Wills

Question 1

Do proceeds from life insurance policies pass by will or intestacy?

Answer 1

No. A life insurance policy is a contract, and the disposition of the policy’s proceeds is governed by the terms of the contract.

Question 2

What is a “totten trust”?

Answer 2

A Totten trust is a deposit of money in a bank account in “trust” for another person. The depositor retains complete control over the account during their lifetime, and the transfer is complete only upon their death. Totten trusts are accounts; they are not true trusts.

Question 3

When does property pass by intestate sucession?

Answer 3

Property may pass by intestate succession when:

• A decedent dies without having made a will or their will is denied probate (“total intestacy”)
• A decedent’s will does not dispose of all of the decedent’s property, either because a gift has failed or because the will contains no residuary clause (“partial intestacy”)

Question 4

Which state’s laws apply to intestacy issues?

Answer 4

For personal property, we use the law of the decedent’s domicile at death.

For real property, we use the law of the situs of the property.

Question 5

What is the order of descent for intestate succession?

Answer 5

1. Spouse
2. Descendents (i.e. children)
3. Descendents of deceased descendents (i.e. grandchildren if child is dead)
4. Ascendants (i.e. parents)
5. Descendents of ascendents (i.e. siblings)
6. Other (i.e. cousins, etc.)

Question 6

What are the three methods of computing shares for descendants?

Answer 6

If all descendents survive the decedent, then all of the descendents get equal shares.

If at least one descendant predeceased the decedent and is survived by a descendant who survives the decedent, one of the following methods is used:

1. Classic per stirpes
2. Per capita with representation (majority rule)
3. Per capita at each generational level

Question 7

How does the per stirpes method of distribution work?

Answer 7

One share is created for each child and one share for each deceased child who has at least one surviving descendant.

Each child receives one share and one share passes to a deceased child’s descendants by representation.

This method divides into shares at the child generation even if no child survives the intestate.

Question 8

How does the per capita with representation (the majority rule) method of distribution work?

Answer 8

The property is divided into equal shares at the first generational level at which there are living takers.

Each living person at that level takes a share, and the share of each deceased person at that level passes to their issue by right of representation.

If all children are deceased and all property is going to the grandchildren, each grandchild takes an equal share rather than the share (or part of the share) the parent would have taken had the parent survived.

Question 9

How does the per capita at each generational level method of distribution work?

Answer 9

Property is divided at the first generational level at which there are living takers, but the shares of deceased persons at that level are combined and then divided equally among the takers at the next generational level.

Persons in the same degree of kinship to the decedent always take equal shares.

Question 10

What is the doctrine of “adoption by estoppel”?

Answer 10

The doctrine of adoption by estoppel permits a child to inherit from or through a stepparent or foster parent when legal custody of a child is gained under an (unfulfilled) agreement to adopt them.

Question 11

How are adopted children treated for purposes of intestate succession?

Answer 11

For purposes of intestate succession, adopted children are treated the same as the biological children of the adopting parents. An adopted child inherits from and through the adopting parents and their kin, and the adopting parents take from and through the adopted child.

Generally there is no inheritance in either direction between adopted children and their biological parents

Question 12

How are non-marital children treated for purposes of intestate succession?

Answer 12

A nonmarital child always inherits from the mother.

Generally, the child will inherit from their father if:

• (1) the father married the mother after the child’s birth;
• (2) the man was adjudicated to be the father in a paternity suit; or
• (3) after his death and during probate proceedings, the man is proved by clear and convincing evidence to be the father.

Question 13

Can a will provision disinherit an heir as to property that passes by intestacy (e.g. if a portion of the will fails)?

Answer 13

Common law = No.

• The will must dispose of everything to effectively disinherit an heir

Under modern statutes and UPC = Yes.

• A testator may exclude the right of an individual to succeed to property passing by intestate succession (a “negative” will provision). If the person survives the decedent, their intestate share passes as though they had disclaimed it.

Question 14

What are the rules for advancement?

Answer 14

Common law – a substantial lifetime gift to one of the decedent’s children was presumed an advancement.

