1. Copyright © 2009 by Pearson Prentice Hall. All rights reserved. PowerPoint Slides to Accompany CONTEMPORARY BUSINESS AND ONLINE COMMERCE LAW 6 th Edition by Henry R. Cheeseman Chapter 39 Family Law, Wills, and Trusts

2. 39 - 2Copyright © 2009 by Pearson Prentice Hall. All rights reserved. of Importance Promise-to-marry Engagement and the ring-objective rule – the groom Prenuptial agreements Marriage license Support Common law Same-sex: Massachusetts Parents’ rights and duties – until 18

3. 39 - 3Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Marriage continued Paternity actions Parents’ liability for child’s wrongful act: generally no Surrogacy Adoption Termination Annulment Divorce Division of assets

4. 39 - 4Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Marriage continued Spousal support Child support Family Support Act Child custody

5. 39 - 5Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Will A declaration of how a person wants his or her property distributed after death.

6. 39 - 6Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Wills: Key Terms Testator Testator – the person who makes a will. Beneficiary Beneficiary – a person or organization designated in the will that receives all or a portion of the testator’s property at the time of the testator’s death.

7. 39 - 7Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Requirements for Making a Will Statute of Wills Statute of Wills – a state statute that establishes the requirements for making a valid will. Testamentary Capacity Writing Testator’s Signature

8. 39 - 8Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Attestation by Witnesses attested Wills must be attested to by mentally competent witnesses. Most states require two or three witnesses. Most jurisdictions stipulate that interested parties cannot be witnesses.

9. 39 - 9Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Changing a Will Codicil Codicil – a separate document that must be executed to amend a will. It must be executed with the same formalities as a will. The codicil must incorporate by reference the will it is amending.

10. 39 - 10Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Revoking a Will revoked A will may be revoked by acts of the testator. A will is revoked if the testator intentionally burns, tears, obliterates, or otherwise destroys it. subsequent will A properly executed subsequent will revokes a prior will if it specifically states that it is the testator’s intention to do so.

11. 39 - 11Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Simultaneous Deaths Uniform Simultaneous Death Act Uniform Simultaneous Death Act An act that provides that if people who would inherit property from each other die simultaneously, each person’s property is distributed as though he or she survived.

12. 39 - 12Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Undue Influence Occurs where one person takes advantage of another person’s mental, emotional, or physical weakness and unduly persuades that person to make a will The persuasion by the wrongdoer must overcome the free will of the testator

13. 39 - 13Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Types of Testamentary Gifts Devise Devise – a gift of real estate by will. Bequest Bequest – a gift of personal property by will. Specific gift Specific gift – a gift of a specifically named piece of property. General gift General gift – a gift that does not identify the specific property from which the gift is to be made. Residuary gift Residuary gift – a gift of the estate left after the debts, taxes, and specific and general gifts have been paid. Devise Devise – a gift of real estate by will. Bequest Bequest – a gift of personal property by will. Specific gift Specific gift – a gift of a specifically named piece of property. General gift General gift – a gift that does not identify the specific property from which the gift is to be made. Residuary gift Residuary gift – a gift of the estate left after the debts, taxes, and specific and general gifts have been paid.

14. 39 - 14Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Ademption and Abatement Ademption 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 nothingAdemption Abatement If the property the testator leaves is not sufficient to satisfy all the beneficiaries named in a will and there are both general and residuary bequests, the residuary bequest is abated firstAbatement

15. 39 - 15Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Per Stripes Distribution A distribution of the estate that makes grandchildren and great-grandchildren of the deceased inherit by representation of their parent i.e., they split what their deceased parent would have received If their parent is not deceased, they receive nothing

16. 39 - 16Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Example of a Per Stripes Distribution AnneBeth 1 st DEGREE Bart Bruce (deceased) (deceased) 2 nd DEGREE 3 rd DEGREE Carla Clayton Cathy Deborah Dominic ( 1/3 ) ( 1/6 ) ( 0 ) () () (deceased) 1/12 1/12

