Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Wills & Thrills > Non-Probate Transfers > Flashcards

Non-Probate Transfers Flashcards

1
Q

definition

NON-PROBATE TRANSFERS

A

= assets that pass at decedent’s death outside the terms of the will and outside probate administration process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

definition

WILL SUBSTITUTES

A

non-probate assets are recognized by law

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

7 examples

WILL SUBSTITUTES

A
  1. Life insurance
  2. Joint tenancies or tenancies by the entirety
  3. Inter vivos trust
  4. Bank arrangements
  5. Deeds
  6. Contracts
  7. Inter vivos gifts (including gifts causa mortis)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

key inquiries

NON-PROBATE TRANSFERS

A
  1. Does the subsidiary law of wills apply to non-probate transfers?
  2. Can the beneficiary of a non-probate asset be changed by will?
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

joint assets with right of survivorship

WILL SUBSTITUTES

A

assets held by the decedent and someone else in right of survivorship

example = joint bank account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

life insurance proceeds

WILL SUBSTITUTES

A

controlled at death by beneficiary designation of policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

2 types

BANK/BROKERAGE ACCOUNTS IN BENEFICIARY FORM

A
  1. POD

2. TOD

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

POD

BANK/BROKERAGE ACCOUNTS IN BENEFICIARY FORM

A

= bank accounts payable on death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

TOD

BANK/BROKERAGE ACCOUNTS IN BENEFICIARY FORM

A

= brokerage accounts transferrable on death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

distinction from joint bank account

BANK/BROKERAGE ACCOUNTS IN BENEFICIARY FORM

A

Joint bank account = both account owners can access the money

POD account = only the depositor can access the account while alive, only beneficiary can access account only once depositor dies and designation takes effect

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

revocable living trust

WILL SUBSTITUTES

A
  • used by attorneys to effectuate non-probate transfers to clients
  • puts assets in revocable trust before death with instructions to pass at death
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

inter vivos trust

WILL SUBSTITUTES

A

= trusts created during settlor’s lifetime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

gifts causa mortis

WILL SUBSTITUTES

A

= gifts made in contemplation of death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

general use

WILL SUBSTITUTES

A

Individuals wishing to avoid taxes and to eliminate the cost and inconvenience of probate often turn to various “will substitutes” to transfer their property upon death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

common issue

WILL SUBSTITUTES

A
  • Frequently, the decedent’s testate or intestate takers argue (usually unsuccessfully) that these forms of transfer constitute “testamentary” transfers
  • Therefore invalid for failure to comply with the required formalities for execution of a will
    (Usually an unsuccessful argument)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

life insurance

WILL SUBSTITUTES

A

(probably the most widely used will substitute)

  1. clearly has testamentary effect in the sense that economic interest will pass at death from T
  2. NEVERTHELESS it is not a “will,” and the designation of beneficiary does not have to be attested by witnesses
  3. Rather, courts have held that a life insurance policy is a CONTRACT, and the disposition is governed by the terms of the contract
17
Q

change of beneficiaries

LIFE INSURANCE POLICIES

A

most life insurance policies provide that a change of beneficiaries can be effected by the owner only by notification to the company during owner’s life
= a will cannot change the beneficiary designation, unless the terms of the contract permit this

18
Q

types

BANK ARRANGEMENTS

A
  1. totten trusts
  2. joint or survivor accounts
  3. PODs/TODs
19
Q

joint or survivor accounts

BANK ARRANGEMENTS

A

= deposit of money in a bank in the names of two persons “with right of survivorship” is generally held effective to give the survivor the ABSOLUTE right to ALL of the money

20
Q

extrinsic evidence

JOINT OR SURVIVOR ACCOUNTS

A

in many states, extrinsic evidence is admissible to show

  1. that the dead depositor did not intend a gift to the survivor and
  2. that the account was only a convenience for paying the depositor’s bills
21
Q

survivor is not spouse

JOINT OR SURVIVOR ACCOUNTS

A

where the survivor is not the spouse but someone else, this issue has been frequently litigated

22
Q

majority rule

PAYABLE ON DEATH DESIGNATIONS

A

many courts have held a POD designation on a bank account ineffective

23
Q

majority rule rationale

PAYABLE ON DEATH DESIGNATIONS

A

no interest of any type is transferred to the designated beneficiary during the depositor’s lifetime

(hence the unattested designation violates the Statute of Wills)

24
Q

majority rule reception

PAYABLE ON DEATH DESIGNATIONS

A

= criticized by many authorities
(on the ground that a Totten trust is distinguishable from a P.O.D. designation only by the fact that the depositor has recited that he holds the deposit “in trust” and yet the Totten trust device is upheld)

25
Q

upc response

PAYABLE ON DEATH DESIGNATIONS

A

a number of states and UPC have enacted statutes specifically permitting POD accounts as valid will substitutes

26
Q

2 types of deeds

WILL SUBSTITUTES

A
  1. delivery upon death

2. delivery actually made

27
Q

delivery upon death

DEEDS

A

a deed that is
1. deposited in escrow
2. with delivery conditioned upon the grantor’s death
= may be a valid nontestamentary transfer

28
Q

delivery actually made

DEEDS

A

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

29
Q

contracts

WILL SUBSTITUTES

A

A contract that purports to dispose of property upon death

  1. is testamentary in nature AND
  2. must comply with the formalities required for a will in order to be enforceable
30
Q

revocable trusts

WILL SUBSTITUTES

A

= interest passes during life but becomes possessory at death

31
Q

pour-over

REVOCABLE TRUSTS

A

(from will to revocable trust)

  1. Trust may be established before, after, or concurrently with will
  2. Trust may be amendable and revocable
  3. Gift is valid even if trust unfunded during the settlor’s lifetime
32
Q

contingent beneficiary trust

LIFE INSURANCE TRUSTS

A

ALLOWED

Example = “proceeds to A, but if A does not survive, to B in trust for my children”

33
Q

assignment of policy trust

LIFE INSURANCE TRUSTS

A

ALLOWED

= assign policy to part to hold in trust

34
Q

applicable law

EXAM INSTRUCTIONS

A
  1. wills = tn (compare to UTC)
    intestacy = tn (compare to UTC)
  2. trusts = UTC (or majority if UTC silent)
  3. non-probate transfers = majority
  4. powers of appointment = majority
  5. uniform prudent investment act = adopted by tn
  6. uniform principle and income act = adopted by tn

Wills & Thrills (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions