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Suggested Additional Assignments
Research: Intestacy
Ask students to look up the intestacy laws in their state. Where would their assets go if they had a spouse
and children? Had a spouse but no children? Had children but no spouse? Were single? In South
Carolina, for instance, a spouse inherits half the estate if there are children and everything if there are not.
When a single person dies without children, parents inherit everything. To find this information for South
Carolina, the authors went to the state code section of LEXIS and typed in “heading (intestate).”
Drafting Exercise: Wills
Ask students to try their hand at drafting their own will. Advice on drafting a will is available on the
Internet.
Interview: Living Wills
Have students talk with their parents or guardians about whether they have living wills and what their
preferences would be if they were facing a terminal illness or permanent coma. Students should also
think about whether they want a living will themselves. A sample living will is available from the Caring
Connections Web site at http://www.caringinfo.org.
Research: Insurance
Ask each student to investigate the purchase of $100,000 of insurance on his or her life or $300,000 in
house insurance. They should obtain a quote for annual premiums and also a copy of the proposed policy.
Students can obtain quotes either from an insurance agent or on the Internet at http://itechusa.com, or
http://quickquote.com/.
Research: Insurance Fraud
Ask students to go to http://www.insurancefraud.org and read the “Fraud Case of the Month.” They
should be prepared to give a report in class on at least one of these cases.
Chapter Overview
Chapter Theme
Despite what Stephen Leacock says in the “Quotes of the Day” below, we shall all die some day. And bad
things do happen to good people (and businesses). The impact of these bad things can be mitigated by
diligent planning for the future.
Quotes of the Day
“BEQUEATH”: To generously give to another that which can no longer be denied to somebody.” Ambrose
Bierce (1842-1914?), American writer, Enlarged Devil’s Dictionary.
“I detest life-insurance agents; they always argue that I shall some day die, which is not so.” Leacock,
Stephen (1869-1944), Canadian economist and humorist.
Introduction to Estate Planning
Regardless of your fame or wealth, eventually you and your material goods will part. But you can control
where your assets go after your death.
Purpose
Estate planning has two primary goals: to ensure that property is distributed as the owner desires and to
minimize estate taxes.
Wills
A will is a legal document that disposes of the testator’s property after death.
Requirements for a Valid Will
Generally speaking, a person may leave his assets to whomever he wants. However, the testator (male) or
testatrix (female) must be:
Of legal age (which is 18).
Of sound mind. That is, she must be able to understand what a will is, more or less what she
owns, who her relatives are, and how she is disposing of her property.
Acting without undue influence. Undue influence means that one person has enough power over
another to force him to do something against his free will.
Key Issue: Making a Will
Question: Virtually everyone needs a will. Why?
Answer:
Almost everyone has assets–whether trinkets with just sentimental value or employee
General Questions:
How many students in the class have a will?
Students often think that they do not need a will. Did this discussion change their minds?
Do any of these reasons apply to them?
For a court to enforce a will, generally the will must—
be in writing,
be signed by the testator or, if the testator is too weak, by someone else the testator directs to sign
it, and
be signed by two witnesses to the testator’s signature, neither of whom will inherit under the will
If students completed the suggested will-drafting exercise, this is a good opportunity to look at some of
their efforts.
Question: Have they been sure to:
Include everyone important–spouse, children, parents, siblings (where appropriate),
Appoint a guardian for minor children (and check with the proposed guardian first!),
Name an executor, and
Comply with all the required technicalities–witnesses, etc.?
You Be The Judge: In re Estate of Ulrich1
Facts: Wayne Ulrich had lived his whole life on his family farm. His only relatives were his brother,
Raymond (who lived on the farm next door) and Raymond’s two adult daughters and their children.
Wayne saw and talked on the phone with them fairly regularly, but was not particularly close to them.
When he was 68, he signed a will leaving his property to his nieces and their children.
