WILLS, TRUSTS & ESTATES

Professor Jenkins Fall 2001

 

Vocabulary:

 

1.                    Testate - to die with a valid will.

2.                    Intestate - to die w/o a valid will. Distribution governed by statutes of descent and distribution.

3.                    Will - testamentary instrument describing how testator intends to dispose of his/her property at their death. It’s revocable during the testator’s lifetime.

a.                    Holographic will - handwritten, no witnesses, signed by testator. May not sign but simply state: “I, Joe Blow, do hereby . . .” The mention of his name is enough.

b.                   Oral will - valid will for disposition of personal property only and valid only if made during t’s last illness, 3+ witnesses and probated w/in 6 months. Possibly longer if statement is committed to writing w/in 6 days.)

c.                    Attested will -

i.                     Signed by the T

ii.                    2 witnesses over 14

iii.                  Witnesses must sign in t’s presence;

(1)                 Line of sight test - t must actually see the attestation

(2)                 Conscious presence (Texas) - t could have readily seen the attestation by some slight physical exertion. Eg w/in the same room but didn’t see personally. Out of room, no good, if t couldn’t see from where he was situated.

(3)                 No required order of signatures but must be signed contemporaneously.

4.                    Codicil - amendment to a will. Requires proper execution.

5.                    Probate - state probate courts have jurisdiction over all matters “appertaining to” or “incident to” an estate. Probate is the proceeding in which an instrument is judicially determined to be the duly executed last will of the decedent or, if no will, to determine statutory heirs.

a.                    Petition - request for certain action, the reason and condition/value of the estate

b.                   Notice to interested parties - legatees (personal property), devisees (real property) or heirs (intestate) and all unpaid creditors.

c.                    Hearing

d.                   Judicial confirmation

6.                    Non-probate property - transfer of property at death outside the will

a.                    Joint tenancy

b.                   Life insurance

c.                    Contracts w/ payable on death provisions

d.                   Interests in trusts - trustee holds property for the benefit of named beneficiaries per the terms of the trust instrument. Decedent may have testamentary power over the assets in the trust. Will may be admitted to probate but the trust assets aren’t. They’re distributed by trustee outside of court supervision.

7.                    Requirements for a valid will

a.                    Testamentary intent - showing that t intended the will to take effect on date of his/her death.

i.                     “I leave all to John. Al” - too indefinite

ii.                    “I leave all to John when I’m not here anymore. Al” - little better but still a matter of construction.

iii.                  Cannot go outside the 4 corners of the document to determine testamentary intent.

iv.                  Must be apparent intent to take effect @ death, eg use of words “will,” “testator”

b.                   Capacity - testator knows the nature and character of his/her property, knows who it should go to and nature and effect of the will. Not necessarily competence. Incompetence not conclusive showing or incapacity - only evidence of it.

c.                    Must be 18+, married, or in armed forces and of sound mind.


d.                   No undue influence

8.                    In terrorem clause (no contest clause) - “If anyone challenges this will, they’ll receive nothing.” In Texas, if the challenge is reasonable, court will give no effect to the clause.

a.                    Hypo: Uncle died and left $2 million to his shack-up honey who was 20 years younger. She encouraged him to change his will. Issues:

i               Does nephew have standing to sue? Factors to look at:

1.                    Relationship to testator

2.                    Where’s the other will

3.                    Strength of the relationship between the uncle and nephew

4.                    Intestate succession statute

5.                    Are his parents alive?

i               Usufruct - right to use and enjoy another’s property w/o damaging it or diminishing it.

9.                    County court and probate court are synonymous.  County judge and probate judge are synonymous.

10.                 Distributee - beneficiary under a will or under intestate succession.

11.                 Estate - denotes the real and personal property of a decedent.

12.                 Heirs - those persons, including the surviving spouse, who are entitled under the statutes of descent and distribution to the estate of a decedent who dies intestate.

13.                 Incapacitated means

a.                    A minor

b.                   An adult who, because of a physical or mental condition, is substantially unable to provide food, clothing, or shelter, or to manage their own financial affairs.

c.                    A person who must have a guardian appointed to receive funds due the person from any governmental source

14.                 Independent executor means the personal representative of an estate under independent administration. Includes independent administrator.

15.                 Interested persons means heirs, devisees, spouses, creditors, or any others having a property right in, or claim against, the estate being administered; and anyone interested in the welfare of a minor or incapacitated ward.

16.                 Legacy includes any gift or devise by will, whether of personalty or realty.  Legatee includes any person entitled to a legacy under a will.

17.                 Minors are persons under 18 who have never been married or who have not had disabilities of minority removed for general purposes.

18.                 Person - includes natural persons and corporations.

19.                 Personal property - includes interests in goods, money, choses in action, evidence of debts, and chattels real.

20.                 Personal representative includes executor, independent executor, administrator, independent or temporary, and their successors.

21.                 Property - includes both real and personal.

22.                 Will - includes a codicil

23.                 Next of kin - includes adopted children, their children and the adoptive parent of the adopted child.

