Intestate Succession + Probate Flashcards
Intestate succession - gral / applicable law, court’s approach
- By state statute
- Not favored: court will attemp to interpret extensive evidence to try to save a document with testamentary intent by decedent
Intestate succession - Causes (5)
1) No will
2) Lapsed device
3) Disclaimer
4) Only existing will successfully challenged
5) Will doesn’t cover all property and gives no instructions for rest/residual
Intestate succession - Advancement / concept, CLvs UPC treatment
Decedent transfers to beneficiary prior to his death
- CL: as advancement of intestate share (consider in the total of assets when determining distribution)
VS
-UPC: not advancement unless express in writing at time of gift
(similar analysis to “satisfaction” with will)
Intestate succession - Marital or Community Property / CL vs UPC treatment
- CL: protect surviving spouse/child (dower/courtesy as life state interest)
- Modern: “elective share statute”: requires a minimum amount or % of property to pass within family
Intestate succession - Separate Property - 3 possible situations
1) surviving spouse and issue (children)
2) Only surviving spouse
3) No surviving spouse or issue (children)
Intestate succession - Separate Property - Distribution when surviving legal issue / Gral rule and other specific app
- 1/3 to surviving spouse and 2/3 to surviving children
- some states extend to CL marriage
- “Step children” considered only if formally adopted
Intestate succession - Separate Property - Distribution when there is NO surviving legal issue
- 3/4 to surviving spouse and 1/4 to surviving parent or issue of parent (sibling)
Intestate succession - Separate Property - Distribution when there is NO surviving spouse
Legal Issues take all
Intestate succession - Methods for share determination for legal issues (3)
1) Per stipe: equally for all at same level, then children share upon decedent share
2) Per capita (All the same) with representation
3) Per capita at each generation
Intestate succession - Order for Collateral relatives - rules when no surviving spouse or legal issues (5)
1st: surviving parent
2nd: sibling (natural, adopted, half blood -under UPC)
3rd: grandparents
4th: aunts/uncles
5th: first cousins
Intestate succession - Escheatment / when, effect, exception
- Limits intestate succession to 1st/2nd degree cousins
- Then it escheats to the state
UNLESS: property by decedent was previously inherited from deceased spouse who has other children alive
Power of attorney - gral / concept, formal req, inconsistency
- authorization from ppal to agent to operate on their behalf if later disabled OR incapacitated
- In writing with clear and express intent + possible req of physician concurrence
- Most recent version controls
Power of attorney - Scope
- according to terms of instrument
- if gral: w/”all the ppal’s power of absolute ownership”: it includes all decision regarding: funeral, legal matters, conveyance of assets and health care decision
Power of attorney - Scope - Specific authorizations examples (5)
1) create/modify life insurance policy
2) prepare will
3) make donative transfer
4) trust activities
5) disclaim property
POA - Medical powers - Health Care Directive
- durable POA that authorizes agent for medical decision
- no liability for wrongful death when valid POA + good faith
Medical powers - “Living Will”
- as directive to physician to withhold life extending/sustaining procedure when no reasonable hope of recovery from terminal illness
Probate Proceeding - Gral / actors, fx (3)
- Court supervised process both when will or intestate
- Fx:
1) establish rights of beneficiaries,
2) protect creditors,
3) ensure no beneficiary will have claims against owner once propety is taken
Probate Proceeding - Jdx / original and acillary
- Original jdx: decedent domicile at time of death
- “Ancillary jdx” when probate in one state and property in a different state: court in second state w/jdx over property located in forum regarding disputes in property other than probate
Probate Proceeding -Scope of jdx
1) Appointment/discharge of PR/conservators/guardians
2) Will contests
3) Determination of inheritance rights: heirship/title/rights on property/ construction-adm-distribution of assets
Probate Proceeding - Hearings for court determinations (4)
1) sale/lease/mortgage of assets of the estate
2) to continue decedent’s business
3) to grant auhtority for partial/interim distributions
4) Approval for final reporting/accounting + final decree of distribution
Alternatives to probate - gral / when, adv.disad
- allowed for property not subject to formal probate
- Adv: reduces cost of transfer of assets
- Disad: creditor’s claims over assets are not extinguished, can be asserted later against possessor
Alternatives to Probate - alternatives (6)
1) Insurance policies and pension plans
2) Joint Tenancy w/right of survivorship
3) Pay-on-death accounts
4) Trust Res
5) Pour-over will
6) Community property agreements
Alternatives to probate - Insurance Policies and pension plans
- Allowed unless contract names estate itself as beneficiary (probate necessary)
- Life insurance as will substitute controls over inconsistent will provision regarding beneficiary designation
Alternatives to probate - Joint Tenancy with right of survivorship
