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What is the court trying to do with distribution of property?
It's trying to honor the wishes of the decedent, it will use reliable evidence (the most reliable of which is a validly executed will) to determine intent, if no evidence they will make certain statutory presumptions. Will not honor wishes against public policy.
What are the three types of assets?
- Probate: property held in decedent's name alone that requires a signature to transfer. Must go through testate or intestate succession.
- Nonprobate: assets that travel by operation of law or contract: will substitutes like life insurance policies joint accounts, IRAs.
- Trust: owned by trustee and grantor passes according to terms of trust.
What is the order of payment in insolvent estates?
- 11. Costs and expenses of administration: lawyers, etc.
- 2. reasonable funeral and burial expenses.
- 3. Homestead allowance: 15000 to surving spouse
- 4. Family allowance: money given to family for living expenses, go with 18000 dollars
- 5.exempt property: household effects up to 10000 dollars. (totals 43000 for family protection)
- 6.Debts and taxes with priority: the IRS basically
- 7. Reasonable and necessary medical expenses of last illness.
- 8.State protected taxes and debts
- 9. all other creditor claims
How do you get the gross estate and distributable estates?
Gross estate: all assets, distrubutable estate is gross estate minus creditor claims and family protection claims.
What is the order of distrubution in intestacy?
- Surving spouse
- 2. children: mutual and nonmutual
- 3. parents of decedent
- 3.5decendants of decedent's parents: siblings
- 4. decedent's grand parents
- 5descendants of decedent';s grandparents (aunts and uncles)
- 6. eschats to state.
Who is not a spouse?
Divorced, annulled, bigamist, willfully absent, deserted your spouse, willfully neglected lawful requiremnet to provide support.
What are the rules for suriving spouses share?
- If no decendent or parent survives, all the estate.
- If all surviving descendants are also descendants of surviing spouse, 150000 plus half of balance
- if no desendnt survives but parent does, 150000 plus 3/4 of balance
- if all surviing descenants are decedents and surviign spouses and surving spouse has at least one more non-mutual surviing descendants, 150000 plus 1/2 of balance
- if 1 or more but not all of decedent's surviing descendants are descendants of the surviving spouse, 150000 plus 1/2 balance
- if none of decedent's surving descendants are descendantsof th esurviing spouse, 100000 plus 1/2 balance
Who is a child in epic?
Child born in marriage, child born out of wedlock that father has acknowledged or paternity test, adopted child. parent label can be severed through permanent termination of parental rights.
What is disclaimer?
A refusal to accept the benefits under a will or intestate succession. can be a disclaimer of real propert, personal property, or any legal rights given.Must be in writing, signed, and describe the interest being disclaimed, delivered to the PR or trustee.
What happens to a disclaimed interest?
it's as though the disclaimed predeceased.
what is slayer statute?
a person who feloniously and intentionally kills the decednet forfeits all benefits with respect to decedent's estate.
What is an advancement?
applies only in intestacy, it's when money given during life is subtracted at death from your share. only occurs when decedent declares in writing, or heir acknolwedges in writing, that a gift was an advancement or to be taken into account at division of estate.
How do we calculate an advancement?
Add it to the distrubutable estate, do the usual dividing, then subtract it from final gift to advancee.
What is the elective share?
A forced share by a surviving spouse. Can choose between her abiding by the will, dower right(life estate in 1/3rd of real property),or her forced share (1/2 of intestate minus 1/2 of non-probate) not applicable in community property estates, only applies to women.
What is an omitted spouses share?
when a spouse was accidentially omitted by a will executed prior to the marriage and was not provided for outside the will, they are entitled to their full intestate share minus any gifts to non mutual descendants or descends of non mutual descendents.
What is omitted child share?
a child born after the will was executed, no intentional, not provided for outside the will, or there were no other children alive at the time of the will, then they get their intestate share unless the decedent left all or substantially all of the estate to their surving parent. if there were other children alive, they get the same share the other children do.
What are the basic requirements of a will?
Testamentary intent, must be in writing, must be 18, must be of sound mind(able to recollect their property, knowing which business they are engaging in, capable of forming distribution play, know the natural objects of their bounty, no insane delusions), signed by the testator, signed by two witnesses
What are the two kinds of wills?
Formal will: printed or typewritten, signed by the testator or in their name, sibned by two indibviduals who witnessed signing or acknowledgement,
Holographic will: wholly or substantially handwritten by testator, signed and dated.
What is a conditional will?
A will that doesn't execute on death, but on the occurance of a condition. must be very explicit.
What is the rule of substantial compliance?
even if a document does not comply with will requirements, the document will be treated as though it complies if by clear and conficing evidence the proponent of the document establishes that the decedent intended the document or writing ot constitute the will or revocation of the will.