24.                 Ward - a person for whom a guardian has been appointed

 

 

 


I. A Foundation for Estate Planning: Society’s Control of Inheritance

 

A                   Power to transmit property at death

1.                    Jeffersonian view - dead have no power to direct/control the ownership of property after death.

2.                    Ability to pass on property arose as property owners demanded the right to transmit to others w/in and w/o their family including friends and servants.

i.                     Right to dispose by testament: written or oral instructions property witnessed and authenticated, according to the pleasure of the deceased. Became known as a will.

ii.                    Wills and testaments were creations of the law and so were the rights of inheritance and succession.

iii.                  Was the right to pass on property at death a fundamental, constitutional right?

i.                     Originally, the answer was no.  The Supreme Court said that the power to transmit at death was a legislative creation.  Therefore, Congress and state legislatures had the power to limit, condition or even abolish testamentary power.

ii.                    Constitutional turnaround: Hodel v.  Irving

(a)                 Congress passed legislation limiting the ability of the Sioux nation to transmit property at death.  The Supreme Court held that the power to transmit property at death was a right inherent with ownership.

(b)                 Rationale: Analyzed under takings logic:

(i)                   What’s the economic impact?  Does the taking deprive the party of income?

(ii)                 Is there interference w/investment-backed expectations?

(iii)                Is there average reciprocity of advantage?

(iv)               What’s the character of the governmental taking?  Does it destroy one of the essential sticks in the bundle of rights ie the right to exclude others?

3.                    Societal limitations on the right to pass on and receive.

a.                    Shapira: T left estate to A provided he were either married to a Jewish girl with Jewish parents at the time of T’s death or A married a Jewish girl w/in 7 years of his death.

i.                     Is T’s restriction on A’s receipt of his inheritance unreasonable, unconstitutional and/or contrary to public policy?

(a)                 Constitutionality: Is restriction a restraint on marriage?

1.                    Loving: right to marry is a fundament right.

2.                    Shelley: State can’t enforce a racially restrictive testamentary gift.

3.                    Issue: Is T asking the state to enforce a restraint on marriage?

4.                    Court: No.  T is not asking the state to enforce a prohibition on A’s right to marry.  A can marry anyone he wants.  If he wants the money, he needs to satisfy the condition.  Had T asked the state to enjoin A from marrying someone, different result.

5.                    Evans: T left park land to city Z for whites only.  Court held the gift invalid b/c T asked the city to enforce the restriction.  The enforcement board resigned.  Is it now private action?  No.  Even the private action of this board enforcing the restriction amounts to state action.  Board is a state agent b/c it performs a state-like function.

6.                    Here, T is simply at the state’s whim will and fancy in providing a mechanism for dissolution of the estate.  No enforcement.

(b)                 Public Policy: Total restraint is void; partial restraint is reasonable to ask A to marry w/in a certain religion.

1.                    Hackett: Divorce decree required mother to raise a child w/in Catholic faith.  Held invalid.  It’s religion.


2.                    Court: Partial restraint on marriage different from absolute requirement to stay w/in faith ie divorce conditioned on religion.

3.                    In re Clayton: Upheld gift conditioned upon not marrying a person of a certain religious faith.  Held to be a partial restraint on marriage.

4.                    Drace: Invalidated gift conditioned on remaining faithful to a particular religion..

(c)                 Reasonableness:

1.                    Maddox test: T to A if she marries member of a particular society; no gift over.  Held to be in terrorem ie threat.  T’s condition was unreasonable b/c the society had very few eligible bachelors.

b.                   Restatement (Second): restraint to induce a person to marry w/in a religious faith is valid, if and only if, under the circumstances, the restraint does not unreasonably limit the transferee’s opportunity to marry.  Whether transferee is reasonably limited depends on the type and strength of t’s religious beliefs.  Hypo: T to A provided A doesn’t marry outside race.  Held: It is an absolute restraint of marriage as to one class of people.  It unreasonably limits A’s opportunity to marry.

c.                    Will invalid if it tends to disrupt families:

i.                     T to A until 65 unless her husband dies or divorces her before her 65th birthday.  Valid if intended to provide support in the event A needs the money.

ii.                    T to A, B & C provided they never speak w/D.  Invalid.

iii.                  T to A provided A drops her hyphenated name.  Invalid disruption of marriage.

iv.                  T directs A to destroy house upon his death.  Invalid economic waste, harms the community, diminishes the tax base, destroys value of devise.

v.                   T to A unless B divorces C or C predeceases B then A should liquidate assets and provide for B.  Doesn’t encourage divorce but provides support.

d.             Restatement (second) invalidates trusts contrary to public policy.  Eg restraints on marriage, religion, families, choice of careers.  Balance societal interests.

 

B.                   Transfer of decedent’s estate

1.                    Probate and non-probate property

a.                    Probate passes under the will

b.                   Non-probate passes at death under an instrument other than a will.

