which the doc acknowledged that each had made wills; and that the bulk of each estate would go to their children from previous marriages upon death, and that each had made a complete disclosure to each other of all presently-owned assets. H dies, and W wants the pre-nup declared invalid b/c she did not receive fair disclosure of Hs assets. Held: there was not fair disclosure from H when W signed the pre-nup. How to draft a Pre-Nup: 1. List Assets: list all of the assets of both spouses, along with each assets FMV. Bad! Simply reciting that both parties have disclosed everything w/o listing the actual assets will no work. 2. When: have the agreement signed b/f the engagement is announced Worse Case: have the agreement signed b/f wedding invitations go out. 3. Separate Representation: have each spouse get separate representation. How: represent one spouse, then recommend to the other spouse many other lawyers who could represent the other spouse (let them choose). UPC Waiver Rule: a surviving spouses waiver will be invalid if the surviving spouse proves either: (1) Involuntary Waiver: he/she did not execute the waiver voluntarily; OR o involuntary = presenting the agreement for signing at the rehearsal dinner or presenting the agreement after the wedding invitations have gone out.
(2) Unconscionable: the waiver was unconscionable when it was executed, AND o o o o the decedent spouse did not provide fair disclosure before it was executed; the surviving spouse did not voluntarily waive voluntarily, in writing, any right to disclosure; AND did not have (or reasonably could not have had) adequate knowledge of decedent spouses net worth. unconscionable = decision by the court as a matter of law.
Which is better? o o Common law: the common law approach gives the party w/out financial leverage the legal leverage to negotiate a fair deal. UPC: Under the UPC approach, there is no disclosure required, but parties will not know whether deal will be upheld until court determines if the deal was unconscionable or not.
OTHER PROTECTIONS FOR THE SURVIVING SPOUSE
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Downloaded From OutlineDepot.com Overview: suppose that during the decedents lifetime, they rack up debt beyond their capacity to repay. If decedents creditors obtain judgment against him/her, they are generally free to execute those judgments against decedents property. However, state law typically places some of the decedents property beyond the reach of creditors. Homestead Allowance: statute that protects the family residence from the claims of decedents creditors. o o UPC limits the allowance to $15,000. Ohio repealed the homestead allowance, and combined it w/ exempt property (see below).
Family allowance: court-ordered distribution (upon request of the personal representative) to the decedents family for living expenses protected by any claims of creditors. Exempt property: the surviving spouse is usually entitled to petition to set aside certain items of tangible property listed in states homestead allowance statute.
COMMUNITY PROPERTY Overview: 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 half a share. However, property acquired b/f marriage or by gift/inheritance is the separate property of the respective spouse. Testamentary Disposition: each spouse has the power of testamentary disposition only over his or her half of the community property. That gives the surviving spouse a guaranteed half interest in all community property, but no rights in separate property. How it Works: if the decedents wealth was all earned during the marriage, the surviving spouse will get as his or her share of community property. But, if the money cam in before the marriage or by gift/inheritance, the surviving spouse gets nothing there is no right to the separate property.
PROTECTION OF CHILDREN Overview: the general rule is that any parent can intentionally disinherit their child (or children). However, there are statutes enacted to protect children accidentally omitted from the parents will. The statutes called pretermitted child statutes fall into two broad categories: 1. Children After Execution Statutes: those pre-termitted child statutes that protect only those children born after execution of testators will; a. UPC Approach: only applies to children born after the execution of the will. i. The after-born child shares in the pot of the estate left to then-living children. 1. Ex: X has two children Y & Z. Z was born after Xs will was executed. Xs will leaves Y $5K, but does not name Z. Z would be entitled to split the $5K left to X. ii. The share of the surviving spouse (or others provided for by the will) is not reduced. iii. Does not apply if it appears from the will that the omission was intentional.
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All Children Statutes: those pre-termitted child statutes that protect all children who have been unintentionally disinherited (i.e. those born before and after the execution of the testators will). a. Minority Approach Missouri-Type: for those children born before and after the execution of the will: i. Unintentional: excluded child can inherit so long as omission was unintentional.
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Downloaded From OutlineDepot.com ii. No Extrinsic Evidence: as long the document does not say the inheritance was intentional, the disinheritance is considered unintentional (extrinsic evidence will not be allowed to show otherwise). b. Majority Approach Massachusetts-Type: for those children born before and after the execution of the will: i. Intentional: An excluded child can inherit unless it appears that the omission was intentional. ii. Extrinsic Evidence not Admissible: extrinsic evidence is admissible to prove the omission was intentional.
>> Pre-Termitted Child Statutes Illustration (Estate of Glomset) Facts: H & W signed joint and reciprocal wills leaving each other all of the others property in case of the other, except in the case of a common disaster, in which the whole estate would go to J, their son. C, their daughter, was not named in the will. However, the way the will is written is, if H dies, all goes to W, but what happens when W dies? The answer is, the estate would go intestate. But, on the face of the will, thats probably not their intention seeing they wanted everything to go to their son, J, if they died in a common disaster. >> How to Disinherit Unknown Children (Heir Wars) Example: I hereby leave $1 to anyone who can prove he/she is my child. WILLS EXECUTION OF WILLS WHY FORMALITIES ARE REQUIRED Protective function: formalities protect the testator from fraud, undue influence, mistake and fraudulent suppression of a valid will after the testator dies. Ritual function: will signing is a serious piece of human business that one gives some consideration to; rituals often induce reflection. Evidentiary function: requiring a writing gives us a physical record of the testators wishes. Channeling function: provides standard expressions of a testators intent: o o o Formalities make an instrument w/ a safe conduct pass that assures a swift passage through the legal system; Formalities provide a known channel or canal for an instrument to travel efficiently through the legal system into the safe harbor of admission to probate; and The mysteries created by the required formalities channel testators to lawyers trained in the will-writing process.
FORMALITIES REQUIRED (TRADITIONAL APPROACH) Signature Requirements: o o By Whom: the will must be signed by the testator (through own power, or by assistance of another), OR by another by his direction and in his presence; Mark + Intent: Any mark affixed by the testator, w/ the intent that the mark operate as a signature, satisfies the signature requirement.
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Placement of signature Majority: the will is valid as long as the testator signs somewhere on the instrument. Minority: the will must be subscribed, i.e.: signed at the end of the document. Majority = the logical end of the document. Minority = physical end (material following signature may be struck from the will)
Witnessing of Signatures: the execution of the will must be attested by two or more credible witnesses (OR holographic see below) Witnessing Testator Signature: Testator must sign the will in presence of the witnesses. Own Handwriting: the witnesses must sign the will in his/her own handwriting. Witnesses Signatures General Rule: witnesses must sign the will in presence of testator. Conscious Presence Test: the attestation must occur where testator, unless blind, is able to see it from his actual position at the time, or at most, from such position as slightly altered, where he has the power to make the alteration w/out assistance. Even if in the same room, testator must be able to see the witnesses hand while signing. o In some circumstances the court may adopt the more relaxed conscious presence test which includes the senses other than sight (i.e. hear). Some jurisdictions require witnesses also sign in the presence of each other. o
>> Strict Conscious Presence Test Applied Not in Same Room = Invalid (Morris v West) Facts: During the execution of Ms will, the witnesses were not in the presence of M when they signed his will. Specifically, the witnesses were in the secretarial office when they signed, and M was in the conference room. The secretarial officer and the conference room were separated by the lawyers private office there were two solid walls between the testator and the two witnesses when the witnesses signed their names. Ms daughter challenged the probate of her fathers will b/c 1/3 of the share went to her exhusband. Main Rule Conscious Presence: the witnesses must sign their names in the presence of the testator. 1. Conscious Presence: the attestation must occur where testator, unless blind, is able to see it from his actual position at the time, or at most, from such position as slightly altered, where he has the power to make the alteration w/out assistance. Held: the testator could not have seen them sign w/o arising from his chair, walking some 4 ft to the hallway, and then walking about 14 ft down the hallway to a point where he could have looked through the doorway and seen the witnesses as they signed their names. Thus, the will is ineffective for failure to comply with testamentary formalities. WITNESSES Traditional Credible Witness: a credible witness was deemed to be someone not financially interested in the will (not a beneficiary).
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Traditional common law: if will had to be attested by two witnesses, and one of the witnesses was a beneficiary of the will, the entire will was thrown out. Modern statutes: the entire will is not thrown just b/c it was attested by an interested witness (i.e. beneficiary): AS LONG AS the witness does not take more than what they would take intestacy. If they take more, theyre limited to the intestacy share.
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Executor Interested Party: if youre the executor no problem with being witness. The rationale is, youre getting money for the service of being executor. Attorney Interested Party: if youre an attorney no problem w/ being a witness. Again, the rationale is, youre getting money for the service. Good Practice: actually it is good practice to have an attorney as a witness (easy to find in the future). Potential Contest: if there is a good chance of contest of the will in the future, the more the need for competent witnesses (i.e. medical personnel, attorney, etc.)
