Intestacy Rules Flashcards
GOVERNING LAW FOR WILL
What is the body of law governing NY Estates, Powers and Trusts?
Estates Powers and Trust Law (EPTL)
RESIDUARY
What is a residuary?
Residuary = The balance of the decedent’s estate after all claims, taxes and particular bequests have been distributed
i..e. The “rest” of the estate
WHEN INTESTACY RULES APPLY
When do the the rules of intestacy apply under the EPTL?
Intestacy rules apply when…
1) Decedent left no will OR did not properly execute it;
2) The Will does not make a COMPLETE distribution of the estate (b/c of poor drafting and no residuary clause, or VERY unusual circumstances), resulting in partial intestacy; OR
3) A distributee successfully challenges the Will, and the Will is DENIED probate
ORDER OF PRIORITY OF INTESTACY PAYMENTS
What is the order of priority for appointment as Administrator (in intestacy)?
HIGHLY TESTED MATERIAL
Under Intestacy distributions the Administrator will distribute property in this order…
- Surviving SPOUSE;
- CHILDREN;
- GRANDCHILDREN;
- PARENTS (FATHER / MOTHER);
- BROTHER or SISTER;
- Nieces or Nephews (and decedents)
- GRANDPARENTS
- AUNTS and Uncles
- Cousins
- First Cousins Once Removed
- State of New York
What is the rule when a decedent is survived by a spouse and NO children?
HIGHLY TESTED MATERIAL
The surviving spouse takes the WHOLE estate
What is the rule when the decedent is ONLY survived by his children?
HIGHLY TESTED MATERIAL
If NO child has predeceased the decedent, the estate passes to the children in EQUAL shares
What is the rule when a decedent is survived by a spouse AND children (his issue)?
HIGHLY TESTED MATERIAL
1) The surviving spouse: takes $50k + 1/2 of the RESIDUARY
2) The issue (from ALL marriages, if applicable): takes the left over residuary divided EQUALLY, UNLESS the estate is WORTH LESS THAN $50,000. IF so then issue would then take NOTHING (i.e. everything goes to surviving spouse)
What is the rule when the decedent is survived by his children AND issue of PREDECEASED children?
HIGHLY TESTED MATERIAL
The estate passes to(i)the LIVING children;AND(ii) the issue of the deceased children “by representation” (i.e. Per Capita Distribution)
Steps:
If you started off with $100
3 Kids of deceased (1 alive and 2 dead)
(4 grandchildren) (1 w/living child and 3 with dead parents)
Answer:
(i) Living child gets his share of 1/3
(ii) 3 grandchildren whose parents had dies take the remaining 2/3 that their parents would have got in total and it is divided 3 ways – so 2/9 to each
How does property pass “by representation” (or per capita distribution)?
HIGHLY TESTED MATERIAL
This is the DEFAULT distribution in NY for BOTH intestacy AND will
(also applies if a GIFT is left to a FRIEND who predeceased the decedent)
STEP 1: The property is divided into AS MANY SHARES (parts) as there are issue (dead or alive) at the first generation level WHERE THERE ARE survivors
STEP 2: All LIVING issue at the FIRST generational level take one share (part) EACH
STEP 3: The shares (parts) of the DECEASED issue(s) (only) at the FIRST generational level are COMBINED and divided EQUALLY among THEIR issue at the NEXT generational level
NOTE: the issue of the children who TOOK a share DO NOT get a distribution at this 2d level
NOTE: The SPOUSES of the ISSUE(S) DO NOT get ANYTHING (not an intestate distributee)
What is the rule if the decedent is survived by NEITHER a spouse NOR an issue?
HIGHLY TESTED MATERIAL
If NO SPOUSE or ISSUE, the distribution is….
**1) to the SURVIVING PARENT(S)
(If not survived by parents) ↓
**2) to the ISSUE of the PARENTS (i.e. decedents siblings), who take per capita at each generation
(If not survived by issue of parents (siblings)) ↓
3) 1/2 to MATERNAL GRANDPARENT(S) (OR their issue, who take per capita at each generation)
PLUS
1/2 to PATERNAL GRANDPARENTS (OR their issue, who take per capita at each generation)
NOTE: if one side (maternal or paternal) is wiped out, 100% goes to OTHER SIDE (OR their issue, who take per capita at each generation)
NOTE: if only GRANDCHILDREN of GRANDPARENTS left on either side (e.g. only the cousins of the deceased are remaining on wither side), then they take in EQUAL shares
(If not survived by grandparents OR their issue) ↓
4) If the nearest kin are GREAT GREAT GRANDCHILDREN OF THE GRANDPARENTS (i.e. no great grandchildren – meaning IF NO 1st COUSINS), the estate revearts back to NY State
How does property pass by “per stirpes” distribution?
