Wills and Estates Flashcards
Escheat
When a person dies intestate and has no heirs, the property escheats to the state.
Per Capita at Each Generation
Default method of distribution; may be modified in will.
Estate divided into as many shares as their are surviving heirs in the nearest degree of kinship + the number of deceased persons in the same degree of kinship who have left issue. Each surviving heir gets their share. The remainder of the estate is them divided equally among the next degree of kinship and in the same manner as the first degree.
Per Capita by Representation
The estate is divided into as many shares as there are a) surviving heirs in the nearest degree of kinship and b) deceased persons in the same degree of kinship who have left issue.
The share of the deceased persons is split equally among only that person’s issue.
Strict Per Stirpes
Even if no survivors, estate divided into equal shares at first generation below decedent.
One share is allocated to each member of that generation, alive or deceased. Children in utero are considered as living at the time of the parent’s death.
Rarely used.
Intestate Share of Surviving Spouse if Spouse and 1 Child Survive
Spouse gets 1/2 undivided interest in the real property and the first $30,000 plus 1/2 of the remaining personal property.
Intestate Share of Surviving Spouse if Spouse and 2+ children/lineal descendants survive
1/3 undivided interest in decedent’s real property, first $30K of personal, and 1/3 of remaining personal.
Intestate Share of Spouse if Spouse and 1+ Parents (no children/descendants)
1/2 undivided interest in real property, first $50K of personal property, 1/2 remainder of personal property
Intestate Share of Spouse if only Spouse Survives
All of real and personal property
Elective Life Estate in lieu of Intestate Share
Life estate in 1/3 of all the value of all real estate owned outright (or as TinC) by decedent alone at any time during the marriage. Some properties may be exempted by law (e.g., property surviving spouse joined in conveying).
NC abolished dower, replaced with this. Dower came free of decedent’s creditors.
Dwelling Place Rule
As an alternative to the Elective Life Estate, surviving spouse may take LE in dwelling house occupied by the surviving spouse at the time of the decedent’s death (along with all fixtures, easements, or real property/outbuildings attached to the dwelling), along with fee simple ownership of furnishings.
This may give spouse more than the Elective Life Estate.
Elective LE/Dwelling Place and Debts
LE and furnishings taken free of decedent’s debts, with some exceptions, even if the estate is insolvent.
Time Requirements
Surviving spouse must file notice of election w/in 12 months of decedent’s death (if no admin appointed), or w/in one month after expiration of time to file claims against estate.
If no election made w/in the time, spouse conclusively deemed to have waived.
Lineal Succession Unlimited
No limit on the right of succession by lineal descendants. (Not “collateral kin.”)
Collateral Succession Limited
Only up to five degrees of kinship removed from an intestate allowed, unless required to prevent escheat to the state.
Determining Degrees of Kinship
Ascend to first common ancestor, the descend from that ancestor to the would-be heir.
Half-blood Kin
No distinction b/w half- and full-blood relatives.
Step-children and inheritance
Not legally children of the parent and cannot take from them by intestate succession.
Unborn heirs
CL treats just like other children. NC statute presumes that children born w/in 10 lunar months (30 days) are children of the decedent.
Adopted children and succession
Treated as natural child for all purposes.
Adoption severs all ties b/w biological parents and child; no succession.
Bastards
Modern view: treated as child of mother. Only treated as child of father if accepted/legitimated as father’s child.
Parent inherit from abandoned child
Nope. They can’t inherit from child if they refused to support or abandoned their child.
Recovery for Wrongful Death/Worker’s Comp
Follows intestate succession, as do death benefits under Worker’s Comp.
Pain and suffering damages go into estate, so pass by either will or intestacy.
Aliens and Succession
Aliens in US may inherit like citizen heirs. If alien heir is outside US, NC applies law of heir’s country.
Missing Heirs
At date of distribution, shares of missing heirs held in trust by clerk for a year, then transferred to state treasurer. Clerk not required to provide or publish notice.
