1. CHAPTER 19 Wills, Trusts, and Estates
11/10/2018
CHAPTER 19 Wills, Trusts, and Estates
19-1 Property Distribution Upon Death
19-2 Trusts

2. 19-1 Property Distribution Upon Death
GOALS
Differentiate between dying testate (with a will) and dying intestate(without)
Describe how a decedent’s (dead person’s) property is distributed to the heirs of the estate or will or trust
Chapter 19

3. Will
A declaration of how a person wants his or her property distributed after death.

4. Key Terms Testator – the person who makes a will.
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.
Copyright © 2004 by Prentice-Hall. All rights reserved.

5. Requirements for Making a Will
Statute of Wills – a state statute that establishes the requirements for making a valid will.
Testamentary Capacity
Writing
Testator’s Signature
Death without a will – dying intestate court appoints an administrator
Copyright © 2004 by Prentice-Hall. All rights reserved.

6. Attestation by Witnesses
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.

7. FOCUS Name three reasons a person should have a will.
Pay taxes and administrative expenses dictated by the courts
Prevent family fighting
Carry out the decedents wishes
No Will

8. Recap Testator Testamentary Capacity Beneficiary Decedent Testate
Intestate
Will
Statute of Will
Attested
Chapter 19

9. GA Will Assignment
Research writing a will in GA
(see edmodo.com)

10. Recap
In Georgia, what are the 4 things that the person creating the will (known as the testator) must satisfy in order to create a will? Testator capacity Writing Witnesses Signature

11. Recap 1
Does Georgia recognize holographic wills? No

12. Recap 2
How long does a will remain in place in Georgia? A will remains in full effect until a new will replaces it or it is revoked

13. Recap 3
Does Georgia recognize Oral wills? No

14. Recap 5
In Georgia, does a surviving spouse have a right to a share of the decedent's property if no will exists? Yes and no

15. Recap 6
What is the Probate process is Georgia for people who die intestate? How about people with a will? The court appoints an administrator to handle the estate for people without a will. For with will, the assets are transferred to beneficiaries

16. Recap 7
What are the benefits of having a will? Are there any benefits of not having a will?
Benefits: Testator maintains some control of assets and children. Without a will, the potential heirs of an estate will have to

17. Property Debate Recap
Property Debates

18. Hick owned property on Ruth Lake next to Bend's property on Gull Lake
Hick owned property on Ruth Lake next to Bend's property on Gull Lake. Hick also owned a narrow strip of property over Bend's land that gave him access to Gull Lake. (See the Open map.)
Starting in 1958, Bend built a house and a garage which he located on Hick's narrow strip of land. Bend also poured a concrete patio and retaining wall at the beach, installed a stone barbeque and planted shrubs and trees. All these improvements were on Hick's land near Gull Lake, but Hick did not object to them.
In 1993, Bend claimed adverse possession of the strip of Hick's land near Gull Lake. The court found that Bend possessed Hick's property for the required fifteen years. The court also found that Bend's possession was exclusive, hostile, continuous and actual. The only difficult requirement was whether Bend's possession of Hick's land was "open."
Hick argued that he could not see the improvements from his Ruth Lake property so they were not "obvious" to him. Therefore, Bend's possession of Hick's land was not "open" and adverse possession should be denied. Do you agree?

19. Case 1

20. Case 1
Adverse possession was proven by Bend. The court found that Bend's use of the land was "open" because "open" means visible to the immediate surroundings. People could see Bend's improvements. He wasn't trying to hide his use of the land. Hick lost possession of the strip of land near Gull Lake. 
Based on Hickerson v. Bender, 500 N.W. 2d 169 (Minn Ct of Appeals 1993).

21. Case 2
In 1892 Rick built a store in Austin Minnesota that was 72 x 22 feet in size. A 22 x 22 foot lot directly behind the store was used by the store for parking. However, it belonged to Sam.
In 1930, Sam built a wall behind the store, on his lot, which cut off access to the alley for the store's employees and customers. (See Exclusive Map.) Rick sued Sam for adverse possession of the lot. The court found that Rick used the lot for the required fifteen years. It also determined that Rick's use of the lot was open, continuous and actual. But, did Rick use the lot in an "exclusive" and in a "hostile" way? What do you think?

22. Case 2

23. Case 2
Rick won. He became the owner of the lot by adverse possession. His use of the lot was “exclusive” because even though more than one person used it; all the people had a similar reason for using it—to access his store. The court ruled that “exclusive” doesn’t mean “use” by one person only, but “use” that is separate from the entire community.
The court also found that Rick’s use of the lot was “hostile” to the owner of the lot. This was proven by Sam’s own actions in building the wall to stop Rick’s store traffic. This showed Sam did not like Rick’s use of the lot. It was “hostile” to Sam’s possession of the land.
Based on Merrick v. Scheuder 228 N.W. 755 (Mn. 1930).