NOT A NY RULE
“Per Stirpes” Distribution = where the issue of a PREDECEASED child takes the share that the predeceased child would have taken
***NOT FOLLOWED IN NY – In NY, the DEFAULT rule is “per capita” distribution for predeceased children for BOTH intestacy AND will
NOTE: a WILL can OVERRIDE and change the default distribution (“per capita”) to “per stirpes”
FUN FACT: “Per capita” distribution results in the SAME distribution as “per stirpes” if there is ONLY ONE person in the first generation that PREDECEASED the decedant
ADOPTED CHILDREN
What are the inheritance rights of ADOPTED children?
HIGHLY TESTED MATERIAL
When…
- NEW familyadopts child →adopted child AND his issue have FULL inheritance rights from the ADOPTING family (AND vice versa)
NOTE: The adopted child has NO inheritance rights from the BIRTH (biological) PARENTS or other members of the BIRTH (biological) FAMILY
- SPOUSE of the birth parent (STEP PARENT) adopts the child → the child AND that child’s issue can inherit from
(i) the ADOPTING parent;
(ii) the other BIRTH (biological) parent; AND
(iii) the DECEASED BIRTH (biological) parent’s family
NOTE: if child dies, the non-custodial parent or their family CANNOT inherit (i.e. ONE WAY STREET)
RELATIVEadopts the child → the child inherits under the BIRTH relationship ONLY (i.e. that line is not “extinguished”)
UNLESS the ACTUAL DECEDENT was the adopting parent, then the child inherits under the ADOPTIVE relationship
EXAMPLE:
If there is Grandpa Gaylord; Caleb Sr. has predeceased Grandpa; AND Caleb Jr. had been adopted by his Uncle Aaron
If the decedent is Grandpa Gaylord → Caleb would inherit under Caleb Sr.’s “line”
(thus there are 3, NOT 2 shares at FIRST generation – Caleb, Sr.’s line is NOT eliminated due to Caleb, Jr.’s adoption by Aaron)
However, if the decedent is AARON →Caleb Jr would inherit under Aaron’s “line” NOT Caleb Sr’s (thus Aaron’s estate would be split 3 ways, NOT 2)
NON-MARITAL CHILDREN
What are the inheritance rights of non-marital children?
HIGHLY TESTED MATERIAL
Depends on whether decedent is MOTHER or FATHER…
From MOTHER: a nonmarital child has FULL inheritance rights from his MOTHER and his MOTHER’S family
From FATHER: inheritance ONLY IF paternity is established by…
DURING “FATHER’S” LIFE
1) The father marries the MOTHER after the child’s birth (i.e. “LEGITIMACY BY MARRIAGE”); OR
2) An ORDER OF FILIATION if a PATERNITY SUIT is entered adjudicating the the man to be the child’s father; OR
BEFORE OR AFTER THE “FATHER’S” DEATH
4) Paternity is established by clear and convincing evidence through:
4a) A DNA genetic marker test
4b) Open & notoriously acknowledging child as his own (e.g. PUTTING HIS name on BIRTH CERTIFICATE)
4c) Visitation, participation, gifts to child (NOT child support alone)
What 6circumstances DISQUALIFY a surviving spouse from taking an intestate share?
These 6 things make for a D-I-S-M-AL Spouse
HIGHLY TESTED MATERIAL
(D) Divorce (I) Invalid Divorce if Obtained by Surviving Souse (S) (M) Marriage is Void (AL) Abandonment or Lack of Support
Under certain circumstances, a surviving spouse will not be entitled to ANY intestate share.
1) DIVORCE: a final DECREE of divorce or annulment recognized as valid under NY law
2) INVALID DIVORCE: IF procured by the SURVIVING spouse against the deceased
3) Separation decree: a final DECREE of separation was rendered against the SURVIVING spouse
NOTE: a separation AGMT does NOT result in disqualification UNLESS there is specific language in the agmt waiving the surviving spouse’s right under EPTL
4) Marriage is VOID (incestuous; bigamoous; fraud)
5) Abandonment/Lack of support: the SURVIVING spouse abandoned or refused to support the dead spouse
6) Slayer spouse:if the spouse KILLS the decedent, then she CANNOT inherit
NOTE: If there was a joint tenancy, the bad surviving spouse could ONLY get what he put in
What is the rule when the decedent is survived by a DISQUALIFIED spouse?
HIGHLY TESTED MATERIAL
Rule = we assume the SURVIVING spouse PREDECEASED the decedent→we then drop their share to the children, etc
ADVANCEMENTS (USED FOR INTESTACY GIFTS)
What is the rule for an “advancement” in NY?
