Intestacy Transfers to Children

Question 1

How to Qualify?

Answer 1

a party must establish a legally recognized parent/child relationship

Question 2

EPTL §2-1.3

Answer 2

Adopted children and posthumous children as members of a class  Unless creator expresses contrary intent, dispositions described in instruments include adopted children, children conceived before, but born after such a disposition becomes effective, and nonmarital children subject to by representation distribution

Question 3

Adoption Compare NY to UPC

Answer 3

• UPC 2-114(b)acknowledgement of limited dual inheritance o Pg. 95 in CB • UPC is BROADERrelative of a genetic parent is not limited (doesn’t have to be a biological grandparent or descent of a biological grandparent, like it does in NY) • As revised in 2008 the UPC states a more refined test: o Presumptively excludes a person adopted after reaching the age of 18 from a class gift to the adoptive parent’s children, issue, descendants, or heirs by someone other than the adoptive parent unless the adoptive parent was the adoptee’s stepparent or foster parent, or the adoptive parent “functioned as a parent of the adoptee before the adoptee” turned 18 • Professor says: that “function as a parent” invites fairness and justice BUT it doesn’t mean that it is easy to determine

Question 4

Adoption NY vs. UPC

Answer 4

NY vs. UPC • In NY, you must be related in a “close relationship” (i.e.- issue of grandparents) • UPC does not define it as strictly • Dual Inheritance for Adoptive Children: o Adoptive children in NY can’t inherit from and through his birth parents • 3 exceptions: o 1. Adoptive family can take from and through adoptive child and adoptive child can take from and through the adoptive family  Can also inherit from and through the natural and adoptive kindred of the adoptive parent o 2. Stranger Adoption RuleAfter adoption, the birth parents are relieved of all parental duties and have no rights over the adoptive child or to his property by descent or succession  Exception when a natural or adoption parent having lawful custody of a child marries and consents that the stepparent may adopt the child, the adoptive child and the consenting spouse may inherit from and through each other • The adopted child can inherit from BOTH his adoptive parent and natural parent o 3. If the adopted child is related to the decedent by both a birth relationship and an adoption, the child inherits under the birth relationship UNLESS the decedent is the adopting parent in which case the child inherits under the adoptive relationship only

Question 5

In 1970 Harry (H1) and Wilma (W) are married and have a child C. Thereafter they divorce and in 1980 W remarries a man named Henry (H2) and H2 adopts C. When H1 dies a widower in 1990 survived by C and two children from a previous marriage, D and E, how will his intestate estate be distributed?

Hypo 2: In 2000 when Harry’s brother Bob (B) dies intestate with no spouse or surviving parents how will his estate by distributed? B dies survived by his sister Sunu, and Harry’s children C, D, and E.

Hypo 3: If in 1980 Wilma had instead remarried her former father-in-law Harry, Sr. and Harry Sr. adopted C, then on Harry, Sr.’s death how would his estate be distributed? Presume that Wilma somehow predeceased him along with Bob. Accordingly, Harry Sr. dies survived by Sunu, C, D and E.

Hypo 4: After having a very successful career as an opera singer, Decedent had 2 children A and B. A had two children C and D. B had 2 children E and F. When Decedent’s grandchild F began to demonstrate an interest and talent in opera singing which could not be adequately encouraged by his tone deaf parent B, Decedent decided to adopt F. The adoption order was entered 10 years before Decedent’s death. At Decedent’s death she was survived by C, D, E, and F. As Decedent died intestate, who shares in the estate and what are their shares?

Answer 5

Question 6

Is adult Adoption allowed in NY?

Answer 6

YES! and some other states.

Question 7

Minary v. Citizens Fidelity Bank & Trust Co.

Answer 7

Kentucky Cannot Adopt Adult

Decedent’s son adopted his adult wife in the hopes of bringing his wife under the provisions of the decedent’s trust (which was to be distributed “to my then surviving heirs”) in order to share in the proceeds from the trust Even though the statute provides that the adoption of an adult shall be given the same legal effect as the adoption of a child, the court views this practice to be an act of subterfuge which in effect thwarts the intent of the ancestor whose property is being distributed and cheats the rightful heirs

The purpose of adopting the adult wife is to give her an enhanced inheritance status, which the court says goes against the language of decedent’s trust

The use of an adoption to create a child to come within a class gift is in effect using adoption as a power of appointment

HELDAdopting and adult for the purpose of bring that person within the provisions of a pre-existing testamentary instrument, when that person was clearly not intended to be covered by the instrument should not be permitted