When are you competent to witness a will?
when you are competent to write your own will
who has standing to contest a will?
Any interested party, usually devisees or heirs because they are the ones with a direct pecuniary interest in the estate.
What is undue influence in wills? the factors?
taking advantage of someone you have a fudicary or trust relationship with in a way that benefits you. Factors are opportunity/confidnetialy relationship, susceptibility, disposition, procurement, unusual circumstances,
what is fraud in inducement?
making statements that are false, known to be false, material, with intention of deceiving the testator, successfully deceiving them, which cause the testator to actin in reliance of such statements and execute a will in your favor.
What is an in terrorem clause?
a clause in a will that says that anyone who challenges the will gets removed from inheriting. unenforcable without probable cause.
can the people receiving in the estate agree to alter it?
Yes, if everyone signs a writing that they want to change the gifts, the estate can be distrubted any way they choose.
what is revocation by subsequent instrument? what are the two types.
- When a subsequent will replaces the old will.
- Express revocation: when the will expressly says that it replaces the old will
- Inconsistency: when the subsequent will disposes of the same property in a different way, this replaces the first will.
What is revocation by physical act?
Any physical act intended to revoke the will, burning, tearing, canceling, obligerating, destroying.
What are teh two ways a will is automatically revoked?
Slayer statute or divorce (divorce can effect relative of divorced spouse, not just spouse)
What is a lost will statute?
If a will cannot be found, but was validly executed, and there is evidence to what the will said, and there's a valid reason the will cannot be found (to overcome the presumption that it was torn up and revoked, the will will be executed according to what the evidence shows was in it.
What is the doctrine of dependent relevent revocation?
Revocation is dependent on the replacement working, and if the replacement fails for some reason, it's as though the revocation never happened.
What is express conditional revocation?
a will is revoked only if a particular event specified in the will occurs, otherwise it is not revoked.
What are the 3 scenarios for revival of a revoked will?
- Scenario 1: 1st will revoked in whole by 2nd will, 2nd well then revoked by physical act. 1st will remains revoked unless revived.
- Scenario 2: 1st will revoked in part by 2nd will, 2nd will then revoked by phsyical act. 1st will fully revived unless testator intends otherwise.
- Scenario 3: 1st will revoked in part or whole by 2nd will. 2nd will revoked by 3rd will. 1st will stays revoked unless expressly stated it's revived in will 3
What is republication by codicil?
When you write a codicil on a will that's been revoked, it's treated as having been republished on date of codicil. Leads to issues like intentionally omitting spouse accidentally.
What are the 4 kinds of devises?
- Specific: I give you my blue car
- General: I give you 50000 dollars
- Demonstative: I give you 10000 from the sale of my hummel collection.
- Residuary: rest, residue and remainder of my estate.
What is the order that devises are paid?
Specific (demonstratives are specific towards that piece of property), general, residual, then anything intestate.
What pages constitute the will? What should you do as the drafting attorney?
All pages testator intends to be their final will, attorney should number pages, bind them, have testator initial every page and sign the last.
What is incorporation by reference?
when a document is in existence at th etime of the testator's death, the language of the will manifests the intent an dthe will describes the writing succifently to allow identifiation, then a writing outside the will can be included by reference in the will
What is a list of tangible personal property?
a list of items that are distribued via the will that can be changed after the will is executed in testator's own hand or signed by testator, must be tangible personal prpoerty and mnust describe items and evisees with reasonable certainty. Also must be refere to in the will.
What is the rule of events of indepenent signifigance.
Will can use certain events as indicators of who to distribute to as long as they have an independent signifigance outside the will, e.g. all my classmates would use the class attendance sheets, which exist for a reason outside of the will
What is ademption by extinction?
When the item does not exist in the estate any more but was willed away, presumption of non ademption, they're entitled to the money received for the item.
What is ademption by satisfaction?
when the property was already given before death, they don't get anything to replace it
What is exoneration?
there's a presumption of non-exoneration which means the property it taken subject to any liens or mortgages, exonoeration only occurs when the devise is very specific about money being used to pay off that debt.
What are accessions/increases in security?
In the context of securities, if the number of securities the testator owns is increased by an action outside his own, e.g. a stock dividend, then the person receiving the originoal gift receives the increased gift. The company must do something, not the testator.
What are the steps of anti lapse?
First look if they predeceased the testator, if yes, check to see if there is anternative devise, if yes, they get it, if not, ask if th edevisee was the testator's grand parent, step child, or descendant of grand parent, if no, then anti lapse fails, devise goes to residue, if yes, ask if devisee left surviing descendent if yes, they get gift by representation. If no, to residue.
What are the rules with anti lapse and class gifts?
