1 chapter 50 wills, trusts, and elder law. 2 § 1: wills will provides for a testamentary...

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Chapter 50Wills, Trusts, and Elder Law

Chapter 50Wills, Trusts, and Elder Law

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§ 1: Wills§ 1: Wills

Will provides for a Testamentary disposition of property.A will is the final declaration of how a person

desires to have his or her property disposed of after death.

Testate (One who dies after having made a valid will).

Executor v. Administrator.

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Laws Governing Wills Laws Governing Wills

Probate Laws (vary widely among states).To probate a will means to establish its validity

and carry the administration of the estate through a process supervised by a probate court.

Uniform Probate Code.

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Gifts By WillGifts By Will

Devise: gift of real estate.

Bequest or Legacy: gift of personal property.

Types of Gifts: specific, general, or residuary .

Abatement.

Lapsed Legacies.

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Requirements for a Valid WillRequirements for a Valid Will

Testamentary Capacity and Intent.

Writing Requirements.

Signature Requirements.

Witness Requirements.

Publication Requirements.

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Revocation of WillsRevocation of Wills

Revocation by a Physical Act of the Market.

Revocation by a Subsequent Writing.

Revocation By Operation of Law.

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Rights Under a WillRights Under a Will

The law impose certain limitations on the way a person can dispose of property in a will. Some states force the testator to give a certain amount of their estate to their surviving spouse and/or children.

Beneficiaries can renounce (disclaim) their shares.Spouses in some states can renounce what is given

them in the will and elect to take the forced share.

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Probate ProceduresProbate Procedures

Informal Probate Proceedings.Family Settlement Agreements.Small Estates.

Formal Probate Proceedings.Larger Estates.Guardianship appointment to a minor or

incompetent person and trust has been created to protect that minor or incompetent person.

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Property Transfers Outside the Probate Process

Property Transfers Outside the Probate Process

Living Trusts.

Joint Ownership of Property.

Gifts Intervivos (while one is alive).

Life Insurance Policies.

Individual Retirement Accounts (IRA).

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§ 2: Intestacy Laws § 2: Intestacy Laws

Statues of descent and distribution which attempt to carry out the likely intent and wished of the decedent.Surviving Spouse and Children, Not in-laws.Stepchildren, Adopted children, Illegitimate

children.Grandchildren.

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Surviving Spouse and ChildrenSurviving Spouse and ChildrenSurviving spouse usually receives only a share of the estate.1/3 if two or more children.1/2 if one surviving child.Entire estate if no children or grandchildren.

If no surviving spouse or child the order of inheritance is:Lineal descendants.Collateral heirs (if no lineal descendants).

Not spouses of the children, in-laws.

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Stepchildren, Adopted Children, Illegitimate Children

Stepchildren, Adopted Children, Illegitimate Children

Stepchildren -- not considered children of deceased.

Adopted children -- considered children of deceased.

Illegitimate -- must prove paternity.

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DistributionDistribution

Per stirpes (Intestate). A class or group of distributees take the share that their deceased parent would have been entitled to inherit had that parent lived.

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DistributionDistribution

Per Capita (Intestate). A class or group of distributees equally share in the inheritance.

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§ 3: Trusts§ 3: Trusts

Trust -- A right of property (real or personal) held by one party for the benefit of another.

Essential Elements:Designated beneficiary.Designated trustee.Fund sufficiently identified to enable title to pass to the

trustee.Actual delivery to the trustee with the intention of

passing title.

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Express TrustsExpress Trusts

Living Trusts.

Testamentary Trusts.

Charitable Trusts.

Spendthrift Trusts.

Totten Trusts.

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Implied TrustsImplied Trusts

Constructive Trusts.Arises by operation of the law in th interest of

equity and fairness.

Resulting Trusts.Arises from the conduct of the parties.

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The TrusteeThe Trustee

Trustee’s Duties.Act with honesty, good faith, and prudence in

administering the trust and must exercise a high degree of loyalty toward the trust beneficiaries.

Trustee’s Powers.

Allocation Between Principal and Income.

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Trust TerminationTrust Termination

Trust ends when expressly specified in trust; if trust does not provide specification of termination, trust doesn’t end at death of beneficiary or trustee.

When its purpose has been fulfilled.

When trust’s purposes become illegal or impossible.

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§ 4: Estate Administration§ 4: Estate Administration

Locating the Will.

Duties of the Personal Representative.

Estate and Inheritance Taxes.

Distribution of Assets.

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Locating the WillLocating the Will

If a will -- an executor is usually named.

If no will or not executor -- court will appoint an administrator.

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Duties of the Personal Representative

Duties of the Personal Representative

Inventory and collect assets.

