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107 Cards in this Set
- Front
- Back
What is Probating
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Proving a wills validity. Done after death to make effective.
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What property is subject to probate
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Property decedent held alone
Property held as tenant in common |
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What property is not subject to probate
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Joint Tenancy property
Tenancy by the entirety property Life insurance proceeds on the decedent's life Property in lifetime trusts Trusts Pensions IRAs |
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Reasons to probate
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Collects the assets of decedent
Satisfy creditors Resolve conflicts amon beneficiaries distribute what was left to the appropriate persons or institutions Clearning of title and cutting off of unknown creditors. (unknown creditors have a window of time to claim, elsewise claim is barred Establishes validity of the will. |
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What does a personal representative (executor/administrator) do?
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identifies the assets, pays the debts, distributes the execess to the surivivor.
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Probate process
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Occurs in jurisdiction of decedent
(if there is a will) the will is proved by the testimony of its witnesses, either in person or by affidavit and may be challenged by interested parties. if valid, cts admit will to probate Personal representative is appointed and administration begins either formally or informally Probate is expensive |
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Essential elements of a trust
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(1) property (the res)
(2) held by someone (the trustee) (3) to benefit someone else (the beneficiary) Property serves as principle or corpus, and is to be invested to generate income for the bene Creater of trust is settlor, grantor, donor, testator, etc. One person can be multiple titles, but TRUSTEE must owe a duty to at least one other person. |
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Probate avoidance Devices
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Trusts
Joint Tenancy Contract law, funds paid by a thrid party at the death of someone are treated as contract rights of the bene rather than property rights of the deceased Life insurance, death benefits from either (1) term insurance, or (2) whole life insurance |
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Avoiding Gift tax
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Lifetime/death gifts are below the Congressional exemption (5 million per person, 10 million per couple?)
gifts to spouse - exemption is unlimited in frequency and amount |
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GST
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Generation Skipping Tax - Goal is to tax wealth once in each generation. tax is transfered to two or more generations below transferor's generation
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Survivorship
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Any person who fails to survive the decedent by five days shall be deemed to have predeceased the decedent for purposes of intestate succession and the decedent's heirs shall be determiend accordingly.
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Where does Probate occur?
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Usually decedent's place of domicile at his/her death, but property outside the state will trigger ancillary probate.
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PA intestate succession 2103
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Anything that does not pass to surviving spouse (if there is one) passes in following order:
Issue Parents Brothers, sisters or their issue Grandparents (even split between paternal and maternal sides) (if GP are dead then look to GPC or GPGC) Uncles, aunts, and their children/GC State (if none of the above) |
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Intestate: Spouses
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Spouse of decendent who dies in the course of divorce pendings will have NO INTEREST
Estraged/neglectful spouse for one year or more shall have NO INTEREST |
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Intestate: Non-Marital Children
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Child of Mother: born out of wedlock is the child of his mother
Child of Father: born out of wedlock must prove identity of father by (1) parents of child susequently marry, (2) father embraces the child as his own by receiving him in his home, or providing support for hte child, (3) other clear and convincing evidence such as paternity tests. |
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Intestate: Adopted Child
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child is considered the issue of the adopting parents and not of the natural parents unless
(1) a natural blood relative (other than parent) has maintained a familial relationship with adoptee and adoptee stands to collect from him, or (2) child's natural parent marries adopted parent. |
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Intestate: Posthumous Heirs
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Can collect if conceived before decedent's death
(something additional about eggs) |
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Intestate: Step Child
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Not a heir in PA.
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Sec. 2102 Share of Surviving Spouse
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No issue or parents: Spouse gets the entire intestate estate
No issue but parents: Spouse gets the first $30K plus half of the remaining balance Surviving issue of both decedent and spouse: Spouse gets the first $30K plkus half of the remaining balance Surviving issue where one or more of whom are not issue of spouse: Spouse gets half of the intestate estate [not the first $30K too] Partial Intestacy: any party spouse gets under will contributes to the first $30K |
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Allocating Shares
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"Per capita" - counts people (common in same generation)
"representation" - focus on generation that has a survivor and may treat people as if they were standing in the shoes of their parents/GP |
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Strict Per Stirpes
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divides the estate into as many shares as there are surviving children or deceased children who left descendants surviving the decedent. Children's shares are divvied amonst survivors within their respective stocks.