UPC: the UPC will allow anyone to be a witness. to the will o o Credibility not Mentioned: the UPC does not say anything about the witness being credible (i.e. a witness is not credible if they are an interested party). Impeachment: if the witness does have a financial interest in the will, one can attempt to impeach that witness.
Attestation Clause: an attestation clause is a of boilerplate that states that the will formalities have been satisfied and provides a place for the witnesses signatures. o Not Required: witness signatures on a will are required, but an accompanying attestation clause is not. Every well-drafted will contains an attestation clause, even though they are not technically required. Functions of an Attestation Clause: Creates a Rebuttable Presumption: The attestation clause creates a rebuttable presumption that the formalities recited in the clause were performed. Burden of Proof: w/o a attestation clause, the burden of proof is on the witness to prove that the will formalities have been satisfied, but with an attestation clause, the burden of proof is on contester. Probated w/o Memory: A will can be admitted to probate even if the witnesses have no memory of the signing if there is an attestation clause in the will. Impeach Hostile Witness: the attestation clause can be used to impeach a hostile witness, or inspire a wavering witness to remember. Example: [First Witness] and [second witness], as witnesses, state that the Testator declared this instrument to be his Last Will and Testament; that he signed and
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Downloaded From OutlineDepot.com executed the instrument in our presence, willingly, under no constraint or undue influence; and that he requested that we affix our signatures to this Will. Self Proving Affidavit: signature attached to the will, signed by the witnesses, the testator, and the notary at the time of execution. o Functions of a Self Proving Affidavit Witness Dont Need to be Found: If a self-proving affidavit is signed and attached to will at the time of execution, the witnesses do not need to be found to sign an affidavit at the time of probate. Signature = Substitute for Witness Testimony: when a witness signs a self-proving affidavit, it has the same function of an affidavit it is a substitute for witness testimony at a hearing or other legal proceeding. Rebuttable Presumption: Some jurisdictions signed affidavit creates a rebuttable presumption that will was properly executed. Contested Will: If any chance a will is going to be contested probably a good idea to have one.
Ohio: Ohio has done away w/the requirement that affidavit of witnesses must be obtained to probate a will.
EXECUTION CEREMONY Overview: in general, all execution ceremonies should include the following steps: o o Step #1 Final Form: the will should be in its final form, w/ pages numbered and the will should be securely fastened. Step #2 2+ Witnesses: there should be at least 2 witnesses present use 3 I there is a risk of contest. Note: The drafter often acts as one of the witnesses. Step #3 Gather Everyone: if the witnesses are strangers to the testator, gather everyone (lawyer, witnesses and testator) in the same room, so the witnesses can form an opinion about the testators capacity. Easy to Find + Local + Likely to Outline: b/c it might be later necessary to obtain the witnesses testimony to probate the will, the witnesses should be easy to find, locally available and likely to survive the testator. Beneficiaries: people who take under the will should not be in the room during the ceremony, w/ the possible exception of the testators spouse. Step #4 Questions: Testator: ask testator if this is his will and if he wants to sign the will. Testator: Ask the testator if he would like the witnesses (law partners, secretaries) to be the witnesses to his will. After Answer: After witnesses have heard answers to questions proceed w/ the signing.
SAFEKEEPING
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Testators Right to Original: The testator has an absolute right to his/her original will & most clients leave lawyers office w/ their original will in hand. o Ohio: Ohio has a law which allows testator to file original will w/ the probate court. If Lawyer Can Keep Original: Where it is legal for the lawyer to keep the original will, it is a good idea for lawyer to keep the will, if the lawyer is willing. Bank as Executor: Also possible to give the will to the nominated executor, if a bank is the nominee. One Original Only: Only one original will should be executed if there is more than one will and the testator wants to cancel the will both must be destroyed.
EXEPTIONS TO WILL FORMALITIES SALVAGE DOCTRINES Dispensing power: the judicial power to admit a document to probate even when the document lacks even the basic formalities (i.e. no witnesses to execution of the will) required under the statue of wills; o o Exception: the dispensing power cannot be used to dispense w/ the signature requirement. Substantial compliance and Dispensing Power are NOT the same.
>> Dispensing Power = Clear and Convincing Evidence (Estate of Hall) Facts: H and W were married. W was Hs second wife, and W had 2 children from a previous marriage. H had an original will. H & W met w/ their lawyer (L), and they drafted a joint will. H & W were ready to execute the will as soon as L sent them the final version. H asked L if the draft could stand as a will in which L replied that it will be valid if they executed the draft. H & W executed the draft. After execution of the joint will draft, H instructed W to tear up Hs original will. H died and W applied to informally probate the joint will. Issue: can the court admit the joint will to formal probate? Main Rule UPC Approach (UPC 2-503): although a document was not executed in compliance w/ the statute of wills (i.e. no witnesses to the execution of the will), the document is treated as if it had been executed in compliance w/ the statute of wills if the proponent of the document can establish by clear and convincing evidence that the decedent intended the document to constituted the decedents will. NOTE: less than 10 states have adopted the UPC 2-503. Substantial Compliance: a will may be probated if the court determines it substantially complies w/ the requirements of the statute of wills if: o the document expresses testators testamentary intent, AND o if its form substantially conforms to formalities so that the purposes of formalities statutes are served. o Ex. a will could be admitted to probate even though the witnesses signed the attached selfproving affidavit, but not the will itself (Will of Raney).
HOLOGRAPHIC WILLS Overview: a holographic will is an un-witnessed will, handwritten and signed by the testator. o Recognition: holographic wills are recognized as a valid wills in about half of the states.
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o o o o
Rationale: Even if the testator is unable to obtain witnesses, the court can still be fairly certain of testators intent if it in his own handwriting. Specificity: the will should leave or devise stuff the will should not be ambiguous. Handwritten vs. Partial Handwritten: Some jurisdictions require the entire will to be handwritten; others require only that the material provisions be handwritten. Signature: A testator must sign a holographic will personally. Not Allowed: proxy, rubber stamp signatures. Location of Signature: In some states (and under the UPC) the testator may sign anywhere in the will and in others he/she must sign the will at the end.
WHAT CONSTITUTES THE WILL INCORPORATION BY REFERENCE Overview: incorporation by reference arises when a testator has a non-witnessed document existing outside of the will/codicil, but would like the will to incorporate this non-witnessed document. >> Doctrine of Incorporation by Reference Definition (Estate of Norton) Facts: Decedent (testator) had a document consisting of a legal cover sheet, and 8 sheets of paper. First 6 pages have testators signature, no witnesses, and ended mid-sentence to a real property devise (i.e. it appeared to be missing a page or something) the last 2 pages have all testamentary formalities. Last 2 pages were a codicil to original will. The last 2 pages were stapled to the original will. Issue: were the 1st 6 pages of testators will incorporated by reference, so as to constitute a single document? Main Rule Incorporation by Reference: the court may give effect to a will which disposes of property in accordance with an unattested (unwitnessed) document if: 1. In Existence: the document was in existence at the time the will/codicil was executed AND 2. Clear and Distinct: the document is described and identified w/ such particularity as to designate and clearly show, and so the ct can certainly see, what paper is meant to be made part of the will. 2. NOTE: never use language that the document to be incorporated involves future action, make sure the document already exists; must CLEARLY indicate that the document referred to has already been written. Held: no, the 1st 6 pages of testators will were not incorporated by reference. 1. Yes the 1st 6 pages were in existence at the time the codicil was executed. 2. No there is not adequate evidence that the decedent intended to incorporate the 1st 6 pages. >> Types of Documents Incorporated = Notebooks / Memos (Clark v Greenhalge) Facts: The issue revolves around who gets some painting. Grenhalge is the executor and principal beneficiary of the will, Clark is a good friend. Timeline 1972: testator drafts a memo consisting of a list of items to be distributed upon her death no painting mentioned. 1976: testator amended the memo again no painting mentioned. 1977: testator executes a will stating that all property is to be left to Greenhalge except those items explicitly designated by a memorandum left by her and known to Greenhalge . 1979: testator maintains a bedside notebook, also consisting of a list of items to be distributed upon her
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death says Clark should receive painting. Greenhalge knows of this notebook. 1980: testator writes a codicil to her 1977 will. 1986: testator dies. Greenhalge distributes property in accordance w/ 1972/1976 memo. Greenhalge keeps the paining for himself, claiming he was not bound to give effect to the expression w/in the notebook, b/c it was not specifically identified as a memorandum. Clark sues.
