Wills and Estates Flashcards
Life insurance policies
A beneficiary of a life insurance policy takes by virtue of the insurance contract. The proceeds are not part of the decedent’s estate, unless they are payable to the estate as beneficiary. Life insurance policies typically provide that proceeds will only be paid to a beneficiary named on an appropriate form filed with the insurance company; other possible methods of changing a beneficiary are thus viewed as being excluded by the insurance contract. However, some courts have upheld a beneficiary change by will if the insurance company does not object.
Incorporation by Reference
A will may incorporate by reference another writing not executed with testamentary formalities, provided the other writing meets three requirements: (i) it existed at the time the will was executed; (ii) the testator intended the writing to be incorporated; and (iii) the writing is described in the will with sufficient certainty so as to permit its identification.
Anti-lapse Statutes
Under common law, if a beneficiary died before the testator or before a point in time by which he was required to survive under the will, the gift failed and went to the residue unless the will provided for an alternate disposition. Today, almost all states have anti-lapse statutes that provide for the alternate disposition of lapsed gifts. Under the majority of the statutes, if the gift was made to a relation of the testator within a specific statutory degree, and the relation predeceased the testator but left issue, then the issue succeeds to the gift, unless the will expressly states the contrary.
Abatement
Gifts by will are abated, i.e., reduced, when the assets of the estate are insufficient to pay all debts and legacies. If not otherwise specified in the will, gifts are abated in the following order: (i) intestate property; (ii) residuary bequests; (iii) general bequests; and then (iv) specific bequests. Abatement within each category is pro rata.
Who has standing to contest a will?
Only directly interested parties who stand to benefit financially may contest a will. Intestacy statutes generally favor the decedent’s surviving spouse and issue. Under intestacy laws, an intestate’s children take to the exclusion of their own descendants.
Lack of Mental Capacity
In order to validly execute a will, Testator must have “mental capacity.” A testator has mental capacity if she knows (1) the nature and extent of her property, (2) those persons who are the natural objects of the her bounty, (3) the disposition the testator is attempting to make, and (4) the interrelationship of these items in connection with the testamentary plan formulated in the will. All persons are afforded the presumption that they have mental capacity. The burden of proving that the testator lacks mental capacity rests on the contestant of the will.
Execution: Witnesses
At common law, strict compliance with the formal requirements of wills is required. Governing state law provides that a will is properly executed if the testator signs the will in the presence of two witnesses after having (a) declared the instrument to be her will, and (b) requested the witnesses to act in such capacity.
Conflict of Laws
At common law, the validity of a will is determined under the law of the state where the testator was domiciled at the time of his death. Under the UPC, validity is determined under the law of the place where (i) the will was executed, or (ii) the testator is domiciled, has a place of abode, or is a national at the time of death.
Contingent wills
The validity of a will can be conditioned on a particular event or circumstance. However, whenever possible, the court will construe excess language as a mere explanation or instruction, rather than a barrier to admitting the will to probate as a valid instrument. The court will consider whether the event is referred to expressly as a condition or only a statement of the motive for executing the will. The court considers factors such as where the will was stored after the purported “condition” lapsed, whether setting the will aside would result in intestacy, and whether effectuating the will would result in an inequitable distribution.
Ambiguities
Under the general rule of construction, a will “speaks” as of the time of death. Courts are reluctant to disturb the plain meaning of a will regardless of mistake. However, if there is an ambiguity, courts allow extrinsic evidence to resolve it. Traditionally, courts distinguished between patent and latent ambiguities; however, many states no longer make this distinction.
Omitted Child
Pretermitted heir statutes allow children of a testator to claim a share of the estate even though they were omitted from the testator’s will. While the birth or adoption of a child after the execution of a will does not invalidate the will, such children are omitted from the will. If the testator then dies without revising the will, a presumption is created that the omission of the child was accidental.
An omitted child statute does not apply if: (i) it appears that the omission of the child was intentional; (ii) the testator had other children at the time the will was executed and left substantially all of his estate to the other parent of the pretermitted child; or (iii) the testator provided for the child outside of the will and intended this to be in lieu of a provision in the will.
Power of Attorney
A power of attorney (POA) is an authorization to act on someone else’s behalf in a legal or business matter. The person authorizing the other to act is the principal, and the one authorized to act is the agent.
Healthcare POA
A healthcare POA appoints an agent to make healthcare decisions on behalf of the principal if she becomes unconscious, mentally incompetent, or otherwise unable to make decisions. Unlike other powers of attorney, a healthcare power of attorney becomes effective upon incapacitation of the principal.
An agent must make a healthcare decision in accord with the principal’s instructions or other known wishes. If such instructions do not exist, then the agent must make decisions in accordance with the agent’s determination of the principal’s best interest.
Healthcare POA and Civil Liability
The typical durable healthcare POA statute shields the agent from civil liability for healthcare decisions that are made in good faith. Agents act within the scope of the statute when they act pursuant to a properly executed durable healthcare power of attorney. In general, an agent is held responsible only for intentional misconduct, not for unknowingly doing something wrong.
Slayer Statute
In general, a party cannot take property from a decedent when the party was responsible for the decedent’s death. The killing must have been intentional and felonious to bar the killer from taking.
