Will Substitutes Flashcards
Why do people use will substitutes?
Need to probate things like real property, can be expensive
Inter vivos gifts
Comply with 3 common law rules: intention, acceptance, delivery
Giftos mortis causa
- Death bed gifts, gifts made in contemplation of death given on death.
- Very hard to prove.
- Delivery standard more relaxed.
- Revocable til donor loses capacity
- Automatically revocable if recovers
Deeds and inter vivos trusts
- When conveying real property has to be done via deed, a piece of paper that looks like a will.
- “Grant conveys to A for life and then to B in fee simple”
- Once formally executed grantor loses all interest
- Grant= inter vivos gift
Contrast deed with will
- Deed, once executed it vests. Will, once executed does not vest til they die.
- Deed irrevocable once perfected, will revocable til death
What are the parties in a trust
- Settler (initial owner)
- Trustee (person with whom legal ownership rests)
- Beneficiary (equitable interest, trustee holds for their benefit_
Tenancy in common
Each tenant owns their respective half, and when one dies, their half goes to their estate. (law presumes this)
Joint tenancy
When one of the JTs dies, the deceased’s ownership interest passes to the other owner immediately upon death, very effective will substitute. There’s no probate fees or capital gains taxes, and it doesn’t go to the state.
Joint bank accounts
Presume right of survivorship
Hansen Est v Hansen
Facts: married couple negotiating divorce, man dies before finalized. Wife claims house they owned in JT that man left to daughters his portion in will. Had to prove JT had been severed
Ratio: a will can’t sever, have to prove it was before he died. Ways to sever: convey your interest, mutual agreement, or by course of dealings
Resulting Trust
- People take as JTs, even though only one party has invested in the property.
- While legally the law of survivorship has operated you are presumed to be holding a portion of that in trust for their inheritants
Resulting trust is a…
Presumption that can be rebutted
When does presumption of resulting trust occur?
- When person gratuitously places someone else on title with them (other JT did not contribute)
- Business partners have this presumption
- Anyone who is not related
Exception for married spouses for resulting trust
For legally married spouses, the presumption will NOT apply. The policy rationale being that people want to provide for their spouses.
Pecore v Pecore (Bank Accounts)
- Gratuitous transfers with adult children= presumption of resulting trust
- Minor children= presumption of advancement
- Look at surrounding factors to determine if presumption can be rebutted.