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Trusts, Wills and Estates > Intestate Succession + Probate > Flashcards

Intestate Succession + Probate Flashcards

1
Q

Intestate succession - gral / applicable law, court’s approach

A
  • By state statute
  • Not favored: court will attemp to interpret extensive evidence to try to save a document with testamentary intent by decedent
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2
Q

Intestate succession - Causes (5)

A

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

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3
Q

Intestate succession - Advancement / concept, CLvs UPC treatment

A

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)

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4
Q

Intestate succession - Marital or Community Property / CL vs UPC treatment

A
  • 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
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5
Q

Intestate succession - Separate Property - 3 possible situations

A

1) surviving spouse and issue (children)
2) Only surviving spouse
3) No surviving spouse or issue (children)

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6
Q

Intestate succession - Separate Property - Distribution when surviving legal issue / Gral rule and other specific app

A
  • 1/3 to surviving spouse and 2/3 to surviving children
  • some states extend to CL marriage
  • “Step children” considered only if formally adopted
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7
Q

Intestate succession - Separate Property - Distribution when there is NO surviving legal issue

A
  • 3/4 to surviving spouse and 1/4 to surviving parent or issue of parent (sibling)
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8
Q

Intestate succession - Separate Property - Distribution when there is NO surviving spouse

A

Legal Issues take all

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9
Q

Intestate succession - Methods for share determination for legal issues (3)

A

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

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10
Q

Intestate succession - Order for Collateral relatives - rules when no surviving spouse or legal issues (5)

A

1st: surviving parent
2nd: sibling (natural, adopted, half blood -under UPC)
3rd: grandparents
4th: aunts/uncles
5th: first cousins

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11
Q

Intestate succession - Escheatment / when, effect, exception

A
  • 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

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12
Q

Power of attorney - gral / concept, formal req, inconsistency

A
  • 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
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13
Q

Power of attorney - Scope

A
  • 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
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14
Q

Power of attorney - Scope - Specific authorizations examples (5)

A

1) create/modify life insurance policy
2) prepare will
3) make donative transfer
4) trust activities
5) disclaim property

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15
Q

POA - Medical powers - Health Care Directive

A
  • durable POA that authorizes agent for medical decision
  • no liability for wrongful death when valid POA + good faith
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16
Q

Medical powers - “Living Will”

A
  • as directive to physician to withhold life extending/sustaining procedure when no reasonable hope of recovery from terminal illness
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17
Q

Probate Proceeding - Gral / actors, fx (3)

A
  • 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
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18
Q

Probate Proceeding - Jdx / original and acillary

A
  • 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
19
Q

Probate Proceeding -Scope of jdx

A

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

20
Q

Probate Proceeding - Hearings for court determinations (4)

A

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

21
Q

Alternatives to probate - gral / when, adv.disad

A
  • 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
22
Q

Alternatives to Probate - alternatives (6)

A

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

23
Q

Alternatives to probate - Insurance Policies and pension plans

A
  • Allowed unless contract names estate itself as beneficiary (probate necessary)
  • Life insurance as will substitute controls over inconsistent will provision regarding beneficiary designation
24
Q

Alternatives to probate - Joint Tenancy with right of survivorship

A
  • 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)
25
Q

Alternatives to probate - Pay on death accounts

A
  • Payment w/o probate
  • Donor can withdraw funds prior to-death, but beneficiary can not withdraw funds prior to death
26
Q

Alternatives to probate -Trust Res (Intervivos Trust)

A
  • 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
27
Q

Alternatives to probate - “Pour-over Wills” (testamentary trust)

A
  • Send all or designated assets at death into trust created
28
Q

Alternatives to probate - Community Property Agreements - Recognized types of provisions

A

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_

29
Q

Probate Procedure - Administration of probate estates / by whom (preference), standard of care,

A
  • 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)
30
Q

Probate Procedure - Admission to probate / Standing + non intervention powers

A
  • 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
31
Q

Probate Procedure - Admission to probate - Petition Content

A
  • 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)
32
Q

Probate Procedure - Creditors / notice publication

A
  • 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)
33
Q

Probate Procedure - Creditor’s Claims / $ and opportunity

A
  • 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
34
Q

Probate- PR personal liability / (2) grounds

A

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

35
Q

Probate Procedure - PR no personal liability for cost for: (4)

A

1) adm costs of probate
2) funeral costs
3) last illness expenses
4) court-ordered family maintenance

36
Q

Probate procedure - PR traditional fx (4) i.e.

A

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

37
Q

Probate procedure - PR duties / standards

A
  • Fiduciary duties and act under the Prudent Person on its own affairs standard (similar to trustee)
  • usually compensated
38
Q

Probate - Insolvent Estate Priority for Distribution (7) (when there is no possible Abatement)

A

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

39
Q

Probate - Distribution on beneficiaries - Order (5)

A

1st Specific gifts

2nd Cash/demonstrative legacies

3rd Residuary gifts (left-over property given away)

4th Intestate succession

5th Escheatment to state

40
Q

Probate - Abatements /when, effect of statutes

A
  • 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
41
Q

Probate - Abatement Statutes Priority Order (4)

A

1st: Intestate property
2nd: general residuary gifts
3rd: gral gifts of money
4th: Specific gifts of non-monetary assets

42
Q

Probate - Taxation / file of return, type of tax, who pays for it and exception

A
  • 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
43
Q

Probate Procedure - Non intervention powers

A
  • As will provision for informal probate conducted by PR (w/out court intervention)
  • When estate is solvent
  • Might require submitting bond

Trusts, Wills and Estates (3 decks)

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