Wills Outline—Jenkins

Fall 2003

I. INTRODUCTION.

A. 50 question MC exam, only covers TX law.

B. 2 Methods of transfer @ death.

1. By Will—Testate succession.

a) Person indicates how to distribute their possessions @ death (plan of distribution).

b) You can write your own w/out a law license.

2. By Statute (no will)—Intestate.

a) Person dies w/out a will, or the will is defective.

b) Probate code; declares how property is to be divided based on family relationships, etc.

3. Trust is the other way to transfer, covered later.

C. Requirements for the validity of a will.

1. Testamentary intent: the transfer takes place at death. “I leave all to Jack” has no testamentary intent b/c we don’t know when the transfer takes place. Need to add “upon my death” to make intent. Adding “Will” also gives proper intent.

2. Testamentary capacity: testator must know:

a) Kind & character of his property.

b) Natural objects of his bounty. Those we would naturally look to that would normally take his property.

(1) A girlfriend can be the natural object of his bounty b/c of a relationship.

(2) You don’t have to leave prop to your children.

c) Effect of this act of making a will.

3. Must have ability to form a plan for disposition of her estate.

D. Formal requirements for execution of a will.

1. Execution: actual signing of the will; makes it valid.

2. 2 witnesses if typewritten.

3. T/or’s signature: required in every juris.

4. Competence of witnesses: age, saw the signature applied, etc.

5. Witnesses sign in T’s presence.

6. No publication required.

E. Holographic will—wholly in the handwriting of the t/or; must also be signed by t/or.

1. Problem: what is wholly?

2. Doesn’t require witnesses; must prove handwriting/sig. in ct.

F. Codicil: amendment/addition to existing will.

1. Must be executed in the same way a will in the same format would’ve been executed.

G. Revocation: getting out of an executed will.

1. Requires intent to revoke.

2. Subsequent will revokes the previous.

3. Written revocation of the current will.

H. Probate: validation of the will by a ct.

I. Administration of estate: management of the estate after the will is probated.

1. Administrator (appointed by ct):

a) Gets property together;

b) Pays debts;

c) Distributes what’s left.

2. Executor (named in the will).

3. Independent executorship (TX): acts free of ct. control.

4. Dependent admin: acts under ct supervision; expensive b/c everything requires ct’s permission.

II. POWER TO TRANSMIT PROPERTY AT DEATH.

A. Passing of interests.

1. At death, property passes to the beneficiary, w/ a will or w/out.

2. The heirs exist, but haven’t been determined; the property vests by operation of law—no gaps in seisin.

3. The prop vests subject to the admin of the estate—pay debts, litigate/probate the will, collect prop, etc.

4. Prop is willed by a living person, does a dead person have any rights over it?

5. Dead hand—ability to control prop after death.

B. Right of control of prop.

1. Irving v. Day (p. 3): nothing in the const. prohibits a state to limit, condition or even abolish the power of testamentary disposition over prop w/in its juris.

2. Hodel v. Irving (p. 3): Indian land got fractionated after Congress allowed land allotments. Congress then made a law that allowed the land to escheat back to the tribe if the land earned its owner less than $100/yr; the owner couldn’t devise by will or intestacy. Issue: is this a const. taking, requiring just compensation; is the right to pass it on a prop right? RULE: the right to pass on prop goes into the bundle of sticks; a const. right.

a) Getting rid of any of the rights in the bundle of sticks is an unconst. taking.

b) Factors in determining a regulatory taking:

(1) Economic impact of the reg;

(2) Its interference w/ reas. investment-backed expectations;

(a) Diff. b/t bought land & inherited land = you worked to buy the land; probably no real difference.

(3) The character of the gov’t action.

(a) It should distribute the benefits/burdens broadly.

(b) It’s a taking b/c the statute totally abrogates the right to pass on prop.

3. Is there a const. right to receive prop at death? NO—not a right to receive just b/c you’re a testator’s child.

a) State legislatures are given the power to change the intestacy laws.

C. Taxes & Transmission of Wealth.

1. See syllabus for schedule of amts.

2. Some opinions are that gov’t needs to distribute wealth evenly, & should then tax estates at a higher rate.

D. In Terrorem Clause

1. Example - “A beneficiary shall forfeit his bequest under the will if he contests the validity of the will”

2. Also called the “no contest clause”

3. Rule is valid in Texas but will not apply to an attack on the will that is based on reasonable grounds and instituted in good faith.