Advancements
Weak presumption at CL that gifts from parent to child were advances of intestate share. NC law, gratuitous transfers are presumed gifts. Determined by testator’s intent (for transfer to spouse, requires statement by testator to show advancement).
Add amount of advancement to “hotchpot” to determine the intestate shares. If advancement exceeds intestate share, advancee gets nothing but not liable for difference.
If the money/prop created a debt, rather than advancement, recipient required to pay entire amount regardless of intestate share.
Value at earlier of a) time advancee received possession/enjoyment of prop or b) testator’s death, unless intestate donor named value in a writing.
Simultaneous Death
Uniform Simultaneous Death Act: deemed to predecease unless survive by 120 hours (except for class members). If H & W simultaneously die, TbyE severed and estate treated as TinC.
Act is default rule; will/trust/deed/insurance K may opt out.
Capacity for Will
Legal capacity: 18 years old.
Mental capacity: a) testamentary intent and b) testamentary capacity.
Testamentary Intent
T intended doc as will, not as joke or some other purpose.
Testamentary capacity
Five elements (NC –> presumption in favor):
1) Understand doc signed is a will.
2) Understand effect of doc is to distribute prop after death.
3) Know nature/extent of prop subject to distribution.
4) Know natural object’s of T’s bounty (family), AND
5) Comprehend all elements at same time.
Four types of wills
Attested, holographic, nuncupative, serviceman’s
Attested Will Requirements
Signed by T (or agent in T’s presence) and two competent witnesses. T need not subscribe (sign at end) or date will. Any marking by T on will = signature.
Competent Witnesses = legal competence and does not take under will. Gift to Ws will be voided to allow competence (even spouses/children).
Self-proving affidavits can be provided by T and Ws at time of will execution. Must be notarized. Allows will to be probated w/o testimony by Ws.
Holographic Will Reqs
1) In T’s handwriting (printed words ignored);
2) T signed will, AND
3) Will found amount T’s valuable possessions/papers after death, or other circs to show safekeeping.
To probate:
1) 3 competent Ws that will and signature are T’s handwriting.
2) 1 W to circs of will’s discovery.
3) Ws may be beneficiaries under will.
Nuncupative (Oral) Will
A) Enforceable if:
1) Made orally by person terminally ill or in imminent peril of death and the person does not survive, AND 2) T declares statement to be her will before two competent Ws who were both present and requested by T to bear witness of will.
B) May not dispose of real property, but no limit on personal property.
C) Must be probated w/in 6 months of time made (unless reduced to writing w/in 10 days). Both Ws must testify as to terms and reqs.
Servicemen’s Wills
Will by servicemember probated if three credible Ws testify that signature is that of alleged T.
Foreign Wills
Wills in other jurisdictions are valid if meets NC requirements.
If doesn’t meet NC requirements, can’t pass real prop but can pass personal prop if acceptable in jurisdiction of T’s domicile at time of death.
Codicils
a) Must follow will formalities.
b) Republishes will as of codicil date.
c) Modifies, rather than replaces, will provisions unless express revocation or irreconcilable inconsistency.
d) Can validate prior invalid will through incorporation by reference.
e) Can be holographic (T’s handwriting, T’s signature, and T had express testamentary intent), but holographic codicil cannot revoke the prior will entirely.
Incorporation by Reference
T may incorporate doc by reference if:
a) separate doc in existence when will executed, AND
b) will/codicil refers to doc w/ enough certainty to identify it.
Acts of Independent Significance
Will may dispose of property by reference to acts and events that have significance apart from their effect upon the disposition made by will (e.g., revocation or execution of 3P’s will).
Independent event need not comply with will formalities.
NC Statute: will speaks at time of death.
Conditional Wills/Gifts
T may make a particular gift or the will as a whole conditional upon the occurrence of specific event.
1) Condition must be clear on face of will (and comply with formality reqs).
2) Extrinsic evid will not be allowed to make facially valid will conditional. (But if
3) Condition must be an independent event from the making of the will.