Main Rule Incorporation by Reference + Type of Docs: a properly executed will/codicil may incorporate by reference any document or paper not so executed and witnessed (i.e. a memorandum / notebook), as long as it was in existence at the time of the of the execution of the will/codicil, and is identified by clearly and distinctly identifies the document(s). Main Rule Interpreting Wills + Testators Intent: when interpreting a will, always follow the intention of the testator (if the law allows). The intent of the testator can be determined by: the language which the testator used to express his/her testamentary designs; the circumstances existing at the time of the execution of the will/codicil. Held: that the notebook is not entitled a memorandum is of no consequence, since it is apparent the intention of testator that the notebook be a memorandum in relation to her will. Note UPC: the UPC is simply a codification of the common law doctrine of incorporation by reference.
DOCTRINE OF REPUBLICATION BY CODICIL Overview: a codicil is an amendment to a will. Certain effects of a codicil are: Date Updated: the date of the will is updated to the date the codicil is executed. Validate the Invalid: codicils can validate an invalidly executed will cures the defects. o In other words: signing a codicil to will, it re-publishes the will, thus validating the entire will. Formalities Reqd: Codicils must be executed w/ the same testamentary formalities as a will. DOCTRINE OF INTEGRATION Overview: the doctrine of integration permits courts to treat separate pages as a single integrated will as long as all the pages of the will are present in the room at the time of the testator signing . Rationale: the idea is that the pages of a will can be integrated into a coherent whole. Burden of Proof: proponent of the will has the burden of showing that all the pages were present when the will was executed and were intended by the testator to be part of the will. Avoiding the Issue: to avoid this issue, lawyers should label all the pages of the will (p.# out of total pages) AND have client initial each page.
FACTS OF INDEPENDENT [NON-TESTAMENTARY] SIGNIFICANCE Overview: a will may dispose of property by reference to acts that can be justified by something other than changing the will. >> Doctrine of Facts of Independent Significance Definition (In re Tiplers Will) Facts: The dispute is over whether a holographic codicil should be enforced b/c it referred to a document not yet in existence. Timeline
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1982: W executed a formal will. The will left the bulk of her estate to H, upon the contingency he survives her. However, the will did not address the event H predeceased her. 1982: W created a holographic codicil to her will that directed if H predeceased her, her property should be distributed in accordance with Hs will. However, when W created the holographic codicil, H had not executed a will. The record shows that W did not get along w/ her family, and that she thought of Hs family as her family. 1990: H executes a will. Hs will created a trust in W, and upon Ws death, all property be distributed to Hs relatives. 1991: H dies. 1994: W dies.
Main Rule Doctrine of Facts of Independent Significance: a will may dispose of property by reference to acts and events that have significance apart from their effect upon the disposition made by the will, whether they occur before of after the execution of the will or before or after the testators death. In other words, a will may dispose of property by reference to acts that can be justified by something other than changing the will. Steps: o Find the referenced act or fact. o Ask if the referenced fact has its own independent significance apart from the fact that it affects the testators will. Yes valid gift w/out having executed a codicil. No gift is invalid. Example: Ts will gives $1000 to each person who is in his employ at the time of his death. After the will is executed T hires three new employees and fires two old employees. o The gift is valid b/c it is assumed that T would not make employment decisions simply to make or unmake devises in his will. The act of employment has independent significance apart from its effect on Ts will. Example: Ts will gives $1000 to each person who is listed on an envelope next to his bed. After the will is executed, T creates the envelope w/ the initial names, and keeps changing the names on the envelop. o The gift is NOT valid b/c it is assumed that T created the envelope to make or unmake devises in his will. The act of changing the names does not have independent significance apart from its effect on Ts will. CONSTRUCTION PROBLEMS Overview: this section looks at the different rules for construction problems created by the time gape between will execution and death. All these rules are rules of construction they represent the laws best guess about what testator would have wanted when testator did not explicitly consider the situation that actually occurred. ABATEMENT Overview: abatement rules determine the order or priority among various devisees when the value of the estate is insufficient to satisfy all of the devises in the will. For instance, at the time the testator executes her will, she is quite wealthy, or she expects to be wealthy by the time of her death as a result, she makes generous devises to a variety of people. However, when she dies, her property is insufficient to satisfy the devises. >> Types of Devises + Order of Abatement (In re Estate of Potter) Facts: Mom had a will in which she left her daughter her house, and her son the equivalent cash amount from a trust. The remainder of the trust is to be split between son and daughter. When mom dies, theres not enough money in the trust to pay son the cash equivalent of the house. Types of Devises
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Residuary: whatever is left over after specific and general devises. General: gift which may be satisfied out of the general assets of the testators estate, instead of from any specific fund, thing or things. o Example: I devise $30,000 to each of my children. Demonstrative: devise of a particular amount of money to be drawn from a specified fund; treated as a specific devise up to the value of the specified fund and a general devise for the balance. o Example: I devise $30,000 to my daughter Fran, and I direct that my 2003 Ford Explorer be sold to satisfy this bequest. Specific: a gift by will of property which is particularly designated and which is to be satisfied only by the receipt of the particular property described. o Example: I devise my speedboat to my brother Bob. Main Rule Abatement: abatement is the reduction of a devise (aka legacy) b/c of the insufficiency of the estate of a testator to pay all his debts, all the costs of administration, and the devisees (aka legacies) in full. The following is the order of priority among various devisees when the value of the estate is insufficient to satisfy all of the devises in the will: 1. 2. 3. 4. 5. Creditors: the assets of the estate applied to the payment of debts and costs for particular indebtedness; Not Devised: the assets which have not been devised will abate; Residuary: the assets in the residuary clause will abate; General: if the assets in the residuary clause are insufficient, then general devisees will abate; a. Demonstrative: portion of devise that is the balance is treated as general. Specific: if the assets in the general devises are insufficient, then specific devisees abate. a. Demonstrative: portion of devise up to the value of the specified fund is treated as specific. Sum: creditors not devised residuary general specific
Example: Testators will provides: 1. I devise my speedboat to my brother Bob (specific). 2. I devise $30K to each of my children, Cindy, Daniel, and Edith (general) 3. I devise $30K to my daughter, Fran, and I direct that my 2003 Ford Explorer by sold to satisfy this bequest (demonstrative). 4. I devise the residue of my estate to my alma mater, the Univ. of Penn (residual). At testators death, her estate consists of her boat (valued at $10K), the 2003 Ford Explorer (valued at $10K) and $55K cash. How should Testators estate be distributed? 1. 2. 3. 4. 5. 6. 7. 8. Bob gets boat Fran gets $10K from car (shes owed $30K from car, but car only produced $10K. Thus, treat the $10K as specific, and the balance of $20K as general). $110K is needed to satisfy all devises = $30K x 3 (Cindy, Daniel, Edith) + $20K (remainder for Fran from car) but $55K is available which is 50% of $110K (55K / 110K) Cindy gets $15K (50% of $30K owed) Daniel gets $15K (50% of $30K owed) Edith gets $15K (50% of $30K owed) Fran gets $10K (50% of $20K owed)
Exoneration of Specific Devises Common Law Rule: if a house was devised with a mortgage still on it, a specific devisee is entitled to have the mortgage paid at the expense of the residuary estate, unless it appeared, from the will itself or surrounding circumstances, that testator intended the devisee to take subject to the mortgage. UPC (majority) Approach: presumption of non-exoneration (receiving house free and clear of
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mortgage); specific devisee takes subject to a mortgage lien unless testators contrary intent appears from the will or surrounding circumstances. Apportionment of Taxes Common law: tax claims were generally treated as claims against the estate, unless the will provided otherwise. UPC: taxes are apportioned among estate beneficiaries each beneficiary bears a proportionate share of estate tax liability.
General Directives Overview: a general directive (aka a garbage clause) basically says executor has to pay all debts of testator. Only rationale for a general directive is some people have an idea that it is the moral thing to do. However, executor already has this fiduciary duty to pay testators debts, so a general directive has no legal effect ADEMPTION Overview: ademption applies when testator has devised a particular piece of property (i.e. a diamond ring) which testator disposes of after executing the will. The doctrine of ademption provides, in general terms, that the specific devisee is entitled to nothing if the specifically devised property is not in testators estate at testators death. It is said that specific devise has been adeemed by testators disposal of the specifically devised property. Ademption by Satisfaction Overview: ademption by satisfaction is the testate counterpart to intestacies rule for advancement. Common Law: exactly like rule for advancement. There is a presumption that a gift to devisee from testator in testators lifetime satisfied the gift in testators will, unless writing showed different intent. Modern statute (Ohio and UPC): unless testator has provided in their will or contemporaneous writing that the gift is designed to satisfy the devise in the will it is not considered ademption by satisfaction.
