Freedom of Disposition Flashcards
freedom of disposition
one’s right to do as they wish with their assets when they die
succession
transfer of assets at death
limitations to freedom of disposition
spousal rights; creditor’s rights; unreasonable restraints on alienation or marriage (think shapira [except ruled reasonable in that case]; provisions promoting separation and divorce; impermissible racial or other categoric restrictions; illegal activity; rules against perpetuities and accumulations
probate property
Property that passes under a will or by intestacy is said to be probate property –> Anything attached to the decedent individually such as real property (held solely by decedent or as tenant in common), personal (tangible) property, bank accounts in the decedent’s name or with no right of survivorship, testamentary trusts, etc.
nonprobate property
Property that passes by will substitute out of probate by some other legal process
Tenancy by the entirety (ownership by spouses)-goes to surviving spouse
Joint tenancy (default with right of survivorship)
Joint bank accounts with right of survivorship
Inter vivos trusts
Retirement accounts with named beneficiary (if no named beneficiary, goes to estate and becomes probate property)
Life insurance-usually nonprobate but can be probate
POD accounts-pass by contract on death to named beneficiary
3 core functions of probate
- Provides evidence of transfer of title to the new owners
- Protects creditors by providing a procedure for payment of decedent’s debts
- Distributes decedent’s property to those intended after debts are paid
where is property probated?
estate: state of domicile, not place of death
real property: jurisdiction in which its located
*Ancillary probate required if probate estate includes real property in another jurisdiction
–> Purpose is to prove title to the property in the situs states’ recording system and to protect local creditors
–>Lawyers commonly advice clients with real estate in another jurisdiction to put property into an inter vivos trust so there is no need for ancillary probate*
Formal v Informal Probate
(UPC)
Formal - includes notice to interested parties and litigated judicial determination
Informal - validity of the will or determination of intestacy need not be litigated unless an interested party objects
Supervised v Unsupervised Administration
(UPC)
Supervised - personal representative is subject to ongoing court supervision; time consuming and costly
Unsupervised - personal representative administers estate without having to go back to court; default under UPC
Probate Process (steps)
–> Petition for probate (name, age, date/place of death of decedent; intestate/testate; beneficiaries; would-be intestate inheritors; estimate of assets)
–> publish notice of death –> bring will and death certificate to register of wills –> judge appoints PR
(executor if established by will // administrator if appointed by court)
–> judge signs probate order and issues letters testamentary (executor ) or letters of administration (administrator)
–> give notice to creditors
–> collect all assets
–> close the estate
Does a restriction on a devise requiring the putative devisee to marry within a particular faith violate public policy or the right to marry under the Fourteenth Amendment of the United States Constitution?
No. A bequest conditioned on the devisee first marrying within a particular faith is not an unreasonable restriction that violates public policy or impinges on the devisee’s right to marry under the 14th Amendment of the United States Constitution.
Therefore, the doctrine of Shelley v. Kramer, 334 U.S. 1 (1948)—which applied the protections for individual rights provided under the Fourteenth Amendment, including the right to marry, to cases where the state acts through judicial enforcement of private agreements—does not prevent judicial enforcement of the testator’s will.
An escheatment provision that completely abrogates the right to devise a class of property interests constitutes a taking without compensation in violation of the United States Constitution.
Yes. By prohibiting members of Indian tribes from passing to their heirs certain fractional interests in allotted lands by either descent or devise, Section 207 of the Indian Land Consolidation Act abolished the right of descent or devise for these interests and effected a taking without just compensation. While state and federal governments may adjust the laws governing descent and devise, they may not completely eliminate these rights.
May a property right that accrues to a testator after the testator’s death be devised by will?
No. A testator may not devise by will a property right that the testator did not own at the time of death.
Recent shifts in the law toward permitting the descent of rights that accrue to the testator after death do not change the result in this case since, under the majority rule, a will is interpreted according to the law of the domicile in effect at the time of the testator’s death.
Does a duty run from the attorney drafting a will to the intended beneficiaries of the will, such that an identified intended beneficiary may enforce the contract between the testator and the attorney drafting the will as a third party beneficiary?
Yes. Although a duty arising from a contractual relationship generally only runs to the parties who are in privity of contract with one another, an exception to this rule applies when another party is the intended beneficiary of the contract. The courts of many jurisdictions have employed this exception and concluded that an attorney drafting a will owes a duty to intended beneficiaries of the will, relying on the foreseeability of injury to intended beneficiaries where the intended beneficiaries are identified to the attorney drafting the will.
Where a client uses a lawyer’s services to commit a fraudulent act, may the lawyer disclose that client’s confidential information if the disclosure is needed to rectify the consequences of the fraudulent act?
Yes. A lawyer has a duty to protect a client’s confidential information under Rule 1.6(a) of the Rules of Professional Conduct. However, an exception may be made when the lawyer, who is obligated under Rule 1.4(b) to keep a client informed of facts necessary to make informed decisions relating to the representation, needs to disclose confidential information to rectify the consequences of a co-client’s fraudulent act, which is broadly defined.
According to the Restatement (Third) of the Law Governing Lawyers, an estates lawyer may disclose confidential information to a jointly represented spouse if the lack of this information would be “materially detrimental” to that spouse.
