Intro to Intestacy Flashcards
Freedom of Disposition Rule
the right to dispose of property as one see fit; dispose of one’s property at death on terms she proscribes
The Dead Hand can reach and control the allocation of property after
1) The organizing principle of American law on donative transfers
2) Nearly unrestricted right but not completely unrestricted
Donee right to inherit?
The donee does not have any right to inherit; the right belongs to the donor to dispose
1) No living person has heirs – heirs apparent
2) An expectancy may be transferred in equity if there is
a) Adequate consideration and it is fair
2) An expectancy may be transferred in equity if there is
a) Adequate consideration and it is fair
The court’s role
to facilitate not regulate
1) The goal is to carry out the probable intent of the decedent
Domicile Rule
1) The law of the domicile of the decedent at death applies
a) 6 months + 1 day rule
Limitations on the freedom of diposition
1) One cannot impose conditions that are
**a) (1) unlawful; **
(i) In violation of constitutional right
**b) (2) uncertain; **
(i) Destroying property without purpose
**c) (3) against public policy **
(i) “partial” and “not reasonable” restriction on marriage not against PP.
d) (4) on property one does not own at time of death
**e) (5) against any other limits or rules by state legislature **
(i) Can limit and condition but cannot repeal (taking)
Intentional Omission of Child
Rule: children have no protection against intentional disinheritance by parent
Revocation by operation of law
Marriage and divorce
Marriage revokes will unless
(i) (1) Spouse is already provided for in will and (2) there is no other evidence to rebut the presumption of revocation (an intention not to provide for the spouse)
OR
(ii) Provision made for spouse by marriage contract
Pretermitted statutes
statutes designed to protect unintentionally omitted children or spouses – applies to property not trusts
- when child born after will created
Examine facts and circumstances: timing of will, if all other children provided for, if there is something given to child then probably cannot show omission is mistake
Surviving spouse
Social security
married 10 years – entitled to inherit; if not 10 years – not entitled
Surviving spouse
Pension & retirement
spouses have survivorship rights to employer benefits under ERISA for pension plan
surviving spouse
homestead
majority of states allow spouse to remain in the home
surviving spouse
Personal Property
certain personal property may be given to spouse under value
surviving spouse
Dower
entitles widow to a life estate 1/3 of the LAND of deceased spouse
a) Right attaches when one acquires land or upon marriage (the latter)
surviving spouse
Curtsey
husband had support interest in wife’s lands, didn’t acquire unless kids born then given life estate
Separate states
majority rule common law. treats the married as separate entities.
a) Prince Model
b) Protection against disinheritance – elective share : entitled to 1/3 of all assets
(i) Can override a testator’s plan if enforced by spouse
(ii) Only waive by pre or post nup
Community states
minority rule. Treats married as a partnership.
a) Coldplay model
b) No elective share because all assets are 1/2 of each spouse
Elective Share Rule
1) In separate property states courts evaluate the augmented estate
a) Broad definition: the augmented estate is property applicable to the elective share rule
(i) Take out lifetime transfers to surviving spouse and credits to SS
* Joint tenancy, property together, life insurance as a beneficiary
b) Movement to include non-probate property in elective share calculation
(i) Revocable trust issue
Pre and post nups
can waive elective shares
voiding
pre and post nups
majority and minority rule
1) Can waive the elective shares
2) Majority rule UPAA 1983: Void by showing
a) Not voluntary or
b) Unconscionable when executed
(i) Not fair or fully disclosed
3) Minority rule UPMAA 2012: unenforceable when
a) Involuntary or
b) No access to legal representation or
c) No notice waiver or explanation of marital right if no legal rep
d) No adequate financial disclosure
The Slayer Rule
Three approaches
1) For one who kills the decedent three approaches:
a) The slayer inherits despite the killing
b) The slayer is disinherited – passes through residue or intestacy
c) Creation of a constructive trust goes to slayer but compels him to pass to the next heir
(i) Involuntary (no intent) – to slayer; voluntary/murder (intent) – constructive trust
Disclaimer
Common and modern rule
1) Voluntary refusal to succession or inheritance
2) Common law rule: no disclaimer
3) Modern rule: disclaimant is treated as a predeceased decedent – pass through residue/intestacy systems
estate tax general
A) Estate tax is the federal government way of redistributing wealth
1) Tax on estate – amount in excess of exemption (16K / 12.06) is taxed at 40%
2) Tax on beneficiary – inheritance tax by state
a) In ky based on closeness to the decedent
b) State tax can be deducted from federal tax
tax exemption numbers
1) Federal lifetime exemption: 12.06 mi
2) Annual gift exemption: 16K
gift tax
rule and exemptions
a) Only gifts over 16K are taxed
b) Exempted
(i) Marital gifts
(ii) Under 16K
(iii) Charitable gifts
(iv) Tuition paid directly to school
(v) Medical expenses paid directly to provider** a deduction
c) Example: gift $66,000. Taxable- 1) file form 2) do not have to report first $16,000 3) report $50,000 (66K-16K) 4) nothing pay today 5) new lifetime exemption: $12.06M - $50,000 = 12.01 M
unified gift and estate tax
Every year can give 16K tax free and anything over that is tax free if under 12.06**
tax credit amount
4,769,800
tentative estate tax formula
Formula: (345,800) + (tentative estate – 1M X .40)
probate
court’s supervised method of distributing and carryout the will and monitoring the distribution of probate assets
1) Purposes – evidence of title transfer; protects creditors; distributes property to those intended
2) Will or intestacy or pour over trust
3) Exception
a) De minimums estate under statutory number (30K); personal property; if all to spouse
nonprobate
Will substitute, life insurance, joint tenancy, inter vivos trust, POD and TOD contracts
personal representative
in charge of carrying out the estate
1) Executor named in the will; administrator intestacy appointed
2) Duties: contact creditors, manage estate, decedent’s affairs, fiduciary duties, protect property, accounting of assets, file taxes
3) Gets power from letters of testamentary
devisee v. legatee
real property and money; legateepersonal property
jurisdictions
1) Probate
a) Where one is domiciled at death = domiciliary jurisdiction
(i) 6 months and a day
2) Ancillary probate
a) Real property in another jurisdiction = ancillary jurisdiction
attorney duty to beneficiaries
Attorney owes duty of reasonable care to intended beneficiaries because beneficiary is third party exception since there is no privity of K but is intended beneficiary of will.