Ademption by Extinction Overview: there are 3 approaches to Ademption by Extinction; Traditional, Old UPC, and New UPC. 1. Traditional (Majority) Approach: the traditional ademption by extinction approach applies when the specifically devised property is no longer part of the estate at the time of distribution. a. Modern Test i. Q1: Is the gift a Specific Legacy? If so, ii. Q2: Is it found in the estate at the time of the testators death? 1. If no, the gift is considered adeemed. iii. Note: under this modern test, there is no consideration of testators intent. Exception Form & Substance Rule: a substantial change in the substance of the subject matter of a bequest will operate as an ademption, but a change in form will not. i. Example: switching money to bank X b/c bank Y closed = change in form = no ademption. ii. Example: closing a savings account at bank to buy CDs = change in substance = ademption.
b.
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c.
Benefit: the modern test for ademption by extinction eliminates the need to trace what happens to a specific devise.
>> Money in Bank to Flower Bond = Change in Substance (McGee v McGee) Facts: S had access to Ms bank accounts (for reason), and decided to buy flower bonds w/ all of the money from Ms bank accounts, hoping to avoid estate taxes (not knowing mom didnt have enough assets for estate tax purposes). Ms will bequeathed $20K to friend, and then all Ms shares of Texaco stock, and any money in bank to grandchildren. Held: the change from the bank account to flower bonds is a change in substance, thus the specific legacy to the grandchildren is adeemed. 2. Old UPC Approach: the old UPC approach for ademption by extinction did not consider testators intention w/ certain limited exceptions for amts. unpaid at death. a. Rule: Specific devisee has right to specifically devised property in the testators estate at death AND i. Any balance of the purchase price, together w/any security agreement, owing from a purchaser to the testator at death by reason of sale of the property. ii. Any amount of a condemnation award for the taking of the property unpaid at death. iii. Any proceeds unpaid at death on fire or casualty insurance on or other recovery for injury to the property; AND iv. Property owned by the testator at death & acquired as a result of foreclosure, or obtained in lieu of foreclosure, of the security interest for a specifically devised obligation. 3. New UPC: the new UPC approach for ademption by extinction looks primarily to the testators intent for determining ademption. a. Rule: Specific devisee has right to the specifically devised property in the testators estate at death AND i. (1)-(4) from old UPC and adds two other provisions (both of which are controversial and can cause tracing problems encouraging litigation). ii. Real or tangible personal property owned by the testator at death which the testator acquired as a replacement for the specifically devised real or tangible personal property; AND iii. Unless the facts and circumstances indicate that the ademption of the devise was intended by the testator or ademption of the devise is consistent w/ the testators manifested plan of distribution, the value of the specifically devised property to the extent the specifically devised property is not in the testators estate at death and its value or its replacement is not covered by (1)-(5). LAPSE Overview: when a devisee named in the will dies b/f testators death, the devise generally lapses unless the jxs anti-lapse statute preserves the devise for the devisees descendants. Common Law (Majority) Approach: the common law doctrine of lapse generally assumes that when a devisee dies before the testator, the testator would not have wanted the devised property to pass to the devisees heirs. Thus, the devised lapses.
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Downloaded From OutlineDepot.com 1. Anti-Lapse Statutes: If there is a bequest /devise to a blood relative, and that beneficiary doesnt survive testator, but leaves surviving issue, the share of the devise goes to the beneficiaries issue. a. For Anti-Lapse Statute to Apply: i. The Bequest is to a RELATIVE; AND 1. 2. Who is a relative depends on how broadly/narrowly it is defined in the statue. UPC anti-lapse statute defines relative to include: a. Grandparents & their descendants; AND b. Step-children
ii. The relative has SURVIVING ISSUE b. 2. If (i) and (ii) above are not met, the devise lapses.
Consequences of Lapse: if a specific or general gift to an individual beneficiary lapses, the devised property passes into the residue of the testators estate. a. b. Residuary devises: if the testator devises the residue of his/her estate to a single devisee, and it lapses, the residue passes by intestate succession. If there is more than one residuary beneficiary: i. Traditional view: the fraction of the residue which would have passed to the deceased devisee passes by intestate succession. ii. Modern view: the entire residuary should be distributed to the other residuary devisees no intestacy unless all of the residuary devisees die before the testator.
3.
Class Gifts: a class gift is when the testator did not make a gift to individual, but to a class of people i.e. to my children, to my brothers. What happens if one or more members of the class predeceases the testator? a. b. c. Common Law: if a member of the class predeceased the testator, that members devise lapsed & the remaining class members of the class divide the lapsed devise. Modern Anti-lapse Statutes: if a member of the class predeceases the testator, the predeceased members devise goes to their issue. Gifts to multi-generational classes automatically include issue of deceased class members.
4.
Void Devises: at common law, when the devise was to a person who had died b/f the time of will execution, the devise was deemed a void devise. a. Modern anti-lapse statutes generally apply to save both lapsed and void devises.
5.
Overriding an Anti-lapse Statute a. Traditional (majority) Approach: there is a presumption arises in favor of the operation of the anti-lapse statute BUT where the testator uses words of survivorship, indicating an intention that the devisee shall take the gift only if he survives the testator, the anti-lapse statute does not apply.
>> Traditional Anti-Lapse Statute Override Application (Estate of Rehwinkle)
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Facts: Rs will states that he bequeaths the entire residue of his estate to those of the following who are living at the time of my death: my bro Alex, my sis Augusta, my following nieces, Helene, etc. Helene predeceases R, and upon Rs death, Helenes son (F) filed a petition for an order declaring him an heir of R. F argued that the states anti-lapse statute entitled him to the share which his mother would have recd had she lived. Specifically, the state statute said, in pertinent part, that if estate is devised, and devisee pre-deceases testator, and if devisee has lineal descendants, they shall take the devised property. Held: the language who are living at the time of my death manifests the testators clear intent that the anti-lapse statute not apply. Thus, the gift to Fs mom lapsed when she predeceased testator. b. New UPC Approach: words of survivorship in the testators will are not, in the absence of additional evidence, a sufficient indication of testators intent that the anti-lapse statute not apply. i. The testator must include an alternative beneficiary since language of survivorship will not prevent operation of the anti-lapse statute.
>> New UPC Anti-Lapse Statute Override Application (Estate of Ulrikson) Facts: B died testate w/ a will bequesting $1000 each to 9 nieces and nephews. The residue was to go to Bs brother M, and her sister R, and if one predeceases the other, the entire residue to either M or R (whoevers alive). M & R were alive when B executed her will. However, both M & R predeceased B M left 2 children, while R had no children. B actually had 2 deceased siblings when she executed her will which had a total of 7 nieces (Ps). 2 of these nieces died, one leaving issue. Ps argue that Bs residue provision was intended to override the states antilapse statute which would have given Ms 2 children the residue of Bs estate. Held: it is likely B did not contemplate both her younger siblings would pre-decease her. The residuary clause contains no instructions for the circumstances which occurred. Thus, the words or survivorship would be effective only if there were survivors but since there were no survivors, the anti-lapse statute should operate. MISTAKES IN WILLS AMBIGUITIES Overview: if a will contains a latent ambiguity, extrinsic evidence is often allowed. 1. Latent ambiguity: a latent ambiguity exists when the will appears to be clear on its face, but is susceptible to more than one meaning when applied to the extrinsic facts to which if refers. a) Ex. Ts will reads: I leave my property to my daughter. However, T has two daughters.
b) Classes of Latent Ambiguities i) 2+ Persons/Things: Where there are two or more persons or things that exactly measure up to the description in the will; OR ii) No Persons/Things: Where no person or thing exactly answers the declarations and descriptions of the will, but 2 or more persons or things answer the description imperfectly. c) Extrinsic Evidence: In cases of latent ambiguity, the courts routinely admit evidence of testators circumstances or behavior to enable the court to correlate the language of the will w/ the facts in the world.
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Downloaded From OutlineDepot.com 2. Patent ambiguity: if the ambiguity is obvious from the face of the will; many courts will not allow extrinsic evidence to correct a mistake. a) Ex. Ts will reads, in provision 1: I leave my house to my son John. However, in provision 2 of Ts will, it reads I leave my house to my son Marc. Many courts, in this situation, would not allow extrinsic evidence to correct this mistake.
3.
Mistakes: mistakes occur when the language of the will is susceptible to only one meaning, but the meaning does not reflect the testators intent. a) Common law rule: If testator leaves out a beneficiary b/c of a mistaken belief, the omitted beneficiary cannot take under will unless the will states what the beneficiary would have gotten if testator didnt have mistaken belief. b) Ex. I leave nothing to X, b/c I believe hes dead. But, if X is not dead, I leave X
4.
Correcting Mistakes Doctrine of Mistakes: when the face of a will contains a mistake or latent ambiguity, the testators intent should prevail! Thus, if a mistake or latent ambiguity exists w/in testators will, to clear up the ambiguity, extrinsic evidence should be admitted to: a) interpret something actually written in the will (latent ambiguity) --OR-b) strike something from a will (mistake see Gibbs), c) BUT never to add to the will anything left out by mistake (see Knupp). Example: Ts will reads: I leave my real estate in Franklin County described in book #315 | Parcel # 206 to Y. However, T really own Book #513 | Parcel # 602. Using the word my is helpful in this situation (instead of the) b/c it shows a mistake. Thus, ct will likely strike this description as a mistake. d) Striking Creates Latent Ambiguity: If by striking a portion of the will creates a latent ambiguity, evidence can be admitted for clarification.