- avoids probate by vesting property into joint-t, not into the estate - on death of one joint-t the property goes to the other bc of rights of survivorship and not into probate
- When joint back account : it might specifically define how survivor depositant takes balance (equal shares or proportionate to their deposits)
Alternatives to probate - Pay on death accounts
- Payment w/o probate
- Donor can withdraw funds prior to-death, but beneficiary can not withdraw funds prior to death
Alternatives to probate -Trust Res (Intervivos Trust)
- When a priorly formed inter-vivos trust, the transferred property is removed from decedent’s estate, hence at time of death beneficiary can take without probate
- Adv: privacy - no need to inventory to court
- Disad: need for modification when assets change frequently + 4-6 moths limitation on creditor’s claim
Alternatives to probate - “Pour-over Wills” (testamentary trust)
- Send all or designated assets at death into trust created
Alternatives to probate - Community Property Agreements - Recognized types of provisions
1) “Everything we own is in community property”
2) “everything we acquire will be community property”
3) “ When I die, all community property goes to surviving spouse”
- If none: c_ommunity property goes through probate_
Probate Procedure - Administration of probate estates / by whom (preference), standard of care,
- By PR appointed by court upon petition
- Preference:
1st: executor named in will,
2nd: surviving spouse or nearest of kin,
3rd: professional executor - Act as fiduciary that is capable and with r_easonable care_ + entitled to compensation from assets (similar to trustee)
Probate Procedure - Admission to probate / Standing + non intervention powers
- Any person with interest can petition
OR
- Non-intervention powers: applies for solvent estates where PR is allowed to conduct probate without court intervention
- potential request for bond
Probate Procedure - Admission to probate - Petition Content
- ID if existing will
- ID of would-be-heirs or devisees
- Reasonable effort to locate them
- Estimate of assets of the estate
- Any contest of the will
- If available copy of will (some states have procedures to take proof when there was clear/congent/convincing evidence of intent when will was is not availability)
Probate Procedure - Creditors / notice publication
- PR must publish notice : 3 consecutive weeks in local newspapaer
- Content of publication: ID decedent, probate court, PR contact info, deadline for claims (4-6 months since publication)
Probate Procedure - Creditor’s Claims / $ and opportunity
- If >$1K: deemed allowed if not rejected within 6 months
- If<$1K: claim must be allowed or rejected
- 30 days for claimant to notify PR of petition to court for claim to be allowed
- then PR has 20 days to respond. Failure to respond allows claimant to note matter up for hearing. If rejected, allows claimant to sue within 30 days;
- if allowed, court can assess estate w/reasonable attorney fees
Probate- PR personal liability / (2) grounds
1) When non-payment of creditor is on his fault
2) When making estate insolvent bc of paying debt or distribution without retaining sufficient assets to pay taxes
Probate Procedure - PR no personal liability for cost for: (4)
1) adm costs of probate
2) funeral costs
3) last illness expenses
4) court-ordered family maintenance
Probate procedure - PR traditional fx (4) i.e.
1) Collect estate assets and debts
2) make interim distribution to beneficiaries
3) Run estate business
4) if w/authority: sell property and execute property deeds
Probate procedure - PR duties / standards
- Fiduciary duties and act under the Prudent Person on its own affairs standard (similar to trustee)
- usually compensated
Probate - Insolvent Estate Priority for Distribution (7) (when there is no possible Abatement)
1st: cost of administrator: PR, accounting, legal expenses
2nd: Reasonable Funeral + last illness expenses
3rd: Family maintenance for surviving spouse/children ordered by court
4th: Fed/State Taxes
5th: Judgment debts
6th: Unsecured Debts: all other debts w/o judgment
7th: Beneficiaries
Probate - Distribution on beneficiaries - Order (5)
1st Specific gifts
2nd Cash/demonstrative legacies
3rd Residuary gifts (left-over property given away)
4th Intestate succession
5th Escheatment to state
Probate - Abatements /when, effect of statutes
- For situation when estates have less assets that the decedent devised to all takers
- Proportional reduction/diminution
- Abatement of assets statutes regulate the situation setting ap riority for property
Probate - Abatement Statutes Priority Order (4)
1st: Intestate property
2nd: general residuary gifts
3rd: gral gifts of money
4th: Specific gifts of non-monetary assets
Probate - Taxation / file of return, type of tax, who pays for it and exception
- Fed estate tax return must be filed within 9 months of death
- State inheritance tax: can be allowed as deduction from federal return
- Unless indicated in the will, the taxes are apportioned by value received by each person as of value of the entire estate
- Charities usually escluded from tax apportionment
Probate Procedure - Non intervention powers
- As will provision for informal probate conducted by PR (w/out court intervention)
- When estate is solvent
- Might require submitting bond
