Outline Trusts and Estates PDF

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Outline for Turano's T&E....

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I. Intestacy Vocabulary Estate (EPT 1-2.6)  

The interest a person has in property, or The aggregate property a person owns

Will (1-2.19): an oral declaration or written instrument that takes effect upon death (and is revocable during lifetime), whereby a person:     

disposes of property or directs how it shall not be disposed of, disposes of his body or any part thereof, exercises a power, appoints a fiduciary or makes any other provision for the administration of his estate

Fiduciary (1-2.7): a “personal representative” or someone who is designated to act for the benefit of creditors, or a committee, conservator, curator, custodian, guardian, trustee or donee of a power during minority. Personal Representative (1-2.13): someone who administers the estate of a decedent (but not someone who acts for the benefit of creditors, or a committee, conservator, curator, custodian, guardian, trustee or donee of a power during minority). Distributee (1-2.5): a person entitled to share in the property of a decedent under the statutes governing descent and distribution (intestate transfers). Disposition (1-2.4): transfer of property by will or during lifetime Issue (1-2.10): Unless contrary intention is indicated:  

Issue are the descendants in any degree from a common ancestor (children, grandchildren, greatgrandchildren, etc.) The terms “issue” and “descendants” includes adopted children

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EPT § 4-1.1: determines how decedent’s property is distributed if it he died intestate or the property was not disposed of by a will. (a)

(b) (c) (d) (e)

If decedent is survived by: (1) A Spouse and Issue  Spouse gets $50,000 and then half of whatever remains.  Issue get the rest, by representation (2) A Spouse and no Issue  Spouse gets everything (3) Issue and no Spouse  Issue get everything, by representation (4) One or both Parents and no spouse and no issue  Parent or Parents get everything (5) Issue of Parents (Siblings or Nieces/Nephews) and no Spouse, Issue, or Parent  Siblings or Nieces/Nephews get everything, by representation (6) One or more Grandparents or the Issue of Grandparents (Aunts and Uncles and First Cousins and Nieces/Nephews) and no Spouse, Issue, Parent, or Siblings  Paternal Grandparent or Grandparents get one half o Or, if neither paternal Grandparent survives the decedent: Issue of paternal grandparents get half of estate, by representation  Maternal Grandparent or grandparents get the other half o Or, if neither maternal Grandparent survives the decedent: Issue of maternal grandparents get other half of estate, by representation  OR, if decedent is not survived by Grandparent or Issue of Grandparents on one side: all goes to the living side  [For this section (6), “Issue of Grandparents” doesn’t go further than grandchildren of grandparents (first cousins)] (7) Great-grandchildren of Grandparents (First Cousin Once Removed) and no Spouse, Issue, Parent, Issue of Parent (Siblings/ first cousins), Grandparent, children of Grandparent (Aunts and Uncles) or Grandchildren of Grandparents (First Cousins)  Great Grandchildren of Paternal Grandparents get one half, per capita (per capita means each person gets an equal amount, regardless of generation)  Great Grandchildren of Maternal Grandparents get other half  OR, if there are no Great-grandchildren of Grandparents on one side, then the Great-Grandchildren of Grandparents on the other side get it all For this section, half relatives are treated the same as whole relatives Distributees of decedent who were conceived before death, but born after, take as if they were born in decedent’s lifetime Rights of adopted children are provided in Domestic Relations Law (DRL) [deals with dowers—not really relevant anymore]

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II. Per Sterpes and By Representation EPT 2-1.2 

For all wills executed after September 1, 1992, whenever a disposition of property is made to “issue”, By Representation is the default, unless a contrary intention is expressed

EPT 1-2.16 By Representation: 1. Estate is divided into as many shares as there are i. Surviving Issue in the generation closest to the decedent that contains any surviving issue, and ii. Deceased Issue in the same generation who left any Issue 2. Each surviving member of the closest generation gets one share 3. The remaining shares are combined and then divided equally among the surviving issue of the deceased issue of the closest generation By Representation = “Per Capita at each generation”

EPT 1-2.14 Per Sterpes: 1. Estate is divided into as many shares as there are i. Surviving Issue in the generation closest to the decedent that contains any surviving issue, and ii. Deceased Issue in the same generation who left any Issue 2. Each surviving member of the closest generation gets one share 3. The share of each Deceased Issue is distributed the same way as in steps (1) and (2)

EPT 1-2.11 Per Capita: Property is distributed and each distributee receives an equal share, regardless of generation.

