Family Protections

Question 1

Homestead

Answer 1

Many states have laws protecting the “homestead” from creditors during their life and in some states after death they allow the surviving spouses and children a right to continue to live in home

States have various requirement rules some by value, some by type and some by acreage

Question 2

3 types of homestead protections

Answer 2

1) Tied to particular real estate with limitations on descent and devise
- Provide surviving spouse or children with some type of real property right in particular piece of real estate
- I.e life estate, remainder, terms of years
2) Limited value homestead protections tied to particular real estate
- Assign dollar value exemption for homestead which allows creditors to force a sale if property is value above statutory limit and homeowner has equity in that house up to that value
3) Cash amount or homestead allowance
- Cash allowance from estate to be applied toward housing or other expenses free of claims from creditors
- Can only be used to cover payments and necessary housing expenses

Question 3

Family Allowance

Answer 3

• Every state allows probate court to award an allowance for maintenance of surviving spouse and dependent children during period of estate administration
• UPC allows up to 27K
• Most states also allow surviving spouse & dependent children to receive certain personal property

Question 4

Exempt Property

Answer 4

• Testator is precluded from devising property to someone else that is set aside for spouse/dependent children
• But when testator devises exempt property to surviving spouse it may pass by virtue of the exempt property statute and not the will thereby not counting to value of estate for elective share/intestacy purposes but will be considered for tax purposes
• UPC has rules for determining what property is available and the priorities of claims

Question 5

Definition of Putative Spouses

Answer 5

People who have a good faith belief that they are legally married but because of some defect in the process are not

Treated as legal spouses or at very least entitled to some martial benefits

Question 6

Voidable Marriages

Answer 6

Marriages that were illegal when entered into but treated as valid if upon the illegality dissolves they continued to live as husband and wife and didn’t renounce their marriages

May be treated as putative spouses

Question 7

When a parent-child rel exists

Answer 7

• Presumption father is husband during marriage
• Genetic parents
• Name on birth cert of parents creates presumption
• Someone who consents (consents = functioned as a parent, intended to but prevent by death/incapacity, intended but child was created posthumously)
• Adopted children

Question 8

2 theories of elective share

Answer 8

Support theory = obligation to support one’s S.S. before and after death

Partnership Theory = entitled to share of property by virtue of contribution to the joint accumulation of wealth

Question 9

Elective Share Definition

Answer 9

Elective share statutes give to a surviving spouse a fixed fraction, typically out of a probate estate of the deceased spouse. Traditionally that fraction is one-third of the estate regardless of the length of the marriage. The Uniform Probate Code provides a more complicated scheme for determining the elective share based on length of marriage.

Question 10

Definition of elective estate

Answer 10

amount of property included in the estate for elective share purposes

Question 11

Augmented estate

Answer 11

Combination of all the probate and non probate property

Question 12

3 Models Used to Calculate Elective Share

Answer 12

1) Net probate
2) Augmented Estate
3) Graduated Super Augmented Estate

Question 13

Rule of Net Probate Calculation for Elective Share

Answer 13

• Surviving spouse is entitled to a percentage determined by state law of decedent spouse’s probate estate
• Net probate estate = all property titled in decedent’s name at death after funeral expenses, admin expenses, homestead, exempt property, family allowances, and debts
• Only shares bucket 1 property - the same subject to will or intestacy

Question 14

Augmented Estate Calculation for Elective Share

Answer 14

Spouse is entitled to flat percentage determined by state law of decedent’s augmented estate

Augmented estate = sum of values of all property : decedent’s net probate, decedent’s non probate, non-probate transfer to others, non-probate transfers to S.S. spouse, S.S. property & non-probate transfers to others

Question 15

Graduated Super Augmented Estate Calculation for Elective Share

Answer 15

UPC’s approach to elective share
- Percentage is determined based on the length of marriage; after 15 years and above you get 50% of the augmented estate

Purpose is under partnership theory of marriage you should only be given amount you contributed to which is determined by length of marriage

Question 16

Community Property rule

Answer 16

CP is all property earned during marriage and most income earned during marriage in

No elective share since CP gives spouses half typically while some states give S.S. right of survivorship

Cannot devise, transfer inter vivos, or create trusts with property without spouses consent

Question 17

Diff types of property under CP Rules

Answer 17

CP = All property earned during marriage and most income earned during marriage
Separate = property acquired before marriage
Quasi-CP = martial property transferred into CP state (only 4 states give protections for this)

Question 18

Pre-Nuptial Agreements: Uniformal Premartial Act Requirements

Answer 18

Must be in writing, signed by both parties and is enforceable without consideration

Question 19

Pre-Nuptial Agreements: Uniformal Premartial Act Valid Content

Answer 19

-Rights/obligations of each in any of the property acquired
- Right to buy, sell, use, lease, etc
- Disposition of property upon an event (divorce, death, separation)
- Modification or elimination of spousal support
- Any matter not in violation of public policy

Question 20

Pre-Nup Agreements are not enforceable both under UPC and UPA if

Answer 20

• Involuntarily
• Unconscionable and the party
  1) was not provided fair and reasonable disclosure of property/finances
  2) Did not voluntarily and expressly waive right for such disclosures and
  3) did not have adequate knowledge of property/finances

Question 21

Requirements of a guardian

Answer 21

1) File a bond
2) Provide periodic accountings to court
3) Seek court approval for sales, investment, or distribution of property
4) Ends at 18
5) Treated like a trustee

Question 22

Mechanisms for caring for children and their property

Answer 22

• Guardianships, custodianships, and trusts are mechanisms for taking care of children/ children’s property when they are unable to do so

Default is guardianship which is rigid

Trusts & Powers provide greater flexibility