Substitute gifts are created if the testator left it to a class, as long as it wasn't issue, descendents, heirs, next of kin, relatives, or family. The class closes when the testator dies, and any prrson born within 9 months of testator's death that survives 120 days gets to be part of the class.
What is a trust?
A fidicuary relationship with respect to property, in which a person holds property for the benefit of another, with specific duties attacin gin the manner with which the trustee deaslw tiht eh property. The only way a trust can control property is to own it as a trustee, if not' it's held in your name alone and it becomes a probate asset/
What's the difference between express and implied trust?
- Express trust is a direct trust, arises via intentional act. Must have trust property, intent, property to be held in trust by trustee for benefit of another, and beneficiary.
- Implied trust is one that arises through operation of law, implied from circumstances, and not express intent.
Whare are the elements of a trust?
- Competent tettlor and trustee (same level as a will)
- Intent to creat trust
- Certain and definite terms that indicate intent to transfer property for benefit of another,
- Trust property (2 elements, prinvipal value and income it generates)
- Identifiable beneficiary(must be somewhat definite)
- Trustee: person who holds and deals witht he property(will not fail for lack of trustee, court can name one.)
What is a pour over will?
A will that covers the distribution of any assets that fall outside the trust, a backup for late acquired assets or laziness.
How can a creditor get at trust assets?
Demand it when money is distriputed, or if they don't have a spend thrift provision. A spend thrift provision prevents a beneficiary from assigning rights to payment away before they receive them.
What is a discrestionary trust?
a trust that say that payments are to be decided by the trustee, rather than by a provision of the trust.
What is a support trust?
A trust that is set up for the support and maintainance of the beneficiary, e.g. healthcare, school, food, shelter.
What are the 4 ways a trust can end?
the language of the trust has an ending, there's a merger in title (someone becomes trustee and beneficiary), trust is revoked in states that allow it or through speficic right in the trust, early terminiation by the beneficiaries.
What are the two requirements for early termination of a trust?
All beneficiares must agree, material purporse of the trust has been served (not in all states)
What is the material purpose doctrine?
A trust cannot be shut down if the material purpose of the trust's provisions haven't been met, e.g., age requirements. Not in Michigan.
What are the special rules for chariable trusts?
no beneficiary needed, can go on forever, courts can replace the beneficiary charitity with a similar charity if the charity ceases to exist.
What are the duties of a trustee?
Protect settlor's intent, must accept appointment, duty of loyalty, duty of care, must invest prudently
What is the estate tax?
- If you have over 2 million in assets, you are taxed 45% of everything over 2 million.
- Formula is gross estate - expenses =net taxable estate
- Net taxable estate x tax rate = tentative tax liability
- tentative tax liablity - avaliable tax credit = tax liability.
What are the rules of gift tax?
You can give 12000 dollars to a person every year without being subject to taxes, beyond that, you have 2 million lifetime that you can give away without taxes.
Who's eligible for a durable power of attorney, guardianship, or conservatorship?
An adult with an impairment that gives them a lack of sufficient ability to communicate or make informed decisions.
What is a durable power of attorney?
A power of attorney agency relationship that survives the loss of capacity by the principal, enables them to make decisions on their behalf after loss of capacity.
What are the requirements for a PoA with health care decisions?
document filed with medical provider, persona ppointed as advocate must accpet in writing, designated a successor, allows patient to advocate refusal of lifesupport. Doctor must determine that patient has a conditon that in incurable and cannot live without life support or are in a coma and will never recover.
What is a guardianship?
Court ordered protector of a person, they become their ward, must prove incapacitation and appointment is necessary as means of care and supervision.
What is a conservatorship?
Person who manages estates or assets of individual, court appoints if unable to manage property or property will be wasted without support.
What is medicare?
federally funded insurance program that helps pay for certain medical costs, automatic at 65 or proven disabiilty, costs 800 out of pocked then co pays.Only pays for 100 days of nursing home.
What is the medicare perscription program?
pay 35 a month, once you've paid 275 dollars, insurance will pay 75% of costs upto 2250. Nothing paid from 2250-3600, 95% paid after 3600.
What is medicaid?
Federal program for extremely poor, pays for indefinite nursing care, match program for every 1 dollars, governmetn pays 2. Must have 700 dollars or less in income, medical costs must be greater than income, only 2000 in assets, not counting home, automobile,, house hold goods, whole life policies
What is spending down?
Either investing your money in non-countable assets or giving i taway to qualify for medicaid. If giving away, last 60 months cause a penalty for amount you could have spent on medicaid.
What 3 things can establish a contract to make a will?
Provision in will stating material provision of the cotract, exprss reference in the will to the contract, writing sighend by decednet evidence contract.
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