Modern courts – A lifetime gift to any heir is presumptively not an advancement unless shown to be intended as such.

UPC – an advancement only if it is: (1) declared as such in a contemporaneous writing by the donor, or (2) acknowledged as such in a writing by the heir

Question 15

How is an advancement treated in the probate estate?

Answer 15

If found to be an advancement, the gift’s value when given is added back into the estate for purposes of calculating shares, and then subtracted from the recipient’s share.

Question 16

What are the rules for simultaneous death?

Answer 16

Uniform Simultaneous Death Act (“USDA”):

• If there is any evidence of the order of death, follow that
• If no evidence of order of death, the property of each decedent is disposed of as if they had survived the other.

120 Hour Rule:

• a person must survive the decedent by 120 hours to take any distribution of the decedent’s property.

Question 17

What is a disclaimer?

Answer 17

When an heir, will beneficiary, life insurance beneficiary, surviving joint tenant, etc., rejects an inheritance or gift under a will.

Question 18

What are some requirements for a valid disclaimer?

Answer 18

Formalities – a disclaimer must be written, signed by the disclaimant, acknowledged before a notary, and filed with the appropriate court within nine months of death

Estoppel – An interest cannot be disclaimed if the heir or beneficiary has accepted the property or any of its benefits (i.e. the recipient will be estopped from disclaiming)

Effect – The disclaimed property passes as if the disclaimant had predeceased the decedent.

Question 19

What is required for valid execution of a will or codicil?

Answer 19

Testamentary capacity

• Testator must understand:
  
  • The nature of their act—that is, that the testator is executing a will
  • The nature and extent of their property
  • The persons who are the natural objects of their bounty (family members)
  • Be able to formulate an orderly scheme of disposition

Testamentary intent

• The testator must have present intent that the instrument operate as his will.
  
  • (1) intended to dispose of the property;
  • (2) intended the disposition to occur only upon his death; and
  • (3) intended that the instrument in question accomplish the disposition.

Acknowledgment

• In writing
• Signed by testator at the end of will
• in the presence of two attesting witnesses
• signed by witnesses in testator’s presence
• Witnesses must know that the instrument is a will

Question 20

What is a holographic will?

Answer 20

A holographic will is one that is entirely in the testator’s handwriting and has no attesting witnesses.

Most states that recognize holographic wills give effect to handwritten changes made by the testator after the will is completed.

Question 21

What are the terms used for testamentary gifts?

Answer 21

A devise is a gift of real property, and the recipient of a devise is a devisee.

A bequest is a gift of personal property.

A legacy is a gift of personal property in a will, usually of money, and the recipient is called a legatee.

Question 22

What are the classifications for testamentary gifts?

Answer 22

Specific Devise or Legacy – a gift of a particular item of property distinct from all other objects in the testator’s estate.

General Legacy – a gift of a general economic benefit (often a dollar amount) payable out of the general assets of the estate without requiring any particular source of payment.

Demonstrative Legacy – a gift of a general amount that is to be paid from a particular source or fund. It is treated as a specific legacy to the extent the source of payment is available and a general legacy to the extent of any shortfall of that source of payment.

Residuary Estate – a gift of the residue, consists of the balance of the testator’s property after paying (1) debts, expenses, and taxes; and (2) specific, general, and demonstrative gifts.

Question 23

What is ademption and what does it apply to?

Answer 23

Ademption refers to the failure of a gift because the property is no longer in the testator’s estate at the time of their death.

Ademption applies only to specific devises and bequests.

Question 24

What are the rules for ademption?

Answer 24

“Identity” approach – if specifically bequeathed property is not in the testator’s estate at death, the bequest is adeemed and the beneficiary takes nothing.

Partial Ademption – Where the testator devises a large tract of land and then conveys a portion of the tract during their life. The beneficiary takes the remaining portion.

Question 25

What are common exceptions for ademption?

Answer 25

Replacement Property – Some states allow the beneficiary to receive replacement property if the testator replaced the gifted item with another similar item.

