Trusts and Estates Law Outline 2013

8/19/2019 Trusts and Estates Law Outline 2013

1/39

Wills/Testate EstateIntro to Wills, probate, standing and public policyPreliminary Issues and Testator Issues

In Terrorem ClausesPreliminary IssuesTestamentary Capacity, Mental CapacityUndue InfluenceFraud and Mistake

ocument E!ecution Issues

Formal "e#uirementsWitness IssuesE!ecution Mistakes/$ubstantial Compliance%olograp&ic Wills

ocument E!ecution'Multiple ocumentsIntegration (internal and e!ternal)"epublication*cts of Independent $ignificanceMemorandum disposition of personal property

Will Contracts"e+ocation"e+i+al"e+ocation by operation of la

*mbiguity and MistakeTestate P"-PE"T. issuesTestate E0EFICI*". issues

Intestate EstatesUPC II Intestacy

-t&er issues'testate and intestateE!pectancy interests

"elease*ssignment

isclaimersProtection mec&anisms

eneficiary misconduct-mitted c&ildrenFamily protectionsisin&erited spouse/augmented estate/electi+e s&are (co+ered later in trusts)

0on1Probate PropertyProbate *dministration

2e+el of court in+ol+ementP" issuesCreditors3 claims

T"U$T$Trust background/terminologyTrust re#uirementsMet&ods for creating a trustPrecatory language and distribution language

iscretionary trustsTrust propertyTrust beneficiaryTransfers and assignments of beneficial interests$elf1settled trustsTrustee1fiduciary issues$tatute of fraudsImplied trusts4 constructi+e and resulting trustsIndefinite beneficiaries/trust purposes/c&aritable trust purposes$ettlor3s creditors%onorary trustsuty to register a trustTrust reformation/termination


2/39

Wills/Testate Estate

Core Concepts:

- testate v. intestate

o TE$T*TE5 you die it& a ill6 I0TE$T*TE5 no ill or a certain pro+ision of t&e ill failed

1 escheat ($1C%E*T)o if e3+e gone t&roug& all of t&e processes to determine &o s&ould get your property and come

up it& 0- -0E7 t&en t&e estate escheats to t&e state in &ic& t&e estate is probatedo paid to a certain fund and &eld for 89 years in trust (after 89 yrs, if not claimed, goes to a state

education fund (in C-2-))1 basic will format (see Marilyn Monroe3s ill)

o some designation t&at t&is is your ill, section about &o is your family, specific gifts, t&en

:residuary clause;5 garbage disposal (:anyt&ing not disposed of in t&is ill7;'catc&all b/c it3simpossible to list E>

Uniform Probate Code (updated: UPC - adopted in C! in "##$%

1 UPC II is pretty liberal, a pretty good uniform la1 Criticism4 e!tremely liberal, ants people to die testate, ants testator3s intent to stick'ant to keep

t&e ill from being kicked out of court>>o Intestacy is o+er&elmingly different from t&e ay people really di+ide t&eir property in reality

&tandin' to contest a will

1 Hodel v. Irving 4 &a+e to &a+e standing to contest a ill1 T&e person c&allenging t&e ill must show that he has suffered some harm as a result of the will1 %I0T4 look for an e!pected or intended beneficiary

nheritance

- t&e rig&t to take property by de+ise or descent is t&e creature of t&e la and not a natural rig&t

urden of Proof:

1 the person contesting a will &as t&e burden of establis&ing lack of testamentary intent, capacity, undueinfluence, fraud, duress, mistake or re+ocation

The basic format of a )simple* will:96 esignation as a 2ast Will and Testament?86 $tatement of self, family, relations, etc6?@6 "eference to personal property memorandums, if applicable?A6 $pecific =ifts?B6 =eneral =ifts?6 "esiduary Clause / "esiduary =ifts?D6 $ignatures Witnesses


3/39

n Terrorem Clauses

1 :+o contest clauses;':if you contest mywill , you get nothing ;

o does not block contest by someone &o &as

probable cause to c&allenge t&e ill, courton3t orry about t&e clause

o ut if you3re ust contesting to be a pain in t&e butt, t&e clause ill operate and pre+ent a ill

contest>

o E!4 :if any beneficiary of my ill engages in any of t&e folloing actions, t&e rig&t of suc& beneficiary to take any interest gi+en to suc& beneficiary s&all be determined as it ould &a+e been determined &ad suc& beneficiary predeceased me it&out sur+i+ing issue6 Contests by aclaim of undue influence, fraud, menace, duress7;

Public Polic,

1 $trange conditions on gifts are -G so long as dont violate public polic,1 Bank of Portland v. Snodgrass put a condition t&at can &a+e all t&e money as long as you don3t

become a Cat&olic or married someone of t&e Cat&olic fait&o C&allenged as unconstitutional'ct said t&at t&is is not a restraint on marriage, t&e deceased as

free to do somet&ing like t&is>>

o Cases like t&is usually &old up'you ill &a+e clients &o ask for t&is>> *sk4 is t&is &o youant to be rememberedHH Create animosityHH

- +EE +&ET 0!U +TE+T 1& 1 &U&TTUTE 2! 0!U C3E+T&4

1 Conditions t&at don3t i+e it& public policy in+alidates t&at &ole gift>> (but not t&e &ole ill>>)'ifno residual clause, t&at gift ill ind up going t&roug& intestacy>>

- 5E&TUCT!+ !2 TE&T1T!& !W+ P!PET0:

o I ant my "embrant cremated and t&e as&es sprinkled on my gra+e (ort& a couple million )

o If t&e property is of social or monetary significance'Courts ill step in and say :no, not going

to let t&at &appen; society cannot assist t&e decendent3s economic aste> :* settlor may destroy &is on "embrandt6 ut &e cannot establis& a trust and order &is

trustees to destroy it6 $ociety ill not assist &im to aste economic assets6 $uc&

restraints on oners&ip rig&ts are not needed for t&e li+ing &o &a+e a natural desire to preser+e &at t&ey on, but t&e la must impose c&ecks on a decedents e!tra+aganceand eccentricity6; Eyerman v. Mercantile Trust Co.

o Can destroy your on property &ile ali+e, but t&e game c&anges &en you die>

1'eot& U6P6C6 and Colorado re#uire t&e Testator to be at least "6 ,ears of age6

7ental Capacit,Cunningham v. Stender and t&e Cunnin'ham Test (%*)

Cunnin'ham TE&T:* positi+e s&oing t&at at t&e time of e!ecuting t&e ill, t&e testator4

1 understands t&e nature of &is act? (t&at &e/s&e is signing a WI22)1 knos t&e e!tent of &is property?1 understands t&e proposed testamentary disposition?1 knos t&e natural obects of &is bounty? (&o your blood relati+es are) 1+5

Testator ssues1'e

7ental Capacit,+ot &ufferin' from nsane 5elusions

+ot &ub8ect to Undue nfluence+o 2raud or 7ista9e


4/39

1 t&e ill represents &is is&es6 (mostly comes into play in undue influence or fraudcases)

.ou MU$T establis& t&e Testamentary Capacity elements 1T TE T7E TE W33 & E;ECUTE5>

Haynes v. $irst %ational Bank - Confidential elationship B 1ctive Participation EUTT13E PE&U7PT!+ !2 U


5/39

- Confidential relations&ipo $ome kind of relations&ip'li+ing toget&er, married, taking care of ailing parent7o %ere4 btn T and &er c&ild, also btn t&e atty (ill benefits &is client1 t&e daug&ter1 &a+e to get

consent to do somet&ing like t&is>>)- *cti+e Participation

o *cti+ely in+ol+ed in some ay it& t&e preparation and signing of t&e illo &ere4 daug&ter W*. T-- in+ol+ed, as around &er all t&e time (lots of oppty to influence &er)

- "ebuttable presumption of UI4o %o could it &a+e been rebuttedHH E+idence t&at mom anted to make t&ese c&anges as a ay

of t&anking &er daug&ter for taking care of &er - "EUTTI0= T%E P"E$UMPTI-04o Pretty lo t&res&old (&o strong1illed t&e T as7)o If presumption is rebutted, c&allenger still &as t&e ultimate burden of persuasion>>


6/39

+o 2raud and 7ista9e

Elements of 2raud1 False statements of material fact1 Gnon to be false by t&e party making t&e statement?1 Made it& intention of decei+ing testator - Causes the testator to act in reliance on the

statement.

