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Wills & Thrills > Protection (Wills + Intestacy) > Flashcards

Protection (Wills + Intestacy) Flashcards

1
Q

purpose

RESTRICTIONS ON POWER OF TESTATION

A

protection of the family

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2
Q

3 considerations

RESTRICTIONS ON POWER OF TESTATION

A
  1. Spousal protection
  2. Property rights
  3. Support rights
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3
Q

early 1900s

EVOLUTION OF PROPERTY RIGHTS

A

= the decedent spouse was allowed to disinherit the surviving spouse

EXCEPTIONS

  1. Dower
  2. Curtesy
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4
Q

mid-1900s

EVOLUTION OF PROPERTY RIGHTS

A

= disinherited spouse could renounce the will and elect to take ⅓ (or ½) of the probate estate

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5
Q

upc and modern statutes

EVOLUTION OF PROPERTY RIGHTS

A

= a disinherited spouse is entitled to a share of the total marital assets

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6
Q

2 systems

PROPERTY RIGHTS SYSTEMS

A
  1. Community property

2. Separate property

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7
Q

community property

PROPERTY RIGHTS SYSTEMS

A

= each spouse own an undivided interest in all earning of the spouses and property acquired from such earnings during marriage

@ death, a spouse has testamentary power over only his or her one-half community share

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8
Q

community property states

PROPERTY RIGHTS SYSTEMS

A
  • 9 states = community property states

- 3 states INCLUDING TN = optional community property states

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9
Q

separate property

PROPERTY RIGHTS SYSTEMS

A

= each spouse owns all of his or her earnings during the marriage

@ the death of one spouse, the surviving spouse has two options:

  1. Take under the decedent’s spouse’s will (or intestate laws if no will)
  2. Take an elective share
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10
Q

4 statutory tests

PROPERTY RIGHTS SYSTEMS

A
  1. intent to defraud test
  2. illusory transfer test
  3. general power of appointment test
  4. first-generation statute
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11
Q

intent to defraud test

PROPERTY RIGHTS SYSTEMS

A

= was the transfer made for the purpose of defrauding the surviving spouse out of his or her elective share?

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12
Q

2 factors

INTENT TO DEFRAUD TEST

A
  1. Subjective evidence

2. Objective evidence

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13
Q

objective evidence

INTENT TO DEFRAUD TEST

A
  1. Control retained by the transferor
  2. Amount of time between transfer and death
  3. Amount of property left to the surviving spouse
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14
Q

illusory transfer test

PROPERTY RIGHTS SYSTEMS

A

= did the transferor in good faith divest him or herself of ownership of the property or was the transfer illusory

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15
Q

rule

UPC GPOA TEST

A
  1. a marriage ends with death of spouse AND
  2. the deceased spouse had created an inter vivos trust during the marriage for which only that spouse had the general power of appointment
    = the assets of that trust shall be included in the probate estate for the purpose of determining the omitted spouse’s share
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16
Q

rationale

UPC GPOA TEST

A
  • public policy changes resulted in increased share of the estate for spouses upon divorce
  • an omitted spouse’s access to marital assets should not be more restricted than that of a divorced spouse
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17
Q

inquiry required

UPC GPOA TEST

A

imposes an objective test that does not require an inquiry into whether the trust was created for the purpose of disinheriting the spouse and avoiding the spousal share under the statute

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18
Q

tn modern approach

PROPERTY RIGHTS

A
  • Dower and curtesy are abolished

- Doesn’t affect rights that have vested before April 1, 1977

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19
Q

elective share

RESTRICTIONS ON POWER OF TESTATION

A
  • designed to protect a surviving spouse from disinheritance
  • give spouse an election to take a statutory share of decedent’s estate IN LIEU OF taking under the will
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20
Q

modern approach to protection of the surviving spouse

ELECTIVE SHARE

A

elective share statutes

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21
Q

tn omitted spouse protection

ELECTIVE SHARE

A

Will or any part revoked by both

  1. subsequent marriage AND
  2. birth of a child

(otherwise = spouse may opt for elective share)

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22
Q

tn elective share formula

AMOUNT OF ELECTIVE SHARE

A

surviving spouse’s elective share %
MULTIPLIED BY decedent spouse’s net estate
MINUS property passing to surviving spouse
= elective share

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23
Q

step one

TN ELECTIVE SHARE FORMULA

A

surviving S of intestate D who elects AGAINST taking an intestate share
OR surviving S who elects against D’s will
- has a right of election
- to take an elective-share amount
- equal to the value of the D’s net estate
- determined by the length of marriage
— Less than 3 yrs = 10%
— 3 yrs but less than 6 yrs = 20%
— 5 yrs but less than 9 yrs = 30%
— 9 yrs or more = 40%

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24
Q

number of years (step one)

