Beruflich Dokumente
Kultur Dokumente
Freedom of Disposition
1. Power to Transmit property at Death
2. Mechanics of Succession
a. Probate and Nonprobate property probate property is property that
passes through probate under the decedents will or by intestacy.
Nonprobate property is property that passes by way of a will substitute.
(see below)
i. Inter Vivos Trust
1. Property put in trust, trustee holds it for the benefit of one
or more beneficiaries.
2. Testementary trust passes through probate, but property in
I.V. trust during the decedents life passes in accordance
with the trust avoiding probate administration
ii. Life Insurance
iii. Pay-on-Death (POD) and Transfer-on-Death (TOD) Contracts
iv. Joint Tenancy
1. Decedents interest vanishes at death
b. Probate terminology
i. Personal representative a fiduciary who collects and inventories
the property of the decedent (to be used in this class in lieu of
executor/executrix, or other tor/-trixes)
ii. Testate her will names the person to execute the will (the
executor)
1. Devise real property to devisees and bequeath personal
property to legatees
iii. Intestate court names a representative (administrator)
iv. Probate is a type of court, or specialized court within the state
1. May have a subsystem of referees
2. Can be analogized to bankruptcy case judicially
supervised procedure
c. Probate administration serves 3 purposes 1) Evidence of transfer of title,
2) protects creditors, and 3) distributes the decedents property
i. Opening Probate and Choice of Law
1. Primary or domiciliary jurisdiction if where decedent
domiciled at death
2. Ancillary probate if real property is located in another
jurisdiction
ii. Common Form and Solemn Form Probate
1. Common form ex parte proceeding in which no notice or
process was issued
2. With a period of years, an interested party could file a
caveat, compelling probate of the will in solemn form
a. Notice was issued
iii. Formal and Informal Probate (difference is lack of notice)
a. Depends
i. SoF (1677) 3 witnesses
ii. Wills Act (1837) 2 witnesses
iii. UPC (1990) 2 witnesses and signatures
iv. UPC (rev.2008) 2 witnesses signatures or
notarization
ii. Functions of Formalities
1. Four policies
a. Evidentiary
b. Protective
c. Ritual
d. Channeling
2. Classification of Gratuitous Transfers
3. Substantial Compliance with the Wills Act
iii. Strict Compliance Rule
1. In re Groffman (1969)
2. Stevens v. Casdorph (1998)
a. F:
b. I: Whether a will is valid if it was not witnessed
properly by the witness?
c. R: Testamentary intent and a written instrument,
executed in a manner provided by statute, existing
concurrently, are essential to the creation of a valid
will
d. Meaning of Presence policy need more than a
gut feeling . Both old and new UPC have presence
requirement if someone is signing for the testator
i. Line of Sight
1. Can argue conscious presence. Case
law moving more toward a more
expansive definition
ii. Conscious Presence
1. Doesnt require you to see pen touch
paper and comprehends the act of
signing
iii. Uniform Probate Code 2-502(a)
e. Signature Requirement
i. Signature by Mark, with Assistance, or by
Another
ii. Order of signing
iii. Subscription and addition after signature
iv. Delayed attestation
v. Meaning of Writing and Video or Electronic
Wills
iv. Interested Witnesses and Purging Statutes
1. Estate of Morea (1996)
3. Components of a Will
a. Integration all papers present at the time of execution and are intended to
be part of the will are treated as part of the will
i. In re Estate of Rigby (1992)
1. F: Two pages presented for probate. The first appears to be
testamentary while the second is offered as part of the will.
2. I: Can the second page be treated as part of a valid
holographic will?
3. R:
b. Republication by Codocil
i. A validly executed will is treated as re-executed as of the date of
the codicil.
ii. Idea of updating the execution of the entire will
c. Incorporation by Reference
i. Existing Writings
1. Clark v. Greenhalge (1991)
a. F:
b. I:Whether a document may be incorporated by
reference into a will if the will refers to the
document even though it may not be in the same
form as stated in the will, but serves the same
function as the document stated in the will, and was
in existence at the time the codicils to the will were
created.
c. R: A document may be incorporated into a will by
reference if (1) the will makes reference to the
document, (2) the document existed at the time the
will was created, and (3) is the document
sufficiently identifiable in the will.
d. Court held yes.
2. Again, the writing must (1) predate the will and be (2)
clearly referenced in the will.
3. 2-513 list: Tangible Personal Property
a. Not available in all jurisdictions
d. Acts of independent significance
i. UPC 1990 (2 512) Events of independent significance
1. A will may dispose of property by reference to acts and
events that have significance apart from their effect upon
the dispositions made by the will, whether they occur
before or after the execution of the will or before or after
the testators death. The execution or revocation of another
individuals will is such an event.