Revoke Attested Will
1) Subsequent written will/codicil or other writing complying w/ will formalities OR
2) Being destroyed with intent to revoke will, either by T or by agent in T’s presence.
3) Language may expressly revoke or impliedly revoke by inconsistent provisions.
Revoke Holographic Will
1) Any method to revoke attested will.
2) If T strikes out or alters portions of will in handwriting, those acts do not revoke if (a) they are not enough to create a holographic will and (b) there was no intent to revoke.
Revocation by Changed Domestic Circs
1) Subsequent divorce/annulment revokes only those provisions in favor of former spouse. Revived by remarriage.
2) Subsequent marriage does not revoke former will; surviving spouse still gets elective share if will predates marriage.
Revoke Nuncupative Will
1) Can by subsequent nuncupative will or by methods for attested wills.
2) Written will (attested or holographic) may not be revoked by nuncupative will.
Lost Wills
1) If will last in T’s possession and can’t be found after T’s death, presumption that destroyed.
2) Burden on person attempted to probate lost will to show (a) not destroyed or (b) T not of sound mind.
3) If proven not destroyed, copy of will may be probated.
Mental Capacity for Revocation
T must have same capacity to revoke as to make, and must have at time of act revoking will.
Dependent Relative Revocation
T intends to revoke Will 1 and execute Will 2, but doesn’t execute Will 2 after revoking Will 1.
If Will 1 and Will 2 are similar, court will revive Will 1, if there is good evidence of T’s intent.
Contractual Wills
1) SoF
2) Contract must clearly state provisions of will; courts don’t like this.
3) Consideration required, can be “will not contest will.”
4) Other K principles apply (restitution, rescission, quasi-contract, etc.).
5) B/w spouses: bilateral promises are enough consideration.
6) Neither joint nor mutual wills give rise to presumption of contract not to revoke.
Joint Wills
Doc prepared by 2+ Ts, serves as will for all signers.
Mutual Wills
Separate wills executed by 2+ persons with reciprocal provisions for distributing assets.
Rules of Construction for Wills
1) T’s intent w/in 4 corners governs, but courts will consider circumstances at execution.
2) Will “speaks” at death.
3) Will construed as if it were executed immediately before T’s death, unless contrary intention appears in will.
4) Courts presume T meant to dispose of entire estate in will, not intestate as to any share.
5) Devises are presumed in fee simple.
Wills and Parol/Extrinsic Evid
Unless ambig, no extrinsic evid to explain or contradict terms admissible.
Oral statements of intent are inadmissible to prove T intention.
Patent Ambiguities in Wills
1) Extrinsic evidence not admissible.
2) Court may modify will to align with T’s intent.
Latent Ambigs in Wills
Extrinsic evid admissible to resolve.
Integration
Are all the pages/documents part of will included?
Usually not problem; numbered pages w/ T’s initials on each.
Specific bequests/devises
Identified item to identified individual.
General bequests
Specific dollar amount to identified indiv.
Demonstrative Bequests
Gift payable from specified source and, if that’s inadequate, then from general estate assets, to specified indiv.
Residuary Dispositions
Gift of whatever is left over after all specific, demonstrative, and general bequests (as well as all creditor’s claims) are satisfied.
Ademption by Extinction
Gift fails if property specifically devised is not in T’s estate at time of death, whether by intentional (even an exchange) or involuntary act of T.
Doesn’t apply to changes in stocks/securities.
Ademption by Satisfaction
Like advancement in intestacy.
Court will consider:
a) intent of T
b) circs surrounding inter vivos transfer (e.g., before or after will execution)
c) inter vivos gift to child from parent presumed satisfaction
Exoneration
NC does not follow this doctrine, which requires that all liens against a property be removed prior to distribution.
T may include this requirement in will if uses specific language (besides “settle all debts”).
Lapse
CL: If devisee predeceased T, gift lapsed/failed and fell into residuary.
NC Anti-Lapse: Gift to deceased or renouncing beneficiary passes to issue of beneficiary ONLY IF devisee is a grandparent or descendant of grandparent of T.
