Wills-Transfer Limitations-DWB

Question 1

Spousal Support

Answer 1

In nearly all jurisdictions, a surviving spouse has a right to support under:

1. the social security system
2. private pension plans under ERISA (Employment Retirement Income Security Act)
3. the Homestead Exemption
4. the personal property set aside
5. the family allowance

Question 2

Surviving Spouse’s

Right to a

Share of the

Marital Property

Answer 2

In separate property jurisdictions, surviving spouses are entitled to a share of the marital property under the elective share or forced share doctrines.

In community property states spouses are entitled to a share of the marital property under the community property system.

Question 3

Elective Share

Scope

Answer 3

Traditionally only affected wills, and could be avoided through non-probate transfers, e.g. joint tenancy, inter vivos transfer, or trust.

Modernly, elective share is generally extended to property transferred through nonprobate transfers as well through one of four doctrines:

• Illusory Transfer Test
• Present Donative Intent Test
• Intent to Defraud Test
• UPC Approach

Question 4

Illusory Transfer

Answer 4

Under the illusory transfer approach, courts analyze whether a non-probate arrangement actually constituted an inter vivos transfer or whether the decedent retained an interest in and/or control over the property, effectively rendering it a testamentary, rather than an inter vivos, transfer.

Question 5

Illusory Transfer

California

Answer 5

Under the California Probate Code, a surviving spouse may ‘recapture’ 1/2 (interest, proceeds, or value) of property transfered inter vivos by the decedent if:

1. SS expectancy
2. decedent domiciled in CA,
3. transfer made w/o consideration or written consent of spouse
4. at death, decedent retained: interest, power to revoke, or right of survivorship

Question 6

Present Donative Intent

Answer 6

Under the Present Donative Intent approach, courts analyze whether the decedent had an actual present donative intent at the time the transfer was made,

i.e. the decedent actually intended to give the property to the transferee, and was not simply trying to keep it from their spouse.

Question 7

Intent to Defraud

Answer 7

Under the Intent to Defraud approach, courts attempt to determine whether the decedent mad the transfer with the intent to defraud the surviving spouse.

Within the jurisdictions employing this approach, there is a split over whether to apply a subjective (actual intent) or objective (intent inferred from a variety of factors) standard to the testator’s intent.

Question 8

UPC

Marital Property

Approach

Answer 8

Under the UPC Marital Property approach, the surviving spouse is entitled to the greater of 50% of the Marital Property or $75,000.

Marital property is determined to be a set percentage of the spouses’ combined net worth at decedent’s death. (Net Probate Estate + Non-Probate Transfers + Survivor’s separate property)(*MP%)

Combine spouse’s marital property and transfers to spouse, subtract form.

Question 9

Life Estate

and

Elective Share

Answer 9

In most states, a life estate constitutes ‘support’ and not a ‘share’, and is thus not counted toward a survivng spouse’s elective share.

Question 10

Exercising Elective Share

Answer 10

Elective share is optional, not automatic, and may only be exercised by the surviving spouse, not their estate.

Question 11

Waiver

Answer 11

A spouse can waive their spousal protection and/or support rights. However, such a waiver is generally looked upon with suspicion by the courts, must meet strict requirements, and even then can still usually be set aside by a court if it is deemed to be unconscionable.

Question 12

Spousal Share/Support

Waiver Requirements

Answer 12

In order for a waiver of spousal share or spousal protection rights to be enforceable the waiver must be in writing and signed by the surviving spouse.

There must be fair and reasonable disclosure of the property or financial obligations of the decedent, and the surviving spouse must be represented by independent counsel.

Additionally, a court may refuse to enforce all or part of a waiver if it finds the waiver to be unconsconable.

Question 13

Migrating Couples

Community Property

to

Individual Property

Answer 13

When a couple migrates from a community property jurisdiction to an individual property jurisdiction is that the surviving spouse will be overprotection. That is, the surviving spouse will take 1/2 of the community property, and may still be entitled to an elective share of the decedent’s individual property.

Where adopted, the Uniform Disposition of Community Property Rights at Death Act provides that the decedent’s 1/2 of community property is not subject to elective share.

Question 14

Migrating Couples

Individual Property

to

Community Property

Answer 14

Where a couple migrates from an individual property jurisdiction to a community property jurisdiction, there is a risk that the surviving spouse will be underprotected because community property distribution does not provide for elective share of community property.

Many jurisdictions provide for quasi-community property, i.e. property which would have been community property if the couple had been in the state at the time it was acquired, to be disposed of in the same way as community property.

Question 15

Omitted/Pretermitted Spouse

Rule

Answer 15

Where testator executes a valid will, marries thereafter, and dies without having executed a new will, a presumption arises that the testator did not intend to disinherit his or her new spouse.

Question 16

Omitted Spouse

Rebuttal

Answer 16

A presumption that an omitted spouse was omitted unintentionally may be rebutted by:

W contains T’s express intent to disinherit S specifically; general clause disinheriting future spouses is invalid,

T provided for S inter vivos and intended the transfer to be in lieu of S taking under the will; must be ‘in contemplation of marriage’, or

S waived their claim.

Question 17

Omitted Spouse

Proving Intent to Disinherit

Funding Share

Answer 17

Generally, (Maj., CA) T’s intent to disinherit S must be evidenced from the instrument itself.

UPC allows evidence that W was made in contemplation of T’s marriage to S, a general provision in W that it is effective notwithstanding any subsequent marriage.

Funding generally comes from, in order: intestate property then proportionally from other beneficiaries. UPC funding excludes gifts to T’s separate pre-existing children.

Question 18

Omitted/Pretermitted Child

Answer 18

Where testator executes a will and thereafter has a child and later dies without having revoked or revised the will, a presumption arises that the child was unintentionally omitted.

Presumption is rebuttable where C specifically is disinherited, where C is provided for inter vivos in lieu of taking under T’s estate, or where T had children and devised substantially entire estate to C’s other parent.

Question 19

Omitted Child

Jurisdictional Split

Answer 19

In some jurisdictions, omitted child statutes protect also apply to children alive when the instrument was executed.

“Missouri” type - express intent to disinherit

“Massachusets” type - extrinsic evidence ok

Testator unaware of child - (CA)

T mistakenly believed child dead (CA, UPC)

Some states include revocable trusts

Question 20

Mortmain Statutes

Answer 20

Almost all states have revoked their former Mortmain statutes which used to limit testamentary gifts to charitable recipients.

Question 21

Doctrine of Election

Answer 21

The doctrine of equitable election with respect to wills is an obligation imposed upon a beneficiary under a will to “elect” between two inconsistent rights or claims created by the will or by law.

If, in a will, a testator disposes of property belonging to a beneficiary under the will, then acceptance of a devise under the will by the beneficiary constitutes a confirmation of the terms of the will and operates to estop such beneficiary from objecting to the disposition of his own property under the will.