>> Providing Wrong Name of Beneficiary Doctrine of Mistakes Application (Estate of Gibbs) Facts: H & W leave 1% of estate to Robert J. Krause at 4708 N. 46th Street, Milwaukee, Wisconsin. Robert W. Krause (D), Hs employee for 30+ yrs, and friend on the family, did not live at that address, and alleges that he was to receive the 1%, not Robert J. Krause who was unknown to H & W. Held Ambiguity: there was no ambiguity the terms of the bequest exactly fit Robert J. Krause, and no one else. Held Mistake: the ct properly considered the evidence to determine the intent of H and disregarded the middle initial and street address, and determined that D was the Robert Krause whom testators had in mind. >> Missing Name of Residuary Beneficiary Doctrine of Mistakes Application (Knupp) Facts: 6 of Hs will said that the residuary of his estate should go to the beneficiary listed in 8. 8 did not list any beneficiaries. Thus, residue of Hs estate goes to the state. Knupp brings suit claiming he was the intended beneficiary in 8. Held: any ambiguity in Hs will is not of the sort that can be corrected by the consideration of extrinsic evidence. There is no language in the will that could lead a court to infer that H intended K to be the recipient of the residual estate thus it was proper for the ct not to admit extrinsic evidence. translation: this case demonstrate that cts will never add to the will anything left out by mistake. TESTATORS UNATTESTED STATEMENTS
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Downloaded From OutlineDepot.com General Rule: latent ambiguities present questions of identity, and extrinsic evidence may be admitted to help identify the person or the thing to which the will refers. In other words, extrinsic evidence is admissible to identify a person or thing mentioned in a will, BUT it is not admissible to alter or effect the construction of the will. Rationale: A testator writes a will, not a witness. Wills must be executed w/ testamentary formalities; if that is what the testator intended by the will, it should be placed in the will and executed properly. 1. Surrounding Circumstances: surrounding circumstances, as well as the declarations of the testator, are relevant to determine what the will refers to as long as not attempting to demonstrate intent. a) Surrounding Circumstances = facts of which the testator had knowledge when he/she made her will.
b) Surrounding Circumstances Declarations of Testators INTENT: declarations of intent, by a testator, are not admissible to control the construction of his will or to vary, contradict or add to its terms. >> Identifying Testators Intent for Latent Ambiguities Application (Britt v Upchurch) Facts: H executed a will which left his home to his daughter, and everything else to his wife. Hs will bequeathed to his daughter his residence at 2615 Cooleeme Street, Raleigh ,NC. However, H actually owned an adjacent lot too, which actually had a separate address (2617 Cooleeme Street, Raleigh ,NC). However, both lots were used as a single lot. H dies, and Hs step-daughter (P) wanted the adjacent lot (b/c she claims Hs will only bequeathed the single lot to his daughter ), but Hs daughter (D) wanted both lots (b/c she claims H meant both lots). Issue: whether H meant to give D both lots of land, or just 2615 Cooleeme Street. P wanted to introduce evidence from an affidavit by Hs atty who drafted the will that said to the best of his recollection, H wanted the adjacent lot to go to his wife, not D. Held: the description of the property in the will creates a latent ambiguity and extrinsic evidence is admissible to ascertain Hs intent. However, the attys affidavit should be not admitted b/c it is declaration of Hs intent.
REVOCATION OR WILLS Overview: will are ambulatory, meaning they are freely revocable. Revocations can be total (the entire will), or partial (just a portion of the will). 1. Three Ways to Revoke a Will: there are only 3 ways to revoke a will: a) Physical act to the original will: the physical act to the original will is either to the paper the will is written on, or to the writing on the paper. i) Ex. burning, ripping, tearing, erasing or writing cancelled on the writing of a will.
b) Subsequent written instrument: either by an express clause of revocation, or by inconsistent subsequent provisions. c) Operation of Law: by operation of law due to change in circumstances.
1. REVOCATION BY PHYSICAL ACT General Rule: under virtually any statute, a public destruction of a will would provide ample evidence of testators intent.
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1.
What constitutes act a) Majority Touch the Will: in most jurisdictions, to cancel a will by physical act, the act must touch the written words of the will.
b) Minority UPC: under UPC, revocation by physical act is effective whether or not the act touches any of the words on the will. c) 2. Proxy: to effectively have a proxy revoke a will by physical act, the proxy must be in the presence of the testator.
Common Law Presumption of Revocation: when a will that was last known to be in the custody of the testator, or in a location to which he had ready access, cannot be found at his death, it is presumed to have been DESTROYED by the testator w/ the intention of revoking it. a) Strength of Presumption = Fact Sensitive: the strength of the presumption varies with the facts, and depends on: i) the control that the decedent possessed over the repository, AND ii) whether others had access to it.
b) Factors: the following factors weaken the strength of the presumption: i) others who have an interest in the will, that have access to the will; ii) those who have access to the will, and have an interest in the will not going to probate; iii) testator has re-affirmed, re-iterated, or made reference to the will during a reasonable time before his/her death. c) Rebutting Presumption: if the presumption is rebutted, the proponent of the will (usu. the executor) still has to prove the contents of the missing, but not revoked, will. How i) Photocopy of the original will ii) Drafters testimony.
d) Ohio: when a will that was last known to be in the custody of the testator, or in a location to which he had ready access, cannot be found at his death, it is presumed to have been LOST by the testator. >> Strength of Presumption Analysis (Henson-Hammer) Facts: T prepared a will in 1985, and killed himself in 1987. At the time of Ts death, his original will was not found w/ his personal belongings. When executing the will, T kept the original, and kept it in a safety-deposit box. T and his daughter shared this safety deposit box. In 1986, T confirmed his estate plan w/ Banks trust officer. Also, in 1986, T took some important papers from the safety-deposit box, and kept in a kitchen cupboard which Ts daughter also had access. No proof whether or not the will was one of these important papers. Held: the following factors overcame the presumption of revocation by T: daughter's access to the will; daughter would benefit by revocation of Ts will; Ts re-affirmation of his estate plan in 1986; T expressed concern that his grandchildren, rather than daughter's husband, receive his assets. 3. Duplicate Originals: if a testator signs two original wills with the same exact terms, the two wills are duplicate originals. a) Physical Act on Copies of Will: acts done to a copy of the will are irrelevant.
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Downloaded From OutlineDepot.com i) Restatement (Third) of Property: if the testator mistakes a copy for the original, and the intent to revoke can be proved by clear & convincing evidence, the failure to revoke the original can be excused as a mistake.
b) Destroying Duplicate Originals: if client and attorney each retain a duplicate original, whatever the testator does to the original effects the originals not in the custody of the testator. However, if both copies are in the testators possession, the testator must destroy both or destruction is not effective. 4. Partial Revocation by Physical Act: most states allow partial revocation of a will by physical act; except the testator cannot increase any beneficiarys devise by partial revocation unless its a residuary beneficiary.
2. REVOCATION BY SUBSEQUENT WRITTEN INSTRUMENT General Rule: a will may be revoked by a subsequent written instrument IF: 1. the subsequent will was executed solely for that purpose; 2. if the subsequent will contains a revocation clause; --OR-3. the subsequent will contains inconsistent provisions w/ the previous will. BUT, the mere fact that a subsequent will was made, although it claims to be the last, does not create a presumption that it revokes the prior will. Resolving 1st and 2nd Wills: a revocation by a subsequent written instrument will be found if the two wills are so inconsistent that they cannot stand together.
>> Inconsistency in Subsequent Will Analysis (Wolfes Will) Facts: The issue is whether Ws two wills are so inconsistent they cannot stand together. Timeline July 31st, 1911: W wrote a will declaring it to be the last will and testament, and bequeathed land to Ms. Luffman. Aug. 14th, 1911: W wrote a will declaring it to be the last will and testament, and bequeathed all his effects to his brothers and sisters. Held: remanded to trial court to define effects to determine if these two wills are in fact so inconsistent that they cant stand together. Revocation by Codicil: Decedents last will & testament may be a combination of two or more instruments (i.e. will + one or more codicils). Thus, a decedent can revoke a portion of a prior will by executing a codicil w/ testamentary formalities.