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III.Disqualifications and Nonmarital Adoption Disqualification EPTL 4-1.4 Disqualification of parent to take intestate share (a)

(b) (c)

Disqualifies parent from receiving share of deceased child’s estate if parent engages in certain behaviors/acts before child is 21. Such behaviors include: (1) Failure to support, through 21, unless resumed before 21; Abandonment (2) A court order: (A) Terminating parental rights, or (B) Suspending parental rights, in which case the court will consider how well the parent complied with the order . Disqualification = parent treated as having predeceased the decedent

So, what happens when the parent is treated as having predeceased? Look to EPTL 4-1.1  

4-1.1(a)(1)—The other parent gets everything, OR 4-1.1(a)(2)—If there is no other parent, the siblings (or their issue) get everything

Spousal Disqualification EPTL 5-1.2 (a)

Provides 6 bases for disqualifying a spouse from the spousal rights provided by:  4-1.1—intestacy,  5-1.1-A—Right of Election,  5-3.1—the exempt (set-off) property statute, and  5-4.4—wrongful death proceeds (1) A valid NY divorce (2) A void marriage (3) An invalid divorce procured by the surviving spouse (4) A separation decree against the surviving spouse (5) Abandonment by the surviving spouse (6) Failure to support by the surviving spouse (who had the means to support)

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Non-marital Children Hoffman—the word “issue” in a statute should refer to legitimate and illegitimate children

EPTL 4-1.2 (a)

(b)

. (1) A non-marital child is the legitimate child of the mother so that he and his issue inherit from his mother and maternal kindred (2) A non-marital child is the legitimate child of the father so that he and his issue inherit from his father and paternal kindred if: (A) Court order of filiation (B) Father signed an instrument acknowledging paternity (C) Paternity established by clear and convincing evidence (3) A father’s obligation to support a non-marital child does not by itself give the child right to inherit from father, without an order of filiation or acknowledgment of paternity If non-marital child dies, child’s spouse, issue, mother and maternal kindred, and father and paternal kindred may inherit as if he were a marital child, as long as paternity has been established by methods in (a)(2)

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Adoption DRL 117 1. (a) (b)

(c)

(d)

(e)

Upon an order of adoption, the birth parent’s right to inherit from and through the child is terminated, and the birth parent is relieved of all parental responsibilities Upon an order of adoption, the child’s right to inherit from and through the birth parents is terminated  So, the birth parent cannot inherit from the child she put up for adoption, nor can the child inherit from the birth parent  The child that was put up for adoption also may NOT inherit from birth grandparents—“rights of inheritance… from and through his parents” When a parent adopts a child, the inheritance rights the the adoptive parent and adoptive child share from and through each other are the same as those between a birth parent and child  So, the adoptive parents can inherit from the adoptive child, AND the adoptive child may inherit from the adoptive parent o This includes a step-parent who adopted his spouse’s biological child  This also includes a child of your step-parent and birth parent (half sibling)—also supported by 4-1.1(b)  This also includes any child your step-parent had from a previous marriage—“from and through each other and the birth or adopted kindred of the adopted parent”  The adoptive child may also inherit from the adoptive grandparents (implied by the language “from and through each other”) If the child’s birth parent marries and consents to a step-parent adopting the child, that birth parent and child maintain their inheritance rights “from and through each other”, and the birth parent is not relieved of parental responsibilities If: (1) the decedent is the Birth Grandparent of the adoptive child or a descendant of a Birth Grandparent (Aunt, Uncle, Parent, First Cousin, FCOR) , AND (2) an adoptive parent (i) is married to the child’s birth parent, (ii) is the child’s birth grandparent, or (iii) descended from such grandparent, then the adoptive child maintains the right to inherit “from and through” the birth parents. 