24. Case 3
Starting in 1942, Earl and Pete owned property next to each other. In 1936, six years before Pete bought his land, Earl planted shrubs and hedges and also placed stone monuments and heavy urns with flowers in them on some of the land that would eventually be owned by Pete. (See Hostile Map.)
Earl had also created a parking area on the land eventually owed by Pete with a stone walkway to Earl's house. Earl and Pete shared this parking area. They also shared a clothes pole on this strip of land and were neighborly about the use of the area.
In 1972, Earl sued for adverse possession of the strip of land belonging to Pete. The court found that Earl's use of the land was open, exclusive, continuous and actual for at least fifteen years. However, was his use of the area "hostile"? What do you think?

25. Case 3

26. Case 3
Earl won by adverse possession. He got the land because the court found that his use of it was "hostile." "Hostile" possession does not refer to a personal fight or negative attitude. It only means that the adverse possessor acts as though he is claiming exclusive ownership of the land as against the world. Earl certainly was doing that by making so many improvements to the land he ultimately claimed as his.
Based on Ehle v. Prosser, 197 N.W.2d 458 (Minn. 1972).

27. Case 4
Stan inherited lakeshore property in In 1969, Urban purchased the lot next door and used it as a summer home. Urban immediately started using a strip of land near the lake owned by Stan. Urban stored his dock on it and allowed his children and grandchildren to play on it. In 1970, Urban planted trees and bushes on it. In 1975, Urban converted his property to a year round home and moved in. In 1981, Urban built a tin storage shed on a concrete slab on this strip of land. At this time, he also offered to buy the piece of property from Stan. Stan refused and asked him to remove the shed. (See Actual Map.)
In 1989, Stan sued to recover his piece of property by the lake. Urban claimed he acquired it by adverse possession. He claimed that for at least fifteen years he had used it in an open, exclusive, hostile, continuous and actual manner. Stan claimed that Urban's use of the property was not "actual" because he did not "actually" take over the property until he built the storage shed on it in 1981, only eight years ago - not enough time to adversely possess. Before that, Stan argued Urban only used the property in an occasional and sporadic manner, such as in the summer for boat storage or when Urban had company with children who played on the land. What do you think? Has Urban proved adverse possession?

28. Case 4

29. Case 4
No adverse possession. Stan gets his property back. The court agreed that sporadic use and upkeep of the piece of property was not sufficient to constitute "actual" possession. The court agreed with Stan and stated that it wasn't until Urban built the shed that his possession became actual, triggering the 15-year period needed for adverse possession. And since only eight years passed between the construction of the shed and the lawsuit, that element of adverse possession was not proved by Urban.
The court also held that since Urban had offered to buy the disputed property from Stan, Urban had broken the "continuity" of his adverse possession claim by acknowledging Stan's ownership of the land.
Based on Standard v. Urban, 453 N.W.2d (Minn. Ct. of Appeals 1990)

30. Case 5
In 1863 Eddie took a look at Carl's land in upper Duluth. In 1864 he removed bushes on the land and in 1866 and 1867 he cut timber and saved it to build a house that he finished in It was a story and a half dwelling enclosed by a fence with shrubbery and apple trees. Eddie also planted raspberry, gooseberry and currant bushes. (See Continuous Map.) He lived on Carl's land until Then he rented it out, but he always had the key to the place, paid taxes and made improvements on it.
In 1890, Carl sued to get his land back claiming Eddie abandoned the property when he moved out. The court ruled that Eddie's use of the land was open, exclusive, hostile and actual for at least fifteen years. But was it continuous? What do you think?

31. Case 5

32. Case 5
Carl lost. Eddie secured the land by adverse possession even though he did not live there all the time. The court ruled that actual residence and continuous occupancy is not required to show continuous use. The fact that Eddie kept up the property and continued to "rule" over it was enough "continuity" for adverse possession.
Based on Costello v. Edson, 46 N.W. 299 (Minn. 1890).

33. Case 6

35. Amendment of a Valid Will
What is a CODICIL?
codicil which is a formal written and witnessed amendment to a will
A will can be changed or cancelled any time during the testators life
Chapter 19

36. Changing a Will
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.
Copyright © 2004 by Prentice-Hall. All rights reserved.