Default rule; T may provide substitute gifts.
Creditors of deceased/renouncing devisee may not reach the estate property.
Also applies to class gifts.
Slayer Statute
CL: Beneficiary/heir who kills T may not inherit from T. No one should benefit from wrongdoing. Rule still applies, despite statute.
NC statute: Slayer, if willful and unlawful, deemed to have immediately predeceased decedent for intestacy/will/insurance purposes; Slayer’s heirs may still take. NCSC has said slayer still barred from benefiting even if not willful and unlawful as req by statute.
TbyE: If Slayer was spouse, half of prop goes into estate, Slayer gets LE in other half and then at Slayer’s death prop goes to decedent’s heirs/devisees, not Slayer’s. Slayer holds prop in trust for the heirs/devisees during life.
Renunciation
Requirements:
(a) Must be done w/in 9 months of T’s/decedent’s death for immediate gifts, 6 months before vesting for future gifts.
(b) In writing
(c) ID transferring party
(d) Describe property/interest renounced
(e) Declare renunciation and extent thereof, AND
(f) Be signed and acknowledged by person renouncing.
Renouncing party deemed to predecease T/decedent.
Effect of Disclaimer
If T hasn’t provided for substitute disposition, renouncing person deemed to predecease T.
Prop passes through either residuary, intestacy, or applicable anti-lapse statute.
Abatement
Gifts abate in the following order by default:
1) Residue
2) Demonstrative gifts
3) General bequests
4) Specific bequests
Class gifts
Anti-lapse statute substitutes issue for devisee if predeceases/renounces.
Class closes when first distribution has to be made. (“Rule of convenience.”)
Gifts to “next of kin”
Gifts to intestate heirs, unless contrary intent appears in will.
Will Contest/Caveat
Grounds:
1) Lack of testamentary capacity,
2) Undue influence
3) Fraud
4) Mistake
Burden on proponents of will.
Undue Influence
Will or any portion affected by UI is invalid.
Prima facie case:
1) Person subject to influence,
2) Opportunity to exert influence,
3) Disposition to exert influence, and
4) Result indicating UI.
Factors:
A) Old age and physical/mental weakness of T,
B) T is in home of beneficiary and subject to beneficiary’s constant association/supervision,
C) Others have little/no opportunity to see T,
D) Will is different from/revokes prior will,
E) Beneficiary not a blood relative,
F) Will disinherits natural objects of T’s bounty,
G) Beneficiary procured will’s execution.
Confidential or fiduciary r-ship = presumption of UI,
Remedies for Fraud/UI
If only part of will fraud/UI: Legacy falls into residue.
If entire will is tainted, all prop passes by intestacy.
If the fraud prevented the execution of a valid will in favor of Plaintiff, she may either
a) sue wrongdoer in tort for damages, OR
b) sue for imposition of constructive trust the proceeds that wrongdoer received as result of wrongfully preventing execution of will in favor of plaintiff.
Mistake
Mistake in the inducement does not result in setting aside provisions of will.
Mistake of fact:
a) if mistake is about identity of beneficiary, cannot be reformed.
b) If mistake goes to testamentary capacity, the will may be held invalid.
No-Contest/”in terrorem” Clauses
T may include a clause that says devisee forfeits gift if contests will.
But, good faith petition by beneficiary does not invoke such a clause.
Standing to Contest Will
Interested persons may contest will (pecuniary interest beyond an expectancy interest; includes state’s interest in escheat).
Will Substitutes/Non-probate Transfers
Types
1) Inter vivos gifts
2) Gifts causa mortis
3) JT w/ survivorship rights (J&S bank accounts, P.O.D. accounts, Totten trusts)
Reasons A) Avoid time/expense of probate. B) Avoid will contests. C) Avoid elective share. D) Creditor claims on estate. E) Estate taxes.