So, if a child’s mother remarries and the step-father adopts the child: o That child can still inherit from his birth father’s mother, o The child can also inherit from the birth father’s sister (if the birth father’s sister had no spouse, issue, parents, or other siblings—consider 4-1.1(a)(6)) o However, the birth father’s sister may not inherit from the child. This rule only benefits the child. 1.(a) still applies. 6

2. . (a)

(b)

After adoption, the adoptive children and their issue are considered strangers to any birth relatives for purposes of interpreting wills or a disposition in any instrument, UNLESS a contrary intention is expressed  So, if the birth grandmother writes a will, leaving her estate to her “issue”, the adopted child will not share as one of the issue If a will designates a class of persons described in EPTL 2-1.3 (issue, children, descendants, heirs, next of kin, distributees, or anything like that) and: (1) an adoptive parent (i) is married to the child’s birth parent, (ii) is the child’s birth grandparent, or (iii) descended from such grandparent, AND (2) the creator of the will is the child’s birth grandparent or the descendent of such grandparent then that term applies to any adoptive child who was a member of that class in his birth relationship prior to adoption, UNLESS a contrary intention is expressed 

So, if a child’s birth parent remarries and the step-parent adopts the child, and the birth grandmother makes a will leaving her estate to her “issue”, the child may share as one of her issue.

Best:   

Daughter gave non-marital child up to adoption. Birth Grandmother made a trust leaving estate to “issue” Daughter pre-deceased grandmother

Court decided that children who were adopted out of the biological family was not to be included as “issue” child born out of wedlock who is adopted out of his biological family at birth is not entitled to a share of a trust estate devised by his biological grandmother to his biological mother's “issue.” resulted in the addition of subparagraphs (e) and (2)(b) to DRL 117

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IV. Genetic Children 4-1.1(c)—governs distribution to children conceived before death, but born after 2-1.3(a)(2)—governs disposition to children conceived before death, but born after But what about children conceived after death?

Matter of Martin B—decedent created trust payable to wife for rest of her life and then to son’s issue. Decedent got sick and had his sperm frozen. Wife had his children years after his death. Could these post-conceived children share in the trust? Yes. But you must consider the intent of the decedent.

Astrue v. Capato—Sup. Ct. case. Decedent left cryopreserved sperm. Was post-conceived child entitled to survivor benefits? Court decided that depends upon the state’s intestacy statute, leading to passing of 4-1.3.

EPTL 4-1.3—governs children conceived after parent’s death (a) (b)

. A genetic child is the child of genetic parents for purposes of intestacy and wills/trusts  i.e. Even if not conceived before death, still considered the child under intestacy statute (i.e. notwithstanding 4-1.1(c)), and o So, a child conceived after the genetic father’s death could still inherit from the father if the father died intestate. o This also entitles them to survivor benefits under Social Security (Capato)  Even if not conceived before death, still considered the issue for purposes of wills and trusts (i.e. notwithstanding 2-1.3(a)(2)) o So, if father had a will that left 25% of his estate to his issue by representation, the children conceived posthumously would share in that 25% As long as 4 conditions are met: (1) The genetic parent executed a written instrument within 7 years before the death of the genetic parent, which (A) Expressly consented to the use of his/her genetic material to posthumously conceive his/her child, and (B) Authorized a person to make decisions about the use of the genetic material after the death of the genetic parent

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(c)

(d) (e) (f)

(g) (h)

(2) The authorized person (the spouse) must give written notice that the genetic material was available for the purpose of conceiving a child. That notice must be given: (A) To the personal representative (executor) of the genetic parent, within 7 months (3) The authorized person must file the written notice in the surrogate court within 7 months of genetic parent’s death (4) the genetic child was in utero within 24 months or born within 33 months after the genetic parent's death The written instrument: (1) Must be signed before 2 witnesses (2) Can only be revoked by a similarly formal instrument (one signed by the genetic parent and executed in the same way) (3) Cannot be altered by a will (must be changed during lifetime) (4) May appoint an alternate authorized person if the original authorized person dies or is unable to perform responsibilities (5) Gives you the form to use for a situation like this The instrument is revoked by a divorce of the couple . If the child would be considered the parent’s child under (b), then if someone else uses the word “issue” in a will (or lifetime trust), then that child will be considered his parent’s issue under that person’s will also, provided person who made the will died after September 1, 2014.  So, if grandparent left $100,000 in her will to her issue by representation, as long as the grandparent died after Sep 1, 2014, the posthumously conceived children will share in the $100,000  However, this section (f) does not include intestacy. So, if the grandmother died intestate after the father died, but before the mother became pregnant, the posthumously conceived child does not get to share in the estate. This is governed by 4-1.1(c), which holds that posthumous children are only distributes if conceived before the grandmother’s death and born alive after. Also, under EPTL 2-1.6 they must survive for 120 hours.  But, if the mother was pregnant with a posthumous child when the grandmother died intestate, then the child would be entitled to a share of the grandmother’s estate For purposes of 3-3.3, the term “issue” includes a genetic child who meets the requirements of this statute Possibility of having genetic child is disregarded for purposes of rule against perpetuities