intestacy
When one dies without a testamentary plan, the uniform laws provide an estate plan that is supposed to be the likely and reasonable intention of the decedent
When spouse, no kids, no parents =
spouse takes all
When all kids are spouse and decedents =
spouse takes all
When all kids are spouses, but not all decedents =
spouse takes 150K and 1/2 remaining, kids in common take 1/2 remaining
When all kids are decedents, but not all spouses =
spouse takes 150K and 1/2 remaining, decedent’s kids take 1/2
When spouse and parents, no kids =
spouse takes 300K and 3/4 remaining, parents take 1/4
When kids, no spouse no parents =
all to kids per capita
When no spouse, no parents, no kids, but siblings/ descendants of parents =
all to siblings per capita
When no spouse, no parents, no kids, but siblings/ descendants of parents =
all to siblings per capita
When no spouse, no parent, no kids, no siblings/descendants of parents, surviving grandparent (G) or descendant of grandparent (GD) aunts/uncles =
a) If both paternal and maternal G or GD = 1/2 to each maternal and paternal (all to G or if none per capita at GD generation)
b) If only on one side survivor = all to G or GD on that side
No spouse, no parent, no kids, no sibling, no descendants of parents, no G or GD =
stepchild or escheat, no laughing heirs
cohabitating partners
not heirs at law
USDA / simulatenous death issues
a) Traditional law: if sufficient evidence that spouse survived other spouse proceeds paid to spouse who survived longer
b) UPC/USDA: claimant must establish survivorship by 120 hours, 5 days by clear and convincing evidence
table of consanguinity
only when no surviving spouse
a) First to direct descendants’ line children, Grandchildren, GG children
b) Then, first parenthetic line (parent’s) siblings, nieces/nephews, grand and GG
c) Last, second parenthetic line (GP) uncles/aunts, 1 cousin to 3 cousin
(i) UPC stops here to prevent laughing heirs
half blood issues
UPC inherit as full blood, KY 1/2 of full blood
English per stripes
(vertical)
(i) Shares are split under first direct line and split further
(ii) Begin at level below decedent – peg board
Modern per stripes
(i) Shares are equal at each line of the closest living generation
(ii) Begin at first level of living descendant – either EPS or UPC
UPC per capita
(horizontal)
(i) Shares are equal at first generation living, the remainder goes into a common pot
(ii) Each taker at each level treated equally – pot distributed over and over again
Dead limb problem
cut off deceased without representation
Adoption Rule
a) Rule: adopted child is treated as the natural child of the adopted parent
(i) Except when adopted by the spouse of the natural parent (step parent)
* Adoption is “rebirth”
b) UPC General Rule: adoption cuts off a child’s right to inherit from natural parents. Exceptions:
(i) Stepchild adopted by stepparent
(ii) Individual adopted by relative of genetic parent
(iii) Individual adopted after death of both genetic parents
(iv) Assisted reproduction child adopted after
adult adoption
majority rule: most states do not draw a distinction between adult and children adoption; not barred
posthumous child issue
minority and majority rule
when conceived before and born after death
a) Majority under UPA: rebuttable presumption that child born 300 days after death of husband is a child of the husband
(i) Minority rule: 280 days after the death
nonmarital children
a) Common law: disinherited
b) Modern: always can inherit from mother, state vary about father
advancements
definition
a lifetime gift from a donor to an intestate heir where the donor intends the lifetime gift to be in place of an inheritance by intestacy only
advancements
common law v. modern UPC
2) Common law rule: gift made during life of decedent always counts against heir’s share
3) Modern Rule UPC: if a writing and a gift made to the beneficiary accompanying writing
a) Timing: within a week or month, not a year though
Advancement calculation
when less and when more would inherit
a) If advancement is less than what would have inherited
(i) Add advancement amount to estate total = hotchpot
(ii) Divide by number of heirs
(iii) Subtract the advancement from one who received living gift
(iv) Surviving kids get the divided share
b) If advancement is equal to or more than what heir would have inherited
(i) Split the estate as if advancement individual is not there – predeceased
conservatorship
must be clear and convincing evidence cannot manage property
1) UPC gives priority to some people to serve as conservator chosen in advance
a) Agent under DPOA
b) Spouse
c) Adult child
d) Parent
durable POA v. POA
DPOA: agent authorized to act with respect to any of principal’s property, but only while he is alive.
a) DPOA: Continues through incapacity while alive v. POA: terminates at incapacity
b) Agent does not have powers unless given specific powers
c) duties
(i) loyalty: avoid personal interest or doing something to benefit self
(ii) care/prudence: reasonably prudent manner, ordinary care, due diligence, good faith, don’t waste resources