Proceeds of Condemnation Award or Insurance – Some states allow the beneficiary to receive a condemnation award paid after the testator’s death or casualty insurance proceeds for the loss of the property if they are paid after the testator’s death.

Proceeds from Sale by Guardian or Conservator – If the testator became incompetent and the specifically devised property was sold by a guardian, the beneficiary may be entitled to a general pecuniary legacy equal to the amount of the proceeds.

Question 26

What is ademption by satisfaction?

Answer 26

A testamentary gift may be satisfied in whole or in part by an inter vivos transfer from the testator to the beneficiary after the execution of the will, if the testator intends the transfer to have that effect.

Question 27

What are the rules for securities acquired after will execution?

Answer 27

Stock Splits and Stock Dividends

• Common law – a specific bequest of stock includes any additional shares produced by a stock split but does not include shares produced by a stock dividend.
• Modern law – a specific bequest of stock includes any additional shares produced by a stock split, including stock dividends. The beneficiary will also take an increase in securities caused by a merger or corporate reorganization.

Newly Purchased Securities

• The beneficiary does not take new securities that have been purchased or acquired by the reinvestment of dividends.

Question 28

What is the rule for exoneration of liens on property?

Answer 28

Common law – Liens are exonerated upon death using estate funds.

Modern view – liens on specifically devised property are not exonerated (paid off with estate funds) unless the will so directs. This means the beneficiary takes the property subject to the debt.

Question 29

What is abatement?

Answer 29

Abatement is the process of reducing testamentary gifts in cases where the estate assets are not sufficient to pay all claims against the estate and satisfy all bequests and devises.

Question 30

What is the order of abatement (unless otherwise specified in the will)?

Answer 30

In order of first to abate (i.e. be reduced to pay other claims):

• Property passing by intestacy
• Residuary estate
• General legacies
• Demonstrative legacies
• Specific bequests and devises

Within a class, abatement is pro rata.

To the extent they can be satisfied from the designated source, demonstrative legacies are treated as specific legacies for abatement purposes. To the extent the fund is insufficient, demonstrative legacies are treated as general legacies for abatement purposes.

Question 31

What is a lapsed gift?

Answer 31

A gift lapses if the beneficiary predeceases the testator or if the beneficiary is treated as not surviving the testator

Question 32

Who receives a lapsed gift?

Answer 32

Who receives a lapsed gift is controlled by:

• The express terms of the will
• Rule of law (such as an anti-lapse statute)
• Residuary clause
• Intestacy

Question 33

What are the rules for when a gift of the residue of an estate lapses?

Answer 33

Common law – does not allow the surviving residuary beneficiaries to divide the deceased beneficiary’s share among them (unless the will specifies this). Instead, the deceased beneficiary’s share passes by intestacy.

Modern (majority) rule – “no residue of a residue” rule, allowing the surviving residuary beneficiaries to divide the share in proportion to their interests in the residue.

(Note that if the anti-lapse statute’s provisions are met, that statute takes precedence, and the deceased beneficiary’s descendants take.)

Question 34

What is incorporation by reference?

Answer 34

Instead of writing something in the will, a testator may incorporate an extraneous document into the will by reference.

The effect of incorporation by reference is that the incorporated material is treated as if it were actually written out in full in the will. It does not matter that the document, for example, lacked witnesses, is not signed, or was written under the influence.

Question 35

What are the rules for incorporation by reference?

Answer 35

• The will manifests an intent to incorporate the document
• The document is in existence at the time the will is executed;
• The document is sufficiently described in the will in such a way that it may be reasonably identified;
• The document must correspond to the description in the will.

Question 36

What is a codicil?

Answer 36

A codicil modifies a previously executed will and must itself be executed with the same formalities.

Under the doctrine of republication by codicil, the will and codicil are treated as one instrument speaking from the date of the last codicil’s execution.

Question 37

What effect does a valid codicil have on an invalid will?

Answer 37

A validly executed codicil is generally viewed as impliedly incorporating a defective will by reference, thus validating the will.

Note that an invalid will technically cannot be republished. So even if the word “republish” is used in the codicil, the defective will is instead impliedly incorporated by reference.