1 2013 Minn. App. Unpub. LEXIS 770; 2013 WL 4404717 Court of Appeals of Minnesota, 2013
He then met Susan Sorenson, who was a customer at his farm. Ten years after he met her, he suddenly
broke off all communication with his brother and closest friends, because he thought they had stolen
items from his home while he was in the hospital. His list of missing items included dish towels and a
canister of dried prunes. There was no evidence that they had taken anything.
Wayne began to rely on Sorenson to help him with household chores and personal grooming. He attended
many Sorenson family events and began to look upon her as a daughter. He also had daily help from a
home healthcare assistant.
Two years later, when Wayne was 80 years old, he asked his lawyer to draft a power of attorney giving
Sorenson authority over his affairs and a will leaving everything to her. He told the lawyer that Sorenson
would not accept a power of attorney unless it gave her the right to control his money. He believed that
she would take care of him and keep him out of a nursing home. The lawyer refused to draft the
documents.
Sorenson recommended a different law firm, although she herself was not a client there. She drove him to
his appointment but did not attend his meetings. Because Wayne’s request was so unusual, the lawyer
insisted that he meet privately with two other attorneys at the firm to assess his competence and any
undue influence. Wayne explained that Sorenson was like family to him and his nieces would inherit
from their father. All three lawyers stated that Wayne was a competent, very strong-willed person who
made his own decisions and who was not likely to be unduly influenced. Wayne signed both a will and a
power of attorney.
Three years later, Wayne entered a nursing home. Sorenson visited, took him on excursions, and bought
what he needed. During the last five years of his life, Sorenson wrote herself $256,000 worth of checks
from Wayne’s accounts. She said they were gifts from Wayne.
Bette Schmidt, one of Wayne’s nieces, sued, alleging that Wayne’s will was invalid because of Sorenson’s
undue influence. Sorenson moved for summary judgment, which the trial court granted. Schmidt
appealed.
You Be the Judge: When Wayne altered his will, was he acting under undue influence?
Argument for Schmidt: When Wayne Ulrich changed his will, he was a confused old man, isolated from
his family and long-time friends. Did he really think someone had stolen a canister of prunes from him?
He had lived on his farm his entire life. When he asked for the power of attorney and the new will, he was
clearly afraid of having to go into a nursing home. He was depending on Sorenson to keep him at home.
(Not that she did.) Sorenson refused to accept a power of attorney unless it gave her the right to take
money from Wayne. And take she did—hundreds of thousands of dollars.
Wayne’s request for the power of attorney and will was so unusual that the first lawyer refused to draft it
for him. Then Sorenson helpfully found another lawyer and even drove him to his appointment. Three
lawyers said he was competent, but of course they had an incentive to say so. And competence is not the
same thing as acting with free will. How could they assess, in one visit, her influence over him?
Argument for Sorenson: No one has alleged that Wayne was demented or unaware of what he was
doing. And when he changed his will, he was not isolated—home healthcare aides visited him regularly.
At that point, Sorenson had taken care of him for more than a decade. She continued to care for him
afterward—visiting him at the nursing home and taking him on excursions. He considered her his family
and, indeed, she acted like a daughter. As for his biological family, he knew that his brother would be able
to provide for his nieces and their children.
There is no evidence that Sorenson told him to change his will or make the power of attorney. She was
not in the room when he met with the lawyers. Three of them interviewed him before allowing him to
sign the documents. If anything, Wayne was the opposite of confused or persuadable: He was a
hard-headed man who had the right to change his will.
It is easy to see why the nieces are disappointed at being left out of their uncle’s will. No one likes being
disinherited. But the money and the farm were Wayne’s to do with as he pleased.
Holding: Judgment for Sorenson affirmed. Because decedent left his estate to Sorenson, the district court
concluded that Schmidt does not have a property interest in decedent’s estate and therefore lacks standing
to assert a claim. We agree. The district court did not err in granting summary judgment to Sorenson on
this claim.
Question: According to Schmidt, which of the three elements of a valid will appears to be lacking?
Question: What is a power of attorney?
