misc admin of estate; powers of appointment; POA

Question 1

What is the probate process?

Answer 1

Probate is the proceeding in which an instrument is established to the last will of the decedent, or if no will, to determine intestate distributees.

Question 2

What is a personal representative? What are the powers and duties of the personal representative?

Answer 2

All major powers and duties of trustee are also applicable to personal representative (the Fiduciary Powers Act also applies, and a strict self-dealing rule applies to all fiduciaries).

Question 3

In what order or letters of administration be granted to heirs of intestate decedent (this is the order of priority for appointment as administrator of the intestate estate)?

Answer 3

The order of priority for appointment as administrator is: 1. Surviving spouse, 2. Children, 3. Grandchildren, 4. Father mother, 5. Brothers and sisters, 6. Any other distributee.

Question 4

What corporations or legal entities can service personal representatives?

Answer 4

Except for trust companies, a corporation cannot serve as executor in less it is the sole residuary beneficiary. A law firm cannot be executor. (Also, a will provision designating a law firm to represent the estate is not binding on the executor.)

Question 5

For estates less than ______, the administrator files an affidavit giving her authority to handle the estate without court order or posting a bond. (Does not apply to real property)

Answer 5

$30,000

Question 6

What is the abatement process and how does it work?

Answer 6

Abatement is the process of reducing testamentary gifts in cases where the estate assets are insufficient to pay all claims and satisfy all bequests. You proceed from unassigned property to residuary estate to general dispositions to specific dispositions.

Question 7

How are estate taxes paid?

Answer 7

Estate taxes are equitably apportioned among all estate beneficiaries (rather than being paid out of the residuary estate). The will, however, may direct otherwise, e.g., directing that taxes are paid out of the residuary estate.

Question 8

What is the power of appointment?

Answer 8

A power of appointment is a term most frequently used in the law of wills to describe the ability of the testator (the person writing the will) to select a person who will be given the authority to dispose of certain property under the will.

Question 9

What is the difference between a special and general power of appointment?

Answer 9

A general power of appointment can be exercised in favor of the donee, or state, or her creditors. A special power is exercisable only in favor of the specified class that does not include the donee, or estate, or her creditors. E.g., “I give my videogame collection to my son Andrew to distribute among his cousins as he sees fit” would be a special power of appointment.

Question 10

How does the donee act of the donors agent?

Answer 10

When the donee exercises his power, transferring property to an appointee, the appointee takes title directly from the donor through a relation back.

Question 11

Can the power of appointment be delegated?

Answer 11

No, it is personal to the donee. It cannot be delegated or assigned.

Question 12

What’s the difference between an exclusive and nonexclusive special power of appointment?

Answer 12

A special power of appointment may be exclusive or nonexclusive. If exclusive, the donee can appoint all the property to one or more members of the class of permissible appointees to the exclusion of the other members of the class. If nonexclusive, the donee must appoint some property to each object.

Question 13

With respect to general and special powers of appointment, when may donee’s creditors access the property subject to the power of appointment?

Answer 13

A creditor may not reach property subject to special power. A donee’s creditor may only reach property subject to a PRESENTLY EXERCISABLE general power.

Question 14

Powers of appointment may be _______ exercisable or _______ ?

Answer 14

Presently exercisable or testamentary

Question 15

If the power of appointment is given the 2 or more donees, how must it be exercised?

Answer 15

The donees must unite and exercise it unanimously.

Question 16

If a donee has the power of appointment, when may he contract to make an appointment (that is, to use his power to give property to one of its possible recipients) – when may there be a contract for that?

Answer 16

Such a contract is valid for a PRESENTLY EXERCISABLE power of appointment. For a TESTAMENTARY power of appointment, such a contract is invalid because it would effectively transform the testamentary power into a presently exercisable power by contract.

Question 17

What is a power of attorney?

Answer 17

Powers of attorney a written authorizations to act on behalf of of another.

Question 18

What is a durable power of attorney?

What is a springing power of attorney?

Answer 18

1. A durable power of attorney survives the disability or incapacity of the principal. By statute, under New York law, all powers of attorney are durable and less it otherwise EXPRESSLY PROVIDES that is terminated by the principles incapacity.
2. Springing powers of attorney are ones that are effective upon a future time or occurrence (e.g., incapacity).

Question 19

What is a healthcare proxy? What authority does it convey?

Answer 19

A healthcare proxy is a durable healthcare power, appointing an agent to make health decisions on behalf of the principal. It becomes EFFECTIVE WHEN THE PRINCIPAL BECOMES INCAPACITATED. A healthcare proxy gives the agent’s authority to make any decision on the principal’s behalf the principal could of made him for himself while having capacity. No liability, provided that a healthcare proxy acts in good faith.

Question 20

How do you create a healthcare proxy and how do you revoke it?

Answer 20

You create it by a signed writing by the principal witnessed by 2 adults (SAME REQUIREMENTS as a WILL).
You can revoke a healthcare proxy by notifying the agent or the principles healthcare writer ORALLY or in WRITING.

Question 21

A living will generally covers 3 things

Answer 21

1. Whether to administer, withhold, or withdraw LIFE SUSTAINING PROCEDURES,
2. Whether the provide, withhold, or withdraw ARTIFICIAL NUTRITION or HYDRATION, and
3. Whether the provide treatment to ALLEVIATE PAIN.
   Intent to terminate life-sustaining measures may be ORAL or written, the must be established by CLEAR and CONVINCING evidence.

