Probate Process
Why do we need a probate process? Clear title, distribute assets, pay creditors or bar them from collecting later.
Statutes of Limitations: Creditors – 4 months or 60 days (CPC 9100) / To probate a will – 60 days or 120 days (CPC 8226).
How to avoid probate: JTWROS, POD bank accounts (and similar property), revocable trust (and other revocable transfers), life insurance proceeds, lifetime gifts. Avoiding probate =/= avoiding taxes:
JTWROS = 100% FMV at death
Revocable transfers = FMV at death
Pay on death beneficiary designations = FMV at death
Life insurance = Death proceeds if owned by D
Taxable lifetime gifts (over $14k) = adjusted taxable gifts (go into base to determine cumulative gifting amount).
Tax Exemptions and Exclusions
Estate and gift tax exemption = $5.25 million ($10.5 million per couple).
Annual gift tax exclusion (per donee) = $14k of a present interest.
Estate and gift tax rate on amounts in excess of the $5.25 million exemption = 40 percent.
Note: state estate taxes could apply even when federal estate taxes do not apply.
Step-up in basis at death = IRC § 1014 vs. original cost basis if gift is carryover (§ 1015).
Statute of Limitations for Malpractice
Heyer v. Flaig: Marriage revoked the will.Issue: When does the S/L begin to run on the malpractice action? Holding: at time of T’s death. Today: Cause of action accrues under the discovery rule which may be later than T’s death.
Choice of Law
Real property: where property is located / Personal property: where decedent is domiciled at death.
English per stirpes: vertical quality—each line of descent treated equally.
Modern per stirpes (CA): each line of descent treated equally beginning at first generation with a living taker.
UPC per capita: horizontal equality—each taker at each generation treated equally (“equally near, equally dear”).
Summary of UPC Intestacy Provisions (Text pp. 69-70)
(S)pouse; (D)escendent; (P)arents under 1990 UPC § § 2-101 to 2-106 (rev. 2008)
S; no D; no P – Spouse gets it all
S; D – Spouse gets it all only if all D are also S’s and S’s only kids
S; no D; P – Spouse gets $300k + ¾; the rest goes to P
UPC: Ancestors, Collaterals, and Others (Text p. 85)
UPC: No laughing heirs / CPC 6402 (French at p. 14) provides for laughing heirs.
Advancements and Hotchpot
Common law advancement and hotchpot (modern trend is gifts are presumed to be gifts.)
Summary of Community Property Intestacy Provisions
Community property includes all property acquired during marriage other than by gift, bequest, or devise. Quasi-community property is acquired while married in a non-community property state, treated as community property for purposes of distribution at death and divorce (i.e., quasi-community property has not vested until death or divorce).
CPC § 6401 Share of Spouse
(a) Community property—the intestate share of the surviving spouse is the one-half of the community property that belongs to the decedent.
(b) Quasi-community property—the intestate share of the surviving spouse is the one-half of the quasi-community property that belongs to the decedent
(c) Separate property—the intestate share of the surviving spouse is:
(1) 100% if no issue, parent, siblings, etc.
(2) 50% if one child or issue of one deceased child with no issue, but parents or issue of parents
(3) 33.3% more than one child
Definition of a Spouse under State Law
Marriage is generally necessary (but subjective good faith belief in validity of marriage produces putative spouse in CA).
Taxation permitted for same-sex spouses but social security is still in the works.
In CA you may be a registered domestic partner AND a spouse (other states may limit or eradicate RDP).
Registered domestic partners and civil union partners (property acquired from 2001-2005 is community property).
Long term cohabitants are not spouses (exception: Washington state cohabitation contracts create CP rights).
Simultaneous Death
Uniform Simultaneous Death Act: If there is no sufficient evidence of survivorship, the beneficiary is deemed to have predeceased. Claimant must establish survivorship by 120 hours (5 days) by clear and convincing evidence.
Janus v. Tarasewicz [Cyanide-laced Tylenol capsules]: The determination of legal death must be made in accordance with the usual and customary standards of medical practice, i.e., Theresa’s brain death.