3. REVOCATION BY OPERATION OF LAW Overview: situation arise where testator writes a will, leaving all his/her property to her husband/wife. Years later, testator never changes his/her will. Revocation by Operation of Law considers whether the exwife or ex-husband should inherit the property, or should we focus on the testators likely intent. There are two approaches the Old vs. New UPC. 1. New UPC: divorce (or equivalent, i.e. annulment) revokes a revocable disposition to the former spouse OR a relative of the former spouse. a. Applies to governing instruments: the New UPC applies to wills, insurance policies, annuities, inter vivos trusts, etc.
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i. Exception: the new UPC does not apply to designations covered by ERISA S.Ct. held that the governing federal statute, which directs that proceeds of non-probate assets should be paid to the individual designated as beneficiary in the K (the former spouse if not changed before death) preempts state law. b. c. 2. Surviving the Divorce: if a bequest is to survive the divorce, a statement should appear in the will, court order or divorce settlement. Effect of Revocation: if a bequest is revoked by divorce, the gift passes as though the beneficiaries predeceased the testator.
Old UPC: bequest is invalidated unless the will expressly provides otherwise. a. b. c. Former Spouse only: divorce merely revokes bequests to the former spouse, not relatives of the spouse. Only addresses wills: the Old UPC does not include life insurance policies or inter vivos trusts. Majority Approach: most state statutes adopt the approach of the old UPC.
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Pre-Marital Wills: in some states, marriage will revoke a pre-marital will. a. b. Effect: if a state holds that a marriage revokes a pre-marital will, the estate passes through intestacy. Other States: other states have enacted pretermitted or omitted spouse statutes the will is not revoked; the spouse gets omitted spouses share and the rest passes under the terms of the will.
REVIVAL OF REVOKE WILL 1. Three Approaches to Revival of Testators Revoked Will A. Common Law (Courts of England): prior will (will #1) was not revoked, and the prior will (will #1) governs disposition of testators property. 1. Rationale: Wills are revocable subsequent will (will #2) did not speak until moment of testators death, thus the clause revoking prior will (will #1) was not in effect until testators death.
B. Ecclesiastical courts (Courts of the Catholic Church): prior will (will #1) was not reinstated unless re-executed with testamentary formalities. 1. 2. 3. Rationale: subsequent will (will #2) that revoke a previous will have immediate effect. Wills speak when executed, only property passes at death. Effect: Decedent died intestate if first will (will #1) not re-executed. Problem: most jxs adopted the ecclesiastical approach. However, people dont understand that revoking subsequent will (will #2) wont automatically reinstate prior will (will #1).
C. New UPC Approach: adopts a mild Ecclesiastical approach. Essentially, the previous will remains revoked unless it is revived.
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Downloaded From OutlineDepot.com 1. 2. 3. 2. Revived: the previous will is revived if it is evident from the circumstances of the revocation of the subsequent will or from the testators contemporary or subsequent declarations that the testator intended the previous will to take effect as executed. translation: the new UPC focuses on testator intent; the first will is revived if that is what testator intended. Effect: The new UPC approach makes the Doctrine of Dependent Relative Revocation less necessary.
Revocation of Codicil: Revocation of the codicil leaves the will, w/out the revoked codicil, intact.
DEPENDENT RELATIVE REVOCATION (DRR) Overview: the DRR doctrine involves situations like the following: Testator has a valid will. Testator attempts to revoke this will, intending to execute a new will. The revocation of the will is facially successful, but the 2nd will fails for some reason (i.e. no testamentary formalities). What would the testator rather have, the 1st will, or no will? 1. Applying DRR: the court asks what the testator would rather: 1. To Die Intestate (no will); OR 2. The revoked First Will in effect? Effect of DRR: if it appears that the testator would have preferred the revoked will to be in effect as opposed to dying intestacy, DRR will revive the revoked will. Premise: the premise underlying DRR is that the testators revocation of his/her will was based on a mistake often a mistake about the effect of the revocation.
Example: Provision in Ts will states: I leave $10K $15K to friend Frank. Step #1: Provision in Ts will cant be used b/c there were no testamentary formalities surrounding the change in the wills provision. Step #2: Ask whether you think T would want Frank to get $10K (will #1), or nothing (intestacy)? Step #3: T would probably have preferred Frank to get $10K as opposed nothing. Step #4: Apply DRR revive Ts first will. Example: Provision in Ts will states: I leave $10K $1.00K to friend Frank. Step #1: Provision in Ts will cant be used b/c there were no testamentary formalities surrounding the change in the wills provision. Step #2: Ask whether you think T would want Frank to get $10K (will #1), or nothing (intestacy)? Step #3: T would probably have preferred Frank to get nothing as opposed to $10K. Step #4: Do not apply DRR simply revoke Ts first will. >> DRR Application (Carter v 1st United Methodist) Facts: C executed a will on Aug. 21, 1963. Upon her death, the will was found folded together w/ a handwritten instrument that was unsigned and unwitnessed. The instrument established a different distribution scheme. C had told her atty from time to time that she needed to see him to change/revise her current will, or to make a new will. The issue is whether C meant to revoke her will, and if so, would C have rather died with the executed will, or via intestacy? Held: Evidence supported that C would not have preferred to die with the first will in effect, as opposed to dying intestacy. CONTRACTS TO MAKE WILL & JOINT WILLS
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CONTRACTS TO MAKE WILLS 1. Common Law: if a joint will or mutual (reciprocal) wills does not contain a reference to a contract, that does not necessarily mean the will is not contractual. The intent of the testators to be bound by a contract need not be an expressed statement, rather it may be determined circumstantially by the language and other expressions used in the will. Language indicating a contractual will includes: A. the use of plural pronouns; B. the identical distribution of property upon the death of the survivor; C. joint revocation of former wills; D. consideration, such as mutual promises. UPC Approach: The execution of a joint will or reciprocal wills does not create a
presumption of a contract not to revoke the will or wills. A contract to make a will, may be established only by: A. provisions of a will stating material provisions of the contract, B. an express reference in a will to a contract and extrinsic evidence proving the terms of the contract, OR
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C. a writing signed by the decedent evidencing the contract. 3. Effect of Contract: if it is deemed that the will or wills are contractual, and an attempt is made
to revoke the will or wills, the party attempting to revoke the will or wills is in breach of contract.
4. Notes of Contracts to Make Wills: contracts to make will is never a good idea clients lie,
and it binds the surviving spouse for life. >> Common Law Contract to Make Wills Application (Garrett v Reed) Facts: H & W executed identical wills. Both wills said that the spouse should receive everything upon death, but if the spouse does not survive them, everything should be distributed equally between all their kids. Each will also contained a provision giving each the ability to change the shares that their own kids should get (while not changing the shares the other spouses kids should get). H had 3 kids from a previous marriage, and W had 3 kids from a previous marriage; H & W did not have kids together. H died, and W wanted to change her will. Basically, she wanted to take Hs kids out of her will, and give everything to her kids. The issue is whether H & Ws wills were contractual in the sense to not allow the surviving spouse the ability to change the shares designated for the deceased spouses children. Held: The wills were contractual, thus W would only disinherit her children, and grandchildren. 1. Wills were identical, leaving everything to the surviving parent, then to children, evenly divided. 2. H & W communicated their wishes to be bound by their agreement with each other to leave a portion of the estate's assets to one another's children. 3. H & W wanted the freedom to change the distributions to their own children. JOINT WILLS Overview: A joint will is the will of two or more persons executed on the same piece of paper and intended to serve as the will of each its a single instrument executed by two or more testators. If one of the joint testators should revoke her joint will, the document would still serve and be admissible to probate as the will of the others.
WILL CONTESTS STANDING TO CONTEST
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Downloaded From OutlineDepot.com General Rule: testators heirs, and any beneficiaries who would take larger amounts under a prior will have standing to contest; i.e., people who are worse off by the new will, and better off by a prior will people w/ a financial interest in invalidating the last will. 1) Administrators: Jurisdictions are divided about the right of an administrator or executor under a prior will to contest a subsequently executed will. 2) Trustees: Trustees under prior wills generally can contest b/c they have a financial interest as title holders. 3) Creditors: creditors generally have no standing to contest, b/c the contest will not affect the size of the estate, BUT a) Courts are divided about whether the creditors of an heir or beneficiary or a prior will have standing to contest. i) Unsecured creditor (i.e. master-card, someone who lent testator money) = no standing. ii) Secured creditor = standing TESTAMENTARY CAPACITY General Rule: a testators testamentary capacity is sufficient if he/she: 1. understands the nature of business w/ which he is about to engage (knows he/she is executing a will); 2. knows what property is being disposed of; 3. knows who the objects of his bounty are (i.e. family members); AND 4. knows how he wants to dispose of his property. NOT: the testator need not possess high quality or strength of mind (i.e. testator can be feeble and weak minded) the testators mind may be debilitated, and he/she may be eccentric or peculiar.
2) Lucid Intervals: a lucid interval is a period of time during which the testator had sufficient understanding to make a will. a) Rebutting Evidence of Incapacity: the proponent of a will can rebut evidence of incapacity by showing that, even if testator often lacked capacity, the testator executed the will during a lucid interval.
