After-Born Children (5-3.2) PDF

Preview

Summary

New York Trust and Estates EPTL Lecture ch 5...

Description

Trust and Estates Notes

Set-Off (Exempt) Property (5-3.1) This property is NOT estate assets and VESTS immediately when other spouse dies (disqualification applies) and cannot be reached by creditors. If both spouses dead, kids above 21 get it. $92,500 TOTAL a. Furniture, utensils, sewing machine, clothing, appliances, electronics, instruments, & jewelry not in the will up to $20k b. Books, bible, pictures, CDs, DVDs, videotapes up to $2,500 c. Animals w/ food for 60 days, farm machinery up to $20k d. Car worth up to $25k OR cash in amount of car’s value e. Money up to $25k after funeral expenses are paid, reduced by the excess value of items (a),(b),(c) 2. Any amount over these statutory limits must be paid to the estate or specific legatee 3. FMV of each item will be reduced by all outstanding encumbrances: (car FMV value – car loan = value) 4. Spouse can waive right to this property

After-Born Children (5-3.2) 1. Statute applies to children born after the will’s execution during the testator’s lifetime or in gestation at the time of testator’s death that are “unprovided for” in the will a. Genetic children don’t count, unless “issue” or “children” language is used in the will/trust b. Adopted children are considered “born” to the testator at the time of adoption and non-marital children can take after-born share if requirements of this statute are otherwise met and if able to satisfy one of the proofs of paternity under 4-1.2. 1. If T had no children when will was executed  AB takes intestate share, paid ratably by will’s beneficiaries a. Remember: Spouse’s share can’t be reduced to less than elective share. 2. If T had children when will was executed, and: a. All kids were left out of the will  AB gets nothing

b. One or more kids receive a disposition under the will  AB will take an equal share of the total disposition to children, paid ratably by them c. There’s a limiting provision to all children  AB will take intestate share, paid ratably by other children or testamentary beneficiaries 3. Calculations: a. Three children at will’s execution and they get $300,000 each. After-born appears. i. 3 children + 1 AB = 4 . . . 900,000/4 = 225,000 each. Each child contributes $75,000 to AB. b. Three children that got $100k, $200k, and $300k respectively. After-born appears. i. $600,000 total . . . 3 children + 1 AB = 4 . . . 600,000/4 = 150,000 for AB. NOW, the 3 children share the remaining $450,000 in a 1:2:3 ratio (resulting in $75k, $150k, and $225k respectively) c. M had no children when she executed a will giving $100k to husband H and the residuary to the Nature Conservatory. Net estate at death was $400k. She was survived by after-born children. What are the rights and how is their share paid? i. Children are entitled to their intestate share: 1. 400k – 50,000 (because spouse) = 350k/2 Abs = $175,000 for both ABs 2. Where does the $175k come from? From NC and H in a 1:3 ratio a. NC pays $131,250, leaving it with $168,750 b. H pays $43,750, leaving him with $56,250 i. Less than 1/3 of estate ($133,333) so he can elect against will. 1. Did H receive anything absolutely? Yes, the $56,250. Therefore, H is entitled to… $133,333 – 56,250 = $77,083 2. Where does the $77,083 come from? Ratably from the ABs and NC. a. The ratio will be 175:169 b. 175/344 (sum of ratio) x 77,083 = 39,200 (children) c. 169/344 (sum of ratio) x 77,083 = 37,800 (NC)...