17. 39 - 17Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Per Capita Distribution A distribution of the estate that makes each grandchild and great-grandchild of the deceased inherit equally with the children of the deceased

18. 39 - 18Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Example of a Per Capita Distribution AnneBeth 1 st DEGREE Bart Bruce (deceased) (deceased) 2 nd DEGREE 3 rd DEGREE Carla Clayton Cathy Deborah Dominic ( 1/6 ) (deceased)

19. 39 - 19Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Special Types of Wills Holographic Will Holographic Will Will that is entirely handwritten and signed by the testator Noncupative Will Noncupative Will Oral will that is made before a witness during the testator’s last illness

20. 39 - 20Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Joint and Mutual Wills Joint Will A will that is executed by two or more testators A joint will may be held invalid as to one testator but not the others Joint Will A will that is executed by two or more testators A joint will may be held invalid as to one testator but not the others Mutual Wills Occur 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 at the time of death as agreed by the testators Mutual Wills Occur 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 at the time of death as agreed by the testators

21. 39 - 21Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Intestate Succession SituationParties Who Receive Deceased’s Property Deceased dies with a valid will Beneficiaries named in the will. Deceased dies without a valid will Heirs set forth in the applicable intestacy statute. If there are no heirs, the deceased’s property escheats (goes) to the state.

22. 39 - 22Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Living Wills Right to Die Right to Die A personal liberty protected by the Due Process Clause of the U.S. Constitution Living Will Living Will A document signed by a person that stipulates his or her wishes to not have his or her life prolonged indefinitely by artificial means

23. 39 - 23Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Trust A legal arrangement established when one person transfers title to property to another person to be held and used for the benefit of a third person Trust Corpus Trust Corpus – the property held in trust. The trust has legal title to the trust corpus The beneficiary has equitable title

24. 39 - 24Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Parties to a Trust Settlor or Trustor Settlor or Trustor – person who creates a trust. Trustee Trustee – person who hold legal title to the trust corpus and manages the trust for the benefit of the beneficiary or beneficiaries. Beneficiary Beneficiary – person for whose benefit a trust is created.

25. 39 - 25Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Trusts Express Inter vivos Testamentary Resulting Constructive Charitable Spendthrift Totten

26. 39 - 26Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Example of Parties to a Trust Equitable title to the trust corpus Legal title to the trust corpus Manages the trust for the benefit of the beneficiary or beneficiaries Settlor Trustee Beneficiary or Beneficiaries

27. 39 - 27Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Living Trust A legal entity used for estate planning grantor’s trustrevocable trustinter vivos trust Also called a grantor’s trust, revocable trust, or inter vivos trust Trust corpus Trust corpus – the property that is placed in the trust to fund the trust. The primary purpose of using a living trust is to avoid probate.

28. 39 - 28Copyright © 2009 by Pearson Prentice Hall. All rights reserved. Parties to a Living Trust Grantor Grantor – person who establishes a living trust. Trustee Trustee – person who is responsible for maintaining, investing, buying, and selling trust assets. Income beneficiary Income beneficiary – person who is entitled to receive income from a living trust. Remainder beneficiary Remainder beneficiary – person who is entitled to receive the assets of the trust upon the death of the grantor. Pour-over will Pour-over will – necessary to distribute any of the grantor’s property not in the living trust at the time of the grantor’s death to the trust upon the grantor’s death. Grantor Grantor – person who establishes a living trust. Trustee Trustee – person who is responsible for maintaining, investing, buying, and selling trust assets. Income beneficiary Income beneficiary – person who is entitled to receive income from a living trust. Remainder beneficiary Remainder beneficiary – person who is entitled to receive the assets of the trust upon the death of the grantor. Pour-over will Pour-over will – necessary to distribute any of the grantor’s property not in the living trust at the time of the grantor’s death to the trust upon the grantor’s death.