= 9inds of fraud:- fraud in the inducement:

o $omeone fraudulently induces t&e testator to make a ill6 Testator kne s&e as signing a ill, but as fraudulently induced into making t&e ill (if you ill your residuary estate to me, I promise to take care of you for t&e rest of your dying days666 ill is signed, and t&e beneficiarydoes not make good on t&e promise)6

o Essentially, a bad promise (I3ll do t&is if you3ll put me in your ill)- fraud in the eDecution:

o (fraud in t&e factum)4 Testator as tricked into signing somet&ing s&e did not kno as a ill Lor cases &ere one ill is substituted for anot&er6

7&T1@E

uestions to as9:- was this a )harmless error*>- would reformin' the will tamper with the Testators intent>

Issue4 can t&e mistake be corrected or o+erlooked it&out c&anging t&e Testator3s intentHH1 is it &armless error, or ill t&e court be tampering it& T3s intentHH1 Modern trend4 courts more likely to o+erlook minor errors as long as not messing it& intent (eg6 typos)

173E&& E! 4 &armless if reforming it ould 0-T c&ange t&e testator3s intent (if making t&ec&ange ould c&ange t&e testator3s intent't&en t&ere is a problem7)

Matter of Snide41 Mr Mrs, bot& &a+e identical ills Mr dies, Mrs tries to probate &is ill, but t&ey mistakenly

e!ecuted eac& ot&er3s ills (signed t&e rong t&ing)1 %usband Wife &ad :Mutual Wills;

o aka :reciprocal ills;? aka :I lo+e you ills;

1 W&at is t&e potential problem it& a court reforming a ill to correct a mistakeHH1 Concept of :&armless error;

o %armless to reform t&is and pretend t&at t&e signatures are sapped (ould be a different

ballgame if t&ey eren3t E*CT2. t&e same't&e effect ill be t&e same if t&e ill is reformedt&is ay>)

o Aenerall, this is a harmless error as lon' as the wills are DENTC!"


7/39

Will EDecutions

&A+? 1TTE&T? 1TTE&T

(T signs, and 8 itnesses sign1 Ws &a+e to see t&eT sign t&e ill)

! 1C@+!W3E5AE? 1TTE&T? 1TTE&T

(:I acknoledge t&at t&is is my ill, please attestt&at I &a+e signed it;)

2ormal eFuirements:- UPC: G=-$H=

o In riting?o $igned by t&e testator or in the testators name b, some other individual in the testators

conscious presence and b, the testators direction? ando $igned by at least to indi+iduals, eac& of &om signed within a reasonable time after &e or

s&e itnessed eit&er t&e signing of t&e ill or the testators ac9nowled'ement of thatsi'nature or ac9nowled'ement of the will.

o Intent t&at t&e document constitute t&e T3s ill can be establis&ed by e!trinsic e+idence,including, for &olograp&ic ills, portions of t&e document t&at are not in t&e T3s &andriting6

- Colorado: C& G"$-""-$H=o In riting?o $igned by t&e testator, or in the testatorIs name b, some other individual in the testatorIs

conscious presence and b, the testatorIs direction? and

Colorado la states t&at Nconscious presenceN re#uires p&ysical pro!imity to t&e testator but not necessarily it&in testatorOs line of sig&t6

o $igned by at least to indi+iduals, either prior to or after the testatorIs death, each of whomsi'ned within a reasonable time after he or she witnessed either the testatorIs si'nin' of thewill as described in para'raph (b% of this subsection ("% or the testatorIs ac9nowled'ment oft&at signature or acknoledgment of t&e ill6

o ntent that the document constitute the testatorIs will can be establis&ed by e!trinsice+idence, including, for &olograp&ic ills, portions of t&e document t&at are not in t&e testatorOs&andriting6

TE 522EE+CE: )prior to ! 12TE Ts death*1 orks if client drops dead in t&e middle of e!ecution1 W3s ob is basically to be able to recall t&e e+ents, gi+e testimony about problems it& e!ecution,

capacity, etc1 2onger t&e gap in time, orse recall'plays into :rsbl time;1 T%I$ IFFE"E0CE I$


8/39

WT+E&& &&UE&: 1 witness 7U&T witness the si'nin' or ac9nowled'ement of the will- no eDceptions4

". 5id the W witness the si'nature or ac9nowled'ement>=. &patial relationship of Ws to T> (witness )tests*%

Witness Tests: (for t&e protection of t&e testator1 C2 tests, still around in C-2-)"EMEME"4 T&ese tests apply to t&e T3s relations&ip to t&e Ws, not t&e ot&er ay around> (Could t&e T,using all senses, kno t&e Ws ere signing as itnessesH)

1 )3ine of &i'ht Test* (most traditional) (most strict, dying out t&e fastest)o W in T3s line of sig&t &en t&e W signs as a itness>> T has to directl, see W si'n as

witnesses>> (linking is -G, sneeing -G) (0ot&ing blocking &is +ie, C-U2 &e &a+e seent&e Ws sign)

96 %ot t&at t&e W &ad direct line of sig&t &en t&e T signedo $ort of anti1fraud'so T can see t&at e!tra pages &a+en3t been added, ot&er ill substituted7 etc

1 )Presence Test* (less traditional) (+ague, open to argument) (C-2->>)o %a+e to at least be :in t&e presence; of t&e itnesses, so t&e T rsbly knos t&at t&e Ws are

itnessing &is/&er ill96 0ot dealing it& lines of sig&t

o If in separate rooms, t&en not present in t&e same general area

o *2W*.$ fails in t&e courtso Waiting to be seen4 +ideo or eb conferencing>

96 2ine of sig&tH 0o6 PresenceH Probably not6 Conscious presenceHH Closest1 only problem &ere is don3t kno &at is going on outside t&e picture t&e W3s can see (is t&erea guy &olding a gun to t&e T3s &ead saying :sign it or I3ll s&oot you;)1 Ws can3t seee+eryt&ing t&at as going on> 0o e+idence to rebut allegations of duress7

•*2$- problems it& W3s testimony in t&e e+ent of contest1 couldn3t &ear t&e T+ery ell, fuy picture7t&is stuff doesn3t bode ell for Witnessing>>

-T%E" W I$$UE$4I0 C-2- (and under UPC)

1 W must be 'enerall, competent (recall, ability to obser+e e+ents1 remember t&e W3s function is torecall t&ese e+ents in t&e future if t&ere is any problem)

- 1+5 interested witness 5!E&+T invalidate the will or an, provision of it

o Can of orms4 undue influence claim> T&is makes t&e interested W acti+ely in+ol+ed in t&e ill

preparationo It is 0-T good practice to &a+e interested Ws (if you can find, better Ws t&at *"E disinterested)


9/39

Burns v. &damson

1 8 Ws, one signed prior to T signing ill, t&en left b/f T actually signed1 Problem4 W did not itness t&e T signing>> iggest problem &ere>>1 "ERUI"EME0T$4

o W must itness t&e T signing

o $igned by at least 8 indi+, eac& of &om itnessed t&e signature /in a rsbl time

1 WI22 F*I2E'couldn3t be admitted to probate1 died intestate

Estate of "e'er 1 t&e :dri+e t&roug&; ill1 friend dri+es guy to t&e dri+e t&roug& of t&e small1ton bank, lets t&e tellers kno &at3s going on1 $trike 94 Ws didn3t see &im sign1 $trike 84 t&e Ws signed belo t&e le+el of t&e indosill (couldn3t see eit&er b/c &e as in t&e car

instead of in t&e bank)1 Can3t get *0. of t&e @ tests'

o 2ine of sig&tH arrier'couldn3t see t&at t&ey ere signing %I$ WI22 t&at &e ust signed (could

&a+e been a big sitc&erooo PresenceHH T as in t&e car, t&en open space, t&en t&e Ws are inside t&e building be&ind bullet1

proof glass>o Conscious presenceH Couldn3t see, &ear, smell, taste any of it>>

Estate of "atts

1 @ Wso $ome states re#uire @ Ws, in states t&at re#uire 8 Ws, t&e e!tra one is called a supernumerary W

96 $-ME states4 t&e @rd can ser+e as W if one person doesn3t #ualify as an -G W, somestates not

1 *ll @ Ws ere beneficiaries, and 8 ere co1personal representati+es*22 WE"E I0TE"E$TE Ws>

1 End result'b/c -T% of &is residuary clauses ere purged b/c of interested Ws, &e died intestate>

The 2lawed EDecution


10/39

olo'raphic Wills

If :formal; re#uirements ere not met, can t&e documents be probated as a %olograp&ic WillH =enerally, a&olograp&ic ill is in t&e testator3s on &andriting and signed by t&e testator L t&ere is no itnessre#uirement6

!3!A1PC W33& must be:- in writin'- si'ned b, the Testator- 7aterial portions in Testators handwritin'

o (date, introductory comments are 0-T material)o T&is is &o get around pre1printed form issue