1.                    Administration of estates

a.                    Appoint a personal representative (executor for will; administrator for intestate):

i.                     Inventory assets

ii.                    Manage assets during administration

iii.                  Receive and pay claims of creditors

iv.                  Distribute remaining assets

b.                   Purpose of probate

i.                     Evidence of transfer of property

ii.                    Protects creditors

iii.                  Distributes property           

c.                    Primary jurisdiction - domicile of decedent

d.                   Ancillary jurisdiction - location of real property outside primary jurisdiction

e.                    Letters of testamentary/administration - court authorization in the personal representative to act on behalf of the estate.

 

C.                   An estate Planning Problem

1.                    Chapter V.  Probate and Grant of Administration

 


ESTATE OF DECEDENTS:

§72.  Proceedings before death.

a.                    Administration of an estate of a living person is void.  Curt may issue letters upon the estate of a person believed to be dead.  Wait 3 years to distribute property.  Restore estate and/or proceeds if decedent is really found alive later.

b.                   Circumstantial proof.  Postings and publications.

 

§73.  Period for probate.

a.                    W/in 4 years of death unless party shows they weren’t at fault in failing to petition  earlier.  Letters testamentary will not be issued after the expiration of 4 years.

b.                   BFP after 4 years have good title.

 

§76.  Persons who may make application.

a.                    An executor named in the will or any interested person make application to the court of a proper county:

i.                     For an order admitting the will, whether written or oral, in possession or lost, destroyed or out of state.

ii.                    For the appointment of an executor.

iii.                  For an appointment of an administrator.

iv.                  Interested persons - include heirs, devisees, spouses, creditors or others w/ property rights or claims against the estate plus anyone interested in the welfare of a minor or incapitated ward.  Eg T hits Z.  Both die.  Persons in Z’s estate may apply to administer T’s estate to settle a claim.

 

§77.  Order of persons qualified to serve.

a.                    To the person named as executor

b.                   To the surviving husband or wife

c.                    To the principal devisee or legatee of the testator.

d.                   To any devisee or legatee of the testator

e.                    To the next of kin of the deceased, the nearest in order of descent first, and so on and the next of kin includes a person and his descendants who legally adopted the deceased or who have been legally adopted by the deceased.

f.                     To a creditor

g.                   To any person of good character residing the county.

h.                   To any other non-disqualified person.  When applications are equally entitled, letters shall be granted to the applicant who, in the judgment of the court is most likely to administer the estate advantageously or they may be granted to any two or more of such applicants.               

 

§78.  Person disqualified.

a.                    Incapitated

b.                   Convicted felon unless pardoned.

c.                    Non-resident person or corporation (w/o a registered agent in the state)

d.                   Corporation not authorized to act as a fiduciary.

 

§79.  Waiver of right to serve

a.                    Party entitled to by executor or administrator may renounce his right to letters testamentary/administration in favor of another qualified person.

 

§80.  Prevention of administration.

a.                    Method of prevention.  A creditor’s application or another interested party’s application to administrate the estate may be defeated by:


i.                     Paying the creditor

ii.                    Disputing the debt

iii.                  Executing a bond, twice the amount in dispute, conditioned on establishing the validity of the debt.

 

§81.  Contents of application for letters testamentary.

a.                    Name and domicile of each applicant

b.                   Name, age, domicile of decedent and fact, time and place of death

c.                    Facts showing court’s venue

i.                     County where deceased lived

ii.                    If didn’t live in Texas and had no primary residence, the county where his principal property or county where he died.

iii.                  No domicile and died outside state, county of nearest kin.

iv.                  No kin here, where principal property was

v.                   In county of residence for purposes of receiving funds or money due.

d.                   Facts stating that the decedent owned property, its description and probable value.

e.                    Date of will, name and residence of executor named or if none named, the name and address of person to whom letters s/b issued and names and addresses of subscribing witnesses.

f.                     Names of surviving children

g.                   Fact that executor or applicant is not disqualified per §78.

h.                   Names of divorced spouses.

i.                     Names of state, gov’t agency or charities if named.

j.                     All these statements must be revealed if known or knowable w/rsble diligence.  Any omission must be explained.

k.                    Lost will - must prove all above plus

i.                     Why it can’t be produced

ii.                    Contents (eg copy)

iii.                  Date of will and name of appointed executor

iv.                  Name, age, marital status and address and relationship of each devisee or legatee.

v.                   PRESUMPTION THAT A LOST WILL HAS BEEN REVOKED BY PHYSICAL DESTRUCTION! Discuss facts that might indicate otherwise.

l.                     Non-cupative (oral) will - must prove sections a-j plus

i.                     Substance of the words spoken

ii.                    Names and addresses of witnesses

 

§82. Contents of application for letters of administration.

Name and domicile of each applicant

a.                    Name, age, domicile of decedent and fact, time and place of death

b.                   Facts showing court’s venue

i.                     County where deceased lived

ii.                    If didn’t live in Texas and had no primary residence, the county where his principal property or county where he died.

iii.                  No domicile and died outside state, county of nearest kin.

iv.                  No kin here, where principal property was

v.                   In county of residence for purposes of receiving funds or money due.

d.                   Facts stating that the decedent owned property, its description and probable value.

e.                    Date of will, name and residence of executor named or if none named, the name and address of person to whom letters s/b issued and names and addresses of subscribing witnesses.

f.                     Names of surviving children


g.                   Fact that executor or applicant is not disqualified per §78.

h.                   Names of divorced spouses.

i.                     Alleging necessity of administration.