Wills: Capacity and Contests
1. Capacity to make a will
a. Mental Capacity Traditional 4 part test: the testator must be capable of
knowing (1) the nature and extent of his or her property, (2) the natural
objects of his or her bounty [the people who take the testators estate], and
(3) the disposition that he or she is making of that property, and must be
capable of (4) relating these elements to one another and forming an
orderly desire regarding the disposition of the property.
i. In re Wrights Estate (1936)
1. F: An old man left an unusual will. Various witnesses
claimed he was of unsound mind will the will was
executed. The witnesses ranged from testimony devoid of
fact to those who gave specific details of quirks or unusual
behavior
2. I: Whether there is a good contest of this will by claiming
the testator was of unsound mind during the execution of
the will.
3. R: Legal presumption is always in favor of sanity,
especially after attestation by subscribing witnesses. It is
the duty of the witnesses to be satisfied of the testators
sanity before they subscribe the instrument (the latter
seems to be a stretch by the court)
4. Testamentary capacity cannot be destroyed by showing a
few isolated acts unless they directly bear upon and have
influenced the testamentary act.
5. C: The will was held to be valid
ii. Wilson v. Lane (2005)
1. F: the woman was showing signs of senile dementia.
2. I: Was there enough evidence of mental incapacity to
invalidate her will
3. R: The will standard is lower. There needs to be evidence
of mental incapacity during the execution of the will
b. Insane delusion held that idiots and persons of non-sane memory
could not make wills, but accepted as valid the will of the testator who met
the four elements, but was crazy.
To be considered insane - 1) False conception of reality, 2) will related
to the insanity as the causation element
i. In re Strittmaters Estate (1947)
1. F: Woman appeared to be a crazy man hater (may have
been justified, with appropriate facts) and left her estate to
the national woman party
2. I:
3. R:
ii. Breeden v. Stone (2000)
1. F: Man was paranoid about the government and went on a
drug binge. Executed a holographic will, killed his dog,
and then killed himself.
2. I:
3. R: Defined insanity belief w/ no existence in fact adhere
to it against all the evidence
4. However, the entire will does not fail if only part of it are
affected by delusion.
2. Undue Influence
a. What is undue influence? (Use both approaches when analyzing) First
question though, ask if the testator had free agency.
i. Influence exerted over the donor overcame the donors free will
and caused the donor to make a transfer that the donor would not
have made otherwise
1. Approach 1
a. Show confidential relationship
b. Suspicious circumstances
i. Unexpected disposition of the estate (i.e.
bulk of the estate going to a non-relative)
ii. Strange facts in the execution of the estate
c. Raising the prior two facts raises the presumption of
undue influence rebuttable presumption
2. Approach 2 - Inference of undue influence from
a. Donor was susceptible to undue influence
b. Alleged wrongdoer had opportunity to exert undue
influence
c. Alleged wrongdoer had a disposition to exert undue
influence,(Bad motive) AND
d. There was a result appearing to be the effect of the
undue influence (usually this means a benefit)
b. Undue influences in cases
i. Estate of Lakatosh (1995)
1. Suspicious circumstances offered in the Restatement 3d p.
290
ii. In re Estate of Reid (2002)
1. Cupit had many methods to try to get the property
(adoption, holographic will, having it deeded to him)
2. R: Look to the factors of a confidential relationship. Once
a confidential relationship is found, the burden shifts to the
beneficiary to disprove the presumption of undue influence
by clear and convincing evidence.
3. To over the presumption, proponents must show 1) good
faith on the part of the beneficiary, 2) grantors full
knowledge and deliberation of the consequences of her
actions, and 3) the grantors independent consent and
action
4. Independent counsel key aspect of rebutting the
presumption
iii. Lipper v. Weslow (1963)
1. Attempts to prevent will from being contested
a. Includes a no contest clause
b. Explanation about the disinheritance
b. Antilapse Statutes does not prevent lapse but rather substitute other
beneficiaries if certain requirements are met - UPC 2-605
(1) Who is covered? grandparent or lineal descendant of GP(notice spouse is
not covered)
(2) Substitute beneficiaries issue of the deceased relative
i. Presumed Intent for certain predeceasing devisees, the testator
would prefer a substitute gift to the devisees descendants rather
than for the gift to pass in accordance with the common law of
lapse
ii. Scope applies to a lapse devise only if the devisee bears the
particular relationship to the testator specified in the statute
1. Some apply to descendants
2. Others are broader, applying to grandparents or to all
kindred of the testator (occasionally to kindred of testators
spouse as well)
iii. Default rules
1. Designed to implement presumed intent, they are default
rules that yield to an expression of the testators actual
intent that is contrary to the statute
iv. Words of survivorship To A, if he survives me may
accidently draft out of antilapse statute, and maybe even out of
survive longer than 120 hrs
1. Ruotolo v. Tietjen (2006)
a. F: will contained the words if X survives me. TC
held the words as a contingency.
b. I: Did TC err in construing words as words of
survivorship
c. R: Antilapse statutes provide that there is a
presumption of intent of testator to avoid intestacy
or disinheritance
d. Court emphasizing the avoidance of passing
through intestacy. Words like if he survives me
are in many case surplusage
e. Burden is on the people who want the bequest to
lapse
c. Class Gifts
i. What is a class? problems: is this meant to be a group bequest?