37. Revoking a Will A will may be revoked by acts of the testator.
burns, tears, obliterates, or otherwise destroys
What happens if no one can find the will?
A properly executed subsequent will revokes a prior will if it specifically states that it is the testator’s intention to do so.
Divorce, Kids,
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38. Revoking a Will “I hereby revoke all other wills and codicils”
Divorce, Kids,
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39. What’s the difference between a holographic and noncupative will?
Holographic Will
Will that is entirely handwritten and signed by the testator.
Noncupative Will
Oral will that is made before a witness during the testator’s last illness.
Copyright © 2004 by Prentice-Hall. All rights reserved.

40. Holographic Wills
Chapter 19

41. Revoking a Will
Can be done only by the testator and he or she must have intent and capacity at the time of change or revoking.
Making a new will and stating I hereby revoke all prior wills
Divorce does not revoke or change a will only a divorce settlement can
Chapter 19

43. Will can be used to name guardian of minors
Terms you need to know
Executor-executrix vs. administrator
Testator- testatrix
Contested
Living will
Life support
Durable power of attorney
Posting bond (exempt)
escheats
Will can be used to name guardian of minors

44. Procedures Prior to distribution
Assembling, preserving, inventorying, and appraising estate’s assets and collecting debts owed to it
Public Notice to file claims against state
Pay valid claims
Distribute remaining property
6 months**
Enoch Arden
Laws
5-7 years

45. Personal representative is liable for failure to reasonably carryout duties
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46. 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.
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47. Example of a Per Stripes Distribution
1st DEGREE
Bart
(1/3)
2nd DEGREE
Anne
Beth
Carla
( 0 )
(1/3)
(deceased)
3rd DEGREE
Clayton
(1/6)
Deborah
Bruce (
1/12 )
(deceased)
Cathy
Dominic
(deceased) (
1/12 )
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48. 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.
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49. Example of a Per Capita Distribution
1st DEGREE
Bart
(1/6)
2nd DEGREE
Anne
Beth
Carla
(1/6)
(1/6)
(deceased)
3rd DEGREE
Clayton
(1/6)
Deborah
Bruce
(1/6)
(deceased)
Cathy
Dominic
(deceased)
(1/6)
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50. Types of Testamentary Gifts
Devise
Bequest
Specific Gift
General Gift
Residuary Gift
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51. Assignment
Pg 347
1-15
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52. Types of Testamentary Gifts
Specific bequest: A specific bequest or devise is a gift of a specific item of property (e.g., a Picasso painting) that can be easily identified and distinguished from all other property in the testator’s estate.
Demonstrative bequest: A testamentary gift which must be paid from a specific fund (e.g., $5,000 from my bank account at First Federal).
Copyright © 2004 by Prentice-Hall. All rights reserved.

53. Types of Testamentary Gifts
General bequest: A testamentary gift that is paid out of the general assets of the estate.
Residuary: The amount remaining in the estate after payment of the administration expenses, creditors’ claims, and other dispositions—specific, demonstrative and general bequests.
Copyright © 2004 by Prentice-Hall. All rights reserved.

54. Ademption and Abatement
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 nothing.
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 first.
Copyright © 2004 by Prentice-Hall. All rights reserved.

55. Special Issues Concerning Wills:Simultaneous Deaths
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.
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56. Special Issues Concerning Wills:Joint and Mutual Wills
Joint Will
A will that is executed by two or more 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.
Copyright © 2004 by Prentice-Hall. All rights reserved.

57. Special Issues Concerning Wills: 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.
Copyright © 2004 by Prentice-Hall. All rights reserved.

58. Intestate Succession Situation Parties 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.
Copyright © 2004 by Prentice-Hall. All rights reserved.

59. Intestate Succession Situation Parties Who Receive Deceased’s Property
No Spouse, 1 or more surviving kids
Kids receive equal shares of real & personal property
Spouse, 1+ kids or grandkids,
Spouse gets ½. Kids split 50%.
If one of the kids is deceased…grandkids split share
Spouse. 0 kids. 0 grandkids.
Spouse gets ½ of property. Parents get ½.
**some states spouse gets 100%
0 Spouse. 0 kids. 0 grandkids.
Each parent gets 50%
If 1 parent is deceased, 50% split between siblings
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60. Settlement of the Estate (Probate)
The process of a deceased’s property being collected, debts and taxes being paid, and the remainder of the estate being distributed.
Probate Court
A specialized state court that supervises the administration and settlement of an estate.
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61. The Uniform Probate Code (UPC)
Model law promulgated to establish uniform rules for the:
Creation of wills
Administration of estates
Resolution of conflicts in settling estates
About one-third of the states have adopted all or part of the UPC.
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62. DISTRIBUTION OF THE DECEDENT’S ESTATE
Procedure prior to distribution
Get a death certificate from funeral parlor
Assemble the estate and its property
Public notice in a paper so creditors can come forth
Distribute the will to the heirs
Chapter 19