 

§84.  Proof of written will produced in court:

a.                    Self-proved.  If self-proved, no other formalities required.  A self-proved is a will accompanied by an affidavit attesting that the will is t’s last will and testament.  Witnesses attest the signing before T who was 18+, in armed forces or married, and of sound mind.  Purpose is to eliminate the need to have W’s appear in court to attest to T’s signature

b.                   Attested written will.  If not self-proved, then:

i.                     Sworn by 1+ W’s.  Affidavit or testimony.

ii.                    Out of county or unable to attend:

1.             Sworn oral or written deposition of 1 or more original W’s

2.             If will is not contested in writing, sworn testimony in court or deposition to signatures or one or more of W’s or of T’s signature.

3.                    If only 1 W is found, then his sworn testimony is sufficient as to handwriting or signature.

iii.                  If W’s are dead, in armed services or outside the jurisdiction of the court, then 2 other W’s as to signatures or handwriting of 1+ subscribing Ws or T.

c.                    Holographic will.  If not self-proved, a will wholly in the handwriting of T must be proved by 2 Ws to his handwriting.  If Ws outside jurisdiction, sworn oral or written deposition are fine.

d.                   Deposition if no contest filed.  No opposing party or attorney of record.

 

§85.  Proof of will not produced in court.

a.                    Same as above plus

i.                     Why it can’t be produced

ii.                    Contents (eg copy)

iii.                  Date of will and name of appointed executor

iv.                  Name, age, marital status and address and relationship of each devisee or legatee.

 

§86.  Proof of noncupative will

a.                    Can’t be proved w/in 14 days of T’s death, or until those who would have been entitled by inheritance, had there been no will, have been summoned to contest the same, is they desire to.

b.                   Testimony.  Proving testimony only heard w/in 6 months.  Written testimony okay if it were recorded w/in 6 days.

c.                    Value of estate exceeds $30.  Need 3 credible witnesses that T called on a person to take notice or bear testimony that such is his will.

 

§88.  Proof required to probate and issuance of letters testamentary/administration.

a.                    General proof.

i.                     Allege the person is dead and 4 year SOL hadn’t expired.

ii.                    Court has jurisdiction and venue

iii.                  Citation served and returned

iv.                  Executor/administrator not disqualified.

b.                   Additional proof to probate a will


i.                     If not self-proving that T was 18+, in the armed forces or married at the time he executed the will

ii.                    If self-proved, that T executed will formally.

iii.                  The will wasn’t revoked by T.

c.                    Additional proof letters of testamentary - the executor is named in the will and there appears to be proof required to prove the will.

d.                   Additional proof letters of administration - required proof is met plus the necessity for administration.

§ 93.  Period for contesting probate

a.                    Probate must be contested w/in 2 years after will was admitted to probate.

 

PROCEDURE PERTAINING TO FOREIGN WILLS

§ 95.  Probate of foreign will accomplished by filing and recording.

a.                    Written will of T not domiciled in Texas at time of his death that would affect property in Texas, may be admitted to probate if probated elsewhere.

b.                   Application and citation.

i.                     If foreign will has been admitted out of state, the application needs to request an authentication of the foreign proceedings.

 

§ 98.  Effect of recording copy of will in deed records.  Valid and effective as a deed of conveyance of all property in this state.

 

§ 295.  Notice to holders of secured claims.

c.                    Personal representative must notify known creditors/claimants w/in 2 months letters issued.  If representative receives actual knowledge of creditors after 2 months but w/in a reasonable time, must notify.

d.                   Notice by certified mail.

e.                    Clerk must receive copy of each notice.

 

2.                    Professional responsibility.

A.                  Calivas: Plaintiff sued drafting attorney of father’s will.  Left “homestead” to wife when he meant to say “home.”

a.                    Contract theory - 3rd party beneficiaries may enforce the terms of the contract.

b.                   Negligence - show duty by showing foreseeability.

c.                    Collateral estoppel - no preclusion.  A probate action is different from tort.

B.                   Texas: Total privity bar


II.  Intestacy: An Estate Plan by Default

 

A                   The Basic Scheme (Jenkins: no statute of limitations on establishing an heirship)

1.                    Texas Probate Code: DESCENT AND DISTRIBUTION

§38.  Persons who take upon intestacy

i.                     Intestate - leaving no husband or wife.

(a)                 To his children and their descendants.  If none, then

(b)                 To his m/f in equal shares.  If only 1 surviving parent, then

(i)                   ˝ surviving parent

(ii)                 ˝ bro/sis and their descendants.

(iii)                If no surviving bro/sis or their descendants and only 1 parent, then she gets it all.

(iv)               If no parents, then

(c)                 All to bro/sis and their descendants.

(i)                   If surviving bro/sis is ˝ blood, their share is ˝

(ii)                 A, B, C and D are full blood and E is ˝.  A, B, C and D get 2/9ths each.  E gets 1/9th share.