CPC: Simultaneous death rule applies to community and quasi-community property upon death of spouses. / Applies to life insurance, JTWROS, CPWROS, etc. / For intestacy, heir must survive by 120 hours (5 days) rather than mere seconds.
Posthumously Conceived Children
UPC says posthumously conceived child is treated as in gestation if the child is in utero within 36 months after the individual’s death, or born within 45 months after the individual’s death. Time limitations help close the estate.
CPC 249.5 conception after death; 9th circuit rule on SS (recognizing paternity before conception makes you a father.)
In re Martin B. [Unexpected grandchildren]: When a governing instrument is silent, post-conceived children should be accorded the same rights as children who are conceived prior to their father’s death.
In re estate of Mahoney: A conviction of voluntary manslaughter disables the party from taking under the decedent’s will or through intestate succession.(If no state statute, constructive trust approach divests any inequitable legal title.)
At common law, the commission of any felony deprived the wrongdoer of his right to inherit property. Today, most states simply bar murderers from inheriting any interest in the victim’s estate.
California Slayer Statute [CPC § 250 (Supp at 39)]
For “A person who feloniously and intentionally kills the decedent…” property passes as though killer predeceased.
Applies to property passing by will or trust, property subject to power of appointment, insurance, JT and intestacy.
BoF § 254 – conviction is conclusive, but if acquitted (or not tried) then preponderance of the evidence is sufficient.
JTWROS § 251 – killer should not be better off by killing victim (but see Estate of Castiglioni community property).
§ 253 any case not described by statute where one person kills another, any acquisition as a result shall be treated in accordance with the principles (so 251 should apply to community property).
Beneficiary cannot take and passes as though killer/beneficiary predeceased (goes to contingent beneficiary or estate).
Guardianship and Conservatorship for Minors
Trust: IRC §2503(c) satisfies the gift of a present interest as long as distributed to the minor once they reach 18.
(Note: “strong-armed trust” is a way to keep money in trust past 18.)Shellenbarger: Deadbeat parents cannot inherit.
Disclaiming an Interest
Disclaimer Statute: CPC § 282: Property passes as if disclaimant predeceased the creator of the interest.
Drye v. United States: Exception: IRS tax lien trumps disclaimers.(Some people also try to disclaim to keep Medicaid.)
“Valid where executed”Statutory Formalities
UPC § 2-502(a): Except as otherwise provided, a will must be (1) in writing; (2) signed by testator; (3) signed by at least two individuals within a reasonable time after witnessing OR acknowledged by the testator before a notary public.
Functions of Formalities
Evidentiary function: Supply satisfactory evidence to the court.
Ritual/cautionary function: The performance of some ceremony for the purpose of impressing the significance.
Protective function: Prophylactic purpose of safeguarding the testator.
Channeling function:The standardization of form simplifies administration.
Presence REQ in Will Execution
Line of sight: T does not actually have to see the witnesses sign, but must be able to see them were the testator to look.
Conscious Presence: T through sight, hearing, or general consciousness of events, comprehends that witness is signing.
Signature in Will Execution
What forms of signature evidence finality, distinguishing a will from a draft or mere notes?
Type of mark: name in full; a cross (In re Estate of McCabe); abbreviation; nickname; electronically printed name in full (cursive font) (Taylor v. Holt); Initials and date sometimes; Mark made by someone else at the direction of the testator
Location o mark: At the end of the document generally; Subscription “at the foot or end thereof” (req. for few states)
Order of “signing”: Additions to will madeafter”signing” may be invalid.
Witnesses: At time of T’s signing or acknowledgement, as part of one continuous transaction, or within a reasonable time, sometimes even after T’s death (modern trend to accept after death if reasonable)
CPC Section 6110: The will shall be witnessed by being signed, during the testator's lifetime, by at least two persons each of whom (A) being present at the same time, witnessed either the signing of the will or the testator's acknowledgment of the signature or of the will and (B) understand that the instrument they sign is the testator's will.
(2) If a will was not executed in compliance with paragraph (1), the will shall be treated as if it was executed in compliance with that paragraph if the proponent of the will establishes by clear and convincing evidence that, at the time the testator signed the will, the testator intended the will to constitute the testator's will.