4. Shapira v. Union National Bank: Restriction in will requires son to have married a Jewish girl with two Jewish parents; Π argued that the restriction was an unconstitutional restriction on the right to marry.

a) This argument fails because a 14^th amendment violation requires state action; this restriction is action by the individual testator.

b) However, to enforce a condition of a will, parties go to state courtàis this sufficient state action for a 14^th amendment violation? Courts have repeatedly held that court enforcement is not sufficient to constitute state action.

c) The Π’s right is not constitutionally protected – there is no constitutional right to inherit property.

5. Pennsylvania case – testator left money in trust to a university for the education expenses of poor white male orphans; this was state action because it was enforced by a state agency (the university).

a) This does not mean that there cannot be a college fund for a particular group – it must be managed by a private organization rather than a state agency

6. Restatement (p. 32)—if the restriction does not unreasonably restrict the transferee’s opportunity to marry, it may induce a person to marry a member of a particular faith.

a) Ex: “if D marries, X, who is Jewish” – overly restrictive.

b) Condition that D marries a Jewish girl would be invalid if the testator knew that D was engaged to another girl who is Catholic (this is disruptive of the family).

c) This same logic would apply if the son was gay and the testator knew that (this is effectively a total restriction).

7. Residuary – Destruction.

a) What happens if the testator requests that property be destroyed upon their death?

b) Public policy – society’s total wealth will be maximized by permitting private individuals to decide the best use of their property; there is an assumption that each individual will make rational choices to maximize her wealth, and the loss that would follow poor decisions will act as a deterrent.

c) The court may ignore this kind of condition in a will because it violates public policy – waste of property harms society.

d) The court will:

(1) Weigh the social utility of destruction against loss to society of valuable resource.

(2) Weigh motivation of testator.

e) When you are alive, you bear the burden of whether you are going to waste your assets, because you will bear the resultant economic burden; after your death, others must bear the burden associated with waste, and you are not in as good of a position to make such a decision.

f) Notes discussion other kinds of property that have been requested to be destroyed – Justice Black destroyed his notes in his lifetime; what about musicians and authors whose works have literary value? In some of those situations, instructions to destroy have been ignored.

E. Probate Process.

1. Probate means that the court validates a will; court issues and order admitting the will to probate.

2. The process has to do with administering the estate after the court has decided that the will is good.

3. TPC §72

a) Probate or administration of the estate of a living person is void.

b) Probate of one believed to be dead proved by circumstantial evidence is allowed.

(1) Ex: two pilots – one saw the other eject and the parachute did not open; this is sufficient circumstantial evidence to prove death.

c) 4 year statute of limitations (unless proof that party was not in default-muniment of title only).

d) Muniment of title – if the testator put the will in a mason jar and buried it, forgetting to tell someone where it was, after 5 years it is found – if the person can show that they were not in default (not at fault) for failing to present the will, the will can still be probated as a muniment of title (this can be done as many as 30 years later).

e) If everything is distributed and the will is found, a party must swear that there is no will and a diligent search has been made; even so, if it involves real property, the property can be subsequently divided according to the will (this would be unlikely if cash were involved because it is probably gone).

4. TPC § 81(b)—Probate of a Lost Will.

a) Presumption: the testator destroyed it.

b) In order to probate a lost will, you must overcome the presumption and must show:

(1) Reason it cannot be produced;

(2) Contents, as far as known;

(3) Date of execution & executor, as far as known;

(4) Name, age, martial status, rela. to decedent, of each devisee, as far as known.

(5) To have this information you would have to have read the will or have seen a copy of it.

c) interested person – one who has a pecuniary interest (see definition section of the code).

5. Non-probate property – Property passing under an instrument other than a will which became effective before death.

a) Ex:

(1) joint tenancy property – right of receivership; this does not pass under the will, it passes under contract law.

(2) life insurance.

(3) contracts with payable-on-death provisions.

(4) interests in trust – governed by trust law.

6. Probate property—Property that passes under a will or by intestacy.

F. Personal representatives = persons who probate the will; executor [named in will] or administrator [ct appointed].

1. Duties of the rep:

a) inventory & collect the assets of the decedent;

b) manage the assets during administration;

c) to receive & pay claims of creditors & tax collectors;

d) to distribute what’s left.