(iii)                If no parents, bro/sis, descendants, then

(d)                 Divide into 2 moieties - one goes to paternal grandparents and the other to maternal grandparents.

(i)                   If both alive, either side, then they share equally.

(ii)                 If one alive, survivor gets ˝ w/ remainder going to non-surviving grandparent’s descendants.

(iii)                If one alive and no surviving descendants, the surviving grandparents gets it all.

(iv)               If no surviving grandparent, then all to descendants.

 

ii.                    Intestate - leaving husband or wife.  Property other than community property.

(a)                 W/children. Surviving spouse gets 1/3 life estate in real property and 1/3 personal property.  Surviving descendants get 2/3 property and remainder in life estate.

(b)                 W/o children.  Surviving spouse gets all personal property and ˝ real property.  The other ˝ goes by way of intestacy ie m/f equally if both alive, or surviving parent ˝ w/ remaining ˝ to bro/sis and their descendants.  If none, to grandparents, etc.

 

§41.  Matters affecting and not affecting the right to inherit.

a.                    Class closes at death of decedent - unless child on way

b.                   ˝ blood gets ˝ share; full share if no full blood survives.

c.                    Don’t have to be a citizen to be an heir.

d.                   May be heir if convicted unless conviction related to fraud of estate, insurance company or death of decedent.

 

§42.  Inheritance rights of children.

a.                    Maternal inheritance.  Child is child of his biological or adopted mother so that his children will inherit from her.

b.                   Paternal inheritance.  Child is a child of biological father if so under 151.002 of the family code, or adjudicated to be the father, adopted or father executed a statement of paternity.  Child claiming to be child of father may petition probate court for a determination of right of inheritance.  Court will use clear and convincing standard of proof.

 


§43.  Determination of per capita and per stirpes distribution.

a.                    Per capita: equally to the first full generation alone.

b.                   Per stirpes: by representation if partial generation; children represent their parent.

 

§45.  Community estate.

a.                    H/W - H dies intestate, w gets if:

i.                     No surviving children

ii.                    Only surviving children are W’s (surviving spouse’s through another marriage).

iii.                  Surviving children are decedent’s, they get ˝.

2.                    Steps:

A.                  Is it community property?

B.                   If partly or fully separate, determine how it descends.

C.                   If descends to descendants, look to see if there’s a full or partial generation.  If full, per capita; if partial, per stirpes.

 

3.                    Hypos:

A.                  H/W.  H has never divorced previous wife.  W is putative spouse.

1.                    Presumption - last marriage is the valid one

2.                    Putative spouse - has a right to property acquired in their marriage as if the party were the lawful spouse.

B.                   A’s will: All to B if B doesn’t survive me, then to D.  B’s will: All to C.  A and B in traffic accident.  Both die.  No known order of death.

1.                    Law - each predeceased the other.  Regarding A, then, to D.  Regarding B, then, all to C.

2.                    Overcome the law - sufficient proof that one or the other survived by more than 120 hours.  Includes time on life support.  If can’t be determined, then presumption is that they failed to survive the other.

3.                    Will may provide for a contingency so that this section is inapplicable.

4.                    Janus: Standard of death:

i.                     Common law: irreversible cessation of circulatory and respiratory functions.

ii.                    If under life support, then irreversible cessation of total brain function.

iii.                  Evidence of survivorship:

1.                    Law witness observes signs of life

2.                    Expert witness testifies to the usual and customary standards of practice.

C.                   A and B same sex.  Both wills say their property should go to the other.  How would you ensure that the wills go uncontested?  A might adopt B.  Okay to adopt adults.

D.                  Can’t limit inheritance to bodily issue.  Law includes adoptive children as well.

 

4.                    Transfer to children

A.                  Posthumous

1.                    Hall: Adopted children could not inherit from their natural father after their mother remarried and the second father adopted the children.

2.                    Texas: §40.  Inheritance by and from adopted children

i.                     Child can inherit from natural and adoptive parents.

ii.                    Natural parents not entitled to inherit from child.

B.                   Reproductive technology


1.                    Johnson: H/W signed K with surrogate M using fertilized egg of W.  M reneged. Held: Parenthood in surrogate mother cases should not be determined by who gave birth or who contributed genetic material.  Should turn on the intent of the parties pursuant to the contract.

2.                    Same sex partners: A and B same sex.  Have child through artificial insemination. Adoption followed by A. 

3.                    O’Neal: A was the child of B.  A’s father left.  B died and Aunt C took care.  Eventually, aunt C couldn’t handle so she gave to D.  No one ever adopted A.  D died intestate and A asserted rights under intestate succession.  Issue: Was there an equitable adoption?  Elements of an equitable adoption:

i.                     Agreement between natural parents and adoptive parents

ii.                    Performance by the natural parents of the child in giving up custody

iii.                  Performance by the child by living in the home of the adoptive parents;

iv.                  Partial performance by the foster parents in taking the child into the home and treating her as their child and

v.                   The intestacy of the foster parents.