HIGHLY TESTED MATERIAL
Advancement = Irrevocable gift intended by the donor as prepayment of an inheritance
At common law, an inter vivos (lifetime) gift was PREEMPTIVELY an advance pmt of a distributee’s share
This rule hase been REJECTED by statute in NY
In NY, there is NO ADVANCEMENT UNLESS PROVEN BY…
1) a CONTEMPORANEOUS WRITING made at the time of the gift (CANNOT be oral);
AND
2) the writing is SIGNED by the DONOR (advancer) or DONEE (advancee)
If there IS a VALID advancement:
(i) the advanced property is ADDED with the rest of the decedent’s estate;
(ii) that total is then DIVIDED by the number of sharing distributees; AND
(iii) the share for distribute w/ the advancement is REDUCED by the value of the advancement
NOTE: if advancement is larger than intestate share, she DOES NOT have to return the difference
SIDE NOTE: NY’s advancement statute ALSO applies to inter vivos gifts to beneficiaries under a WILL
(i.e. “SATISFACTION OF LEGACIES”)
What is the rule when a distributee disclaims property in intestacy?
HIGHLY TESTED MATERIAL
An heir, will beneficiary, life insurance beneficiary, surviving joint tenant, etc. CANNOT BE FORCED TO ACCEPT AN INHERITANCE OR A GIFT UNDER A WILL
The interest in the decedent’s estate can be renounced in whole or in part
Rule: the person who disclaims is considered to have PREDECEASED the decedent
The interest THEN DROPS TO THE DISCLAIMING DISTRIBUTEE’S ISSUE
NOTE: if this RULE, wrt per capita distribution, would cause the distribution to “skip” a generation (leading to a situation where the next class of distributees would share equally), THEN the “legal death” of the disclaiming distributee is IGNORED (i.e. we assume the disclaiming distributee dies ONE DAY later than the decedent)
EXAMPLE:
Dylan died intestate, survived by his daughters Amber and Betsy. Amber had two children, Giselle and Gussie. Betsy had one child, Garfield. Dylan’s estate is valued at $1,500,000. Three months after her father’s death, Amber (an Estate Planning partner in a NYC law firm) filed with the Surrogate’s Court a document, signed and acknowledged before a notary public, that stated: “I hereby irrevocably renounce and disclaim all of my right, title and interest in the estate of my late father.” In a separate sworn instrument, Amber stated: “I have received no consideration for making this disclaimer.”
The disclaimer is valid because it meets all the requirements discussed above.
Betsy receives $750,000.
Giselle and Gussie each received $375,000.
Suppose Betsy predeceased Dylan, survived by Garfield. What is the distribution?
Although it would appear that all three Grandchildren would receive one-third due to the biological and legal deaths of all individuals in the first generation, the law does not allow a disclaimant to impact the shares of other individuals. Accordingly, the distribution is the same as in the prior example.
DISCLAIMERS
Why would a distibutee disclaim and what 4 steps must a distributee take to properly “disclaim”?
A valid disclaimer must be:
1) WRITING
2) SIGNED by the disclaimant; and
3) ACKNOWLEDGED before a notary public;
that is Accompanied by
4) AFFIDAVIT stating no consideration was received for disclaiming;
AND EVERYTHING
5) FILED with the Surrogate’s Ct w/in 9 MONTHS after date of death
DISCLAIMER IS IRREVOCABLE Once Accepted
Reasons to Disclaim:
1) Burdensome — e.g., afraid of liability if property contains a toxic waste dump
2) Tax — Disclaimed property is not treated as a gift from the disclaimant to the eventual recipient.
3) Avoid Creditors except for FEDERAL TAXES and Medicaid/Medicare
NOTE: distributee CANNOT disclaim to (i) avoid a FEDERAL TAX lien; OR (ii) remain eligible for Medicaid/Medicare
HOW IS THE STATE WHO’S INTESTACY LAW WILL APPLY SELECTED?
FOR MARITAL PROPERTY RIGHTS
Marital Rights:
TO DETERMINE who owns the property before death?
Look at the Law of the DOMICILE at the TIME the PROPERTY was ACQUIRED
NOTE: the property rights will be based on when the property was ACQUIRED and the rights DO NOT change
as the couple moves from one state to another
HOW IS THE STATE WHO’S INTESTACY LAW WILL APPLY SELECTED?
FOR SUCCESSION RIGHTS
Succession Rights – Which state’s intestacy law applies?
a. Personal Property = INTESTATE LAW of DECEDENT’S DOMICILE AT DEATH
b. Real Property = INTESTATE LAW of the SITUS of the Property