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Per Stirpes
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Skips older (empty) generation and divides estate into shares at the first generation leaving survivors
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Representation: Per Capita at Each Generation
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divides the estate into as many equal shares as there are: (1) surviving descendents in the generation nearest to the decedent which contains one more surviving descendents; and (2) deceased descendants in the same generation who left surviving descendents if any.
Go to first generation with survivors. Split shares into equal amounts for all, dead or alive, and give one share to each survivor. Recombine remaining shares (provided for deceased) and split them into equal shares for their issues. Rinse. Wash, Repeat |
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Will Vocabulary:
Nuncupative Will Negative Will Holographic WIll Codicil |
Nuncupative Will - an oral or verbal will
Negative Will - a will that does not dispose of property but simply names a fiduciary or disinherits someone. Holographic WIll - a will that has been handwritten and signed Codicil - amendment to a will. |
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PA (does not) recognize(s) what wills
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Recognizes: document that merely naemes an executor or exercises power to appoint
Does not recognize: oral wills or document that simply disinherits |
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Mental element of wills: Testamentary Intent
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Intend for the document or transaction to: (1) control the dispostion of my property at my death; and (2) to create no rights or powers until that time.
----Creation of powers before death is an intervivos gift If a letter is merely a declaration of what the writer intends to do in the future, but fails to do so, it is not consdiered a will. but if a letter shows the intent to be effective until a more formal writing is executed, it is considered a will or codicil. |
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mental element of wills: Testamentary Capacity
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testator must be above 18 & mental state must be of sound mind
-Mental deficiency: does the testator understand enough things realting to the will making process. this may invalidate entire will -Insane Delusion: only effects teh particular provisions and strikes them for void. (wife is screwing the milkman so i disinherit. there hasn't been a milk man for forty years) |
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Undue Influence
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Person benefiting from will, had a hand in its creation and contestant proves that:
(1) the donor was susceptible to undue influence; (2) the alleged wrongdoer had an opportunity to exert under influence; (3) the alleged wrongdoer had a disposition to exert undue influence, and (4) there was a result appearing to be in the effect of undue influence. |
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Tortious Interference w. expectancy
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One who by fraud,duress, etc. prevents another from receiving inheritance/gift from a third
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Fraud in factum
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fooling the testator into signing a document purporting to be a will, or including a false provision in a real will
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Fraud in the inducement
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Getting the testator to execute a document by misrepresenting facts
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Will execution
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Must be signed by testator (if so no witness is necessary, but two competent disinterested subscribing witnesses will be called to verify signature for probate)
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Self-Proving will
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(1) the testator signs at the end,
(2) the witnesses sign to attest; (3) both the testator and the witnesses take oaths (via affidavits) that it is their signatures on the will. |
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Holographic will
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Permitted in pa, does not need to be entirely handwritten, just signed at the end.
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Doctrine of integration
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which pieces of paper were meant to be in the will
All papers must be (1) present at the time of execution of the will, and (2) intended to be part of the will are considered part of the will. |
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Doctrine of incorporation by reference
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allows a testator to give testamentary effect to words not physically present at the execution ceremony.
if document is not present at execution, doc may be incorp. by reference if (1) it was in existence at the time of the execution, and (2) it can be clearly identified because of its reference in the will. If a subsequent codicill references a doc that was dated after the will, it is accepted. |
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Doctrine of acts of independent significance
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allows reference to facts outside the will
My children/ my home. All can be determined by extrinsic evidence Document must exist to serve some function aside from the will. (prevents adding and removing of names/items) |
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Two types of ambiguities
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Patent Ambiguities: ones that are apparent from the face of the document (CL no extrinsic evdience allowed to prove)
Latent Ambiguities: ones only discoverable by considering evidences extrinsic to the document |
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3 ways to revoke a will
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(1) by putting something in writing (signed, in writing, and must have intent to revoke)
(2) by physical act (3) by operation of law |
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Revocation by Writing
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validly executing a later document expressly revoking the will.