Element at issue: legal custody.  Held: The aunt never had legal custody ie no court ever awarded custody to C so C had no authority over A.  Dissent: Aunt really stood in the shoes of the natural mother.  Also, the child has performed and is entitled.

4.                    Hecht: A and B never married.  A had kids by a previous marriage.  A committed suicide but prior to his death he had deposited several vials of sperm in a sperm bank so that B could have a child after he died.  Issue: How will the law treat sperm upon the death of the donor?  Held: A had an ongoing say in how the sperm would be used.  Its value is in its potential to create a life and donor had a continuing ownership interest in it to extent he could say how it could be used for reproduction. Sperm is neither a person nor a property interest.  There is no public policy issue debate as to the rights of single women to become pregnant artificially.  Likewise, there’s no sufficient state interest in prohibiting B from becoming pregnant after the death of A.  Legally, the child born of B will not be the child of A.

i.                     Social security benefits for child not conceived upon the death of a parent. Will pay benefits if the state recognizes the rights of after death children.

 

C.                   Transfer of an expectancy.  The persons who would be the heirs of A, a living person, if A dies within the next hour, are not the heirs of A but the heirs apparent.  They have a mere expectancy.  A transfer of an expectancy may be enforceable in equity for adequate consideration if fair under all the circumstances.

1.                    Not a valid interest b/c a will is an ambulatory document.

 

D.                  Managing a minor’s property

1.                    Minor doesn’t have legal capacity to manage property

2.                    Guardian of person has responsibility for custody and care of the child.

3.                    Guardian of the estate has responsibility for the assets.

4.                    Court may grant both powers in one person.  The natural parent will not necessarily be the guardian of the estate.

5.                    A dies leaving B $100,000 life insurance settlement.  The insurance company won’t give to the parent but will to the guardian of the estate (might be the parent too).  The guardian must manage the money for the child’s benefit.  Need court permission to pay expenses out of the settlement money.  The guardian’s ordinary expenses don’t count.  Settlement money should go to the child when he reaches 18 or 21 w/ special court action.

6.                    Guardianships are expensive.  May ask trust company to take over the management of the estate.

7.                    The insurance money may have gone straight into a trust.  A trust can last past 18.

8.                    Advancements (intestate succession).  Value of inter vivos transfers deducted from share of estate inheritance.


i.                     44.  Advancements

a.                    If T dies intestate as to all or a portion of his estate, property he gave during his lifetime to a person who, on the date of T’s death, is the decedent’s heir, or property received by a decedent’s heir under a non-testamentary transfer is an advancement against the heir’s estate only if:

1.                    T declared in a contemporaneous writing or the heir acknowledged in a writing that the gift or non-testamentary transfer is an advancement; or

2.                    T’s contemporaneous writing otherwise indicates that the gift or non-testamentary transfer is to be taken into account in computing the division and distribution.

3.                    Advanced property is valued at the time the heir came into possession or at the time of T’s death whichever is first.

4.                    If the recipient of the property doesn’t survive T, then the property isn’t taken into account in the division unless T’s writing says to.

 

E.                   Bars to succession

1.                    In re Mahoney: Homicide.  Issue: Does a widow convicted of manslaughter take by intestacy?  No slayer statute in the state.  Jurisdictional views:

i.                     Slayer takes b/c law should not punish the slayer twice.

ii.                    Slayer doesn’t take.

iii.                  Slayer takes as a constructive trustee.  “It’s the formula through which the conscience of equity finds expression.” Difference between voluntary and involuntary manslaughter is the element of intent.  Slayer s/n profit.  The property passes as if the slayer predeceased the decedent.

2.                    Thompson v.  Mayes: A shot and killed B.  A then shot himself.  C sued A’s estate asking the court to impose a constructive trust.  A’s estate argued that A had never been charged with the wrongful death of B.  Held: A constructive trust would be imposed if a beneficiary received property either by inheritance or by will if the beneficiary willfully and wrongfully caused the death of another.  Proof of willful and wrongful death is preponderance.  No res judicata where the constructive trust action could have been brought in the probate proceeding.

3.                    Passage of title and Disclaimer. §§36-37.  Means of evidencing disclaimer or renunciation of property or interest receivable from the decedent.

i.                     Person dies and leaves a will, all appointment powers and legal interests vest immediately.  All property not under the will vests immediately in heirs.  All interests are subject to payment of debts and delinquent court ordered child support.  When letters testamentary or administration are issued, the executor/administrator has possessory rights.  A party who wishes to disclaim his share may do so in writing and acknowledged in front of a notary.  The disclaimer relates back to the time of the decedent’s death.  Creditor’s accrue no rights against a party who property disclaimed.  Property includes that which is acquired outright or that which is burdened by debt.

ii.                    Irrevocable

iii.                  Partial or whole disclaimer.

iv.                  Can’t be asserted after beneficiary accepts property.

v.                   Filed w/in 9 months of death

vi.                  Filed in probate court


vii.                If administration is closed or year has passed or nothing’s been filed, then file in county of decedent’s residence.

viii.               If non-resident, then file where decedent’s property is located.