TN ELECTIVE SHARE FORMULA

A
  • years do not have to be consecutive, may be separated by divorce
  • number of years persons are married to the same person shall be combined
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25
Q

percentage of decedent’s net estate for less than 3 yrs (step one)
TN ELECTIVE SHARE FORMULA

A

= 10%

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26
Q

percentage of decedent’s net estate for 3 yrs but less than 6 yrs (step one)
TN ELECTIVE SHARE FORMULA

A

= 20%

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27
Q

percentage of decedent’s net estate for 5 yrs but less than 9 yrs (step one)
TN ELECTIVE SHARE FORMULA

A

= 30%

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28
Q

percentage of decedent’s net estate for 9 yrs or more (step one)
TN ELECTIVE SHARE FORMULA

A

= 40%

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29
Q

value of the net estate (step two)

TN ELECTIVE SHARE FORMULA

A

includes all of the decedent’s real property and personal property subject to disposition under will/intestacy laws MINUS

  1. secured debts to the extent that secured creditors are entitled to realize on the applicable collateral AND
  2. funeral and administration expenses AND
  3. award of exempt property, homestead allowance and year’s support allowance
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30
Q

net does not include (step two)

TN ELECTIVE SHARE FORMULA

A

any assets over which the decedent held a power of appointment

  • whether exercised or not
  • UNLESS D exercises the power of appointment to direct the assets to be paid to the decedent’s personal representative for administration as part of probate estate
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31
Q

step three

TN ELECTIVE SHARE FORMULA

A

amount payable to S by the estate shall be reduced by the value of all assets includable in the decedent’s gross estate that were
a. transferred or deemed transferred to S OR
b. for the benefit of S
EXCEPT
1. homestead allowance AND
2. exempt property AND
3. year’s support allowance

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32
Q

fraud

NET ESTATE

A

any conveyance
1. made fraudulently
2. to children or others
3. with an intent to defeat S of distributive/elective share
= at the election of S, can be
a. includable in the decedent’s net estate
b. voidable to the extent the other assets in the decedent’s net estate are insufficient to fund and pay the elective share amount

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33
Q

finley factors application

NET ESTATE

A
  • used to determination whether conveyance should be voided
  • factors should not be applied mechanically
  • weight and significance of factors = depend on the facts of each particular case
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34
Q

7 finley factors

NET ESTATE

A
  1. whether transaction was made with/without consideration
  2. size of the transfer in relation to D’s total estate,
  3. time between the transfer and D’s death,
  4. relations which existed between D and S at the time of the transfer
  5. source from which the property came
  6. whether transfer was illusory
  7. whether S was adequately provided for in the will
35
Q

required procedure

WAIVER OF ELECTIVE SHARE

A

Notice must be filed, right to elective share is not automatic

36
Q

notice of election

WAIVER OF ELECTIVE SHARE

A

= surviving spouse must file a notice of election within specific period

37
Q

upc waiver of right to elect

WAIVER OF ELECTIVE SHARE

A 
right of election of a surviving spouse AND 
rights of surviving spouse to 
a.	homestead allowance
b.	exempt property
c.	and family allowance
d.	or any of them
MAY BE WAIVED
- wholly or partially
- before or after marriage
- by a written 
a.	contract
b.	agreement
c.	waiver 
- signed by S
38
Q

upc unenforceable waiver

WAIVER OF ELECTIVE SHARE

A

S’s waiver is not enforceable if the surviving spouse proves that

  • S did not execute the waiver voluntarily OR
  • that 4 elements are present
    1. waiver was unconscionable when it was executed AND
    2. before execution of the waiver S was not provided a fair and reasonable disclosure of the property or financial obligations of the decedent
    3. did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the decedent beyond disclosure provided AND
    4. did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the decedent
39
Q

upc extent of waiver

WAIVER OF ELECTIVE SHARE

A

a. waiver of “all rights” (or equivalent) in present/prospective spouse’s property/estate OR
b. complete property settlement entered into after/in anticipation of separation/divorce
= waiver of
1. all rights of elective share
2. homestead allowance
3. exempt property
4. AND family allowance
= renunciation by each of all benefits
that would otherwise pass by
a. intestate succession OR
b. will executed BEFORE the waiver OR
c. property settlement
UNLESS waiver provides to the contrary

40
Q

upc unconscionability

WAIVER OF ELECTIVE SHARE

A

= for decision of court as a matter of law

41
Q

tn waiver by antenuptial/prenuptial agreements

WAIVER OF ELECTIVE SHARE

A

Any antenuptial/prenuptial agreements re: property owned by either spouse before marriage
= BINDING IF entered into
1. freely, knowledgeably, and in good faith
2. without exertion of duress or undue influence