Holographic Will
Some states recognize a holographic will, which is a will that is handwritten and signed by the testatrix,
but not witnessed. A holographic must be in a testator’s own handwriting—it cannot be typed or written
by someone else. Nuncupative Will
A few states will also accept a nuncupative will for personal property but not for real estate. 2 This is the
formal term for an oral will. For a nuncupative will to be valid:
the testatrix must know she is dying,
there must be two witnesses, and
these witnesses must know that they are listening to her will .Children’s Share
Parents are not required to leave assets to their children—even minors whom the testator was obligated to
support while alive.
Key Issue: Intestacy
Research
If you asked your students to do the Suggested Additional Assignment in which they looked up the
intestacy laws in your state, this would be a good time to let the students report the results of their
research.
General Questions: Where would their assets go if they:
Have a spouse and children
Have a spouse but no children
Have children but no spouse, or
Are single?
Case: In re Estate of Josiah James Treloar, Jr.3
Facts: Josiah Treloar’s first will left his estate to his wife unless she died before he did, in which case one
piece of land was to go to his daughter, Evelyn, another to his son, Rodney, and the rest of his estate was
to be divided equally among Evelyn, Rodney and another daughter, Beverly.
2For a good summary of state laws on nuncupative and holographic wills, google “findlaw state laws
wills.”
3 151 N.H. 460; 859 A.2d 1162; 2004 N.H. LEXIS 177 Supreme Court of New Hampshire, 2004
After his daughter Evelyn died, Josiah executed a new will. To help his lawyer in preparing this
document, Josiah gave him a copy of the old will with handwritten changes, including Evelyn’s name
crossed out. The new will left the land to Rodney and the remainder of the estate to Rodney and Beverly
equally. Evelyn’s husband and children got nothing although Evelyn’s husband, Leon, was named as
executor. The will stated: “I hereby nominate and so far as I legally may appoint as Executor of this will,
my son-in-law, Leon Merrill of Concord, New Hampshire.”
Under New Hampshire law, all issue (including children and grandchildren) can qualify as
pretermitted heirs. The law assumes that if the testator does not leave anything to his issue or does not
refer to them in his will, it is because he has forgotten them. They are therefore entitled to a share of his
estate. If Josiah had mentioned Evelyn then the assumption would be that he had not forgotten her or her
children. Evelyn’s children argued that they were pretermitted heirs and, therefore, were entitled to a
share of Josiah’s estate. Josiah’s attorney was serving as executor (not Leon). When he refused to pay the
children, they sued.
Issue: Are Evelyn’s children entitled to a share of Josiah’s estate?
Holding: Judgment for Evelyn’s children. The court did not consider the evidence of the prior will that
Josiah had marked up. Instead, it looked only within the “four corners” of the existing will. It is not
sufficient for that will to refer obliquely to Evelyn by mentioning her husband. Her children are
pretermitted heirs unless she or they are specifically named.
Question: What is a pretermitted heir?
Question: Is a child entitled to inherit something?
Question: What must a parent do then if he doesn’t want to leave money to a child?
Question: Why does the law presume that a child who is left nothing has been forgotten?
Question: What happens to the pretermitted heir?
Question: How much is that?
Answer: Each state has its own intestacy statutes, establishing how the estate of a person who dies
without a will is distributed.
Question: In this case, did Josiah forget Evelyn?
Question: Why did the court ignore his clear intent?
Question: What should Josiah have done?
Digital Assets
The rules on the inheritance of digital assets are based on:
Service provider policies
Federal statutes
State statutes
Court decisions
Power of Attorney
A power of attorney is a document that permits the attorney-in-fact to act for the principal. (An
attorney-in-fact need not be a lawyer.) Typically, a power of attorney expires if the principal revokes it,
becomes incapacitated or dies. But a durable power is valid even if the principal can no longer make
decisions for herself.
Anatomical Gifts
You can register to be an organ donor:
under the Uniform Anatomical Gift Act (UAGA), by putting a provision in your will or by
signing an organ donation card in the presence of two witnesses,
by using a smartphone app such as DonateLives or Organ Donor ECard,
or in, some states, by signing up when you apply for or renew a driver’s license.