>> Aged + Eccentric Lacking Testamentary Capacity (Wilson v Lane) Facts: Testator (T) was an eccentric woman. She had trouble dressing/bathing, and also had an irrational fear of floods. Further, T often called the Fire Dept about fires that did not exist. Testimony from Ts physician stated that it appeared she was in the middle stages of a dementia of Alzheimers type. However, drafting atty (and some of Ts friends) testified that it appeared T was mentally competent at time will was executed. Further, Ts bequeathed her belongings to 16 blood relatives, and 1 caregiver. Ts will was contested on the grounds that she lacked testamentary capacity saying she was aged, eccentric, and peculiar in the last years of her life. Held: there was no evidence to show that, at the time the will was executed, T suffered from a form of dementia sufficient to render her unable to form a decided and rational desire regarding the disposition of her assets. 3) Guardianship: cts will uphold a testators capacity to make a will even after a guardian had been appointed to manage testators affairs as long as the general rule (above) is met. 4) Justifications for Invalidation: some justifications for invalidating a will based on lack of capacity include: a) The will does not reflect the testators true desires, the desires the testator would have had were it not for testators illness.
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Downloaded From OutlineDepot.com b) Family members may be entitled to an inheritance, either b/c they have relied on the inheritance during their lifetime or b/c they have developed expectations about inheritance which ought not to be disappointed unless testator has a rational basis for disinheriting them. LAY WITNESS vs. MEDICAL TESTIMONY Lay Testimony: lay testimony about the testators behavior may be the most persuasive evidence about testators capacity b/c testator may not have undergone psychical or psychological examination. 1) Facts Reqd for Conclusion: Lay person testimony is routinely admitted, but, the witness may not state a conclusion about testators capacity w/out relating the facts upon which the conclusion is based. Medical Testimony: When a physician has examined the testator close to the time of will execution, the physicians testimony is always relevant. BUT medical testimony can be by a physician who examined the testator OR by a physician who did not examine the testator. INSANE DELUSION General Rule: a testators insane delusion will invalidate a will for lack of capacity, IF the delusion produced the disposition made in the will. 1) Insane Delusion: an insane delusion is when a person has a false belief for which there is no reasonable foundation, against all evidence of probability, and this person conducts themselves as if this false belief is true. a) Ex. the belief that testators spouse has been unfaithful. b) Ex. testators belief that some of their relatives are trying to kill them. c) Ex. testators belief that some of their relatives are trying to commit them to a nursing home. 2) General Capacity: if the testator has an insane delusion, they generally have the capacity to conduct everyday affairs, but for this one delusion which has no factual basis. 3) Some Facts = No Insane Delusion: if there are facts, however insufficient they may in reality be, from which a prejudiced or a narrow and bigoted mind might derive a particular idea or belief, it cannot be said that the testator suffers from an insane delusion (Ex. Dougherty). >> Insane Delusion Example (Dougherty v Rubenstein) Facts: T was in poor health due to alcoholism. T had a stroke, and during hospitalization, T was disoriented and confused. Hospital recommended placing T in a nursing home. Ts son, J, placed T in a crappy nursing home. T was miserable there. Eventually, Ts sisters removed T from the nursing home. Once home, T began to improve and re-established his relationship w/ J. J managed Ts money in which T kept accusing J of stealing all his money. However, this was by all accounts not true. T insisted J stole his money and eventually changed his will to disinherit J. The issue is whether Ts belief that J was stealing his money was an insane delusion which caused him to disinherit J, thus invalidating the will? Held: B/c J put T in the nursing home, T was convinced J betrayed him. Ts delusion was an outgrowth of a stubborn conviction that J had done something wrong by imprisoning T in the nursing home. translation: the false belief had some reasonable foundation Ts perceived betrayal. MALPRACTICE ACTIONS General Rule: generally, intended beneficiaries of a will who lose their testamentary rights b/c of the failure of the attorney to properly fulfill their obligations under his or her K w/ the testator (i.e. wrote a bad will), may recover damages as third party beneficiaries and also on a tort liability theory for breach of duty owed directly to the beneficiaries.
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Downloaded From OutlineDepot.com 1) Lawyers Duty in Relation to Testamentary Capacity: the primary duty of the atty to the client is fulfilled if the atty, convinced of testamentary capacity by his or her own observations and experience with the client, draws the will as requested. a) Effect: an atty who fails to investigate the testamentary capacity of his/her client is not: i) liable in tort to a former beneficiary disinherited by the will drawn by the atty, and ii) liable in contract since the disinherited person is not a 3rd party beneficiary of the contract between the atty and testator.
b) Rationale: Extending liability would place an intolerable burden on attorneys & the potential for liability would unjustifiably deny many persons the opportunity to make their wills. >> Lawyers Duty in Relation to Testamentary Capacity Example (Gonsalves) Facts: Nephew (P) filed a complaint against G for professional negligence, and alleged that w/ any amt of diligence, G would have known of the lack of testamentary capacity of the deceased, and should have refused to permit the execution of the documents. Atty (G) was called by Ts friend, D, saying that her friend was sick, and that she needed assistance with estate planning matters. G visited T in the hospital, and said she looked healthy, well-rested and alert. T said that she wanted G to inherit her estate. T said shed like to disinherit her niece and nephew, and wanted disinheritance language in the will. T executed the will. A physician testified that T suffered from confusion, disorientation, and hallucinations after a surgery. Further, Ts personal physical testified that T had suffered from hallucinations for many years, and in the last year of her life, she was very depressed. Held: G was not held liable. UNDUE INFLUENCE Overview: when contestants argue undue influence, they argue that the written will does not reflect the testators true intent. The contestants generally argue that the written will reflects the successful effort of a will beneficiary to substitute his own wishes for those of a testator susceptible to the beneficiarys influence. 1) Undue Influence Defined: Undue influence is the mental, moral or physical exertion which has broken down the free will of a testator, and accepting instead the domination and influence of another. 2) General Rule: when a contention of undue influence is made, the burden of proving undue influence lies upon the contestant (in other words, if I say there was undue influence, I have to prove it). However i) Exception: if a beneficiary stood in a (1) confidential relationship to the testator AND (2) there are additional circumstances of suspicious character present which require explanation. ii) Shift Burden of Proof: the law raises a presumption of undue influence, and the burden of proof is shifted to the proponent to establish there was no undue influence. (1) Standard of Proof: once a presumption of undue influence has been established, and the burden of proof shifts to the proponent of the will, the proponent standard of proof is normally by a preponderance of the evidence. (2) Exception: the clear and convincing standard may be required in certain circumstances. (a) Ex. where an attorney-beneficiary drafts the will
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Downloaded From OutlineDepot.com (b) Ex. where an attorney-beneficiary introduces testator to the drafter. (c) Ex. where attorney has a conflict of interest 3) Effect of Undue Influence: if a will is tainted by undue influence, it may be invalidated. 4) Confidential Relationship Defined: a confidential relationship exists where trust is relaxed by reason of the testators weakness or dependence OR where the parties occupied relations in which reliance is naturally inspired or in fact exists. 5) Suspicious circumstances : the following are examples of suspicious circumstances: a) dispositions made to persons who do not appear to be the natural objects of testators bounty (i.e. devise to lawyer as opposed to testators sister ). b) testators will has changed dramatically over time to benefit the supposed influencer. 6) Beneficiaries Inside the Family: if the beneficiary is a family member the court will likely place more emphasis on the testators capacity. >> Undue Influence Rule Application (Haynes) Facts: Mom (T) had 2 kids H & C. Ts original will left H & C equal shares of her estate (and their children if they dont survive T). H has 2 kids, C has 4 kids. T moves in with H. They develop a close relationship. Hs kids move to Canada to dodge the draft, and T and H live together. H dies so T moves in with C. While living with C, T was told that her will is unfair b/c it Hs children stand to make a lot more money that Cs kids (H only has 2 kids, and C has 4 kids thus, a diluted amount). Cs husband has T talk to his lawyer (B), although T already has a lawyer (S). Eventually, T drops her other lawyer, and edits her will to give all grandkids $10K, and everything else to C. The issue is whether T was unduly influenced to change her will? Held: the burden shifted to C (proponent) to prove by clear and convincing evidence that no undue influence existed in Ts execution of the new will b/c. 1. 2. 3. Confidential Relationship: a confidential relationship did exist between C and T T was old and sick, and heavily relied on C. Suspicious Circumstances: there were suspicious circumstances Ts new attorney was Cs husbands businesses attorney, and a drastic change in Ts disposition favoring C. Burden of Proof: the burden of proof here is clear and convincing evidence b/c of Bs (Ts new attorney Cs current attorney) had a conflict in interest in drafting Ts will. Why C was a big client of B and C wants B to turn Ts estate plan around in Cs favor. B doesnt want to lose this big client thus, hes taking marching orders from C. In other words, its the circumstances in which B representing beneficiary (C).