- Testamentar, ntento (e!trinsic e+idence)

- alid whether or not its witnessedo (less risk of forgery if in T3s on &andriting)

What words are material>>>

"HHK holo'raphic1 not an issue (back in t&e time before typeriters)o Used to be it %* to be entirely &andritten'people &o rote on letter&ead, it asn3t

probatable>,brid wills4 I= I$$UE (&ybrid ills are preprinted forms it& blanks filled in by t&e testator)

96 strike all preprinted ords (to see &at is material)a6 if can s&o testamentary dispositions after t&e preprinted ords are gone, t&en it3s -G

86 Establis& Testamentary ispositiona6 look for testamentary disposition (gifts>>) b6 can3t fudge testamentary dispositions b/c cts don3t ant to try to get into t&e T3s &ead to try to

determine &et&er somet&ing as a gift (ill go t&ere to find testamentary intent'but fordispositions, you3re stuck it& t&e A corners of t&e doc>)

@6 $TI22 &a+e to pro+e testamentary intent (t&is is &ere all of t&e preprinted stuff you struck before getsto come back in1 e!trinsic e+idence)

a6 C*0 go outside A corners of t&e doc for testamentary intent (but 0-T testamentary disposition)

1+130&& if cant meet this? cant be probated4496 in ritingHH86 signed by t&e testatorH@6 appropriately itnessedHA6 substantial complianceH (not going to sol+e t&e lack of itnesses)B6 Can it be probated as a &olograp&ic illH

a6 In riting b6 $igned by t&e testator c6 Material portions in testator3s &andritingd6 Testamentary intent


11/39

+TEA1T!+Estate Plan nte'ration: because its a rare situation where there is onl, one will out thereL

E!ternal Integration41 putting all t&e ills, codicils, and ot&er testamentary documents toget&er for probate

Internal Integration41 does t&e probated document contain all pages, are all pages aut&entic, etcH

o W&at pages/parts/components constitute t&e entire illH

o 2ook for p&ysical connection (stapled toget&er, page numbers, initials of Ws and T on eac& page7)o Gey4 all papers present at t&e time of t&e e!ecution, intended to be part of t&e ill, are integrated

into t&e illo %a+e client and Ws initial eac& page of t&e ill

96 T s&ould initial all pages'standard practice for t&e T and bot& Ws to initial eac& page oft&e ill'says t&e T read eac& page'fraud pre+ention

5ocument ssues

5ocument ssues:

- republishin'- incorporation b, reference- acts of independent si'nificance- memorandum disposition of personal

propert,

EPU3C1T!+ re-eDecutin' the will so that its effective %ate is the %ate of the new will or co%icil

T&e typical ay C!5C3

*not&er ay e-EDecution (sign, attest, attest'or meeting &olograp&ic re#uirements again)1 :I redeclare and republis& my ill6;1 W%*T T%I$ ME*0$4

o Effective date of !A+13 will is the date of the codicil/re-eDecution

Wh, republish>>

1 Testator e!ecution issueso Ruestions about capacit, at first e!ecution

$ince you3re republis&ing, t&e only capacity t&at matters is t&e capacity at t&e date of

republis&ing'eit&er by codicil or re1e!ecution (sign, attest, attest'make sure to put t&edate so t&ere is no ambiguity about t&e 8 different sets of signatures

o Ruestions of U or fraud

1 :Procedurally; in+alid e!ecutions

C*03T republis& t&ese (b/c ne+er really publis&ed in t&e first place'can3t re1 )o Can ,ou republish an invalidl, eDecuted will b, codicil>> +!44

* ill t&at procedurally, on its face is in+alid (lacking a itness'missing an element)

can3t republis& somet&ing t&at doesn3t e+en legally e!ist in t&e first place>> C*03T"EPU2I$% T%I$ . C-ICI2>>>

"epublication GI22$ undue influence, and ot&er testator issues in t&e first document'can3t be broug&t upafter a republication>>


12/39

ncorporation b, eference

recognies t&at a properly e&ecute% will may, by appropriate reference, incorporate t&e terms of an e!trinsicdocument or riting, e+en t&oug& t&at ot&er document as not properly e!ecuted and is not ot&erisetestamentary in nature6 -+er &alf of t&e states &a+e codified t&is doctrine6

0ou must have the followin' to incorporate b, reference:

- ntent to incorporateM

- The will must describe a separate document / writin'M

- The incorporated document must eDist when the will is eDecuted

o words on it must eDist N not 8ust the actual document N noteboo9 eDampleM

- The underl,in' will itself must be valid.

Incorporation by reference can sa+e you a lot of time7UT you can3t c&ange t&em after t&e ill is e!ecuted>>

1 * c&ange ould mean t&e doc as not in e!istence &en t&e ill as ritten (and ould destroy it>>)

IF can3t pro+e doc e!isted at t&e time t&e ill as ritten F-"=ET IT>>1 %as to be credible e+idence in order to incorporate by reference (&as to be a date or some ot&er

e+idence)TE !+30 T+A 0!U C1++!T +C!P!1TE & 1 TE&T17E+T10 5!CU7E+T44

1 so if trying to incorporate a &ybrid ill'in order to do t&is &a+e to s&o t&at it3s not a testamentary doc 't&at it fails t&e test for &ybrid ills1 not a +alid testamentary document

7emorandum 5isposition of Personal Propert,

=i+es T t&e poer to create memos to deal -02. it& personal property (no real property, no cas&) ill &as to actually refer to t&is poer'if it doesn3t, you can3t use it>> (people eit&er lo+e it or &ate it)

7emo 5isp of Pers Prop

o &i'ned b, the testator

o 5escribe the items and devisees with rsbl certaint,

o 7a, or ma, not eDist at time of the writin'

o Can be altered after will preparation

o 7a, be a writin' that has absolutel, no si'nificance apart from its effect on the

dispositions made to will

o W33 7U&T E2E T! T& P!WE

o 7U&T E )tan'ible personal propert,* C1+T 5&P!&E !2 C1& T& W1044

ifference btn Memo Incorp by ref41 memo is more fle!ible, but &as its limitations1 incorp1 doc &as to e!ist at t&e time t&e ill is e!ecuted

1 -T%'can -02. &a+e t&ese if you &a+e a >

IF memo conflicts it& disposition in t&e ill 8 c&oices1 memo is not testamentary in nature, so t&e ill trumps>1 IF t&ere is an argument t&at t&e sticky1note is a codicil, t&en maybe it3s a republication> (amendment>>

$ticky1note ins on t&is one>> %a+e to s&o intent to amend7)

E!ample memorandum disposition4:I gi+e all my &ouse&old goods, and personal effects, toget&er it& any insurance policies co+ering suc& property and claims under suc& policies, in accor%ance with any memoran%um %irecting the%isposition of such property signe% $y me or in my han%writing which may leave at my %eath.'


13/39

1cts of ndependent &i'nificance

1 a ill t&at is making a gift dependent on someone else (or t&e testator3s actions)- t,pical eDample: 'ift )to all of the emplo,ees emplo,ed in m, business at the time of m, death*

o if &iring firing is entirely inde(endent of the T , t&en t&is is fine

o UT if T t&inks an employee is a erk, so fires t&em b/c don3t ant t&em to s&are in &er estate

't&en t&e T3s actions are TE$T*ME0T*". in naturef acts have testamentar, si'nificance? then it voids the 'ift to the emplo,ees44

T1+T& TE W!3E A2T444

Will states :auto I on at my deat& ill go to my nep&e Mic&ael;'at time of e!ecution oned a Keep, &endied it as a "ange "o+er

1 0o big deal if ust a ne car purc&ase UT if it3s moti+ated by anting to gi+e more to yournep&e, t&en it had testamentar, si'nificance and !5& TE A2T

:I gi+e 9QQQ to e+ery person &o can s&o my personal representati+e a letter ritten to t&em by my sisterstating t&at &e or s&e ill recei+e 9QQQ &en my ill is probated;

1 t&e letters &a+e testamentary significance so t&e gifts are )1 &o &as accessH) -pportunity for fraudH

o %mm I3m going to get t&e contents of t&is bo!/draer/c&est'so I start putting +aluables in it

o 2 TEE & 21U5 even if its the testator doin' it


14/39

W33 C!+T1CT& (contracts not to re+oke, amend, etc6)t&ey create a contract to 0-T re+oke your ill'to 0-T c&ange your ill>(Prof not bi' on these


15/39

E!C1T!+* ill is a dispositi+e instrument -02. opon T3s deat& UT a ill can be a re+ocation instrument (can actto re+oke anot&er testamentary document)

