Succession

Question 1

Priority of claims to inheritable assets after a person dies (6)

Answer 1

1. Government allocates to private parties (close family member)
2. Government allocates unsecured creditors
3. Government allocates to government via tax
4. Government allocates to surviving spouses
5. Government to decedents
6. Government allocation by default rules

Question 2

Homestead Allowance

Answer 2

UPC 2-402: $22,500 (varies by state)

To spouse, if none, minor and dependent kids

Before creditors

Question 3

Family Allowance

Answer 3

UPC 2-404: $27,000 (personal rep can choose to pay)

Question 4

Exempt Property

Answer 4

UPC 2-403: household furniture, cars, appliances, and personal effects up to value of $15,000

Question 5

Do former spouses get these exemptions? (Homestead, family, exempt property)

Answer 5

No

Question 6

Do domestic partners apply to the exemptions? (homestead, family allowance, exempt)

Answer 6

Common Law: NO

UPC: advises states to include domestic partners

Question 7

Waiver of Homestead/Family Allowance + Exempt Property

Answer 7

PERMITTED - UPC 2-213

Question 8

Federal Law Legacy Tax

Answer 8

Dates back to the 1797 legacy tax

Unified + Gift tax: 40% of the amount above the federal exemption ($12,060,000), plus $16,000 per person per year

Spouses can use some of the exclusion (doubling it) if they file a return to make the exclusion “PORTABLE”

Question 9

Failure to file the “portable” exclusion by the surviving spouse [federal]

Answer 9

Surviving Spouse Estate Tax Trap

Question 10

Estate tax (state)(MA, VE, NY, MS, RI, CN, MR. DC. IL, MN, WA, OR, HI)

Answer 10

Depends on the net value of the decedent’s gifts before death and assets remaining at death (varying marginal rates)

Like the federal

Question 11

Inheritance tax (state) (PA, NJ, MR, KE, IA, NE)

Answer 11

Government’s portion depends on the amount of each recipient’s gifts and inheritances

Question 12

What state has both an estate + inheritance tax?

Answer 12

Maryland

Question 13

Spousal elective share

Answer 13

allows the spouse to take assets ahead of those allocations made by the decedent

Question 14

Highest priority of deciding who gets claims to what assets?

Answer 14

State enforces the decedent’s choice via will or substitute

Question 15

Who should decide who should get sentimental personalty?

Answer 15

Decedent, NOT the state

Question 16

Who should choose where tangible property should go?

Answer 16

Decedent

Question 17

Who should choose between farms and businesses?

Answer 17

Decedents to preserve
1) subjective value
2) efficiency - will know who will manage the business/farm

Question 18

What kills the middle class farms?

Answer 18

Estate tax - barely enough to survive

Question 19

Why is allowing the decedent’s intent necessary?

Answer 19

1. promotes justice to get service from kids
2. avoid unjust enrichment
3. reduce injustice
4. advance justice by increasing distributive justice
5. achieve fairness of rewards
6. benefits families
7. consideration of the capital formation
8. consider public goods
9. consider democracy
10. consider happiness of those who think they will have less than $3,000,000

Question 20

Easiest way to split control to the government

Answer 20

tax the estate

Question 21

Parks v. Fink

Answer 21

Uses the modern rule that a lawyer might have a duty to an intended beneficiary

Question 22

Does the lawyer owe a duty to an intended beneficiary?

Answer 22

Common Law: NO.

Modern Trend: depends - exceptions

Question 23

Modern Trend of Beneficiary Duty

Answer 23

Lawyer owes a duty in some cases, but not if:

1. there was a failure for the client to execute the will
2. if the will was never executed
3. if inappropriate to a 6-factor balancing test

Question 24

Six-factor balancing test (when the intended beneficiary does not have a right to the lawyer)

Answer 24

1. Extent to which the transaction was intended to benefit the nonclient plaintiff
2. Forseeability of harm to the plaintiff
3. Degree of certainty that the plaintiff suffered injury
4. The closeness of the connection between the D’s conduct and the injury
5. Preventing future harm
6. Extent to which the profession would be unduly burdened

Question 25

2 factors of the major focus of the courts in the 6-six factor exception test

Answer 25

1. preventing future harm + 2. extent to which the profession would be unduly burdened

Question 26

Reciprocal wills

Answer 26

individual, separate wills that two people make to pass property, usually to one another, upon the first spouse’s passing.

Question 27

Problems with reciprocal wills

Answer 27

Survivor may change their will, could remarry and die - leaving a new spouse who would get this estate

Question 28

A v. B

Answer 28

Issue of telling the wife about husband’s bastard child, had to because of the duty for a reciprocal will

She needed to know for her will creation

Question 29

Example 2.01: The lawyer prepares a will for the client,
which the lawyer sends by email to the client. The
client tells the lawyer that it says exactly what the
client wants. The client gets sick and enters the
hospital. On his death bed, the client repeatedly emails
and calls the lawyer, imploring the lawyer to bring the
will to him to be executed. The lawyer fails to do so and the client dies. The client’s estate sues. Can the estate recover from the lawyer?

Answer 29

Client sues and wins the malpractice suit- - not much in damages because the estate has lost so little

Question 30

When does a beneficiary have standing to sue for breach of duty?

Answer 30

1. If the lawyer would be liable to the client for breach of duty and
2. The beneficiary can show harm to the beneficiary from the breach of duty to the client