Living Wills
Living wills permit adults to refuse extreme medical treatment that would prolong their lives. In addition,
a living will can be used to appoint a health care proxy to make decisions for a person who has become
incompetent.
Example
For the last four years, Brenda Young has spent her days in torment, rhythmically screaming and
thrashing in her mother’s modest house in Flint, Michigan. Since a seizure at age 34, Ms. Young has
needed total care. She must be fed, bathed, diapered, and, at night, tied into bed so she does not push
herself over the padded bed rails. Sometimes she manages a few intelligible words: “Water” or “Bury
me.” But mostly she screams, over and over, for five and six hours at a time. Her father, unable to stand
it, abandoned his wife after more than 30 years of marriage. Her mother has tried to find a convalescent
home for her, but none has been willing to cope with the screaming.
Young’s situation was predictable. For some time she had been suffering seizures that were becoming
increasingly severe. Her doctor had warned her that she would ultimately become profoundly disabled. A
month before the seizure that left her so disabled, Young signed an advance directive giving her mother a
power of attorney to stop treatment if she became incapacitated. But to no avail: after her next seizure,
the hospital put Young on a ventilator and tube-fed her during a two-month coma, despite her mother’s
insistence that Young did not want life support.
Divide students into three groups, one to represent each side in this case, and one to serve as jury.
Question: Should Young and her mother be able to recover damages from the hospital that treated
Young against the instructions of her mother? On what legal theories might Young and her mother
base their claims?
Answer: This type of lawsuit is typically based on:
Question: What arguments might the hospital make?
Answer: The hospital made the following arguments:
Young’s doctors believed they were doing what was best for her.
Question: If you were on the jury, what would you decide?
Answer: In this case, the jury awarded Young and her mother $16.5 million. This is apparently the
Interview
If you asked your students to talk with their parents or guardians about whether they have living wills,
now would be an opportune moment to ask the results of their interviews.
General Questions:
Did they find out something that surprised them?
Do they have (or plan to have) their own living will?
Do they have objections to the concept of a living will?
Key Issue: Assisted Suicide
Doctors are legally permitted to shorten a patient’s life by withholding medical treatment. Four states—
Montana, Oregon, Vermont, and Washington—also allow doctors to prescribe a lethal dose of medication
for use by a terminal patient who is suffering intolerably.
Additional Case: You Be the Judge: Washington v. Glucksberg
Facts: The plaintiffs comprise a coalition of three terminally ill patients, five physicians who treat
terminally ill patients, and Compassion in Dying, an organization that provides support to mentally
competent, terminally ill adults considering suicide. Jane Roe (she and the other patients used
pseudonyms) is a 69-year-old retired pediatrician who has suffered for six years from metastatic cancer.
Although she underwent chemotherapy and radiation, she is now in the terminal phase of her disease.
She has been almost completely bedridden for a year and is in severe pain despite the use of pain
medication. She also suffers from swollen legs, bed sores, poor appetite, nausea, and vomiting, impaired
vision, incontinence of bowel, and general weakness.
John Doe is a 44-year-old artist dying of AIDS. Since his diagnosis three years ago, he has
experienced two bouts of pneumonia, chronic, severe skin and sinus infections, grand mal seizures, and
extreme fatigue. He has already lost 70 percent of his vision to a degenerative disease that will end in
blindness and rob him of his ability to paint.
James Poe is a 69-year-old retired sales representative who suffers from emphysema. He is connected
to an oxygen tank at all times and takes morphine regularly to calm the panic reaction associated with his
constant feeling of suffocating. Poe also suffers from heart failure related to his pulmonary disease,
which obstructs the flow of blood to his extremities and causes severe leg pain. He is in the terminal
4 Tamer Lewin, “Ignoring ‘Right to Die’ Directives, Medical Community Is Being Sued,” New York
Times, June 2, 1996, p. 1
phase of his illness. [This medical information about the patients is from the appeals court decision. 5 It
was omitted from the Supreme Court opinion, but is included here to help students understand the issues
better.]