"e+ocation by P&ysical *ct (can be t&e subect of some ambiguity'not t&e preferred met&od>>)( )Burn, tear, o$literate or %estroy *T+ NTENT TO REO-E'

o %a+e to &a+e I0TE0T>> on3t forget I0TE0T>>

o

%*


16/39

=. a court order or

O. a contract relatin' to the division of the marital estate made between divorced

individuals before or after the marria'e? divorce or annulment

- 2elonious and ntentional 9illin' of the T:

o issue4 figuring out &at under P"-*TE la constitutes felonious intentional killing suc&

t&at t&e killer is disin&eritedo 1E T! 1E:

EDhaustion of all appeal ri'hts

Conviction? 'uilt, or nolo contendere plea

Court of competent 8urisdiction determines that the elements of a felonious 9illin'

were established b, a PEP!+5E1+CE !2 TE E5E+CE

eld up b/c not ta9in' awa, the sla,ers freedom? 8ust their ri'ht to inherit

from the deceased

o E!4 -K $impson'ac#uitted, but in ci+il court found to be guilty> *c#uitted, but couldn3t in&erit

any of 0icole3s estateo Weird t&ing if do establis& felonious/intentional killing, 0- CUTTI0= -FF T%E GI22E"3$

2I0E (killer3s kids can still in&erit from t&e deceased)

E13 !2 1 E!@E5 W331 re+i+al4 re+i+ing ills t&at &a+e been re+oked by -T%E" testamentary docs (not t&e tear, obliterate ,destroy stuff)

1 $tatute4 "e+i+al of a "e+oked Will C"$ S 9B1991BQ (pre+ious ill 5 9, subse#uent ill 5 8) (learnt&e first 8)

o Part ": f second will E+TE30 revo9es previous will

f later on T comes bac9 and revo9es the =nd will


17/39

Testate P!PET0 &&UE&Propert, Classifications

- &pecific Aift- Aeneral Aift- 5emonstrative Aift- esiduar,

1demption- 1demption b, eDtinction

- 1demption b, satisfaction

1batement

EDoneration

Propert, classifications.

• &pecific 'ift6 $pecific property, identifiable and distinguis&able from t&e rest of t&e testator3s estate6

• Aeneral 'ift6 =ift of a certain amount or #uantity payable from general assets of t&e estate and does not

re#uire deli+ery of any particular property or payment from any designated source

o typically a sum of money, or a formula to determine V or dollar amount from estate

o e!4 :8Qk to an;

• 5emonstrative 'ift6 =ift of a specified amount of #uantity to be paid from a particular source and, if

necessary, paid from t&e general assets of t&e estate6

o a little eird7 look like general gifts, but payable from a specific source -02. *PP2IE$

T- M-0E.

o e!4 :8Qk from my sa+ings account at Wells Fargo to an;

o Geep in mind'if t&at sa+ings acct at WF only &as a balance of 9k &ate+er in t&e account

is a specific gift, &ate+er is left to make up t&e difference (8k) is a general gift

• esiduar,6 =ift of &at remains after all ot&er dispositions &a+e been satisfied6

o W&ate+er passes t&roug& t&e residuary clause

15E7PT!+ *pplies -02. specific gifts6*demption issues arise &en a specific gift was sol% or %estroye% prior to the testators %eath6

id t&at particular gift adeem (i6e6, is it e!tinguis&ed), or &as testator s&on a contrary intentH U6P6C6 &as a mild presumption against ademption'attempts to a+oid &ere it ould frustrate T3s intent

Colorado la does not fa+or ademption6

1demption b, EDtinction:

The propert, has 'one awa,


18/39

part of the estate and passes that wa,

1demption b, EDtinction Colo &tat "$-""-QHQ (tracks t&e UPC) property as destroyed or sold

1 beneficiary of &PEC2C A2T& (+!T 'eneral 'ifts44% ill recei+e t&e property T ac#uired as areplacement

- 5evisee of specific propert, has a ri'ht to:

o The prop devised to them that is in the estate


19/39

1 for abatement only4 t&e money in t&e specific fund is treated as a specific gift, e+eryt&ing else to makeup t&e gift (if t&ere is not enoug& money in t&e account to satisfy t&e gift amount) is treated as a generalgift

T C*0 T"UMP T%E -"E" P"-PE"T. I$ $-2 I0 T%E WI22>> Can specifically say :general abates

first, specific second, residuary t&ird7;

E;!+E1T!+ if you3re a de+isee, you take subect to any security interest in t&e property'still &a+e to

make t&e payments (regardless of &at t&e ill says about paying debts)1 you get t&e &ouse, and a certain amount of time to finance it yourself -" $E22 IT>> (don3t get t&e

benefit of T3s credit score>)

E+E2C10 &&UE&

- &urvivorship

- 1lternate Aifts

- Class Aifts

- elationship Test

- 1nti-3apse- +TE&T1C0

31P&E if t&e beneficiary dies before t&e T, t&e gift to t&at beneficiary &as 2*P$E1 eirdness4 not ust looking at t&e moment of T3s deat&'&a+e to look (by statute>) up to 98Q &ours (B

days) after T dieso if beneficiary dies it&in 98Q &ours of t&e T, beneficiary is determined to &a+e predeceased T

o T can name &is/&er on sur+i+ors&ip period, as long as it3s reasonable (can c&oose to &a+e 0-

sur+i+ors&ip re#uirement, but can3t be 8 years)

&U!&P4

1 Must sur+i+e t&e T by at least 98Q &ours>> If not, determined to &a+e predeceased>1 dealing / someone &o &asn3t sur+i+ed t&e T'C- re#uires :clear con+incing e+idence; of sur+i+al

o keeping someone ali+e on life support so t&ey make it t&e 98Q &ours is -G

13TE+1TE A2T&:

( vali% alternate gift !"*!1S trumps anti(lapse

o e!4 :to Koe, but if &e does not sur+i+e me, t&is gift s&all lapse and pass to Kane6;

Kane gets t&e gift without applying anti1lapse

o Gey'make it


20/39

o To my7 issue, descendants, &eirs of my body, ne!t of kin, relati+es, family

T&ese are not classes b/c t&ese terms are defined in intestacy part of probate code1 so

&en e see t&is, e default to intestacy definitions and go from t&ere> -02. ay t&is could be a class is if T I0TE0E t&em to be>> (To my relati+es, and I

intend t&is to be a class)o To $usan, =ail Claire (t&is is 0-T a class e+en t&oug& t&is is a list of all of t&e T3s c&ildren)

2isting names GI22$ * C2*$$

C2*$$ C2-$I0= 1 :"ule of Con+enience;'mostly going to follo t&is one

o close t&e class of :c&ildren of my friend an;'an3s c&ildren at t&e time t&e estate is closed

1 :0atural Closing; of t&e classo $ince an could t&eoretically reproduce fore+er (fertile octogenarian) t&e class :naturally

closes; &en an dies

W&o is E;C3U5E5 from a classH1 terms of relations&ip t&at - 0-T re#uire any differentiation by blood are EC2UE (basically

e!cludes relations&ips by affinity (ie4 by marriage)o

relations&ip by marriage'e!4 Uncle3s ife4 you call &er :aunt; but for t&is purpose, s&e3s noto be careful it& t&e terms *unt, Uncle, 0iece, 0ep&e

1 step1siblings only related by *FFI0IT. (marriage)'like t&e rady unc&1 &a+e to &a+e relations&ip

by blood (e+en if only &alf1blood1 see belo)

W&o is +C3U5E5 in a classH1 no differentiation by &alf1blood relations&ip

o brot&er, sister, niece, nep&e (half($rother is inclu%e% in class of )$rothers', $ut step($rother

woul% NOT $e inclu%e% )1 %a+e to ask4 are any of your brot&ers &alf1brot&ers or step1brot&ersH If step1brot&ers, &a+e to make sure

to put t&em in t&ere, because t&ey on3t automatically be in t&e group :brot&ers;

1nother t,pe of class 'ift T is gi+ing a gift to another persons chil%ren (+ery common>)1 T *3s c&ildren4 C&ildren is a class>>

1 8 t&ings to t&ink about4 (different rules)o +atural born children of 1

0ot considered a c&ild for t&is class unless, as a minor, li+ed it& * as a regular member

of t&e &ouse&old -" 2i+ed as a reg member of t&e &ouse&old of *3s parent, *3s sister, *3s spouse, *3s brot&er

or *3s sur+i+ing spouse

• so'if * fat&ered a c&ild and ne+er li+ed it& *, or *3s named relations'can3t

pull t&em in>> If you see a c&ild t&at doesn3t fit t&e norm &ere1 arnings s&ould

go off'may &a+e a class problem> More ays to get nat born kids into t&e class

o 1dopted children of 1

%*$ T- E4 as a minor (eit&er before or after adoption) &ad to li+e as a regular member

of *3s &ouse&old +! other wa, 'doesn3t ork if li+ed it& *3s parent, sibling, etc7

o When ,ou see a 'ift li9e this:

*sk for E*C% C%I2 in t&e class'nat born or adoptedH do t&ey meet t&e testsH

-02. if you &a+e a gift to $-ME-0E E2$E3$ C%I2"E0 (don3t do t&is for gift to T3s

on kids>)


21/39

E31T!+&P TE&T

( s the %evisee the Ts 2R!ND0!RENT OR a )lineal %escen%ant of the Ts gran%parent'33

o If .E$'t&en * &as met t&e relations&ip test, so t&e gift ill #ualify for application of anti1lapse

o IF 0-'0- *0TI12*P$E>>

1 IF .E$ t&en anti1lapse may create a substitute gift if t&e de+isee left lineal descendants to &om t&e

gift could pass

Whole idea of anti-lapse


22/39

213E5 +!+-C31&& A2T& t&e gift lapses and passes t&roug& t&e residuary estate'if t&ere is noresiduary clause, t&is gift ill pass t&roug& intestacy it& all t&e ot&er failed gifts

failed residuary gifts4

o if residuary estate is de+ised to 8 or more people (and 0- -0E meets t&e :relations&ip test;)

t&e sur+i+ing residuary takers proportionately s&are t&e gift (modern, maority rule)

o -" (minority rule) residuary gift passes t&roug& intestacy

+TE&T1C0

&tep ": &hare of &urvivin' &pouse

&tep =: &hare of !thers

T&is determines &o muc& goes to t&e $$, t&en &o muc&gets split among t&e :ot&ers;'to figure out &o muc& goes tot&e :ot&ers; &a+e to do intestacy trees>>

Terms41 heir4 persons, including t&e sur+i+ing spouse, &o are entitled under t&e statutes of intestate succession

to t&e property of a decedento *0.-0E entitled to take under intestacy'+ery broad

o to be tec&nically correct1 no &eirs &ile you3re ali+e1 doesn3t kick in until you die (&ile you3reali+e, t&ey3re called :&eir apparent;

o &eir, issue descendants can and - o+erlap

1 issue


23/39

1 Posthumous heirs 'c&ild concei+ed before decedent passed aay (no, can be concei+ed *FTE" b/cof froen sperm issue)

o Treated as &eir, treated as lineal descendant'subect to 98Q &our sur+i+al

o Geep froen sperm issue in back of your &ead'really t&ros a renc& in t&ings, on3t go o+er

it too muc&

$EE T%E $T*TUTE T- ETE"MI0E W%- =ET$ W%*T>> (t&e &andout it& t&e table'ne!t page>)


24/39

1dvancements4 remember4 *d+ancements go it& I0TE$T*C. (ademption goes it& testate estates) Ine+itably, &e3ll gi+e a #uestion t&at is 0-T * %a+e to &a+e a +alid

ad+ancement to e+en go t&roug& t&is analysis (e!4 ga+e t&e money as a loan instead of a gift7) 0- affirmati+e duty to pay back amounts t&at are o+er ad+anced't&ey ust don3t take from t&e estate b/c

t&ey3+e been sufficiently compensated &ile t&e T as ali+e

2! 151+CE7E+T& bac9 to 'ifts

- O elements of a 'ift

o intent b, the donoro deliver, (can be constructive deliver,%

o acceptance

EFI0ITI-05 an irrevocable? unconditional? inter-vivos 'ift intended to be advanced a'ainst an heirspotential intestate share

- Aift is considered an advancement !+30 2:

o T 5eclared in a contemporaneous writin' that 'ift intended to be an advancement ! heir

ac9nowled'ed this in writin'

$TI22 &a+e to do796 s&are of sur+i+ing spouse86 s&are of ot&ers

a. this is where advancements are comin' in444

b. take &at is left 12TE $$3s s&are, and t&en di+ide up t&e "EM*I0I0= estate among t&e restof t&e &eirs (if t&ere are ad+ancements)

&tep "4 &otc&pot 5 total estate J +alid ad+ancements1 e!4

o Estate 98Q,QQQ

o C9 ad+ Q,QQQ

o C8 ad+ 9Q,QQQ

o C@ ad+ Q

%otc&pot5 89Q,QQQ

&tep =4 di+ide t&e %otc&pot e+enly among t&e c&ildren, and subtract t&e ad+ancements gi+en to eac& c&ild1 e!4 &otc&pot / @ kids5 DQ,QQQ eac&

C9 C8 C@DQ,QQQ DQ,QQQ DQ,QQQ(Q,QQQ) (9Q,QQQ) (Q)19Q,QQQ Q,QQQ DQ,QQQ

&tep O4 If any c&ild &as a 0E=*TI)


25/39

151+CE7E+T& v. 15E7PT!+

ntestate Testate

1dvancement4 trying to e#ualie out t&e estate amongt&e intestate &eirs'&en &a+e a potentialad+ancement, &a+e to figure it out to keep t&ings ase#ual as possible

R4 is t&ere a riting, or is t&ere 0-T a riting

1demption4 property t&at is 0-T T%E"E at deat&(for &ate+er reason1 destroyed, replaced)

*demption by satisfaction4 property 0-T T%E"E b/cit as already gifted aay (inter1+i+os gift>)

1 R4 did t&e T intend t&at t&e gift adeem becauseof t&e inter1+i+os gift


26/39

elease? 1ssi'nment J 5isclaimers

E;PECT1+C0 +TEE&T: somet&ing you don3t &a+e, somet&ing you3d e!pect in t&e future1 a li+ing person &as no :&eirs;, only :&eirs apparent;1 &eir apparent &as no legally recognied interest in a li+ing person3s property

o -02. &a+e e!pectancy interest> (t&is interest could +aporie for a million different reasons>)'

0-T 1 E!pectancy is a prospect of a succession t&at may +anis& if t&e potential &eir dies or is disin&erited

1 E!pectancy may be released to t&e source (decedent to be) or assigned to a @rd party

E3E1&E: (this one is much more common%

1 .ou are releasing your e!pectancy *CG T- &ile is still ali+e1 Must &a+e consideration, must be fair and ade#uate consideration (factually dependent>>)1 If C9 does a +alid release, it cuts off his issue too>> Cuts t&e line off at t&e source> (so =C9 ill get

not&ing>)1 "eleases not limited to intestacy>

1&&A+7E+T41 Transfer of e!pectancy to a t&ird party for +alid, fair ade#uate consideration

o Instead of releasing back to t&e , does an *$$I=0ME0T to a t&ird party *$$I=0EE1 *ssignee takes a %I=E "I$G (onoug& +6 =arland case'easy to follo e!planation of t&e la, skip t&e

facts>)1 *ssignment %oes not cut off lineal %escen%ants if assignor predeceases'ust t&e assignor is $-21 UT if assignor does 0-T predecease , t&en &is kids are cut off too> (not&ing for t&em to in&erit>)

Case4 onough v. +arland 1 &en an &eir1apparent releases an e!pectancy, &at is t&e impact on &is &eirsH

o "elease is also binding on t&e &eir1apparent3s &eirs>>

o (so if c&ild releases back to parent, it cuts off t&e rig&ts of t&e grandc&ildren>)'b/c if it didn3t t&e

grandc&ildren ould be double1dipping (t&ey3d get t&eir s&are from grandparent *0 from &at

is left from t&eir parent3s estate)o %-2I0= of v. +4 eleasors heirs are compensated throu'h fair and adeFuate

consideration made for the release


27/39

5&C317E& affirmative refusal to accept a testamentar, transfer of propert,. f valid? the

disclaimin' part, is treated as if he or she predeceased the decedent

5&C317E U3E&:

- must file the disclaimer no later than nine months after decedents death (has to be filed with the

probate court%

o ! nine months after the disclaimin' part, obtains actual 9nowled'e of the eDistence of

the interest

- 1+5 5isclaimer 7U&T:o 5escribe the propert, disclaimed

o e si'ned b, the disclaimant

o 1+5 must be ac9nowled'ed (witnessed% if it affects real propert,

Effect of a 5isclaimer:

1 disclaimant treated as t&oug& pre%ecease% so alternate gifts operate1 -02. t&e disclaimed interest passes :per capita at eac& gen; (Colo) or :by rep; (UPC8 states)

1 T &as a lot of fle!ibility about &at to plan in contingency in case t&e person disclaims (&et&er or not its&ould go to t&e person3s &eirs1 b/c treated as t&oug& predeceased1 s&ould t&eir line get t&at giftH)