Inter Vivos and Causa Mortis Gifts
IV Gifts:
1) Intent
2) Delivery (delivery through recipient’s agent counts)
3) Acceptance
4) Conditional gifts may be revoked (in contemplation of marriage, infancy, causa mortis)
Testamentary Gifts:
A) Effective will
B) Devisee accepts
Gifts Causa Mortis:
1) Just like iV, except oral and looks testamentary.
2) Revoked by law if T doesn’t die.
Joint Accounts
1) May provide right of survivorship.
2) Not included in estate of deceased and not subject to probate.
3) But, claims against estate of deceased joint tenant may be brought by personal representative of decedent.
POD Accounts
Payable on request to one person, payable on death of that person’s death to one or more people.
Don’t pass through probate.
Creditors have same rights as joint accounts.
Revocable until settlor dies.
If beneficiary predeceases settlor, becomes an individual account.
Savings Account / Totten Trusts
“In name of A, in trust for B.” account
Depositor must sign contract w/ bank naming beneficiary.
Settlor may keep bankbook, make withdrawals, and need not give beneficiary notice.
Settlor may change beneficiary at any time.
Only one beneficiary allowed by statute.
Personal rep may recover funds to satisfy claims against estate.
Probate Jurisdiction
1) Clerk of superior court has original and exclusive jurisdiction over probate of will.s
2) Clerk responsibilities:
(a) accept will for probate
(b) mail notices to beneficiaries
(c) compel production of will when req
(d) appoint personal rep
(e) determine validity and contents of will
(f) determining when bond necessary
(g) remove personal rep when req
Forms of Probate
Solemn: open court, all interested parties notified and opportunity to be heard. Final decree not subject to caveat except by heirs w/ no knowledge of original proceedings.
Common: ex parte proceeding, only the clerk, propounders of will, and Ws if will not self-proved. Valid only until a caveat is filed.
Time Limits to File for Probate
A) Executor may apply to clerk of superior court at any time.
B) Will not effective to pass real or personal property against BFPs unless probated or offered for probate within two years of the death of the T or prior to the final account of a duly appointed administrator (earlier of those).
C) If will lost/stolen/destroyed/suppressed and action brought regarding loss/suppression, time limit begins to run after action completed.
D) If Executor doesn’t submit w/in 60 days of death, any interested party may submit will upon 10 days’ notice to Executor.
Filing Caveat
1) Must be w/in three years of application for probate.
2) Notice must be sent to all interested persons.
3) May not be filed by person who participated in solemn probate proceedings.
4) Transfers jurisdiction from clerk of superior court to the court itself.
5) Docketed for jury trial, jury decides which will instrument is valid.
Rights of Surviving Spouse to Elective Share
1) Surviving spouse’s protection against inter vivos transfers is limited, since separate property is not considered part of the net estate.
2) Spouse can decline benefits under will and opt for elective share. Prevents disinheritance, even through inter vivos transfers.
Procedure for Elective Share
1) Determine total assets in estate and subtract the value of the property passing to the surviving spouse.
2) Spouse gets: 1/2 of total net assets if decedent survived by either either no lineal descendants or one child (or that child’s lineal descendants).
3) Spouse gets: 1/3 if 2+ surviving children (or their children).
Calculating Total Net Assets
Includes all property in which decedent had interest at time of death. Including:
a) prop held as JT w/ other than spouse (and half of value of prop held as JT w/ spouse),
b) retirement account proceeds,
c) gifts made to other than spouse within year before death,
d) property decedent transferred irrevocably while retaining LE,
e) property over which decedent held a presently exercisable power of appointment (including revocable trusts, etc.).
Property Passing to Surviving Spouse
Equals the sum of:
a) property devised, outright or by trust, to spouse
b) property that passes, outright or in trust, to surviving spouse by intestacy or any other manner by reason of decedent’s death,
c) 1/2 of the value of property held by surviving spouse and decedent as JT or TbyE
d) any year’s allowance awarded to surviving spouse
e) property renounced by surviving spouse
f) surviving spouse’s interest in life insurance
g) value of gifts, outright or through trust, during decdent’s lifetime for which surviving spouse signs a written acknowledgement of the gift, and
h) property held in spousal trust.