Possible cures for switched wills
(1) Probate the will that the testator intended to sign—cure the defect in the execution (makes sense to fulfill will).
(2) Probate the will that the testator mistakenly signed—reform the terms of the will so that it makes sense, reforming its terms to make sense (used because the writing requirement is so important).
Self-proving affidavit: where available can be used to prove the will, but the will must be properly executed.
In re Will of Ranney: Two step self proving affidavit; witnesses signed the affidavit, not the will; substantial compliance.
In re Will of Ferree: Will was not notarized but there was no second witness. The court did not think this was sufficient.
This would have constituted harmless error under the UPC 2-503.
Substantial Compliance / Harmless Error (UPC § 2-503)The court may deem a defectively executed will as being in accord with statutory formalities if there is clear and convincing evidence that the purposes of those formalities were served. / The court may excuse noncompliance if there is clear and convincing evidence that the decedent intended the document to be his will.
Will signing ceremony instructions to satisfy the formal requirements in all states (text pp. 168-169).
Note: The harmless error rule applies to a document that was misexecuted, not a document that doesn’t exist
Holographic Wills
CPC § 6111 Signature and the material provisions must be in the handwriting of the testator. No date necessary unless inconsistent with another will. Any statement of testamentary intent may be a part of a commercially printed form will.
Jurisdictional Split: Only about half the states recognize holographic wills and requirements vary.
1st generation (Entirely written, signed, and dated): If the jurisdiction requires that the holographic will be entirely in the testator’s handwriting, any printing or other marks on the document may invalidate the whole will under a strict compliance approach to the requirements.
2nd generation (Surplusage theory):All of the material provisions that affect the disposition of testator’s property must be handwritten, e.g., the “who gets what,” any administrative provisions (i.e., appointment of a personal representative or guardian), and under strict compliance even testamentary intent (i.e., the intent that this document constitutes the person’s last will and testament.)
3rd generation (UPC approach): The UPC requires only that the material portions, not the entire instrument, be in the testator’s handwriting. UPC § 2-502(b). Testamentary intent can be derived from the handwritten material, the non-handwritten provisions, or other extrinsic evidence. UPC § 2-502(c).
Testamentary Intent
Kimmel’s Estate (1924): Decedent handwrote a letter to three of his children. Words such as “Kepp this letter” supports a finding of testamentary intent and “Father” qualifies as a signature since that is how he normally signed letters.
Material Provisions
Estate of Gonzales (2004): Decedent purchased a commercially printed form will, filled in the blanks, then signed the form will. The decedent showed the document to his brother and sister-in-law, then told them he planned to write it more neatly on a second form. The decedent fell ill and died before copying the testamentary provisions over to the second form that his family members had signed. The court chose to apply a looser standard and find a valid will.
Conditional Wills
Conditional wills are those that contain an express clause conditioning their being given effect upon some event occurring. Courts tend to construe such clauses, when possible, as mere explanations for why the decedent executed the will as opposed to an express condition precedent to the will being given effect.
Eaton v. Brown (1904): “I am going on a journey and may not return. If I do not, I leave everything to my son.”
Estate of Harris (1948): “In case I die in this mess, I leave all to the wife.” Scratch with a knife, in extremis.
Revocation of Wills
UPC 2-507: May revoke a will or any part thereof by executing a subsequent will expressly or by inconsistency, or by performing a revokatory act. / CPC 6120: Acts constituting revocation.
Majority: Testator does not intend to die intestate.
Minority: Once revoked, always revoked.
Harrison v. Bird: Speer executed duplicate wills naming Harrison as the main beneficiary. Speer instructed her attorney by phone to revoke her will. The attorney tore the will into four pieces and sent the pieces along with a letter stating that the will was revoked to Speer. Speer dies. The letter from the lawyer but not the pieces of the will are found.