Question 22

Testamentary power of appointment a donee can appoint only by?

Answer 22

Only in their will

Question 23

Will a general clause in your will disposing of all your property or residuary estate is sufficient exercise a general power of appointment?

Answer 23

A general clause in your will disposing of all your property or residuary estate is sufficient exercise a general power of appointment, provided that the donor did not demand otherwise: demand that you specifically distribute it or name it in your will.

Question 24

who is default taker for power of appointment?

Answer 24

goes to TAKERS IN DEFAULT, if named. otherwise back to donor or donor’s estate or beneficiary.

Question 25

is general presently exercisable power of appointment a testamentary substitute for purposes of calculating elective estate?

Answer 25

yes

Question 26

is general testamentary power of appointment a testamentary substitute for purposes of calculating elective estate?

Answer 26

no, b/c its testamentary

Question 27

is special power of appointment a testamentary substitute for purposes of calculating elective estate?

Answer 27

no b/c it’s not donee’s asset

Question 28

how to apply RAP to power of appointment?

Answer 28

To determine whether interests vest within lives in being +21 years, you have to look at whether the power of appointment will be exercised within lives in being +21 years of the date of the CREATION of the instrument giving the power of appointment. When it vests, for example, in the donee’s issue who reach age 30, take the wait and see approach (also known as the second approach).

Question 29

**RAP cheklist (7 things)

Answer 29

1. ID interest
2. Give RAP rule
3. find LIB and run w/ it
4. NY Reform Statute (cut age to 21 years)
5. Give Suspension Rule (ID’able people can jointly convey fee simple w/in LIB + 21)
6. Look to see if there’s interest income in unborn beneficiary and state that the interest income is void
7. Remainder interests

Question 30

RAP def

Answer 30

an interest must vest within lives in being plus 21 years.

Question 31

**NY suspension rule for RAP

Answer 31

For a given interest, there are identified persons who could, together, convey fee simple absolute within LIB plus 21 years. Otherwise interest is void (unborn kids).

Question 32

• NY statutory spendthrift rule for RAP

Answer 32

income beneficiaries CANNOT assign or convey their income interest

Question 33

conclusively presumed that testator read and understood the will absent 1. ______; thus it’s assumed that plain meaning controls and can’t be overturned by 2_____

Answer 33

1. suspicious circumstances

2. extrinsic evidence

Question 34

1. what’s latent ambiguity in will? 2. if there is one, we can admit ____

Answer 34

1. ambiguity not evidence looking at will.

2. extrinsic evidence admissible to find meaning of T’s words, including intent stuff and statements to atty

Question 35

what if extrinsic evidence doesn’t cure latent ambiguity in will as to who receives gift?

Answer 35

gift fails. goes to risduary

Question 36

what’s patent ambiguity?

Answer 36

obvious ambiguity, e.g., “I give twenty-five ($25,000) to my friend”

Question 37

with patent ambiguity, what’s admissible?

Answer 37

extrinsic evidence, BUT NOT STATEMENTS TO THIRD PARTIES ABOUT INTENT that contradict will (except statements to atty)

Question 38

if someone has a conditional will (“if i don’t survive paragliding”) and they make no other will and survive, is that will binding after he survives condition?

Answer 38

if he leaves no other will, you have to argue both sides

Question 39

what is joint will?

Answer 39

will of two people in one document. BAD IDEA!

Question 40

Can you make K to make a will or not revoke a will? (think JOINT WILL situations)

Answer 40

yes, but reqs EXPRESS STATEMENT OF INTENT THAT WILL’S PROVISIONS CONSTITUTE CONTRACT B/T THE PARTIES.

Question 41

1. If someone breaches joint will 1 where there’s a K for it, do you probate will 2 that person created in breach of will 1? 2. what happens?

Answer 41

1. probate will #2
2. impose constructive trust in favor of intended beneficiaries of will #1 (still gotta keep contract from will #1, but new specific bequests in will #2 can be effectuated)

Question 42

capacity to make a will greater than or less than for normal K?

Answer 42

capacity for will IS THE LOWEST LEVEL OF CAPACITY to make a will. Even a moment of clarity will do it. This prevents estates from drifting into intestacy.

Question 43

evidence of undue influence is usually ______

Answer 43

circumstantial

Question 44

only time circumstantial evidence creates presumption of undue influence? the presumption is rebuttable

Answer 44

confidential relationship with T and you get a gift

Question 45

if drafting atty gets gift, that results in ___ scrutiny

Answer 45

PUTNAM scrutiny. basically, the lawyer is in bad shape and has to rebut presumption of influence

Question 46

Can drafting atty be appointed as executor of estate? IFF (4 things)

Answer 46

1. written notice that
2. executor can be anyone
3. executor gets statutory commission
4. atty entitled to legal fees for representing estate

Question 47

define the SUSPENSION RULE

Answer 47

The “Suspension Rule” states that all interests must theoretically be able to join together within LIB plus 21 years to convey a fee simple absolute. If this is not possible, the power of alienation is suspended and the POA is void.

Question 48

DEFINE New York reform statute

Answer 48

Use the New York reform statute to reduce the age contingency for distribution to 21 years of age.