Question 38

What is the effect of a divorce on a will?

Answer 38

Divorce or Annulment Revokes Provisions in Favor of Former Spouse as a matter of law.

In most states, divorce or annulment following execution of a will revokes all gifts and fiduciary appointments in favor of the former spouse. The will remains valid and is read as if the ex-spouse predeceased the testator. The UPC and some non-UPC states extend the application of the rule to provisions in favor of the former spouse’s relatives who are not relatives of the testator. The divorce must be final. If the parties remarry, the revocation does not occur.

Question 39

How is revocation by physical act achieved?

Answer 39

A will or codicil can be revoked by burning, tearing, canceling, or obliterating a material portion of the will with the intent to revoke.

The testator must have the intent to revoke, and the intent must be concurrent with the act. If the will is destroyed accidentally or by mistake, no revocation occurs.

The testator may direct someone else to destroy or cancel the will, but under the law of most states, the physical act must be done at the testator’s request and in the testator’s presence.

Question 40

What effect does revocation have on other testamentary instruments?

Answer 40

The revocation of a will revokes all codicils to it.

Revocation of a codicil to a will does not revoke the entire will.

Question 41

What are the rules for revocation by inconsistency?

Answer 41

If the new instrument completely disposes of the testator’s property, the old will is completely revoked by inconsistency.

If the new instrument partially disposes of the testator’s property, the old will is revoked only to the extent of the inconsistent provisions.

Question 42

When is there a presumption of revocation?

Answer 42

If a will last seen in the testator’s possession or under their control cannot be found after their death or is found in a mutilated condition, a rebuttable presumption arises that the testator revoked it.

Question 43

When can a lost or destroyed will be admitted to probate?

Answer 43

If a will is lost or destroyed (and the presumption that the testator revoked it is overcome), it may be admitted to probate if the following can be proven:

• (1) valid execution;
• (2) the cause of nonproduction (that is, proof that the will was not revoked); and
• (3) the contents of the will.

Question 44

What are the approaches to reviving a revoked will?

• Testator executes valid Will 1.
• Testator executes valid Will 2 which expressly revokes Will 1.
• Testator then validly revokes Will 2.
• Is Will 1 revived?

Answer 44

UPC

• if a will that wholly revoked a previous will is thereafter revoked, the previous will remains revoked unless it is evident from the circumstances or the testator’s statements that the testator intended to revive the previous will.
• If the original will was only partly revoked, the revoked provisions are revived unless it is evident from the circumstances or the testator’s statements that the testator did not intend to revive the provisions.

Automatic Revival Approach

• In other states, revival is automatic under the theory that the revoking will did not take effect because it was revoked prior to the testator’s death.

No Revival Approach

In some other states, a will, once revoked, is not revived when the subsequent will is itself revoked. The revocation clause is effective when executed just like a revocation by physical act. The earlier will can be revived only if it is re-executed or republished by a validly executed codicil.

Question 45

What is a pretermitted child statute?

Answer 45

A testator may disinherit their children; pretermitted child statutes protect children from being accidentally omitted.

In many states, the pretermitted child takes an intestate share of the decedent’s estate. If a decedent has other surviving children and the will makes a provision for one or more of the children, the portion of the estate to which the pretermitted child is entitled is limited to the provisions made to the other children. The bequests to the other children are reduced, but no other beneficiary’s bequest is reduced.

Pretermitted child statutes will not apply where:

• The testator had other children at the time the will was executed and devised substantially all of their estate to the other parent of the omitted child
• It appears from the will that the omission was intentional
• The testator provided for the omitted child by a transfer outside of the will in lieu of a testamentary gift

Question 46

What is homestead?

Answer 46

Most states have statutes that protect the family residence or farm from creditors’ claims by exempting a certain amount of land. These statutes often provide that the decedent’s spouse or dependent children are entitled to occupy the homestead for as long as they choose despite the disposition of the residence in the decedent’s will.

Question 47

What is family allowance?

Answer 47

The purpose of the family allowance is to provide support during probate administration, and usually takes precedence over all claims other than funeral and administration expenses.