WHEN IT’S INTESTACY, THIS STATUTE ONLY APPLIES TO GENETIC CHILDREN BEING ABLE TO INHERIT FROM THEIR PARENTS, NOT GRANDPARENTS BUT WHEN IT’S A WILL, THEN THE GENETIC CHILD CAN BE CONSIDERED THE GENETIC GRANDPARENT’S ISSUE AS LONG AS GRANDPARENT WAS BORN AFTER SEPTEMBER 1, 2014.

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V. Wills Validity of Wills EPTL 3-1.1—A will may be made by anyone 18 or older, of sound mind and memory EPTL 3-1.2—Any property may be disposed of by will EPTL 3-1.3(a)—Anybody can receive property under a will. If it’s to a child, the guardian will have to receive it.

There are 4 grounds for objecting to the probate of a will: 1.

Due Execution—Will must be executed properly. (Proponent of will has burden of proof)

NY requires 2 witnesses to sign the self-proving affidavit. Witnesses must be present for whole ceremony —you also need a notary. Testator must announce that it is her will and that it expresses her wishes. Must ask three questions to testator: 1. Can you tell me what this is? (my will) 2. Does it express your wishes? (yes) 3. Would you like these two witnesses to sign as your witnesses? (yes)

EPTL 3-2.1 (a)

Except for nuncupative and holographic wills, all wills must be in writing and executed in the following manner: (1) . (A) . (B) Anything that comes after the signature, or is added to the will after the will is executed, is disregarded  This has nothing to do with whether the addition is hand-written (C) The witnesses must put their addresses, but failure to won’t make it invalid (2) Testator must sign in the presence of 2 witnesses or acknowledge her signature to the 2 witnesses (3) Testator must acknowledge to the witnesses that this is her will (4) The two witnesses shall within 30 days acknowledge the testator’s signature, and they must sign their names and write their addresses. But, if they don’t put the address it won’t affect will’s validity 10

EPTL 3-2.2—nuncupative and holographic wills (a)

(b)

(c)

. (1) Nuncupative: an unwritten will (spoken) and heard by 2 witnesses (2) Holographic: a will written entirely in the handwriting of the testator and not executed and attested in accordance with 3-2.1 Nuncupative and holographic wills are only valid if made by: (1) A member of the armed forces in actual service during a war (2) A person who accompanies the armed forces in actual service during a war (like medical personnel, reporters, etc.) (3) A mariner while at sea These types of wills are invalid if made by: (1) Person in armed forces, more than a year after discharge (2) Person who accompanied armed forces, more than a year after service ended (3) Mariner, more than 3 years after will was made

SCPA 1406—

Witness Beneficiaries EPTL 3-3.2 (a)

2.

An attesting witness to a will who receives a disposition or appointment of property from the will is a competent witness, subject to these conditions: (1) The disposition or appointment is presumed void, unless there were at least 2 other witnesses present who were not receiving a benefit (2) The disposition or appointment is effective unless the witness’s testimony is needed to prove the will, in which case the disposition it is void.  Usually the witness is not needed to prove the will. However, if the will is contested and the witness does need to come in to testify, then she will lose her bequest (3) If the gift is voided, the witness’s intestate share can still be recovered, but not exceeding the value of the bequest.  So, if the witness got a $10,000 gift under the will, but is entitled to a $20,000 intestate share, she will receive only $10,000  If she got $20,000 under the will, but was entitled to an intestate share of $10,000 she would still only get $10,000—i.e. she gets the lesser of the 2.

Testamentary Capacity (burden of proof on proponent of will) 11

EPTL 3-1.1—A will may be made by anyone 18 or older, of sound mind and memory Person must know, at the time of executing the will (the lucid interval): 1. 2. 3. 4.

What property he owns What person society b...