Later writing meeting the statutory requirements for a will can supersede earlier will. (must be accompanied by intent to revoke) |
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Revocation by Act
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Caan be revoked by being burnt, torn, canceled, obliterated, or destroyed. (to destroy, must go into the body(language))
Can be done by proxy so long as two competent witnesses are present |
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Partial revocation by act
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Can cross out but if adding text, codicil requirements kick in (signature/initials)
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Revival of will
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If revoked by another will, can revive if writing revoking will 2 specifically revives will 1, or reexecution of will 1
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Dependent Relative Revocation (DRR)
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Revoke will 1 and execute will 2 improperly, will one can be probated if:
(1) the revocation fo will 1 was based on some mistake of fact or law (2) you can show that the testator's intent will be better served by ignoring will 1's revocation |
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Constructive Trust
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More of a remedy than trust; when someone gets title unjustly, a Ct. may impose the creation of a trust, which orders the titleholder to deed the property to where it should rightfully go.
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Pour-Over WIll
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functions as a residual will under a trust. meant to cover forgotten property.
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Creditors & Trusts
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Putting property into a trust and retaining use/management of it, allows creditors to reach into trust after the settlor's death.
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Term Life Insurance
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Covers only the risk of death and runs for a specific period of time, often renewable.
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Whole Life insurance
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Last the insured's whole life provided premiums are paid. premiums remain constant, and they pay not only for life insurance, but also the company invests some of the premium
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Advancements of Gifts
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only matter if declared in writing to be an advancement of a gift. can be written by decedent or heir. calculated against intestacy at value of when gift was given or death occured. whichever was done first
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Divorce
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Any provision involving the ex spouse will be voided unless it is apparent that the decedent intended to gift the ex still.l
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Disclaimers
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Cannot control the course of money through disclaimers. Disclaimers can be used to direct the money to the intended person only if all persons in the chain between decedent and intended bene. disclaim.
Pennsylvania disclaimers requirements: written describing the interest being disclaimed, declare the disclaimer and sign it. |
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Misconduct
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courts impose a constructive trust against the property the malfeasing bene would otherwise get.
8802-3 No slayer can benefit from the killing of someone else. ( participating in the willful and unlawful killing of another person) [ PA protects BFPs if purchased before slayer was adjudicated.] |
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Classifications of Gifts
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Specific - those specifically identified. Refer to particular piece of property. Usually fail if the asset is not present at death of testator
General - refer to a category or an amount of something. Often legacies Demonstrative - cross between specific and general gifts. ones the testator intends to come from a specific source, but which can also come out of general estate (6K from my PNC account, if account is too small, from my other funds." Residuary - Catch-alls giving "everything else I own." |
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Does a specific gift of securities include the gain
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CASH DIVIDENDS after death will not be included, dividends before will be.
STOCK SPLITS between drafting and death? - includes subsequent stock because no additional value STOCK DIVIDENDS cts are split (Pa includes) |
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Ademption
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if a document gives away property that which is not available and the gift is
general: the fiduciary uses general estate assets to buy property for the bene. specific: bene loses out under the "identity" theory which says that a specific gift fails if the subject matter is not an estate asset at death. |
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Abatement
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If there is not enough money in the trust, gifts to benes abate, or fail, in the following order
Residuary General Demonstrative and Specific Multiple gifts in the same class abate proportionately not equally |
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PA specific gift abatement
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Specific gifts fail in the following order
gifts to non-familial persons gifts to the decedent's issues gifts to decedent's spouse. |
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Exoneration
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PA property will pas subject to any security interest therein existing at the date of the testator's death, i.e. mortgage, liens, etc.
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Doctrine of Lapse
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Doctrine of Lapse says that if you are given a gift, but ypu predecease the testator, the gift will lapse (or fail), and pass under the testator's residuary clause, or if the will lacks one, then by the laws of intestacy
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Anti-Lapse Statutes
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When lapsing would not be sufficient to meet testator's intent or best interest.
Property goes to alternative takers as per statute. |
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Void gifts
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Bene. was dead at the execution of the will
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lapse
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Bene. dies after will is executed but before decedent passes.