42
Q

independent counsel for antenuptial/prenuptial agreements

WAIVER OF ELECTIVE SHARE

A
  • participation of independent counsel is not ESSENTIAL
  • BUT provides best assurance that the legal prerequisites will be met and that the antenuptial agreement will be found enforceable in the future
43
Q

tn enforceability of antenuptial/prenuptial agreements

WAIVER OF ELECTIVE SHARE

A

Terms are enforceable by all remedies available for contract terms

44
Q

general rule

SPOUSE’S PERSONAL RIGHT TO ELECTION

A

right to election is personal to spouse = only the surviving spouse may make the election to take against the will

45
Q

exception

SPOUSE’S PERSONAL RIGHT TO ELECTION

A

= election can be made on behalf of legally incapacitated

  1. With court approval
  2. Upon a showing that an election is necessary to provide adequate support for the spouse during his or her life expectancy
46
Q

spouse dies before election is made

SPOUSE’S PERSONAL RIGHT TO ELECTION

A

= election cannot be made by the spouse’s personal rep

rationale = statute is intended to protect the surviving spouse against disinheritance, not to provide benefits to the spouse’s heirs

47
Q

effect of election on testamentary plan

ELECTIVE SHARE

A

elective share is paid in the manner causing the least disruption to the T’s testamentary plan =

  1. first paid in cash or kind from the assets passing under the will that, but for the election, would have passed to the spouse outright
  2. to the extent that these assets are insufficient, excess is paid pursuant to the abatement rules that apply to creditors’ claims
48
Q

lifetime transfer to defeat elective share

ELECTIVE SHARE

A

lifetime transfers by the decedent = subject to the elective share
IF the grantor-spouse retained the power
a. to revoke OR
b. to invade, consume, or dispose of the principal
= revocable trusts may not be used to defeat a spouse’s right of election

(majority rule where addressed)

49
Q

parent’s disinheritance of kids

PROTECTION OF CHILDREN

A
  1. A testator may disinherit her children

2. = a parent need not bequeath anything to her children

50
Q

pretermitted child statutes

PROTECTION OF CHILDREN

A
  1. designed to protect children from being accidentally omitted from the will
51
Q

2 situations

UPC PRETERMITTED CHILD STATUTE

A
  1. T had no children living when executed will

2. T had 1+ kids when will executed and gave stuff to 1+ of kids

52
Q

testator had no children living when executed will

UPC PRETERMITTED CHILD STATUTE

A

= omitted kid gets share equal in value to that which the child would have received had the testator died intestate UNLESS

  1. will devised all or substantially all of the estate
  2. to the other parent of the omitted child and
  3. that parent survives T and is entitled to take under the will
53
Q

testator had one or more kids when will executed and gave stuff to one or more of the kids
UPC PRETERMITTED CHILD STATUTE

A

= an omitted kid is entitled to
1. Share that’s limited to devises made to T’s then-living kids AND
2. Share that omitted kid would have received had T given equal shares to all omitted and non-omitted kids AND
3. Interest that is same character of that devised to then-living kids
TO THE EXTENT FEASIBLE
- Whether equitable or legal
- Whether present or future

54
Q

effect

UPC PRETERMITTED CHILD STATUTE

A
  • To satisfy a share when T has 1+ kids and gave them stuff = devises to T’s then-living kids abate ratably
  • In abating, court shall preserve character of T’s testamentary plan TO THE MAXIMUM EXTENT POSSIBLE
55
Q

application

UPC PRETERMITTED CHILD STATUTE

A

ONLY APPLIES TO

  1. Any child born or adopted after execution of will
  2. Any child T fails to provide for in will SOLELY because he believes child to be dead
56
Q

doesn’t apply

UPC PRETERMITTED CHILD STATUTE

A

DOESN’T APPLY

  1. If appear from the will that the omission was intentional OR
  2. T provided for the omitted after-born or after-adopted child by transfer outside the will AND intent that the transfer be in lieu of a testamentary provision is
    a. shown by the testator’s statements OR
    b. is reasonably inferred from the amount of the transfer or other evidence
57
Q

rule

TN PRETERMITTED CHILD STATUTE

A

Child born or adopted after making of a will who is
- Not provided for
- Nor disinherited
- Nor provided for by settlement made by T in T’s lifetime
- BUT PRETERMITTED
= gets the same portion of T’s estate as if T died intestate

58
Q

application

TN PRETERMITTED CHILD STATUTE

A

to raise this portion = devisees/legatees/other heirs shall CONTRIBUTE PROPORTIONALLY out of their shares

59
Q

rule

OMITTED CHILD

A

a child born or adopted after the will was executed takes an intestate share of the decedent’s estate

60
Q

application of abatement

OMITTED CHILD

A

normal abatement rules apply

61
Q

exceptions

PROTECTION OF PRETERMITTED CHILDREN

A

pretermitted child will not take a share IF

a. It appears from the will that the omission was intentional OR
b. At the time the will was executed, the testator had other children and devised substantially all of his estate to the other parent of the omitted child OR
c. The testator provided for the omitted child by a transfer outside of the will with the intent that it was in lieu of a testamentary gift