Question 8

Equitable/Virtual/Informal Adoption

Answer 8

• Applies where the natural parents transfer custody of their child to a couple who promises to adopt the child but then fails to complete the proper paperwork to adopt the child legally
• Equity treats the child as a child of the adoptive parent for purposes of distributing the adoptive parent’s intestate property
• An oral agreement to adopt A between H and W and A’s genetic parents is inferred if H and W take baby A into their home and raise A as their child
• As against H and W, equity treats A as if the contract to adopt had been performed by H and W
• Recognized in a majority of states

Question 9

Equitable/Virtual/Informal Adoption Requirements

Answer 9

Requirements:

1. An agreement between the natural parents and the adoptive parents to adopt the child
2. The natural parents fully perform by giving up custody of the child
3. That the child fully performs by moving in and living with the adoptive parents
4. That the adoptive parents partially perform by taking in the child and raising the child as their own
5. That the adoptive parents die intestate

Question 10

O’Neal v. Wilkes (Ga 1994)

Answer 10

CONTRACTUAL EQUITABLE ADOPTION

Hattie O’Neal was born out of wedlock. She was given to many family members, but eventually ended up with the her paternal aunt, Estelle Page. Page contracted with the Cook’s to take in Hattie. The Cook’s never statutorily adopted Hattie, but raised her and referred to her as their daughter. Roswell Cook (the father) died intestate and the administrator of his estate refused to recognize Hattie’s asserted interest in his estate.

HELDPage did not have the authority to contract for Hattie’s adoption

Reasoning:

Right to consent to the adoption of a child is specifically retained by a child’s parent or guardian. Page simply had physical custody of Hattie.

RULEContract may not be specifically enforced unless the contract was entered into by a person with the legal authority to consent to the adoption

Question 11

O’Neal NY complication

Answer 11

• New York does NOT use the O’Neal contractual sense of the equitable adoption doctrine
• In NY, a stepchild or foster child who is not adopted has NO INHERITANCE RIGHTS
• Exception:
• Equitable/Virtual Adoption
• If requirements established, the child is entitled to his intestate share of adoptive parent’s probate estate

Question 12

Posthumously Conceived

Answer 12

EPTL § 4-1.3

The genetic child must be in utero NO LATER than 24 months after the genetic parent’s death, OR

Born NO LATER than 33 months after the genetic parent’s death.

Genetic Parent must have expressly consented to use of their genetic material posthumously, OR

Authorized another person to make decisions about the use of the genetic material in a written instrument not more than 7 years before the death of the genetic parent

Question 13

Uniform Parentage Act §204

Answer 13

establishes a rebuttable presumption that a child born to a woman within 300 days after the death of her husband is a child of that husband.

Question 14

Nonmarital Children Common Law v State Law

Answer 14

At common lawviewed as having no legal status (could not inherit through the maternal or paternal lines)

At state lawAll states have recognition for mothers, but fathers have more administrative steps they must take to acknowledge the paternity

Question 15

Nonmarital Children Paternal Line NY

Answer 15

EPTL §4-1.2

“Legitimate” = legal child for the purposes of inheritance

(a) (1)Automatic inheritance rights on the maternal side
(a) (2)steps taken to prove inheritance rights on the paternal side

Order of the court

Father signs an instrument acknowledging the paternity

Clear and convincing evidence

Evidence derived from a genetic market test

Openly and Notoriously acknowledged the child as his own

Question 16

WHen parents are married, most states assume what of the child?

Answer 16

That the child is the father’s, but this is not a conclusive presumption

Question 17

Who is a nonmarital Child?

Answer 17

The legitimate child of his mother so that he and his issue inherit from his mother and from his maternal kindred

The legitimate child of his father so that he and his issue inherit from his father and from his paternal kindred if: court acknowledgement of paternity, father signed instrument acknowledging paternity, paternity has been established by clear and convincing evidence (DNA or father openly and notoriously acknowledged the child as his own)

Most states permit paternity to be established by evidence of the subsequent marriage of the parents, acknowledgement of the father, an adjudication during the life of the father, or clear and convincing proof after his death

Trend toward allowing posthumous proof of paternity by DNA evidence

Question 18

New york nonmarital child rule

Answer 18

New York Rule

In NY a nonmarital child may prove paternity by “evidence derived from a genetic marker test”

NY has held that a man who has acknowledged paternity and formed a relationship with the child is ESTOPPED from later repudiation the acknowledgment if subsequent DNA testing shows he is not the father

Question 19

A posthumously conceived child is treated as being at the time of what?

