Non-probate Property

Question 1

Will substitutes (in general)

Answer 1

Include:
1. life insurance
2. joint tenancies
3. inter vivos trusts
4. survivorship bank accounts
5. deeds
6. Ks
7. inter vivos gifts

enable individuals to reduce taxes and eliminate the cost and inconvenience of probate

Question 2

Inter vivos outright gifts

Answer 2

If the decedent has already given the property away, it obviously will not pass under the decedent’s will or by intestacy

Question 3

Inter vivos (“living”) trusts

Answer 3

Property the decedent has already transferred into a trust will not pass through the decedent’s estate. instead, it passes under the terms of the trust

Question 4

Is an inter vivos revocable trusts valid?

Answer 4

An inter vivos trust, revocable by the settlor, is valid.

Question 5

Future interests

Answer 5

Pass to the named beneficiary

Question 6

Is probate avoided through a tenancy in common

Answer 6

No, the decedent’s share passes via the decedent’s will

Question 7

Is probate avoided through a joint tenancy

Answer 7

Yes, the surviving joint tenant takes the whole property by operation of law without going through probate

Question 8

How do we treat community property with right of survivorship?

Answer 8

Treated like a joint tenancy in that it (i) can be severed in the same manner as a joint tenancy before either owner’s death; and (ii) passes directly to the survivor outside of probate when an owner dies

Question 9

Savings account trusts

Answer 9

Also known as Totten trusts; are valid.

Valid even though the trustee can withdraw all of the proceeds for their own use. The depositor’s creditors can reach the funds during the depositor’s lifetime.

Question 10

Joint or survivor accounts

Answer 10

The survivor has an absolute right to all the money. Extrinsic evidence may be admitted to show the account was merely for convenience and the decedent did not intend for the survivor to take all the money

Question 11

How is a deed a non-testamentary transfer?

Answer 11

A deed deposited in escrow, with delivery conditioned upon a grantor’s death, may be a valid nontestamentary transfer.

If a deed that is by its terms effective only upon the grantor’s death has actually been delivered to the grantee, a court may sustain the transfer as nontestamentary by construing the deed as a present transfer of a future interest, subject to a life estate reserved in the grantor

Question 12

Are “payable on death” (“POD”) govt bonds valid?

Answer 12

Yes

Question 13

Are life insurance policy proceeds a probate asset?

Answer 13

No

Question 14

Gift causa mortis

gift in view of impending death

Answer 14

A gift of personal property made in contemplation, fear, or peril of impending death with intent that it will be revoked if the giver recovers from the illness or escapes from peril.

Question 15

How to deliver gift causa mortis?

Answer 15

1. actual physical delivery
2. constructive delivery (for example, delivering keys or a passbook); or
3. symbolic delivery (i.e., written instrument)

Question 16

Is a gift causa mortis revocable?

Answer 16

Yes, the donor may revoke by an affirmative act manifesting such intention.

Also revoked by operation of law if the donee fails to survive the donor.

Question 17

If a gift causa mortis subject to creditor claims?

Answer 17

Yes, it is subject to the claims of creditors of the donor’s estate