62
Q

limited to bequests to other children

PROTECTION OF PRETERMITTED CHILDREN

A
  1. T had other children at the time the will was executed AND
  2. the will makes a provision for one or more of the children
    = pretermitted kid’s portion of the estate is limited to the provisions made to the other children
63
Q

reduction of bequests

PROTECTION OF PRETERMITTED CHILDREN

A

the bequests to the other children are reduced by pretermitted kid
BUT no other beneficiary’s bequest is reduced

(UPC/some state)

64
Q

failure to provide for child believed to be dead

PROTECTION OF PRETERMITTED CHILDREN

A

UPC/majority exception to general rule application only afterborn and after-adopted children

existing children are protected IF T fails to provide in her will for a living child solely because she mistakenly believed the child to be dead
= the child shares in the estate as though he were an omitted afterborn or after-adopted child

65
Q

pretermitted grandchildren

PROTECTION OF PRETERMITTED CHILDREN

A

pretermitted child statute operates only in favor of the testator’s children
= the testator’s grandchildren are not covered

66
Q

3 upc support rights

PROTECTION OF FAMILY

A

S and/or minor children are entitled to

  1. Homestead exemption
  2. Personal property exemption
  3. Family allowance
67
Q

upc homestead exemption

PROTECTION OF FAMILY

A

= homestead is exempt from all creditors up to the value of $15K

68
Q

upc personal property exemption

PROTECTION OF FAMILY

A

= tangible personal property is exempt from unsecured creditors up to the value of 10K

69
Q

upc application

PROTECTION OF FAMILY

A

Support rights are NOT CHARGEABLE against any benefit for share passing to S or children by

  1. D’s will
  2. Intestate succession
  3. Elective share
70
Q

upc family allowance

PROTECTION OF FAMILY

A
  • financial support for the period of administration of the decedent’s estate
  • the surviving spouse and decedent children are entitled to a reasonable allowance
71
Q

4 tn support rights

PROTECTION OF FAMILY

A
  1. Homestead
  2. Family allowance
  3. Exempt personal property
  4. Life insurance proceeds
72
Q

tn homestead

PROTECTION OF FAMILY

A

= TN statute protects family residence/farm
- Up to an aggregate value of 5K for property in individual’s name
- Up to an aggregate value of 7.5K for property held jointly
= EXEMPT from creditor’s claims

73
Q

property in individual’s name

TN HOMESTEAD

A

Up to an aggregate value of 7.5K for property held jointly

= EXEMPT from creditor’s claims

74
Q

property held jointly

TN HOMESTEAD

A

Up to an aggregate value of 7.5K for property held jointly

= EXEMPT from creditor’s claims

75
Q

death of household head

TN HOMESTEAD

A

REGARDLESS OF PROVISIONS MADE IN WILL
head of the household dies = homestead property passes
1. to the surviving spouse for life and
2. then to the decedent’s minor kids free from debts of mother/father/children and
3. once minor kids come of age/die = land can be sold and proceed distributed to head of household’s intestate heirs

76
Q

individuals 62 yrs and older

TN HOMESTEAD

A

TN statute provides for larger homestead amount for individuals 62 yrs and older

77
Q

amount of land exempted

TN HOMESTEAD

A

depends on whether the residence is urban or rural

78
Q

tn family allowance

PROTECTION OF FAMILY

A

= 1 year’s support

  • authorizes payment out of an estate of amount needed to maintain S (and kids) for a year
  • in addition to homestead, exempt personal property, share of estate
79
Q

purpose

TN FAMILY ALLOWANCE

A

= to provide funds for support of the spouse and children during the period the decedent’s assets are tied up in probate administration

80
Q

tn personal property exemption

PROTECTION OF FAMILY

A

a. the surviving spouse of an intestate decedent OR
b. a spouse who elects against a decedent’s will
= entitled to receive from the estate of the decedent certain exempt personal property having a fair market value not exceeding 50K (in excess of any indebtedness or security interests in the property)

(in addition to benefits passing by

  1. intestate succession
  2. elective share
  3. homestead
  4. a year’s support allowance)
81
Q

exempt personal property

TN PERSONAL PROPERTY EXEMPTION

A

this exemption applies to

  1. Tangible personal property
    - normally located in or about the principal residence AND
    - not used primarily in a trade or business, or for investment purposes
  2. Motor vehicles
    - not used primarily in a trade or business
82
Q

no surviving spouse

TN PERSONAL PROPERTY EXEMPTION

A

D’s unmarried minor children are entitled, as tenants in common, to the exempt property

83
Q

tn life insurance proceeds

PROTECTION OF FAMILY

A

life insurance on a decedent’s life is generally exempt from creditors’ claims

84
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)

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