Answer 19

conception, rather than from the time of birth if it is to the child’s advantage to do so and the child is born alive.

Question 20

Woodward v. Commissioner of Social Security

Answer 20

After learning that his sickness may later cause him to be sterile, decedent decided to put his sperm in a holding bank so his wife could be artificially inseminated. After his death three years later, appellant, his wife, became pregnant and bore children as a result of the insemination. The wife filed an application to receive her husband’s social security benefits on behalf of her children.

ISSUEWill children resulting from a posthumous conception enjoy the inheritance rights of natural children under MA law?

HELDYES. In certain limited circumstances, a child resulting from posthumous reproduction may enjoy the inheritance rights of “issue” under the MA intestacy law

Posthumous genetic children may enjoy the inheritance rights of “issue” under intestacy law in limited circumstances where, (1) the surviving parent or the child’s other legal representative demonstrates a genetic relationship between the child and the decedent, (2) the survivor or representative must establish that the decedent affirmatively consented to the posthumous conception and to the support of any resulting child, (3) the proper time limitations are met, and (4) notice is given to all parties

RULEsurviving spouse must then prove that the decedent affirmatively consented to posthumous conception AND to the support of any resulting child

Question 21

In Re Martin B. (NY 2008)

Answer 21

WILL SILENT ON POSTHUMOUS CONCEPTION

James predeceased his father, Grantor. When James discovered he was sick, he deposited semen to be held at the directions of his wife upon his death. 3 and 5 years later, wife had 2 children.

Trustees filed this action to ensure they had the authority to hand out money to these kids, not knowing if they were true “issue” of decedent

RULEWhere a governing instrument is silent, children born of this new biotechnology with the consent of their parent are entitled to the same rights for all purposes as those of a natural child

Controlling factor is the grantor’s intent as gleaned from a reading of the trust agreement. Absence of specific intent should not necessarily preclude a determination that such children are members of the class at issue

NOTEJudge limited the decision narrowly to a class status in a trust that uses words like “issue”

Question 22

Advancement

Answer 22

an irrevocable gift intended by the donor as an anticipatory distribution in complete or partial satisfaction of the interest of the donee in the donor’s estate, either as distributee in intestacy or as beneficiary under an existing will of the donor (UPC §2-109

Question 23

NY Advancement Statute

Answer 23

EPTL §2-1.5Advancements must be proven by a writing contemporaneous with the gift giving and signed by the donor evidencing his intention that the gift be treated as an advancement or the donee acknowledging that such was the intention.

Both UPC and NY

If the beneficiary has pre-deceased the donor, it also applies to the “donee or his successor in interest” (aka – advancements still matter to descendants)

This is peculiar to most states

If the advancement is larger than the share that the beneficiary would otherwise take under the intestacy statuteWe ignore the beneficiary

Question 24

UPC Advancement Statute

Answer 24

UPC §2-109 (CB pg. 128)Advancements

Different from NY Rule – (c) if the recipient of the property fails to survive the decedent, the property is not taken into account for shares of their decedents

Similar to NY Rule – they both apply to heirs generally

Question 25

Advancements Test

Answer 25

See if advancement is greater than estate share

If yesrecipient doesn’t take anything under intestacy

If norecipient’s gift is calculated into distribution

Add advancement to estate total

Divide among issue according to intestacy rules

Give recipient the share amount minus her advancement

Question 26

Hotchpot

Answer 26

If a gift is treated as an advancement, it is accounted for when distributing the decedent’s estate by bringing it into hotchpot

Question 27

Guardianship of Property

Answer 27

has responsibility for the minor child’s custody and care.

has no authority to deal with the child’s property.

Guardianship is like a continuous probate until the child reaches the age of majority

• Guardian must continuous report to the court and ask the court for permission when making any type of disposition of the property included in the estate, even if for the child’s benefit
• has the duty of preserving thespecific property left to the minor and delivering it to the ward at age 18 unless court approves a sale, lease, or mortgage
• Guardian ordinarily can only use the income from the property to support the ward
  
  • guardian needs court approval to go into principal

Question 28

Payment of share of infant, incompetent or conservatee or person under disability Statute

Answer 28

SCPA §2220

If payment from tort suit to minor child doesn’t exceed $10,000, the money can be paid to minor child’s parents, or to some competent person (custodian) with whom the child resides, without going to court

