Intestacy and Nonprobate Transfers

Question 1

What is intestate succession?

Answer 1

The passage of decedent’s property in the absence of a valid will

Question 2

What percentage of the decedent’s property does a surviving spouse retain in a community property state?

Answer 2

50%

Question 3

What are the three methods of multi-generational distribution in intestacy?

Answer 3

1) Strict Per Stirpes
2) Modern Per Stirpes
3) Per Capita at Each Generation

Question 4

How does Strict Per Stirpes work?

Answer 4

Start with the distribution at Intestate’s children. Provide equal shares for any of Intestate’s surviving children and Intestate’s dead children who left surviving descendants.

Question 5

How does Modern Per Stirpes work?

Answer 5

It is the same as Strict Per Stirpes except you start at the line with the first surviving descendant. Thus, if all of Intestate’s children are dead, you would start with the line of grandchildren, etc.

Question 6

How does Per Capita at Each Generation work?

Answer 6

Start at the line with the first surviving descendant, and then combine shares for the deceased members of that generation into a “pot” and redistribute equally to the next generation

*equally related heirs receive the SAME PORTION (ex: each child receives 1/4, each grandchild receives 1/6, etc.)

Question 7

What is escheat?

Answer 7

Real property will be given to the state government of the state in which the real property is located if an individual dies intestate and there are no heirs

Question 8

What are nonprobate transfers?

Answer 8

property distributed outside of the probate estate

Question 9

What are some common forms of nonprobate transfers?

Answer 9

1) joint tenancies w/ right of survivorship
2) life insurance policies
3) retirement plans
4) pay on death accounts
5) joint bank account w/ ROS
6) inter vivos transfers

Question 10

What are the three main requirements for an outright inter vivos gift?

Answer 10

1) present donative intent
2) delivery (of gift to donee)
3) acceptance (of gift by donee)

Question 11

What are some reasons a testator would use nonprobate transfers?

Answer 11

1) accelerate asset distribution
2) reduce estate planning expenses
3) minimize taxes
4) more confidentiality
5) protect from creditors
6) isolate from will contests

Question 12

What are gifts causa mortis?

Answer 12

Gifts made in contemplation of death

Question 13

Are outright inter vivos gifts conditional or revocable?

Answer 13

No

Question 14

Are gifts causa mortis conditional and revocable?

Answer 14

Yes

Question 15

How are gifts causa mortis conditional and revocable?

Answer 15

They are conditional on the donor actually dying from the peril that induced them to make the gift, and they are revocable (automatically, sometimes) if the donor survives.

Question 16

What is a power of appointment?

Answer 16

The right to designate a new owner of property

Question 17

How does power of appointment work?

Answer 17

The owner of property (donor) creates a power of appointment in the person who has the power to appoint the property (donee), and the donee may exercise their power to appoint the new owners (appointees).

Question 18

What is a general power of appointment?

Answer 18

There are no restrictions or conditions on the donee’s exercise of their power.

Question 19

What is a specific power of appointment?

Answer 19

The donor may specify certain individuals or groups as the objects of the power that do not include the donee, donee’s creditors, donee’s estate, or the creditors of donee’s estate.

Question 20

Does money in a joint account automatically transfer to the other owner upon one owners death?

Answer 20

No. There must be a right of survivorship attached to the joint account for money to automatically transfer after one owner’s death.