Overall: matter was remanded to lower court. 7) Beneficiaries Outside the Family: if the beneficiary is someone outside the family, the court will likely to place more emphasis on the behavior of the influencer. i) Lawyer as Beneficiary: courts look upon wills in which the lawyer is named as a beneficiary w/ great disfavor this presumption of undue influence can generally be rebutted by proof that the testator acted after obtaining the counsel of persons independent of the alleged influencer.
ii) Nursing Home Operator Beneficiary: a disposition in favor of a nursing home operator is inherently suspicious. iii) Spiritual Advisors: the court will likely invalidate excessive gifts to religious organizations.
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>> Beneficiary = Testators Attorney (Will of Moses) Facts: T was dating her lawyer (H). T was in bad health, was 15 yrs older than H, and T was an alcoholic. Ts original will left everything to her sister except she did leave some jewelry to H. T changes will, in which she names H the sole beneficiary. H did not draft the will another attorney drafted the will to T. Held: the burden shifted to H (proponent) to prove by clear and convincing evidence that no undue influence existed in Ts execution of the new will. 1. 2. 3. Confidential Relationship: a confidential relationship did exist between H and T H & T were dating. Suspicious Circumstances: there were suspicious circumstances T changed her will to leave everything to H, and disinherited her sister. Further, H was a Ts lawyer and boyfriend, 15 yr her junior. Burden of Proof: the burden of proof here is clear and convincing evidence b/c of H was an attorney-beneficiary who introduced T to the drafter.
Overall: H was not able to overcome the presumption of undue influence. 8) Testators Weakened Mental State: the physical and mental condition of the testator as it affects his/her ability to withstand influence is a relevant factor in determining undue influence. FRAUD General Rule: courts set aside wills whose provisions reflect the testators belief in false data arising from fraudulent misrepresentation made to him by a beneficiary. 1) Fraud Defined: fraud which causes testator to execute a will consists of: a) statements which are false, b) which are known to be false by the party who makes them, c) which are material, d) which are made with the intention of deceiving testator, e) which deceive testator, and f) which cause testator to act in reliance upon such statements. 2) Remedy: the remedy for fraud is a constructive trust. a) How it works: When the invalidation of the will in contest will not bring about the desired result, the court will impose a constructive trust on any proceeds inherited by wrongdoers.
b) Prevention of Revocation: constructive trust has also been invoked to aid beneficiaries of an unexecuted will who contend that beneficiaries of an earlier will fraudulently prevented the testator from revoking the old will and executing a new one. TORTIOUS INTERFERENCE WITH INHERITANCE Overview: the typical tortious interference with inheritance situation is the following: T executes a valid will, leaving the bulk of her estate to her friend (L). Sometime after the execution, Ts nephew (R an atty), had T execute a deed to Ts house (her principal asset) to herself and R as joint tenants w/ right of survivorship. T does not explain to T that the paper she signed was a deed he said it would facilitate probate. T dies, and the probate ct distributes all of Ts estate to L, and R claims title to the house.
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Downloaded From OutlineDepot.com 1) Tortious Interference with Inheritance: a tortious interference with inheritance is a claim brought by a beneficiary wrongfully deprived on an inheritance against the wrongdoer. The beneficiary must show the following to establish a tortious interference with inheritance cause of action: a) he/she had an expectancy; b) a reasonable expectation that the expectancy would have been realized, but for the interference; c) intentional interference with that expectancy; d) tortious conduct involve w/ interference, such as fraud, duress, or undue influence; --AND-e) damages. Example: A & B are to receive equal shares under mothers will. B coerces their ailing mother into making certain inter vivos transfers of property to B, which resulted in no property remaining in the estate to divide as the will specified. PLANNING FOR POTENTIAL WILL CONTESTS Overview: a major part of the lawyers job is to plan for the contests that seems likely or even inevitable. 1) Potential Contest: a) Disinherited children or other heirs; b) Large estate; c) Unsympathetic beneficiaries under the will d) Strained relationship between testator and heirs. 2) Defensive Measures: a) Obtain Evidence of Testators Capacity i) Write an explanation letter or prepare an affidavit ii) Videotape the testator stating intent
b) Involve Potential Witnesses i) Inform Themselves: Arrange for persons who are likely to survive the testator to inform themselves about his/her condition at the time of making the will, so they can testify about the subject in the event of a contest. (1) Ex. such persons might include both medical experts and those people who have been long familiar with the testator. ii) Psychiatric Evaluation? it a NOT good idea to have the testator undergo unless the attorney knows and trusts a certain psychiatrist & knows the client really well. c) Include a No-Contest Clause in Testators Will i) Overview: a no contest clause provides that if a beneficiary contests the testators will, he/she loses her interest. ii) No Contest Clause: aka in terrorem clause. i) Successful Challenge: if a beneficiary successfully challenges the will, the no-contest clause will be invalidated along with the rest of the will. ii) UPC Approach: a will contestant is only penalized if there is lack of good faith and/or probable cause for contesting the will. (1) NY and CA approach: contestant loses the gift under the will if the contest is unsuccessful. (2) When is it good to include a no-contest clause? When testator thinks there will be a contest simply in an effort to force a settlement.
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Downloaded From OutlineDepot.com iii) Rationale: no contest clauses require the contestant to make an evaluation of the likelihood that the contest will prove successful. If the likelihood is small, the contestant might choose not to contest, in order to preserve whatever provision testator made for the contestant. ADMINISTRATION OF ESTATES ADMINISTERING ESTATE REASONS Overview: there are two major reasons: 1. To start the statute of limitations on the decedents death; and 2. To be sure that all of the decedents property can be transferred to his successors. NOTE: The presence of real estate or a meaningful number of current or potential creditors, strongly suggests that an administration should be undertaken.
WHERE TO ADMINISTER ESTATE 1) General: In the state where the decedent was a domiciliary. 2) Domiciliary administration: the winding up of the affairs of a domiciliary of the state, in the state. 3) Ancillary administration: supplementary administration (if decedent owns property outside his state of residence) EXECUTOR 1) In general: An executor should be someone who is able to wind up a decedents affairs, or who is able to supervise others whom shed hire to accomplish that windup. GATHERING THE TESTATORS ASSETS 1) Reasonable Time: A fiduciary has to take possession of her trust or estate property w/in a reasonable period of time. 2) Liability: The personal representative is personally liable for assets lost due to bad faith or imprudence in collecting them but the PR is also under a duty not to waste assets by foolishly pursuing small claims or ones of dubious value. CREDITORS CLAIMS NON-CLAIM STATUTES Non claim statutes: claims must be brought against an estate w/in time limit found in the statue, or the claim is forever barred. 1) Two Types of Non-claim Statutes a) Notice: quickly cancels the creditors rights after probate (usu. after 2 to 6 mos.) that begin to run after the commencement of probate proceedings, but notice is required (as long as all statutory procedures are followed). 1. Notice: if creditors identity is known or reasonably ascertainable, the Due Process clause of the 14th amendment requires actual notice.
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(1) Actual Notice: Notice by Mail, Publication, or other means certain to ensure actual notice. 2. Due Process Trigger: due process is triggered by state action affecting property. (1) State Action: there is state action with non-claim statutes b/c the probate courts are intimately involved with the operation of the non-claim statutes (i.e. non-claim statute never becomes operative until probate proceedings have commenced ). (2) Property: a cause of action is a species of property protected by the 14th Amendments Due Process clause. 3. No Commencement of Probate Proceedings: if probate proceedings are not commenced, thus the shorter period is never triggered, claims will be barred by the longer period (i.e. no notice non-claim statutes see directly below).
b) No Notice: extinguishes claim not presented w/in a longer period (usu. 1 to 5 yrs) of time from the decedents death, and no notice required. 2) Ohios Probate Statute: no notice required b/c state action eliminated from the process, thus its a self-executing statute of limitation. a) Self-executing statute of limitation: when the state has no role to play beyond enacting the limitations period while the running of the time period is state action, its limited enough to fall short of the type of state action reqd to implicate the protections of the Due Process Clause.
b) How Ohios Probate Statute Works: Any claims not filed w/in 6 months of death (not commencement in probate ct) are forever barred; executors can give notice to reasonably known creditors, and anyone who received such notice has 30 days to file claim.
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DecedentsEstates Outline Summer08

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DecedentsEstates Outline Summer08

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8. 9. 10. 11. 12. 13.

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>> Disclaimer Example (Estate of Baird)

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OTHER PROTECTIONS FOR THE SURVIVING SPOUSE

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>> Traditional Anti-Lapse Statute Override Application (Estate of Rehwinkle)

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WILL CONTESTS STANDING TO CONTEST

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