Question 29

Conservatorship

Answer 29

• Given title as trustee to the protected person’s property along with investment powers similar to those of a trustee
• established a fiduciary duty without putting excessive constraints on the guardian
• system is more flexible, however the huardian/conservator may have to go to the court annually for an accounting
• terminates when the minor reaches the age of majority or dies before then (UPC 5-431)

Question 30

Custodianship

Answer 30

• a person who is given property to hold for the benefit of a minor under the Uniform Transfers to Minors Act or Uniform Gifts to Minors Act
• These acts, some form of which has been enacted in every state, property may be transferred to a person, including the donor, as custodian for the benefit of the minor
• EPTL §7-6.3Nomination of Custodian
• Facility of Payment Clause – property to be distributed outright to a minor may be paid instead to a custodian or even to the parent or guardian of the minor
• The custodian has the right to manage the property and to reinvest it
• The custodian is a fiduciary and is subject to “the standard of care that would be observed by a prudent person dealing with property of another”
• NOT under the supervision of the court
• DOES NOT need to file an annual accounting

Question 31

Trusteeship

Answer 31

most flexible of all property arrangements

Trust can postpone possession until the donor thinks the child is competent to manage the property

best vehicle for giving gifts to children

Question 32

4 BARS TO SUCCESSION

Answer 32

1. The Slayer Rule
2. Voluntary Disclaimer
3. EPTL §4-1.4Disqualification of parent
4. EPTL §4-1.6Disqualification of joint tenant

Question 33

In re Estate of Mahoney

Answer 33

Wife was convicted of manslaughter in the death of her husband. Husband died intestate, and wife claimed her intestate share. Court said it would be inequitable to permit the wife to profit from her own wrongdoing and adopted the constructive trust approach to the issue to ensure that the killer did not profit

Jurisdictions without slayer statutes had 3 options

Vermont chooses to follow the Constructive Trust Rule

Unjust enrichment due to wrongful conduct is not equitable

Applies only to voluntary manslaughter – intentional killing

UPC provides that the killer is treated as having disclaimed the property. A disclaimant is treated as having died immediately before the victim

UPC and most states provide that a final criminal conviction of a felonious and intentional killing is conclusive. Acquittal is not dispositive of the acquitted individual’s status as a slayer

Question 34

NY and the Slayer Rule

Answer 34

• Surrogate’s court has general subject matter jurisdiction (SCPA §201) so they could deal directly with this question
• NY at the time of Mahoney had case law (Riggs v. Palmer) which held that a wrongdoer shouldn’t be unjustly enriched from his/her wrongdoing
• Imposes a constructive trust
• In NY, children of the slayer still gets to take in intestacy
• Treat the slayer as if they had pre-deceased the decedent to go through the distributive scheme
• NY applies the slayer rule to trusts as well

Question 35

Disqualification of joint tenant in certain instances

Answer 35

EPTL §4-1.6:

1. When the slayer and decedent are joint tenants – the slayer who kills will not be able to take advantage of the survivorship feature of the rights of survivorship
2. We require first that there MUST be a conviction of murder in the second or first degree
3. “Except for those monies contributed by the convicted joint tenant” the slayer gets his own contribution back, but everything else goes to decedent
   
   1. Decedent takes all
4. NOTENY does NOT count mercy killings as murder in the first or second degree

Question 36

Disqualification of parent to take intestate share

Answer 36

EPTL §4-1.4

Parents will be disqualified from taking if while the child, before the age of 21, the parent failed or refused to provide support for the child or abandoned the child or the parents’ parental rights were terminated

Question 37

Disclaimer or Renunciation

Answer 37

When an heir of a devisee will decline to take the property, commonly to reduce taxes or to keep property from creditors.

They are treated as if they had predeceased the decedent.

If a person dies testate, the devisee can refuse to accept the devise, thereby preventing title from passing to them.

Any gift requires acceptance

Question 38

Renunciation of Property Interests Statute

Answer 38

EPTL §2-1.11

1. To be legally effective, renunciation must be done within 9 months of the death of the decedent (“effective date of the disposition”)
2. Must have an affidavit from the renouncing party, in writing, signed and acknowledged by the person renouncing, and filed in the office of the clerk of the court
3. Subpart (e) if someone is going to renounce but the distribution is happening “by representation”the renouncing person shall be treated as having died on the same date as, but immediately after, the creator or decedent
   
   1. Effectively saying that the renouncing party is treated as alive for the first cut of the distribution of the estate
   2. Justification for this is that the renouncing party is essentially passing on exactly what their heirs were entitled to and not messing up the distribution in any other way

Question 39

IRS as Creditor