1 Chapter 50 Wills, Trusts, and Elder Law

2 § 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.

3 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.

4 Gifts By Will Devise: gift of real estate. Bequest or Legacy: gift of personal property. Types of Gifts: specific, general, or residuary. Abatement. Lapsed Legacies.

5 Requirements for a Valid Will Testamentary Capacity and Intent. Writing Requirements. Signature Requirements. Witness Requirements. Publication Requirements.

6 Revocation of Wills Revocation by a Physical Act of the Market. Revocation by a Subsequent Writing. Revocation By Operation of Law.

7 Rights 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.

8 Probate 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.

9 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).

10 § 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.

11 Surviving Spouse and Children Surviving 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.

12 Stepchildren, Adopted Children, Illegitimate Children Stepchildren -- not considered children of deceased. Adopted children -- considered children of deceased. Illegitimate -- must prove paternity.

13 Distribution 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.

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

15 § 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.

16 Express Trusts Living Trusts. Testamentary Trusts. Charitable Trusts. Spendthrift Trusts. Totten Trusts.

17 Implied 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.

18 The 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.

19 Trust 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.

20 § 4: Estate Administration Locating the Will. Duties of the Personal Representative. Estate and Inheritance Taxes. Distribution of Assets.

21 Locating the Will If a will -- an executor is usually named. If no will or not executor -- court will appoint an administrator.

22 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.

23 Estate 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.

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

25 § 5: Elder Law Legal practice area in which attorneys assist older persons in dealing with problems relating to age.

26 Planning for Disability Durable Power of Attorney. Health-Care Power of Attorney. Living Will.

27 Medical Planning Medicaid v. Medicare. Medicaid Planning. Criminalizing Medicaid Planning.

28 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.

29 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)

30 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.

31 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)

32 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.

33 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 com­ply 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)