Was the testator group minded? Difficulty mixing named
individuals and a group
1. 13.1 Class gift defined
2. 13.2 class gift distinguished
3. Dawson v. Yucus (1968)
a. F: Clause gave interest to two relatives. TC held it
was a gift to individuals. Contention was that the
bequest was a class gift.
in a marriage
1. Business trusts
a. For commercial deals organizing a mutual fund or
facilitating asset securitization
b. Not donative in purpose
c. Involve an exercise of freedom of contract, not freedom of
disposition
2. Revocable trusts
a. For nonprobate transfers
b. Subject to the control of the settlor
3. Irrevocable trusts
a. For ongoing fiduciary administration by a trustee in
accordance with settlors intent
b. Trustees powers
i. Permitting the settlor to incorporate by reference in the trust instrument all
or some enumerated powers, or
ii. Changing the default law to give trustees a statutory list of powers, such
as under the UTPA
c. Fiduciary Governance
2. Duty of Loyalty loyalty to beneficiary
a. Hartman v. Hartle (1923)
i. F: Part of the Real estate was sold to the wife of one of the executors
ii. R: a trustee cannot purchase from himself at his own sale, and that his
wife is subject to the same disability, unless leave so to do has been
previously obtained under an order of the court
b. In re Gleesons Will (1955)
i. F: Trustee was given land to hold and lease and leased the property to his
own partnership.
ii. R: General rule is that a trustee cannot deal in his individual capacity with
the trust property
No-Further-Inquiry Rule: If a trustee undertakes a transaction that involves self-dealing
or a conflict between the trustees fiduciary capacity and personal interests, good faith
and fairness are not enough to save a trustee from liability. No further inquiry is made,
trustees good faith and reasonableness of the transaction are irrelevant
Only defenses are:
Settlor authorized the particular self-dealing
The beneficiary consented after full disclosure
Trustee obtained judicial approval in advance
Categorical exceptions:
Most states allow corporate trustees usually allow a dept. to handle
transactions
Structural self-dealing
c. In re Rothko (1977)
i. F: executors of a will rapidly disposed of the estate, selling paintings at a
very reduced rate to a couple of companies (who then sold them to further
purchasers). At least one of the executors had a conflict of interest,
another was gaining a personal advantage, and the third was not stopping
the other two in their dealings with MAG and MNY
ii. There were procedural issues in not getting appraisal, moreover there was
no opportunity for appraisal (sale in 3 weeks)
1. Flooding the market and may depreciate the value
iii. The actors and coexecutors:
Reis
Stamos
Levine
CPA/ dir, Sec., Treas. MNY
not too successful
College prof.
financially artist
Consignment K with Rothko
Curry favor w/ MNY in order Went along with the others
for 10%
to sell his own paintings to
MNY
iv. R: a few rules from this case
1. The duty of loyalty imposed on the fiduciary prevents him from
accepting employment from a third party who is entering into a
business transaction with the trust
2. An executor who knows that his coexecutor is committing
breaches of trust and not only fails to exert efforts directed toward
prevention but accedes to them is legally accountable even though
he was acting on the advice of counsel
3. If the only breach of trust is selling for less than value (and the
person is authorized to sell), then the person is not chargeable with
the amount of any subsequent increase in value of the property.
4. If a trustee in breach of trust transfers trust property to a person
who takes with notice of breach of trust, and the transferee has
disposed of the propertyit seems proper to charge him with the
value at the time of the decree, since if it had not been for the
breach of trust the property would still have been a part of the trust
estate
3. Duty of Prudence
UTC 804
Trustee shall administer the trust as a prudent person would, by considering the
purposes, terms, distributional requirements, and other circumstances of the trust.
In satisfying this standard, the trustee shall exercise reasonable care, skill, and
caution.
a. Distribution Function
In a mandatory trust trustee must make specific distributions to an identified
beneficiary
In a discretionary trust trustee has discretion over when, to whom, or in what
amounts to make a distribution
Power to distributing income, or principle, or both
May be virtually unlimited, or very limited
Standards for forcing trustee range from good faith standard to reasonable
i. Discretionary Distribution
1. Marsman v. Nasca (1991)