Waiving Elective Share
1) May be waived before or after marriage, with or without consideration.
2) Requirements:
(a) writing signed by surviving spouse
(b) voluntary
(c) fair and reasonable disclosure of finances
> Unless spouse waived right to disclosure in writing.
Elective Share Procedure
1) Spouse files claim in writing w/ clerk of superior court in county where primary administration of decedent’s estate lies.
2) Must be filed w/in 6 months of issuance of letters testamentary or letters of administration.
3) Clerk will set hearing for 2-6 months after spouse’s petition, but may be extended.
4) Notice provided to PR and other interested persons, and then clerk decides whether entitled to elective share and amount. Clerk must provide specific findings of fact and conclusions of law as to the total net assets, property passing to surviving spouse, and elective share.
Acts Barring Rights of Surviving Spouse
Spouse loses 1) elective share, 2) homestead allowance, 3) right to elect intestate share, 4) family allowance, and 5) right to administer estate under following circs:
(A) Absolute divorce or annulment, or divorce from bed and board.
(B) Spouse voluntarily left decedent and lived in adulterous relationship not condoned by decedent.
(C) Spouse willfully abandoned and refused to live w/ decedent, and this continued until decedent’s death.
(D) Spouse obtained divorce not recognized in NC.
(E) Spouse knowingly contracted a bigamous marriage.
Rights of Unmarried Partners
1) Agreements regarding property b/w unmarried but cohabiting couples, either express or implied, are enforceable as long as sexual services or promises do not provide the consideration for such agreements.
2 In addition to showing that sexual services/promises did not serve as consideration, Plaintiff must meet standard requirements for recovery on a quantum meruit theory.
Family Allowance Generally
1) Surviving spouse and children entitled to statutorily set payment of support for one year after decedent’s death.
2) Allowance exempt from any lien acquired against decedent’s property.
Allowance and Insolvent Estates
If liquid assets of estate are insufficient, court will allow a deficiency judgment.
Executor will pay the allowance before any other debts as cash becomes available, up to total value of estate (but no more).
Allowance for Spouse
1) Surviving spouse gets $20K for one year after death of deceased spouse, regardless of will or intestacy.
2) Exempt from all liens.
3) If decedent had will, allowance charged against surviving spouse’s elective share.
Allowance for Children
$2K/year goes to each of the following:
1) any child of decedent under 18, including adopted or posthumous.
2) child of decedent under 22 and full-time student.
3) child of decedent under 21 who has been declared mentally incompetent or is totally disabled; OR
4) any other person under 18 residing with decedent at time of death to whom the decedent or surviving parent stood in loco parentis.
Increased Amount of Allowance
(A) Not limited by statutory allowance unless estate is insufficient. May apply directly to court for increased allowance
(B) Increase based on factors like size of estate, previous standard of living, and other available assets. Total value of allowances shall not exceed 1/2 of the average annual net income of the decedent for the three years preceding his death.
Bastards
If father acknowledges in will, treated like legitimate child or in accordance with express will provisions.
Share of After-Born or Pretermitted Children
(A) Birth of child to, or adoption by, the T does not revoke previously executed will.
(B) Excluded child is entitled to share would have taken in intestacy unless:
1) some provision in will for the child, regardless of adequacy 2) apparently intentional omission 3) all other children living at time of execution are omitted from will 4) surviving spouse receives entire estate under will, OR 5) T made other provisions for child that take effect upon T's death (regardless of adequacy)
(C) Share of pretermitted child is allocated to him first out of any property passing by partial intestacy before devised property.
Provisions in Restraint of Marriage
NC hasn’t addressed by statute or case law. Most states invalidate clauses forfeiting gifts upon remarriage as against public policy.
Missing Persons
1) Death not presumed from 7-year absence.
2) Death must be determined in a court action in which all relevant info, including peril to which person was exposed, may be presented.
