978-0134004006 Chapter 52 Lecture Note

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subject Authors Henry R. Cheeseman

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When you have told someone you have left him a legacy, the only decent
thing to do is to die at once. Samuel Butler
I. Teacher to Teacher Dialogue
The origins of the laws of wills and trusts go back to the canon laws of the medieval church.
The church had much control, not only over the spiritual life of its members, but also over the
more temporal affairs such as the disposition of worldly goods. The early church-based patterns
of disposition of property based on family relationships are still reflected in more modern day
elements are taxes, control, and present needs. The federal wealth transfer tax structure is
extensive and very complicated. The three main components of that tax structure are the gift,
estate, and generation skipping taxes. In addition, states have also developed their own property
transfer tax structures based on inheritance taxes, estate pickup taxes, or some combination
The control element also goes to the issue of how much the owner is actually willing to give
up before he or she departs this life. Simple human nature is such that it can be most difficult to
dilemma.
WILLS, TRUSTS, AND ESTATES
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Wills, Trusts, and Estates
purported intent. There is a rhyme and reason to it all in spite of the sometimes-arbitrary nature of
such proceedings.
If a person has not written a will, or the will is not admitted to probate, he or she is deemed to
have died intestate. Every state has stepped into this void and written a will by way of an intestate
estate will be charged with three major duties:
1. To garner the assets of the estate.
2. To net out those assets by paying all proper claims, taxes, and costs of administration.
3. To distribute the net proceeds of the estate per the will or the intestate statute.
II. Chapter Objectives
1. List and describe the requirements for making a valid will.
2. Describe the different types of testamentary gifts.
III. Key Question Checklist
What are the possible transfer options for property available before and after death?
Will any property pass outside of the probate proceeding?
VI. Text Materials
Introduction to Wills, Trusts, and Estates
Wills transfer property upon a death. If one dies intestate, your property is distributed according
to state statute. Trusts are used to transfer property that will be held and managed for a
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Chapter 52
Will
Wills are made out by a testator or testatrix to transfer property after their death to a beneficiary.
Requirements for Making a Will Each state has a Statute of Wills that establishes the
Attestation by Witnesses Only mentally competent witnesses can attest a formal will. Most
Codicil Wills can only be amended by adding a codicil which must be executed with the same
Revoking a Will A will is revoked when the testator burns, tears, obliterates, or, in any way,
Joint and Mutual Wills A joint will is a single instrument that is executed by two or more
Special Types of Wills A holographic will is entirely hand written and signed by the testator.
Simultaneous Deaths The Uniform Simultaneous Death Act provides that each deceased
Probate The process of settling an estate is probate, and is governed by state statute, and
usually administered through a probate court. A personal representative is appointed to handle the
Testamentary Gifts
A gift of real estate left by will is called a devise; personal property willed is called a bequest or a
legacy. Specific gifts are specially identified pieces of property. General gifts are not identified as
to the specific property from which it will be made, so it comes from the general estate. The
Lineal Descendants Property may be left to the lineal descendants.
Per Stirpes Distribution Per stirpes distributes based on the representation of the parents, so
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Wills, Trusts, and Estates
Ademption If a specific gift is left to a beneficiary, but the property is no longer part of the
estate, the beneficiary gets nothing. This is an ademption.
Abatement When a testator’s estate is not large enough to cover all the bequests, abatement
Intestate Succession
If a person dies without a will, or if the will is invalid, his property is distributed pursuant to the
state’s intestacy statute to his heirs. Usually it is distributed first to the spouse, children, lineal
state.
Irrevocable Trust
A trust is a legal arrangement in which a settler, trustor, or transferor delivers and transfers
to the beneficiary.
Beneficiaries Income beneficiaries receive the trust income; remainder beneficiaries receive the
alive.
Testamentary Trust These trusts are created by will and executed after death.
Special Types of Trusts
Resulting Trust This trust is implied by the conduct of the parties.
Charitable Trusts A charitable trust is created to benefit some segment of society or society in
general.
can revoke it at any time.
Totten Trust A Totten trust is created when a person deposits money in a bank account in his
or her own name and holds it as a trustee for the benefit of another person.
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Chapter 52
Living Trust
Benefits of a Living Trust A living trust lets you avoid probate because the assets are owned
by the trust.
Funding and Operation of a Living Trust The grantor transfers title to the trust to fund it. It
Beneficiaries The trust names an income beneficiary (usually the grantor) and a remainder
beneficiary.
Undue Influence
Critical Legal Thinking I think many cases of undue influence occur. I think proving undue