5isclaimers: sometimes called a :renunciation;1 under no affirmati+e obligation to accept *0. gift1 if t&e gift is testamentary7 e+en t&oug& t&e gift &as been gi+en to you, treat it as t&oug& ne+er gi+en to

you at all, ust skips o+er you entirelyo affirmati+ely "EFU$I0= a testamentary gift

can refuse all or 8ust part of the 'ift

o T can bar you from disclaimer

1 unlike e!pectancy, no dealing it& a


28/39

1 Court used t&e :acceptance/reection t&eory; (also C- la)'until you accept t&e benefits of t&e gift oruntil you legally reect t&e gift, you don3t on it>> Can go a&ead and disclaim it and it literally bounceso+er you

o I"$ tried to argue :transfer t&eory;1 t&at once t&e T died, t&e gift +ested

P!TECT!+ 7EC1+&7& ' - omicide/ )&la,er &tatutes*

- !mitted ()pretermitted*% Children

- 2amil, Protections

o omestead (real propert,%o EDempt Propert, (personal propert,%

o 2amil, 1llowance (cash%

omicide/ )&la,er &tatutes*

1 Can only take as long as &a+en3t feloniously killed t&e Testator (applies to e+erybody in t&e tree>>)1 If t&ey I kill t&e T, t&en treated as t&oug& t&ey predeceased1 oes 0-T pre+ent someone in t&e killer3s line from taking

!mitted Children ()Pretermitted children*% 'must disin&erit c&ildren deliberately, not inad+ertently1 I= P"-2EM>> (b/c a lot of people do ill before t&ey &a+e kids, or before t&ey stop &a+ing kids)

1 Under old C2, if t&ere as someone you anted to include, &ad to redo ill to address t&e c&anges>>o -mitted c&ildren don3t &a+e to orry about t&is anymore (but don3t automatically get a s&are1

t&ere are some c&ecks and balances in t&e system)- !7TTE5 C35 C1+ E 1E5 2!7 +ET+A44

o !+30 if disinheritance was deliberate and +!T a mista9e? !

o f child is ta9en care of with transfers outside the will with the intent that those transfers

substitute for inheritance

If t&ere are payments, &a+e to ask &at t&e intent of t&e T as &en made t&e payments

Intent s&on by T3s stmts and/or rsbly inferref from amt of transfer (or ot&er e+idence)

- 2 the omission was &!3E30 b/c T thou'ht the child was dead

o

c&ild is entitled to an omitted c&ild s&are (typical situation4 ar casualty't&ink son is dead, but&e3s really not>)

-mitted c&ildren4 8 different calculations4Test ": T had +! C35 livin' when the will was eDecuted

1 -mitted c&ild entitled to s&are e#ual to &at &e or s&e ould &a+e recei+ed &ad t&e T died intestateo o intestacy4 91 s&are of spouse, t&en 81s&are of ot&ers

1 U02E$$ t&e ill de+ised all or substantially all to t&e omitted c&ild3s ot&er parent and t&at ot&er parentsur+i+es t&e T and is entitled to take (still married, not di+orced, not predeceased, no felonious killing)

Test =: T had one or more children livin' when will was eDecuted? but have one or more afterborn

children1 $&are of omitted c&ild is limited to t&e de+ises made to T3s t&en1li+ing c&ildren under t&e ill1 $&are 5 &at t&e c&ild ould &a+e recei+ed if all omitted after1born and after1adopted c&ildren ere

included and t&e T &ad gi+en an e#ual s&are to eac& c&ild (so if t&e original ill &ad named e+eryone,&at ould t&e omitted c&ild get under t&at giftH)

1 To t&e e!tent possible, omitted c&ild3s s&are s&all be t&e same c&aracter (e#uitable or legal, present orfuture) as &at as de+ised to t&e T3s t&en1li+ing c&ildren under t&e ill

1 Court must preser+e (to t&e ma! e!tent possible) t&e T3s testamentary plan1 -t&er c&ildren3s gifts abate ratably to pro+ide omitted c&ild3s s&are


29/39

2amil, Protections4 &omestead (real property), e!empt property (personal property), family alloance (cas&)Protecting from creditors1 almost e+ery estate &as debt

1 :insol+ent estates;1 &ere t&ere is simply 0- M-0E. for creditors'sometimes after apply all t&efamily protections t&ere isn3t anyt&ing left for creditors)

!7E&TE15 real propert, (t&e be1all, end1all of all protections>>)

1 E!emption +6 *lloance4o !7E&TE15 EDemption4 (C-2-)

a certain part of t&e e#uity you on in a &ome is e!empt from creditors can preser+eABk of &ome3s e#uity in e!cess of liens/encumberances

• if don3t on a &ome, t&ere is no e#uity to &ic& you can apply t&is'so if you3re

a renter, $$ or c&ildren can3t take ad+antage of &omestead e!emption &ome #ualifies for e!emption -02. IF4 occupied as a &ome by t&e oner (decedent) or

&is or &er family &ome is EEMPT from e!ecution and attac&ment

passes to $$ or minor c&ildren (no pro+ision for :dependents; in Colo)

• $o if you &a+e ABk in e#uity abo+e and beyond mortgages1 you keep it>>

• -02. if you3re t&e sur+i+ing spouse -" minor c&ildren (no dependents

language)• If 0- $$ and 0- MI0-" C%I2"E0'&omestead e!emption goes to t&e

creditors

• E!emption is paid in addition to gifts>

o !7E&TE15 1llowance4 (UPC)

9B,QQQ cas& alloance to t&e $$ (or minor c&ildren and dependents if no $$)

Paid I0 *ITI-0 to s&are passing to $$ by ill/ intestacy(or minor/depedent c&ildren)

can get t&is eit&er t&roug& e#uity in &ome -" get a cas& alloance out of t&e rest of t&e

assets of t&e estate as a &omestead alloance (idea is t&at you can go and start your on&omestead it& t&at money)

t&is is UPC better b/c doesn3t penalie people for not oning t&eir &omes>

E;E7PT P!PET0 personal property

1 UPC 9Q,QQQ in e!cess of security interests on t&e property1 C-2- 8,QQQ in e!cess of security interests on t&e property

o $$ entitled to e!empt property6 If no $$ dependent c&ildren s&are ointly

o May take cas& or actual personal property

1 -T% E!empt from all claims against t&e estate (e!cept for t&e e!isting security interests)1 E!empt property &as priority o+er all estate claims ECEPT4

o Costs and e!penses of probate administration

o

"easonable funeral, burial, cremation costs1 E!empt property alloance abates as necessary to permit pymt of family alloance1 E/P alloance paid I0 *ITI-0 T- t&e s&are passing to $$ or dependent c&ildren by ill/intestacy- 2ilin' eFuirements:

o Must re#uest e!empt property alloance

/in Q 7!+T& after first publication of notice to creditors !

/in one ,ear after decedent3s deat&'&ic&e+er limitation e!pires first

Court may e!tend deadline :for cause;'UT 0E


30/39

21730 133!W1+CE cash- 1llocates a certain amount of cash from the estate for the purpose of supportin' 5s spouse and

an, minor children decedent was

o Either obli'ated to support !

o was in fact supportin'

1 *lloance cannot continue for more t&an one year if t&e estate does not &a+e enoug& money to pay all

alloed creditor claims1 Pa,able to:

o $$ (if li+ing) for t&e benefit of t&e 3s minor and dependent c&ildren

o -t&erise'it is payable to c&ildren or t&e person(s) in c&arge of t&e c&ildren3s care and custody

1 %as P!T0 o+er all claims e!cept4o Costs of burial, interment, or cremation e!penses

1 Paid + 155T!+ T! t&e s&are passing to t&e $$ or c&ildren (by ill or intestacy)1 eat& of one entitled to t&e Family *lloance terminates that persons ri'ht to receive the allowance

't&at person3s estate can only reco+er any alloance amount t&at as unpaid at t&e person3s deat&1 UPC up to S"6?HHH/,ear1 Colo up to S=R?HHH/,ear

o !T &10: the allowance should be a reasonable allowance

o 7a, be paid in lump-sum or periodic pa,ments

o && ma, choose the source from which famil, allowance will be paid

f && does not choose? P must choose for him/her

au'mented estate/elective share for disinherited or under-inherited survivin' spouse


31/39

+!+-P!1TE P!PET0 Propert, le'all, passin' to beneficiar, WT!UT probate process.

!%vantages4

est for a client who wants to 'ive beneficiaries mone, automaticall, w/o havin' to wait for probate

dela,s.