2. When intestacy occurs, it is not bequeathed, it descends to the recipient.

G. Functions of probate.

1. Provides E of transfer of title to new owners;

a) G/tor = the testator, g/tee = beneficiary under the will.

2. Protects creditors by requiring payment of debts;

a) Property can still be foreclosed upon after the owner dies.

b) Creditors must still be paid.

3. Distributes the decedent’s prop to those intended to get it.

4. Proof for probate of a will TPC § 88:

a) Person is deceased;

b) 4 yrs have not elapsed since date of death;

(1) Exception: person shows good faith

c) Court has jurisdiction [ct has smj over the estate] & venue [person died in that county];

d) Person applying for “letters” is qualified.

(1) Letters testamentary: ct approves that you are named as executor & allows you to do things on behalf of the estate.

(2) Prop collected must be kept separate from the assets of the executor.

5. TPC 83(b)—when another will is brought after 1 is probated.

a) If 1st application has not been heard: ct will hear both & decide which to admit to probate, or void both & consider decedent intestate.

b) If 1st will has been admitted to probate: ct will determine whether the 1st probate should set aside & admit the 2nd will, or void both & consider decedent intestate.

6. TPC 84(b)—proving a holographic will:

a) 2 witnesses required for the will to be valid;

b) Have 2 disinterested witnesses testify that they recognize his handwriting.

H. Probate Venue—TPC 6

1. First sought where the decedent was domiciled at death (primary or domiciliary juris).

2. See Joe Jackson problem, p. 42.

I. Independent executor vs. Dependent administrator.

1. Executor has control of the estate & it’s under his judgment.

2. Dependent administrator needs ct approval for all decisions he makes regarding the estate (can be requested in will).

J. Estate planning problems (p. 50).

1. Remember that life insurance payouts go through the estate for purposes of the estate tax.

2. But, the owner of the policy should not be the deceased—if another owns it, it does not go through the estate for tax purposes.

K. Professional Responsibility.

1. Simpson v. Calivas (p. 59): P sued lawyer for K & neg b/c he said the will drafted did not reflect the intent of the testator. Will gave wife the “homestead;” son claims that it’s only the house, not the 100 acres & family business also on the land. Ct admitted some extrinsic E of intent, would not admit notes taken by the lawyer during consultation that said “house to wife & rem to son, land to son.” So, will not drafted according to intent of daddy. Son had to buy out mom’s LE for $400K.

a) Duty to beneficiaries (TORT): the attorney owes a duty to both the testator & the intended beneficiaries.

b) RULE: foreseeability of harm allows the beneficiary of a will to recover from a lawyer in the K b/t the lawyer & testator. Beneficiary must be a 3rd party beneficiary (almost a no-brainer, except in TX & other states).

c) RULE: a neg action can be maintained if ben shows duty & foreseeability.

d) TX RULE: beneficiaries can’t sue the lawyer for neg will drafting. BUT, the estate can sue the lawyer for poor estate planning.

2. Hotz v. Minyard (p. 66): daddy had 2 wills, 1 daughter didn’t know about. She got screwed by the 2nd will. She went to lawyer’s office to ask questions about the will (he was also her attny); he showed her the 2nd will & did not disclose the 1st. Issue: did the attny owe her a duty to show her the actual will? YES—she was his client also.

a) Beneficiary has no right to see the will w/out the testator’s permission.

b) Even though she has a prop right, it’s not vested—“mere expectancy.”

c) Lawyer’s rep of both daddy & daughter became improper (adverse) when the lawyer showed her the wrong will.

d) Her dgs are probably what she was represented to receive & what she did receive.

3. Barcelo v. Elliot (p. 65): D was preparing estate documents for P, P didn’t want her son to know that she was cutting him out of the trust. P gave specific instructions that the son was not to know. Trust went unfounded & cost them taxes, bens sued lawyer. RULE: no privity gives ben.’s no remedy.

III. INTESTACY—STATUTES OF DESCENT & DISTRIBUTION.

A. Intro.

1. Intestacy is the default position, for those w/out a will.

2. Reasons why people make wills:

a) Birth of a child;

b) Death of someone they know who didn’t have a will;

c) Going on a trip.

B. § 45—Community Prop/Disposition of whole community.

1. Protects the share of the surviving spouse.

2. Putitative spouse: one who reas believes that the person she married was free to marry (actually divorced). If the belief was reas, they can get a cut of the estate.