All three patients are mentally competent and wish to commit suicide by taking physician-prescribed
drugs. They are prevented from doing so by a statute in the state of Washington that makes it a felony to
help another person attempt suicide.
You Be the Judge: Does a state have the right to punish those who assist the terminally ill to commit
suicide?
Holding: The trial court held the statute was unconstitutional. A three-judge panel of the court of
appeals overturned the trial court. The full appeals court agreed to rehear the case en banc. By a vote of
8-3, the en banc appeals court agreed with the trial court that the statute was unconstitutional. The
opinion stated that preservation of life is an important state interest but, “when patients are no longer able
to pursue liberty or happiness and do not wish to pursue life, the state’s interest in forcing them to remain
alive is less compelling.” However, the Supreme Court overruled the appeals court, holding that the right
to assistance in committing suicide is not a fundamental liberty interest. Further, the state’s assisted
suicide ban is reasonably related to the promotion and protection of a number of the state’s important and
legitimate interests.
Question: What is the difference between this case and the Cruzan case or the Brenda Young case
discussed above?
Question: Why does the state care if someone wants to commit suicide?
Question: Why did the patients in this case want a physician to help them commit suicide?
Question: If the doctor and patient are willing, then why shouldn’t the patient be allowed to seek
help in killing herself?
Answer:
The American Medical Association is firmly opposed to physician-assisted suicide
There is evidence that people want to die only if their pain is unbearable. Even the
In an era of managed care, doctors may have a financial incentive to assist patients in
Question: Why should patients be allowed to ask for help from doctors to kill themselves?
Answer:
The courts increasingly recognize a broad right to privacy. To live or to die is a
5 Compassion in Dying v. Washington, 79 F.3d 790, 1996 U.S. App. LEXIS 3944 Court Appeals for the
Ninth Circuit, 1996
Question: What did the courts decide?
Answer: The courts were very split, as one might expect with such an emotional issue:
By a vote of 5-4, the Supreme Court overturned the appeals court, holding that the right
to assistance in committing suicide is not a fundamental liberty interest. Further, the state’s
Trusts
A trust is an entity that separates legal and beneficial ownership.
Advantages and Disadvantages
William S. Paley and Steven J. Ross were both wealthy, well-connected men. Paley, 89, was chairman
and a major shareholder of CBS, Inc. Ross, 65, was chairman and co-chief executive of Time Warner,
Inc. Paley’s will was 135 pages long with seven executors, including Henry Kissinger. It mentioned
scores of charities. By contrast, Ross’s will was four pages long. He had transferred most of his assets to
a living trust before he died.
Question: Why did these two men–both rich and famous–treat their assets so differently at death?
Answer: Ross had younger children. By putting his assets in a revocable trust, he accomplished
these goals:
Types of Trusts
Depending upon the goal in establishing a trust, a grantor has two choices.
Living Trust
Also known as an inter vivos trust, a living trust is established while the grantor is still alive. In the
typical living trust, the grantor serves as trustee during his lifetime. He maintains total control over the
assets and avoids a trustee’s fee. If the grantor becomes disabled or dies, the successor trustee, who is
named in the trust instrument, takes over automatically. All of the assets stay in the trust and avoid
probate. Most (but not all) living trusts are revocable, meaning that the grantor can terminate or change
the trust at any time.
Testamentary Trust
A testamentary trust is created by a will. It goes into effect when the grantor dies. Naturally, it is
irrevocable because the grantor is dead. The grantor’s property must first go through probate, on its way
to the trust. Living trusts are particularly popular with older people because they want to ensure that their
assets will be properly managed if they become disabled. Younger people typically opt for a testamentary
trust because the probability they will become disabled any time soon is remote. Also they want to avoid
the effort of transferring their assets to the trust while they are still alive.
Trust Administration
The primary obligation of trustees is to carry out the terms of the trust. They may exercise any powers
expressly granted to them in the trust instrument and any implied powers reasonably necessary to
implement the terms of the trust, unless that power has been specifically prohibited. In carrying out the
terms of the trust, the trustees have a fiduciary duty to the beneficiary.