63. Distribution of Property and $$$
Without a Will- distribution is dictated by the courts and peoples claims against the estate
With a Will – terms must be closely followed by the executor of the will
It will be supervised by the court
Usually assisted by an attorney
Chapter 19

64. Per capita-split equally by children Or grandchildren
What are the terms for the two ways in which the testator can distribute the estate among the lineal descendants?
Per capita-split equally by children
Or grandchildren
Per stirpes- if a child is dead then the share goes to his children
Chapter 19

65. What does it mean to die intestate?
It means to die without a will or a trust
Chapter 19

66. 19-2 Trusts GOALS Recognize the value of the trust instrument
Identify the various types of trusts
Chapter 19

67. FOCUS
Scenario
Mario's mother has taken out a million-dollar life insurance policy on herself. However, she does not want the proceeds of the policies paid directly to Mario. She wants the proceeds utilized to help and guide him through his life as she would have done.
Question
What legal device can Mario’s mother set up to meet these objectives?
Chapter 19

68. PURPOSE AND CREATION OF TRUSTS
Trust – a type of will, in which a third party controls money for a beneficiary
Trustee-is the 3rd party in control to administer the trust to the beneficiary
Settlor- the creator of a trust
Beneficiary – is the person receiving the benefit.
Chapter 19

69. What is the legal term for the creator of a trust?
The Settlor
Chapter 19

70. TYPES OF TRUSTS Inter vivos v. testamentary trust –
Intervivos- settlor is alive when trust is made
Testamentary is a trust made as directed in a will after the settlor’s death
Charitable v. private trust
Express v. implied trust
Express- terms in trust are clearly stated
Implied trust- beneficiary cannot receive benefit, the inheritance goes back to trustee
Chapter 19

71. Inter vivos- trust made during lifetime of settlor
What is the difference between an inter vivos trust and a testamentary trust?
Inter vivos- trust made during lifetime of settlor
Testamentary trust- made after the death of the settlor.
Chapter 19

72. 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 – the property held in trust.
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73. Parties to a Trust Settlor or Trustor – person who creates a trust
Trustee – person who hold legal title to the trust corpus and manages the trust for the benefit of the beneficiary or beneficiaries.
Fiduciary Responsibility: Care & Loyalty
Can’t cause beneficiary to incur liability
Death of trustee doesn’t affect trust
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74. Parties to a Trust
Beneficiary – person for whose benefit a trust is created.
Trustees have the right to be paid
If not written in trust, court decides
Trustee may decline in fee is too low
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75. Example of Parties to a Trust
Legal title to the trust corpus
Settlor
Trustee
Manages the trust for the benefit of the beneficiary or beneficiaries
Beneficiary or Beneficiaries
Equitable title to the trust corpus
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76. Express Trusts
A trust created voluntarily by the settlor (written or oral).
Inter Vivos Trust (Living Trust) – a trust that is created while the settlor is alive.
Testamentary Trust – a trust created by will: the trust comes into existence when the settlor dies.
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77. Implied Trusts
A trust that is implied by law or from the conduct of the parties.
Constructive Trust – an equitable trust that is imposed by law to avoid fraud, unjust enrichment, and injustice.
Resulting Trust – a trust that is created by the conduct of the parties.
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78. Special Types of Trusts (1 of 2)
Charitable Trusts – created for the benefit of a segment of society or society in general.
Spendthrift Trusts – designed to prevent a beneficiary’s personal creditors from reaching his or her trust interest.
All control over the trust is removed from the beneficiary.
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79. Special Types of Trusts (2 of 2)
Totten Trusts – created when a person deposits money in a bank account in his or her own name and holds it as a trustee for the benefit of another person.
A small amount of money left by a person of modest means
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80. Totten “poor man's will”
Not subject to probate and, if held in a bank account, are insured in the same manner as any deposit.
The beneficiary has no access to the account until the depositor's death and need not be notified that the account exists.
Also called a tentative trust because it is contingent upon the death of the settlor or creator of the trust account.
Copyright © 2004 by Prentice-Hall. All rights reserved.

81. Termination of a Trust
A trust is irrevocable unless the settlor reserves the right to revoke it.
A trust either:
Contains a specific termination date , or
Provides that it will terminate upon the happening of an event
Upon termination, the trust corpus is distributed as provided in the trust agreement.
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82. Assignment
On pg 348 answer the questions on NetBookmark and submit the answers on Edmodo.
Also read the article about the In and Out heiress for future discussion
Copyright © 2004 by Prentice-Hall. All rights reserved.