%o Pro'ate elays? %o Pro'ate costs0fees? Privacy Issues 1Pro'ate is (u'lic knowledge2? &voiding

Potential "ill Contests? Sim(licity

)Pa, !n 5eath* (P!5% Contracts

". 3ife nsurance=. 7ultiple-Part, an9 1ccounts

O. Voint Tenancies (*ncillary probate a+oidance) If one tenants dies L t&e property passes by operation of la to t&e ot&er tenant6

R. )3ivin'* Trusts

Put all property in to trust for t&eir on benefit L trust usually is re+ocable L if

someone dies trust is closed Upon t&e deat& t&e beneficiaries of t&e trust, t&e property of t&e trust s&all be

distributed as follos7like a ill Trustees allocate property after beneficiaries die according to t&e clause in t&e trust

allocating t&e property6

3ife nsurance

Term 2ife Insurance +s6 W&ole 2ife Insurance

o W&ole 2ife Insurance L uilds cas& +alue

0ame a beneficiary to take t&e cas& payout at deat&6

uilding cas& +alue as long as you pay your fee6

o Term 2ife Insurance

*c#uires no cas& +alue and lasts only for a certain term6

-nly insuring you for a term certain L E!6 if you &a+e 8B yr6 term insurance, and you do not die/in 8B years, get no life insurance co+erage and do not get any of t&e insurance payments back6

Voint an9 1ccounts: Common for parents to put c&ildren on t&eir bank accounts !ption ": ot& parties &a+e t&e poer to dra on t&e account6 T&e sur+i+or ons t&e balance of t&e

account in full by operation of la6o T&is is a true oint tenancy arrangement6

!ption =: -nly * &as t&e poer to it&dra on t&e account during life? &oe+er, is entitled to t&eaccount balance on *3s deat&6

o T&is is a pay1on1deat& (P-) arrangement, as opposed to a oint tenancy6

o T&e beneficiary of P- account &as no rig&t to sums on deposit during t&e depositor3s lifetime6

o Can re+oke P- contracts L but cannot c&ange a P- account by ill L it is a contract it& t&e

bank, and t&at contract ill pre+ail6o T&e P- beneficiary of a bank account cannot be c&anged by ill6 U6P6C6 189@(b)6

o W&en decedent dies, P- beneficiary gets paid amount in t&e bank account6

!ption O: can &a+e t&e poer to dra on t&e account during *3s life? &oe+er, is not entitled to t&e

balance at *3s deat&6o T&is is more of an agency arrangement L it does not create a P- L it simply gi+es lifetime access

to t&e money6o Could &a+e a &ybrid L someone &as access to account t&roug& agency, yet name anot&er party as a

P- &ic& does not &a+e a +ested interest until decedent dies6


32/39

C"$ 9B1 991QA :"e+ocation; by i+orce i+orce se+ers a oint tenancy L and it becomes a tenancy in common6 E!cept as pro+ided by e!press terms of go+erning instrument (the contract3 deed3 etc6), court order, or

contract relating to t&e di+ision of t&e marital estate 6 6 6 divorce severs VTW!& and creates a tenanc,in common.

Estate of 5eWitt

ssue: W&at &appens if you get di+orced and &a+e insurance policies &ere e! is left as an insurance

beneficiary6 Colorado &upreme Court upheld UPC provision on revocation4

o The statute presumes that a person who did not chan'e his eD-spouse as beneficiar, overloo9ed

this in error? not because he or she intended the beneficiar, desi'nation to remain.

If person does not &a+e a backup beneficiary named, t&e money ill come back to t&e estate6

0ote4 * separation agreement can be enoug& to rebut t&is eneficiar, 5eeds (a non-probate ;fer%

5eed eview:

96 =eneral Warranty eed L arrant against all claims against t&is property including past oners of t&e property6

86 $pecial Warranty eed L arrant against claims against t&is property, but only claims t&at come from&en you on t&e &ome, not pre+ious oner6

@6 argain and $ale eed L no arranties at all, buyer accepts all responsibilityA6 Ruit1Claim eed L #uit claim all your interest to someone else to create a tenancy in common or oint

tenancy6 0ote4 91A once you deed property to someone, it is done L cannot re+oke6

B6 eneficiar, 5eed L asically transferring title, but only transferring it upon your deat& L can re+oke it Lit like a P- interest L beneficiary can3t do anyt&ing &ile you are ali+e

eneficiar, 5eeds C& G"$-"$-RH"? G"$-"$-RH=

1 +on-Probate 5eed Transfer / er, Pro'ressive.

@e, is revocabilit, b, the owner / 'rantor. Compare to deedin' a remainder or 8oint tenanc,

interest.

eneficiar, 5eeds ver, fleDible. 7inorit, of states have this N C! offers this t,pe of deed. eneficiar,deed is not even included into ,our estate.

Cannot name an unascertainable beneficiar,.

-nly transfers title to real property on t&e oner3s deat&? To be effecti+e, t&e deed must be recorded prior to t&e onerOs deat&?

T&e deed must be signed by t&e oner granting t&e interest? eed must designate a :grantee1beneficiary6; (&o t&ey are)

T&e transfer becomes effecti+e by operation of la (not t&roug& probate) only upon t&egrantor1oner3s deat&6 Consideration is not re#uired6

Can re+oke t&e beneficiary deed6 eneficiar, 5eeds (see handout eDample%

1 uring t&e oner3s lifetime, t&e grantee beneficiary &as no rig&t, title or interest in t&e property (t&egrantor1oner retains full poer and aut&ority o+er t&e property)

1 -ner can re+oke deed during lifetime by filing a re+oking deed or by filing a subse#uent beneficiarydeed listing a different grantee1beneficiary6


33/39

P!1TE 157+&T1T!+

- T,pical process:

o -pening estate

o *ppointing P"

o Collecting 3s probate estate

o Filing an estate in+entory

o *pplying family protection mec&anisms

o Paying estate3s alloed creditors

o "esol+ing disputes

o Paying estate ta!es/filing applicable ta! returns

o istributing assets

o Closing Estate

1dministration ssues:

Vurisdiction

1mount of Court &upervision

- small estate- informal probate

- formal probate

Personal epresentative

Vurisdiction for openin' a probate

1 &ere t&e decedent as domiciled, -" o comes up a lot in t&e 0./0K area

1 &ere t&e assets of t&e estate are located, -" 1 &ere t&ere is urisdiction o+er t&e person or property of any person &o &as killed t&e decedent1ncillar, Probates:

o real prop is alays probated &ere located'%*


34/39

17!U+T !2 C!UT &UPE&!+:

1 UPC allos parties to determine &o muc& court super+ision is necessary to administer t&e estate1 @ general types of estates4

o $mall estate (t&e easiest one)

o Informal Probate (most common)o Formal Probate (litigation> E+eryt&ing decided in an actual court proceeding)

&mall Estate:

1 re#uirements4o less t&an BQk of assets (after liens, etc) *0 no real property

1 $mall estate affida+it is presented along it& deat& certificate to eac& bank, etc and t&ey pay out t&emoney

1 Court not really in+ol+ed in t&is1 $imple ay to get probate of personal property

o remember4 if KTW"-$, t&ere is no real property> T&e real prop passes to t&e spouse outside

probate>

nformal Probate:

1 "e#uirements4o &a+e to &a+e -"I=I0*2 ill, no e!ceptions

o no document re+oking original ill (person putting t&e pleading before t&e court is signing off

saying t&ey3re not aare of any re+ocation)o no litigation

you3re letting t&e probate court registrar basically take control of entire estate1 appoints

P", makes sure paperork is done correctly1 udge not e+er in+ol+ed unless asked>o

probate court registrar 1 ot& probate of ill and appointment of P" can be done t&roug& informal proceedings

2ormal Probate5 full1blon litigation>1 t&is is &ere you &a+e WI22 C-0TE$T$ actual court proceedin's where a 8ud'e or ma'istrate

ma9es a formal determination on the issues to be decided

1 any action by a udge is made after a court &earing or trial t&roug& formal probate proceedings1 can &a+e %."I$'informal proceeding but &a+e -0E issue t&at is disputed and t&at piece goes to

t&e court1 C*0 probate a copy of a ill in formal probate (&a+e to meet certain re#uirements, but it can be done>)

*0. I$$UE$ ill &a+e to be decided formally>> (doubts about P", doubts about +alidity, etc)


35/39

PE&!+13 EPE&E+T1TE

- P can be 1+0 individual or corporate fiduciar, with the abilit, to contract

- P 7U&T accept the appointment

o UT1 if you take on t&e responsibilities it&out e+er accepting, you3+e ust become a P" it& all

t&e liability t&at comes it& it>1 P" &as a duty to e!pedite t&e administration of t&e estate

5uties of the P:

1 probate t&e ill (or file intestate estate)1 file an :in+entory; of t&e estate property it&in @ mont&s of appointment (in+entory5 debts and assets)1 deal it& creditors1 resol+e disputes1 deny in+alid claims1 determine if estate &as enoug& money to pay creditors and distribute gifts to beneficiaries1 distribute assets and close estate

P" C*0 also be a beneficiary e+en t&oug& t&ese roles are potentially in conflict'if P" decides to contest t&eill, ill be asked to step don't&ere is usually a backup in t&e ill>

W! can be P t&is is a I= E*2 (C"$ 9B19818Q@ :Priority for *ppointment)

1 court ill alays ad&ere to t&e order in t&e statute'+ery &esitant to de+iate1 Priority for *ppointment4 (in t&is order)

o Person it& priority as determined by probated ill

o $$ of t&e &o is a de+isee of

o -t&er de+isees of t&e

o $$ of t&e

o -t&er &eirs of t&e

o AB days after t&e deat& of , any creditor

1 P" is#ualifications t&e court ill dis#ualify a P" if4

o Under t&e age of 89

o

Court finds t&e person unsuitable (done t&roug& formal proceedings)-0CE *PP-I0TE7 P" is issued41 :letters testamentary; -" 1 :letters of administration;

o T&e letters gi+e t&e P" t&e poer and aut&ority to act on be&alf of t&e estate

Testamentar, 'ifts to the P:

1 P" is nominated as P" but also potentially a beneficiary under t&e ill1 Mass. Co. Inc. v. Evans case4

o If you name as P", t&en say :my &ouse to P";'t&at on its face says &ouse goes to t&e P" as

part of t&e rest of t&e estateo

If you do somet&ing like t&is *2W*.$ say :P" in &er indi+idual capacity, not as fiduciary;clears up t&e ambiguity

o %-2I0=4 if its a 'ift in indiv capacit,? has to be E;P3CT in t&e ill>

P Compensation %otspot for P"s'entitled to be P*I for t&eir ser+ices

1 C"$ S9B1981D9o Entitled to reasonable compensation for &is or &er ser+ices "E*$-0*2E>>

1 E+eryt&ing t&e P" is entitled to c&arge for &as to be E0EFICI*2 to t&e estate in some ay1 P" can c&oose to renounce all or part of &er fees1 Painters Estate


36/39

Termination of Ps appointment

1 &a+e to resign in W"ITI0= and file it it& t&e court after 9B days notice to parties interested in t&eestate

1 still on t&e &ook until successor is appointed1 eat& of P" terminates appointment

o If you are a P" and t&e decedent as acting as a P"7 you are no t&e P" for t&e estate of t&e

deceased *0 t&e person &ose estate t&e deceased as acting as P"

1 "EM-


37/39

CE5T!& C317& timeline is @E0444

ate of deat& to one year past date of deat&1 after t&at one ,ear t&ere is an absolute bar a'ainst creditors claims &et&er or not opened up probate

by t&en>ssues4 (sometimes depends on &en you fall on t&e timeline>)

". what t,pe of notice are creditors entitled to>

=. which creditors are entitled to which t,pe of notice>

@ind of +otice ow notified> When must P do this> Creditor response>Publication +otice Publis&ed in nespaper Unless past 9 year claim

bar P" MU$T publis&notice at least @ times, atleast once in eac& of @calendar eeks

M*0*T-". ifopening probate it&inone year of -

*fter one year'no need

to publis& notice

Creditors must respondit&in R months of initial publication

U02E$$'t&e one year period runs out beforet&en t&en t&e one year period absolutely bars t&ecreditor3s claim

Written +otice Indi+idual notice sent tospecific creditors

T-T*22. -PTI-0*2(:P" may gi+e rittennotice;)

U02E$$'if you ant toclose t&e estate in lesst&an one year1 t&en &a+eto gi+e ritten notice to:rsbly ascertainablecreditors;

UT'if ait t&e fullyear, no one needs rittennotice

t&e later of QH da,s -"t&e publication responseperiod, but 0-T T-ECEE t&e one year period>

-0E .E*" *" I$ *$-2UTE7 U02E$$ you delay probate b/c you3re sitting on your rig&ts ( e&vila2

Publication notice 1 usually publis&ed in t&e nespaper 1 unless past t&e 9 yr claim bar, P" MU$T cause notice to creditors to be publis&ed in general circulation

nespaper 1 &as to be publis&ed @ times, at least once in eac& of @ calendar eeks1 C"EIT-"$ MU$T "EP-0 to t&e notice it&in A mont&s of initial publication>>>

o UT'if P" doesn3t publis& notice until 9Q mont&s (&en A mont&s ould be beyond t&e 9 year

bar) t&e creditors only &a+e until t&e date t&e 9 year bar kicks in

Written +otice

1 Indi+idual notice to specific creditors1 0-T M*0*T-".'C-MP2ETE2. -PTI-0*2>>1 P" M&4 gi+e ritten notice1 UE4 t&e later of Q days -" t&e publication response period, but 0-T T- ECEE t&e one year

period>o so if you send out ritten notice t&e same time you publis& notice'ritten notice creditors &a+e

A mont&s to respond as long as t&at A mont&s doesn3t e!ceed t&e 9 year


38/39

ssue becomes: can we close the estate E2!E the " ,ear is up>>>

1 R of W%- MU$T recei+e noticeo If you ait t&e full one year'0- -0E needs notice

o If ant to close EF-"E 9 year, &a+e to go t&roug& t&e creditors and figure out &o are t&e

:reasonably ascertainable creditors; "*Cs &a+e to get actual written notice of 3s deat& before non1claim statute can bar

t&eir claims $o1 if gi+e ritten notice, creditor &as to respond it&in A mont&s'if t&ey don3t, t&ose

creditors ill be s&ut out

E!amples

ate of deat&5 9/9/QB, client comes to you D/9/QBt&is means4 absolute bar to claims5 9/9/Q

1 Client3s goals4 (8 diff &ypos)o close estate *$*P

o no &urry to close t&e estate

1 publication notice is mandatory if opening probate it&in one year of deat& (but sincee3re not7)

1 If publis& notice /9/QB, &en is t&e deadlinefor creditors to respondHH 98/9/QB

1 o you &a+e to do indi+idual ritten noticeHo epends1 are t&ere any knon or rsbly

ascertainable creditors (usually, t&eanser is .E$>> so you ill &a+e to doritten notice for t&ose creditors)

o $-'gi+e ritten notice on same day

/9/QB Can close estate it&out any

orry of creditors coming

back

98/8/QB

-4 9/9/QB, Client comes to you 98/9B/QB1 9 year is t&e ultimate cutoff (9/9/Q)1 so e+en if you gi+e ritten notice to creditors,

t&ey &a+e to respond it&in t&e ne!t toeeks>

C*$E$4

Tulsa Prof Collection Services v. Polk!

1 E


39/39

Estate of 5inks4 (*de#uacy of claim presentation)1 ill4 ife is P", ife ne+er appointed b/c s&e

as only beneficiary of t&e estate (no probateopened, no P" needed)

1 no probate until creditor opens probate 8 yearsafter deat&

1 ife T%E0 appointed as P" 1 Creditor says4 t&e correspondence and

renegotiation it& t&e ife after deat& s&ouldrelate back b/c t&e ife as nominated as t&eP" in t&e ill, so t&oug&t t&ey ere dealingit& t&e P"

1 "elation back doctrine for P"'ust b/csomeone as nominated in t&e ill does notguarantee t&ey3ll be t&e P"

1 *ssuming creditor &ad done t&is it&in oneyear, +alidHHH 0- s&e still &adn3t beenappointed> (but if s&e as doing ot&er t&ignsand acting like a P", t&en s&e I$ a P">)

De!vila v. De+errera (not necessaril, a " ,ear bar

an,more after this case4%

1 8/D5 ate of deat&, 8/ probate opened byclaimant (negligent &omicide1 personal inurycase against ecedent3s estate)

1 0ormally't&is claim is barred by t&e non1claim statute

1 T&en T%I$ C*$E comes along and t&e court

says maybe t&at3 not a T-T*2 bar7o ERUIT.'&a+e to look at t&e claim6

E+en t&oug& recei+ed after t&e 9 yearmark, ould delay ofadministration/distribution of assets&urt t&e beneficiariesH $ince t&eyeren3t in any &urry to settle it (no probate opened in 8 years since deat&)court goes a&ead and allos t&e claim>

1 *$-2UTE2. =-E$ *=*I0$T T%E$T*TUTE>>>

- $- if ,ou strate'icall, rel, on the " ,earbar and dont open probate until after a

,ear after 5!5

Trusts and Estates Law Outline 2013

Documents

Transcript of Trusts and Estates Law Outline 2013