It is in addition to the amount passing by will, intestacy, or elective share. Some states limit the allowance to a specific dollar amount (for example, $15,000), while others authorize payment of an amount needed to maintain the spouse and children for one year or a “reasonable amount.”

Question 48

Who has standing to contest a will?

Answer 48

Only interested parties (that is, those whose interests would be adversely affected by the admission of the will) have standing to contest a will. This includes:

• Heirs (because they would receive the estate by intestacy if the will is invalid)
• Beneficiaries of prior wills (because if the will is invalid, property would pass under the testator’s prior will).
• Creditors, executors, and testamentary trustees are not interested parties.

Question 49

What are the grounds for a will contest and who has the burden?

Answer 49

A will contest challenges the validity of a document offered for probate. Grounds for challenge are:

• (1) defective execution,
• (2) revocation,
• (3) lack of testamentary capacity,
• (4) lack of testamentary intent,
• (5) undue influence or duress,
• (6) fraud, and
• (7) mistake.

The will contestant has the burden to prove the will is invalid.

Question 50

What are the requirements to prove a will is invalid because of insane delusion?

Answer 50

An insane delusion is a belief in facts that do not exist and that no rational person would believe existed.

Insane delusion destroys testamentary capacity only if there is a connection (nexus) between the insane delusion and the property disposition.

Question 51

What are the requirements to prove a will is invalid because of undue influence?

Answer 51

To establish undue influence, the contestants must establish that:

• The influence existed and was exerted
• The effect of the influence was to overpower the mind and free will of the testator (so that the will reflects the desires of the person exerting the influence instead of the testator); and
• The resulting testamentary disposition would not have been executed but for the influence (causation)

For exam purposes, keep in mind that mere pleading, begging, nagging, cajoling, or even threatening do not constitute undue influence. The free will of the testator must be destroyed.

Question 52

What evidence can be used to prove that a will is invalid due to undue influence?

Answer 52

• Unnatural dispositions, such as cutting out close family
• Opportunity or access to testator
• Confidential or fiduciary relationship between parties
• The ability of the testator to resist
• The beneficiary’s involvement with the drafting or execution of the will

Question 53

When is there a presumption that a will is invalid due to undue influence?

Answer 53

A presumption of undue influence arises when:

• (1) there was a confidential relationship between the testator and a beneficiary (that is, the testator placed an unusual amount of confidence in the beneficiary, and relied on the beneficiary); and
• (2) that beneficiary was active in procuring, drafting, or executing the will.

Once these elements are shown, the burden of proof shifts to the will proponent.

Question 54

What are the requirements to prove a will is invalid because of duress?

Answer 54

Duress is a form of undue influence but connotes violent conduct such as the threat of physical harm.

Question 55

What are the requirements to prove a will is invalid because of Fraud?

Answer 55

A successful contest on grounds of fraud requires that the testator have been willfully deceived as to:

• (1) the character or content of the instrument,
• (2) extrinsic facts that would induce the will or a particular disposition, or
• (3) facts material to a disposition.

Elements of Fraud

• False representation made to the testator
• Knowledge of falsity by person making the statement
• The testator reasonably believed the statement
• The statement caused the testator to execute a will or make a particular disposition that the testator would not have made but for the misrepresentation

Question 56

What are the two types of personal representatives in probate?

Answer 56

A personal representative is appointed to carry out the estate administration.

• If named in the will, the personal representative is an executor;
• if not so named, they are an administrator.

Question 57

What is probate?

Answer 57

“Probate” refers to the proceeding in which an instrument is judicially determined to be the will of the decedent OR in which a decedent’s heirs are determined.

Question 58

What is the order in which creditors claims are satisfied?

Answer 58

The personal representative must give notice of administration to creditors of the estate.

Creditors must then file their claims within a specified period of time or the claims may be barred. Claims are generally paid in the following order:

• (1) administration expenses,
• (2) funeral expenses and expenses of the last illness,
• (3) family allowance,
• (4) debts given preference under federal law,
• (5) secured claims,
• (6) judgments entered against the decedent during his lifetime, and
• (7) all other claims.