ix.                   Hypo: A is entitled to take under a will.  A has a judgment against her.  Instead of taking under the will, she disclaims.  The creditor claimed that she was attempting to avoid the judgment and defraud the creditors.  The court said that since she disclaimed, she never had the property to fraudulently transfer.

x.                    Troy: A was in a nursing home receiving Medicade. A inherits $100,000. B, A’s sister, visits him and asks him to disclaim his share so that his new found wealth wouldn’t make him ineligible for Medicade. Held: The renunciation of a potentially available asset was the functional equivalent of a transfer of an asset since by refusing to accept it, the disclaimant effectively funneled it to other familial distributees.

xi.                   §37B. Assignment of Property received from a decedent

a.                    Entitled but doesn’t disclaim may assign.

b.                   Assignor may request it be in writing which must be filed w/in 9 months of decedent’s death.

c.                    Can’t defeat a spendthrift provision imposed in a trust.

xii.                 Other bars to succession:

a.                    §41. Matters affecting and not affecting the right to inherit

i.                     Class closes at death of decedent - unless child on way

ii.                    ˝ blood gets ˝ share; full share if no full blood survives.

iii.                  Don’t have to be a citizen to be an heir.

iv.                  May be heir if convicted unless conviction related to fraud of estate, insurance company or death of decedent.

b.                   §44. Advancements - There’s no such thing as an advancement against a devise or bequest (ie in a will). The Advancement Statute only applies to an intestate distribution evidenced by a writing, written by the donor at the time of the gift or the donee anytime thereafter.


III.  Wills: Capacity and Contests

 

Definitions in this chaper:

 

1.                    Will: A will includes a codicil; it also includes a testamentary instrument which merely:

(1)           Appoints an executor;

(2)                 Directs how property may not be disposed of;

(3)                 Revokes a prior will.

 

2.                    Incapacitate or incapacitated person:

(1)                 A minor;

(2)                 An adult individual who, because of a physical or mental condition, is substantially unable to provide food, clothing, or shelter for himself or herself, to care for the individual’s own physical health, or to manage the individual’s own financial affairs; or

(3)                 A person who must have a guardian appointed to receive funds due the person from any governmental source.

 

3.                    Interested persons: Heirs, devisees, spouses, creditors, or any others having a property right in, or claim against, the estate being administered; and anyone interest in the welfare of a minor or incompetent ward.

 

A                   §57. Who may execute a will

1.                    18, or under 18 and is or was married or in armed forces

2.                    Of sound mind

i.                     Mental capacity: The testator has the ability to know:

i.                     The nature and extent of testator’s property

ii.                    The persons who are the natural objects of the testator’s bounty

iii.                  The disposition the testator is making, and

iv.                  How these elements relate so as to form an orderly plan for the disposition of the testator’s property.

v.                   The mind and the memory relevant to the four matters mentioned.

vi.                  In re Strittmeyer: A lived with her parents for 30 years. They died and she started exhibiting very strange hatred for her parents the men. A joined an organization advocating women’s rights. She left her entire estate to them. B challenged the will on basis that A lacked mental capacity. Held: Invalid due to her insane delusional hatred of men. Jenkins: When in doubt about the capacity of a client, record her thoughts as to the disposition of her estate either in writing or via video. Ask: how they arrived at you office; if they are there of their own free will; who they are and who you are; why they are there; etc.

vii.                Why require capacity?

(a)                 The will should reflect the testator’s true desires;

(b)                 Mentally incompetent persons are not considered persons under the law;

(c)                 To protect the decedent’s family;

(d)                 Reasoned dispositions of property lend credibility to the institution of inheritance;

(e)                 The sane dispositions will be carried out in the event the testator becomes insane later;

(f)                  Prevents the exploitation of the insane by others

v.                   To draft a will for an incompetent person is a breach of professional ethics. The lawyer, however, may rely on his own judgment regarding the client’s capacity.


vi.                  Testator may be under a guardianship but still execute a will provided he does so under when lucid. Jenkins recommends informing the court, who has continuing supervision, that the testator is going to execute a will.

vii.                Insane delusion (negates all the elements of mental capacity)

(a)                 Belief to which the testator adheres against all evidence and reason to the contrary. Element at issue: evidence

(i)                   Majority view: A delusion is insane even if there is some factual basis for it if a rational person in the testator’s situation could not have drawn the conclusion reached by the testator. Would a rational person draw these conclusions? Remedy: purge the gift which was the result of the delusion.

(ii)                 Texas: Belief of a state of facts that do not exist and which no rational person would believe. The will or its terms must also be a product of the insane delusion. If insane delusion doesn’t work, look to undue influence.

(iii)                Minority view: If there is some factual basis for the testator’s belief, he is not suffering from an insane delusion as to that issue. Is there sufficient evidence to support these conclusions?

1)                   In re Honigman: A believed his wife B was having affairs. Everything she did was twisted into supporting his contention. There was evidence he was right and evidence he was wrong.

(b)                 Difference between mistake and insane delusion:

(i)                   Mistake is susceptible to correction if told the truth.