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Anti-Lapse 2514(9)
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protect gifts to (1) my issue, (2) my brothers or sisters, or (3) a child of a brother or sister.
Does not protect gifts to wives, so that the gift would not go to a non-blood relative If there is express condition that if the named person does not survive then to my wife/kids, anti-lapse will not kick in |
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Right to elect
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Used when surviving spouse was disinherited in a Separate property State.
SS has right to claim a share of their predeceased spouse's estate -Elect against hte will and get what the election statuete says they are entitled to |
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PA right to elect statute 2203
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Surviving spouse has a right to an elective share of one third of what was in the will, plus the augmented estate.
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2203 Augmented Estate
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Prevents decedent from dumping everything into a trust and disinheriting spouse
any income from property the decedent conveyed during the marriage if the decedent retained right to w/drawal income therefrom any prop. the dec. conveyed during marriage if the dec. retained the right to revoke, convey, consume, invade, or dispose the principal for his own benefit. any prop. the dec. conveyed with rights of survivorship if he retained the power to unilaterally convey. survivorship rights to a bene. of an annuity contract, purchased during marriage, if the dec. was receiving annual payments conveyances in excess of $3K made by the dec. w/in ONE YEAR OF DEATH. |
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What is excluded from Augmented Estate 2203(b)
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conveyances made where both spouses agreed to it.
life insurance proceeds Interests under any pension, profit sharing, etc. from an employer any property passing by power of appointment |
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Pretermitted Spouses/children
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-Will made, then guy gets married, fails to revise will and did not intentionally exlude, dies.
---Spouse is entitled to the share she would have received had he died intestate -Will made, Child born/adopted, failed to include child and it was not intentional ---child will receive property not passing to a SS, the share the child would have got had the testator died unmarried and intestate (get what wife doesnt) |
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Resulting Trust
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arises when a person
-intends to create an express trust; -validly transfers property to a person as trustee; but -for some reason the trust fails in whole or in part law infers intent of transferor and that he would want the property returned and to go where he intended. Transferee becomes trustee w/ a duty to return property |
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Private Express Trust
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transferor (settlor) transfer legal title to property to a person (trustee) and expressly intends to impose active duties on the trustee for the benefit of one or more private persons (beneficiaries)
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Creation of Trust
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valid trust requires
(1) an intention to create a fiduciary; (2) a settlor; (3) a trustee; (4) a beneficiary; (5) property (and delivery); (6) a valid trust purpose; (7) compliance with formalities |
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Burton case
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For a trust, you must impose a fiduciary obligation on someone for the benefit of at least one other person.
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Oral trusts
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Not allowed in PA
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Mandatory Trust
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Income beneficiary is mandatorily required to receive from the trustee the income derived from the trust. Annual distribution is default
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Discretionary Trust
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Trust authorizes trustee to pay benes. "such amt of principal or income as the trustee in its aboslute discretion shall deem advisable."
Cannot force payments outside of abuse of discretion, so may be better than a spendthrift as far as creditors go |
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Unitrust
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Annuity Trust variant. Settlor decides on what percentage of the trust principal the intended income bene. will receive
Does not require trustee to make any investments because income is not benchmark for distributions |
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Mandatory Accumulation Trust
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Trust is untouchable for x amount of years then principal and accumulation are available to bene.
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Annuity Trusts
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Gives bene. the right to a fixed dollar amount annually. If there isnt enough money in the accumulation, it will take from the corpus.
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Support Trusts
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Limits trustee's discretion for distribution to those necessary for the comfortable support of the bene.
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Discretionary Support Trust
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hybrid which gives the trustee uncontrolled discretion to pay funds for support.
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Beneficial Interests in Trusts
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Freely transferable (unless designated otherwise)
Creditor's rights follow alienability (they get what bene has power to transfer) |
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Spendthrift Trust
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restrict the alienability of their beneficiary's interests as a way of protecting the beneficiaries both from themselves and creditors
Involuntary Creditors are probably exempt from spend thrift (tort victims, child support) Interests (1) cannot be assigned, (2) are not subject to the claims of creditors Is valid in PA only if it restrains both voluntary and involuntary transfer of a benes. interest |
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Chaflin Doctrine
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Benes. can never force termination of a trust if the main purpose has not been accomplished:
"Income to y for life; remainder to Z spendthrift on y." Cannot terminate because MP is spendthrift. |
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Sprinkle Power
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mandatory income trust with power to distribute to benes at any share.
