Transfer by Administration 1

Question 1

On the exam, should you make a distinction between the probate estate and the taxable estate?

Answer 1

Yes

Question 2

Joint Tenancy

Answer 2

• Owned by two or more persons in equal shares
• Requires a written instrument with express declaration it is to be owned jointly
• When a joint tenant dies, the joint tenancy property passes by operation of law by the surviving joint tenant(s)

Question 3

Severance of Joint Tenancy

Answer 3

• Can be done with or without the consent of the joint owner

* Reverts to tenancy in common

Question 4

Tenants in Common

Answer 4

Have an undivided interest in the property -
each own a fractional share.
This interest can be devised in their will.

Question 5

Rights of creditors in deceased joint tenant

Answer 5

The deceased joint tenant’s creditors have not rights in the joint tenancy property.

Question 6

When do joint tenant’s creditors have rights against property held in joint tenancy?

Answer 6

If there was an execution sale before the joint tenant’s death.

Question 7

Transfer on Death Deed

Answer 7

• Conveys titled of RP at grantor’s death to named beneficiaries
• Only for residential property up to 4 units
• Must record deed with 60 days of execution
• There is no beneficiary interest until the death
• It can be revoked, at any time before death
• Decedent’s Estate can Recover from TOD beneficiary - 3 year SOL
• You have to have named beneficiaries
• If the beneficiary dies before the grantor, the deed has not effect

Question 8

Community Property with Right of Survivorship

Answer 8

• Passes to the survivor without probate
• Step-up in both basis for both halves
• The transfer document must expressly declare that the property is community property with right of survivorship

Question 9

Totten Trust

Answer 9

It is a bank account that is in a trust

A trustee administers the account after the death of the grantor

Question 10

Uniform TOD Security Regulation Act

Answer 10

• Beneficiary designation form

* Not governed by the will or trust.

Question 11

Does a creditor with a security interest in personal property travel to the new owner?

Answer 11

Yes

Question 12

Is IRA under state law?

Answer 12

Yes

Question 13

Is 401(k) under federal law?

Answer 13

Yes

Question 14

Why do you not want to leave the IRA to the trust?

Answer 14

The IRS cannot attach RMD’s to a trust.

Question 15

Is there creditor protection for inherited IRA’s?

Answer 15

No

Question 16

Contracts to Convey at Death

Answer 16

Contract to convey property in my will

Question 17

Requirements for Contracts to Convey at Death

Answer 17

• Offer/Acceptance
• Consideration
• SOF
• Good Faith and Fair Dealing

Question 18

SOF - Requirements

Answer 18

• Must be in writing where it promises to answer for the debt or duty of another
• Contracts to sell or convey Real Property
• Contracts not to be performed within the lifetime of the promisor
• Contracts for the sale of goods over the amount of $500 (UCC Provision)
• Not to be performed in one year of the making thereof

Question 19

Alternatives to Will Contracts

Answer 19

• Reciprocal wills

* Funded Revocable Trusts

Question 20

Spousal Set Asides - Family Protection

Answer 20

• The family members right to live in the residence during probate administration.
• It protects against creditor and heirs
• Court has wide discretion re: set-aside

Question 21

Do spousal set asides apply to property not subject to a probate?

Answer 21

No

Question 22

When does the spousal set aside terminate?

Answer 22

Remarriage, divorce, legal separation

Question 23

Are the rights of decedent’s spouse depend on the rights of surviving spouse?

Answer 23

No

Question 24

What is the family allowance?

Answer 24

• Money out of the estate given to the spouse
• Why? They were dependent on decedent. Must be able to show dependency. Dependent minor children do not have to be related.
• They will be paid an allowance under the probate estate

Question 25

Does the spousal set-aside protect against secured debt?

Answer 25

No

Question 26

Priorities for family allowance?

Answer 26

``` Taxes Funeral Expenses Last illness Family Allowance Wage Claims ```

Question 27

PC 6500

Answer 27

Family Allowance | Only applies to items in the probate estate

Question 28

Small Estate Affidavit

Answer 28

* Must wait 40 days - most common, a bank account * Under the Probate Amount * Look for spousal set asides - if there is a family protection issue

Question 29

Real property transfers - Summary Procedures

Answer 29

*Worth under 50k

Question 30

Objectives of a Formal Probate

Answer 30

* Collect and manage all assets subject to probate * Give notice and opportunity to be heard by interested parties * Pay debts and taxes of the decedent * Liquidate assets when necessary or appropriate * Distributed to remaining assets

Question 31

Personal Representative

Answer 31

* Executor - where there is a will | * Administrator - intestate

Question 32

Personal Representative - Priorities

Answer 32

1. Spouse 2. Children 3. Grandchildren 4. Parents 5. Grandparents 6. Siblings 7. Creditors 8. Any other person

Question 33

What is the timeline for filing the will?

Answer 33

Within 30 days of death

Question 34

Self Proving Will

Answer 34

Contains proper attestation clause by two witnesses

Question 35

Not Self Proving Will

Answer 35

Must be proved by declaration of witnesses - if no will contest

Question 36

Holographic Will

Answer 36

* Handwritten and signed by testator * Proven by traditional handwriting analysis * No witnesses required.

Question 37

Lost or Destroyed Will

Answer 37

* If the testator's will was in the testator's possession; was competent until death, and a duplicate cannot be found, it is presumed that the testator destroyed the will with intent to revoke it. * This is just a presumption * A photocopy of a will is not a duplicate original and the presumption of revocation applies. * Photocopy of a will is good evidence, though.

Question 38

Independent Administration of Estates Act (IAEA)

Answer 38

Allows executor to administer most activities without court supervision

Question 39

Formal Probate - Bond Required

Answer 39

* Required by default - mandatory is required by Will * Can be waived by the will or beneficiaries * Alternative - blocked account