Have assets appraised.

Manage the estate prudently.

Receive and pay valid claims.

Pay federal and state income taxes and estate or inheritance taxes.

Post bond -- unless excused.

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Estate and Inheritance TaxesEstate and Inheritance Taxes

Federal tax is levied upon the total value of the estate after debts and expenses for administration have been deducted and after exemptions have been allowed.State tax is levied in form of inheritance tax imposed on the recipient of the bequest rather than on the estate.The closer the relative receiving bequest - the

lower the tax.

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Distribution of AssetsDistribution of Assets

Executor or Administrator.submits distribution plan to court.court approval.distributes assets pursuant to court order.accounting is rendered to court.

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§ 5: Elder Law§ 5: Elder Law

Legal practice area in which attorneys assist older persons in dealing with problems relating to age.

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Planning for DisabilityPlanning for Disability

Durable Power of Attorney.

Health-Care Power of Attorney.

Living Will.

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Medical PlanningMedical Planning

Medicaid v. Medicare.

Medicaid Planning.

Criminalizing Medicaid Planning.

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Case 50.1: In Re Estate of Klauzer(Requirements for Valid Will)

Case 50.1: In Re Estate of Klauzer(Requirements for Valid Will)

FACTS:Klauzer’s will disposed of the majority of his

estate in a residuary clause that named each of various relatives and friends as individuals followed by their relationship to the testator.

The clause provided that they should receive his property “in equal shares, share and share alike. That should any of the individuals above named predecease me, then their share of my estate shall go to their [descendants] surviving.” The court ordered the estate distributed in sixteen equal shares.

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HELD: AFFIRMED. 16 Shares.The language of the will evidenced John’s intent

regarding the distribution of his property in sixteen equal shares.

“First, John refers to his friends as individuals. Second, he requests that they receive his property ‘in

equal shares, share and share alike.’ Third, he states that if one individual predeceases him,

his or her share ‘shall go to their [descendants] surviving.’ *  *  * We determine that the testator’s intent is clearly expressed within the four corners of the document. We are bound by the unambiguous language of the will.”

Case 50.1: In Re Estate of Klauzer(Requirements for Valid Will)

Case 50.1: In Re Estate of Klauzer(Requirements for Valid Will)

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Case 50.2: Bielat v. Bielat(Property Transfers Outside of the Probate Process)

Case 50.2: Bielat v. Bielat(Property Transfers Outside of the Probate Process)

FACTS:IN 1983, Bielat opened an IRA and named his

sister Stella as beneficiary. Later, Chester executed a will that gave all of his property to his wife Dorothy.

In 1993, Ohio enacted its version of the Uniform Transfer‑on‑Death Security Registration Act, under which IRA beneficiary designations were exempted from the formalities that apply to testamentary dispositions.

Dorothy filed a complaint in an Ohio state court against Stella, claiming the IRA.

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HELD: FOR STELLA. COMPLAINT DISMISSED.Dorothy was not a party to the 1983 IRA

Agreement, nor was she a third‑party beneficiary or assignee of Stella’s contingent rights as a designated beneficiary of the account balance. The IRA Adoption Agreement created no rights or obligations for Dorothy.

Dorothy thus had no vested contractual right impaired by the retroactive application of the disputed statutes; she had no contractual rights to impair.”

Case 50.2: Bielat v. Bielat(Property Transfers Outside of the Probate Process)

Case 50.2: Bielat v. Bielat(Property Transfers Outside of the Probate Process)

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Case 50.3: Zeigler v. Cardona(Constructive Trusts)

Case 50.3: Zeigler v. Cardona(Constructive Trusts)

FACTS:Suarez bought a $50,000 life insurance policy from

Liberty National Life Insurance Company. The beneficiary was Suarez’s mother, Cardona.

Later, Suarez and his aunt, Zeigler, met with the insurance agent to change the beneficiary to Zeigler.

Suarez made clear that he wanted the proceeds of the policy used for the benefit of his children and Zeigler agreed. Liberty National never acted on the request.

Suarez died and Zeigler sued. The children sought to have the proceeds placed in a constructive trust on their behalf.

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HELD:The court gave Zeigler $10,000, imposed a

constructive trust on the remainder for the benefit of the children, and gave Cardona nothing.

“[C]ourts will give effect to the intention of the insured by holding that a change of beneficiary has been accomplished where he or she has done all that he or she could do in order to com ply with the provisions of the policy.

A constructive trust may be imposed even though the designated beneficiary is not guilty of fraud or wrongdoing.

Case 50.3: Zeigler v. Cardona(Constructive Trusts)

Case 50.3: Zeigler v. Cardona(Constructive Trusts)