Rebuttable Presumption
If the evidence establishes that Ms. Speer had possession of the will before her death, but the will is not found among her personal effects after her death, a presumption arises that she destroyed the will. Furthermore, if she destroys the duplicate of the will in her possession, a presumption arises that she has revoked her will and all duplicates, even though a duplicate exists that is not in her possession. Burden of rebutting the presumption is on the proponent of the will.
Dependent Relative Revocation (DRR Doctrine)
Did T really intend to revoke Will #1 or was it conditional upon Will #2 being valid?
Fact Situation #1: If the court finds that the testator would not have destroyed his old will had he known that the new will was ineffective, e.g., interested witness, the court will disregard the revocation and probate the destroyed prior will.
Did T intend to revoke Will #2 only if it revived Will #1?
Fact situation #2: T revoked will #1 by a subsequent will, and revoked will #2 by a physical act. Both wills have been revoked, but maybe T intended to revive will #1 by destroying #3.
Note: Some states never recognize partial revocation by physical act (e.g., strikethroughs) to avoid DRR issues.
Issues usually arise when the beneficiary changes, or the amount given decreases, because intent to deprive.
However, partial revocation is recognized in California, by clear and convincing evidence for a holographic will.
Revival Statutes (CPC § 6123)
Majority Jx: Upon revocation of will 2, will 1 is revived if the testator so intends. Such intent may be shown from the circumstances surrounding the revocation of will 2 or from the testator’s contemporaneous or subsequent oral declarations that will 1 is to take effect. UPC § 2-509 is fairly representative of the majority of these state statutes.
Minority Jx: A revoked will cannot be revived unless re-executed with testamentary formalities or republished by being referred to in a later duly executed will.
Revocation by Operation of Law
Marriage used to revoke an existing will. Birth of new children used to revoke a will. Divorce still revokes will for spouse.
Integration
In re Estate of Rigsby: The second page could easily be interpreted as a work sheet listing Decedent’s assets as a preliminary step before drafting the first page. Holding: The second page is missing proof of testamentary intent.
Hypo: T wants to revise a will. He goes to his attorney and the secretary re-prints out page 7. T didn’t re-sign. Invalid.The lawyer can avoid litigation by ensuring that the will is fastened together before the testator signs and by having the testator sign or initial each numbered page of the will for identification.
Republication by Codicil
A will is treated as if it were executed when its most recent codicil was executed.
Incorporation by Reference
UPC § 2-510: Any writing in existence when a will is executed may be incorporated by reference if the language of the will manifests this intent and describes the writing sufficiently to permit its identification.
Requirement: Pre-existing document specifically referenced in the will.
“I give 100k to the first five people named in the Vassar Alumnae Directory of 2012.” Incorporated by reference.
“I give 100k to the first five people named in the Vassar Alumnae Directory of 2015.” Independent significance.
Clark v. Greenhalge: Codicil republished her will, and incorporated all the new entries in her notebook, i.e., farm picture.
Separate Writing Identifying Devise of Certain Types of Tangible Personal Property UPC § 2-513 (1990):
Whether or not the provisions relating to holographic wills apply, a will may refer to a written statement or list to dispose of items of tangible personal property not otherwise disposed of by the will, other than money. To be admissible under this section as evidence of the intended disposition, the writing must be signed y the testator and must describe the items and the devisees with reasonable certainty. The writing may be referred to as one to be in existence at the time of the testator's death; it may be prepared before or after the execution of the will; it may be altered by the testator after its preparation; and it may be a writing that has no significance apart from its effect on the dispositions made by the way.
CPC § 6132 (French at 81-82): (g) The total value of tangible personal property identified and disposed of in the writing shall not exceed 25k. (And maximum value for any single item is 5k.) Additionally, writing must be dated and signed.
What happens if the writing purports to give the diamond ring to Brad and the ring is worth 10k? Residuary.
Acts of Independent Significance
Nontestamentary Amendment to a Will (I.e., Acts not prompted by a desire to change the beneficiaries or their gifts).
UPC § 2-512: A will may dispose of property by reference to acts and events that have significance apart from their effect upon the dispositions made by the will, whether they occur before or after the execution of the will or before or after the testator’s death. / CPC § 6131 adds: The execution or revocation of a will of another person is such an event.