influence is very difficult.
Case 52.1 Undue Influence: In re Estate of Haviland
and Mary called an attorney to have his will changed to favor her and not his children and Mary
prepared directions for the attorney to follow regarding the changes to be made. The second will
was signed. The children were disinherited. Upon his death, the will was challenged by the
children.
Issue: Was there undue influence by Mary?
was a hard case to decide.
Living Will and Health Care Directive
The Supreme Court has determined that the right to refuse medical treatment is a personal liberty
protected by the Due Process Clause.
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Wills, Trusts, and Estates
artificial means.
Health Care Directive In a separate document called a health care proxy you should indicate
the person whom you designate to be a health care agent for you in case of your incapacitation.
Critical Legal Thinking The right to die allows people to have some level of control over their
last wishes. Very often, people are in tremendous amounts of pain. Or, they have certain
religious beliefs about dying. The right to die allows them to act upon certain wishes they may
have. Taken to the extreme, there is assisted suicide and in my view, that is taking the right to die
Critical Legal Thinking Case: Assisted Suicide
An Oregon law permits assisted suicide within a prescribed set of parameters of medical
conditions. The U.S. Attorney General issued a rule holding that the state law was in conflict
with the Controlled Substance Act, a federal statute. The conflict as to whether the state law was
V. Key Terms and Concepts
AbatementIf the property the testator leaves is not sufficient to satisfy all the beneficiaries
abated first (i.e., paid last).
AdemptionA principle that says if a testator leaves a specific devise of property to a
beneficiary, but the property is no longer in the estate when the testator dies, the beneficiary
receives nothing.
Administrator or administratrixDuring settlement of the estate, if no one is named or if the
end his or her own life.
AttestationThe action of a will being witnessed by two or three objective and competent
people.
Attestation clauseWitnesses usually sign a will following the signature of the testator.
These signatures are called the attestation clause.
society in general.
CodicilA separate document that must be executed to amend a will. It must be executed
with the same formalities as a will.
Constructive trustAn equitable trust that is imposed by law to avoid fraud, unjust
enrichment, and injustice.
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Chapter 52
Constitution.
DeviseA gift of real estate by will.
EscheatWhen property or assets from a will are granted to the state because there is no next
of kin to claim such property.
EuthanasiaWhen a physician administers a fatal dose of medicine to a terminally ill patient
to hasten their death.
will.
General giftGift that does not identify the specific property from which the gift is to be
made.
GrantorA person who creates a living trust.
Health care agentIn a living will or in a separate document, usually called a health care
Income beneficiary of a living trustA person who receives the income from a living trust
during his or her life. This is usually the grantor.
Income beneficiary of a trustA person or an entity to be paid income from a trust.
Inter vivos trustA trust that is created while the settlor is alive.
will.
IntestateThe state of having died without leaving a will.
Irrevocable trustA trust is irrevocable unless the settlor reserves the right to revoke it. This
is referred to as an irrevocable trust.
Joint willA will that is executed by two or more testators.
property upon that person’s death.
Living will—A document that stipulates one’s wish not to be kept alive by artificial means.
Mutual willsOccur where two or more testators execute separate wills that leave their
property to each other on the condition that the survivor leave the remaining property on his
or her death as agreed by the testators.
during settlement of the estate.
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an estate.
Remainder beneficiary of a living trustA person who receives the assets of a living trust
upon the death of the grantor.
Remainder beneficiary of a trustA person or an entity to receive the trust corpus upon the
termination of a trust.
have been paid.
Resulting trustA trust that is created by the conduct of the parties.
RevocationTermination of a will.
Right to dieThe right to die is where a terminally ill person may make a decision to end his
or her life.
Successor trusteeThe trust should name a successor trustee to replace the grantor-trustee if
the grantor becomes incapacitated or too ill to manage the trust.
Testamentary capacity—The testator must have been of legal age and “sound mind” when the
will was made.
dies.
Testator or testatrixThe person who makes a will.
Testator’s signature—Wills must be signed. Most jurisdictions require the testator’s signature
to appear at the end of the will.
Totten trustA Totten trust is created when a person deposits money in a bank account in his
Trust corpusThe property held in trust.
TrusteePerson who holds legal title to the trust corpus and manages the trust for the benefit
of the beneficiary or beneficiaries.
Trustee of a living trustA person named in a living will to administer the trust assets. This
is usually the grantor.
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Undue influence—Occurs where one person takes advantage of another person’s mental,
he or she survived.
Videotaped willTo prevent unwarranted will contests, a testator or testatrix can use a
videotaped will to supplement a written will.

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