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Modification of Trusts based on ambiguity
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Correction on lifetime trusts is fine (even if settlor is dead before correction)
cannot correct testamentary trusts |
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Power of Termination of a Trust
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if settlor retains he may terminate trust at will
if settlor does not retain, he must gain benes. approval if power of termination was appointed, appointee may terminate at will |
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Vested Remainder
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Remainder is vested if it satisfies all three:
(1) holder of remainder must be someone who has been born (2) person must be identified (3) can be no express or implied conditon precedent to that person taking. |
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Contingent Remainder
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If it fails any of the vested remainder test it is contingent
(not born yet, unidentified person, express or implied precedent to that person taking) |
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Survival for remainder in trust
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So long as it is not necessary to survive someone else, remainder is not lost at death and passes to heirs
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Swanson v. Swanson
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Predeceasing life beneficiary does not remove right if interested is already vested subject to defeasance upon the occurence of conditions subsequent.
(Son predeceased mother and Son's Wife sought declaration of her rights under the trust. Trust: income to wife for life, remainder to sons & their issue) Son |
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How to determine vested/contingent remainders
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when the instrument takes effect is there a person(s) who would take all the property if the life estate ended now. If yes, then the remainder is vested subject to partial or complete defeasance. if not contingent remainder
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Clobberie's Case
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Gift to someone at a particular age:
"to x at the age of 21" --- x must reach 21 gift payable at a particular age does not require survivorship. |
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Class Gifts Children
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Normal non-marital children are excluded
PA - non-marital children are included in class gifts absent contrary intent. Adopted children are included in their parent's class gifts to children. Not included by others if the others were unaware of the adoption PA - does include adopted children w/in lawful descendant class Adult Adoption: generally excluded from class gifts unless (1) parent treated the adult as a child during child's minority, or (2) step parent or foster parent |
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Class Closing on Gifts (Two ways)
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Physiologically - classes close physiologically when all the person who can feed the class are dead
Rule of Convenience: class will close according to the rule of convenience when any class member has a right to demand possession. |
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Powers of Appointment
Donor Donee Objects Appointee Taker in default appointment |
Donor: who creates the power
Donee: who gets the power Objects: donee can give property to only those designated by donor as objects of the power Appointee: donee exercises power (person must come from objects) Taker in default appointment: who gets the property if the donee does not give it |
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General power of appointment
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one in which a donee could give the property to anyone he wanted; including self
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Special power of Appointment
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donee was limited to a particular class of objects
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Hybrid power
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donee could give to anyone but himself
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Donee dies holding gift
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If general, property is taxed
If special, property is not taxed. |
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If a person's will is not found at their death the presumption is:
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it was revoked
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What happens when a subsequent will was revoked
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Nothing. The prior will can only be reinstated if it was executed again. Otherwise, the property goes intestate.
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Intestate decedent survived by spouse:
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Spouse + No Issue + No Parent = All
Spouse + parent + No issue = First $30K + 1/2 of remainder Spouse + Issue: All issue same parent = 30 + 1/2 remaining Not all issue same parent = 1/2 of estate |
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Intestate order after amount given to spouse or no spouse
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Decedent's Issue (everything left)
Decedent's Parents (both parents equally, or all to remaining parent) Decedent's Parents Issue (siblings; nieces & nephews) Grandparents Uncles Aunts and their children Children of cousins State |
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Method of distribution of decedent's intestate estate
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All living heirs of same degree = Per capita - divided equally
All heirs not of the same degree = per stirpes (take by representation) 1 share for each line |
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Revocation of a codicil
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Either by:
(1) revocation of a will, which revokes ALL codicils thereto, or (2) revoking of the codicil, which does not revoke the will |
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Secret Trusts
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an absolute devise with oral promise to hold on trust
oral evidence is admissible to show the existence of the trust by CLEAR SATISFACTORY and CONVINCING EVIDENCE Constructive Trust results |