1)                   “I leave all to A b/c B is dead.” B is not dead. No court reformation b/c this is a mistake not the product of an insane delusion. Must stay w/in 4 corners of document.

2)                   A tells T that B is dead. “I leave all to A b/c B is dead.” Fraud in the inducement.

(ii)                 Insane delusion is not susceptible to correction when indicating the falsity of the belief.

1)                   “I leave all to A b/c B is dead.”  B calls T and says he’s alive. T asks B to tell her something only T and B knows is true. B does and T still won’t believe. Probably insane delusion.

viii.               Undue influence: the will of the testator is overcome by the will of another.

(a)                 Proof may be wholly inferential and circumstantial

(b)                 Lipper v. Weslow: T had a son by a previous marriage - S1. She also had two more children by a second marriage - S2 and S3.  S1 was deceased. S1's children received nothing under T’s will. They challenged on the basis that S2 had unduly influenced T to exclude them. T explained at length in the will why she wasn’t leaving anything to them. They were rude, failed to stay in touch, S1's wife hated S2 and S3. There was circumstantial proof supporting this.  T also mentioned that she had given all of her children homes and cash during her lifetime.  Circumstantial proof showed that the will was executed 22 days prior to T’s death, that it wasn’t read to T nor had she discussed the will with anyone at all. T was of sound mind.


(i)                   ROL: The test for undue influence is whether such control was exercised over the mind of the testatrix as to overcome her free agency and free will and to substitute the will of another so as to cause the T to do what she would not otherwise have done but for such control. Need (1) the existence and exertion of an influence; (2) that overpowers the mind at the time of execution; and (3) the will would not have been executed “but for” the influence.

(ii)                 Element at issue: the will was the product of undue influence

(iii)                The will does make an unnatural disposition but there is an explanation for it.

(iv)               Look for: confidential relationship, opportunity to influence, motive, unnatural disposition, etc. One or in combination.

(v)                 2 year statute of limitations.

(c)                 No contest clause is enforced unless there is probable cause for the contest.

(i)                   Calvery: The forfeiture rights under the terms of the will not be enforced where the contest of the will was made in good faith and upon probable cause.

(d)                 Bequests to attorneys

(i)                   §58b. Bequests to attorneys and their heirs are void unless related w/in the 2nd degree of consanguinity. Takes effect on wills executed after September 1, 1997. Wills executed prior to that would rely on Pro. Res. 1.08 i.e. lawyer must advice T to seek independent counsel.

(ii)                 Even if the will is written for a relative, the better advice is to another attorney to draw it up.

(iii)                What if T and T’s family insists on giving you the gift?

1)                   Get another attorney to advise

2)                   Have them write a letter accompanying the gift.

(iv)               Sexual relationships between atty. and client. Casts a suspicion of deceit and cautions to the court to examine the evidence w/unusual care.

(v)                 §241. Compensation of personal representatives. 5% commission of entire estate not including checking, insurance, cash payouts.

(e)                 Attorney conduct: Seward Johnson’s Estate: Atty. N was the attorney for an extremely wealthy client, J. She became best friend’s with client’s wife B. J provided for B on his death with a substantial trust. N was to be the trustee and receive $500,000 per year as the trustee. Jenkins: N’s relationship with B created a conflict of interest; namely, her advice to J was at odds with her advice to B - dual representation. The Code of Professional Responsibility provides that where an attorney represents 2 clients and those client’s interests become adverse, the attorney shall withdraw and represent neither. If she were to represent one or the other she could use information gained in confidence to the detriment of one and to the benefit of the other.

(f)                  In re Will of Moses: T had three marriages. All three husbands were dead. She met - but did not marry - an attorney, A. He wined and dined her. Unbeknownst to A, T left nearly all her estate to him. The will was prepared by a disinterested attorney.

(i)                   ROL: A disposition to an attorney is presumptively invalid per under influence unless T had received independent advice and counsel of one entirely devoted to her interest.

(ii)                 Element at issue: independent advice from one entirely devoted to her.

(iii)                T’s attorney should have discussed and/or questioned her disposition to A.  There was no meaningful independent advice. T’s attorney did little more than write down what T said.


(iv)               Dissent: T remarked to a friend that she had to push her attorney to make the will like she wanted it. That involvement indicates that she got what she wanted of her own free will.

(f)                  Same-sex distributions. In re Kaufmann’s Will: K wrote a “coming out” letter which recited all the reasons why he was leaving all his property to his long-time partner. Held: That K’s partner took advantage of K’s weakness and his disposition. Suggestions on how to get around the will contest:

(i)                   Adult adoption

(ii)                 Inter vivos trust: To K for life, then upon K’s death to K’s partner. The trust is better than a will b/c:

1)                   K made contributions to it periodically thus assented to it every time;

2)                   The trustee could testify to the voluntariness of the execution and supply independent validation.

(iii)                Co-habitation agreement

(iv)               Inter vivos gifts (still challengeable after T’s death on undue influence grounds);

(v)                 Non-probate transactions like survivorship accounts, insurance, pensions;

(vi)