Will Substitutes Flashcards
What are the will substitutes?
“Will substitutes” - non-probate assets, not affected by T’s will.
EFFECT –> The property passes to beneficiary or survivor despite any provisions in the will
Example –> JT with right of survivorship
Examples:
- life insurance
- joint tenancy or tenancy by the entirety
- inter vivos trusts
- bank account trusts
- deeds
- contracts
- intervivos gifts
- gifts causa mortis
What rule applies with regards to surviving joint tenant?
Takes property by operation of law without going through probate
How is community property with right of survivorship treated?
It is like JT in that:
- can be severed in same manner as JT before owner’s death
- passes directly to survivor WITHOUT probate when owner dies
HOWEVER –> treated as CP for tax purposes, and receives a double stepped up basis
What rules apply w regards to life insurance?
terms of policy control (deemed to be a K)
policy is NOT a probate asset
What is the rule if a deed is deposited in escrow, with delivery conditioned upon grantor’s death?
May be a valid nontestamentary transfer
What is the rule if a deed is by its TERMS effective only upon grantor’s death, but has actually been delivered to grantee?
May be upheld as nontestamentary transfer
Construed as present transfer of future interest, subject to life estate reserved in grantor
What are CA’s rules w regards to revocable transfer on death deeds?
CA recognizes revocable transfer on death deeds, by which an individual may transfer real property to a beneficiary on the individuals death
- deed MUST be recorded within 60 days of execution;
- HOWEVER –> it need NOT be delivered to beneficiary
During T’s lifetime –> deed does not affect T’s ownership rights, and does not create any legal or equitable right in beneficiary
What are the rule re: an intervivos revocable trust?
An intervivos trust, revocable by settlor, is valid
In CA –>
trust is valid EVEN IF settlor is sole trustee and sole beneficiary during settlor’s lifetime, as long as the trust provides for successor beneficiaries following settlor’s death
What is the rule re: government bonds and “payable on death” designations?
Valid
What rules apply with regards to “savings account trusts”?
savings account trusts (AKA Totten trusts) are valid, even though trustee (depositor) can withdraw all proceeds.
Trust is revoked to extent of withdrawals before death, AND may also be revoked by D’s will
Depositor’s creditors –> MAY REACH during d’s life
What rule applies with regards to joint or survivor accounts?
In general –> Survivor has ABSOLUTE right to all money.
HOWEVER –> extrinsic evidence may be admitted to ahsow the account was merely for convenience and decedent did NOT intent survivor to take all the money
What is the rule w regards to “Payable on Death” designations on bank account
CA –> specifically permits POD accounts as valid will substitutes
What is the rule w regards to multiple party accounts ?
ARE effective
Not considered testamentary. Therefore rights of beneficiary, survivor, or POD payee are not to be denied bc statute of wills formalities were not followed
What is the rule w regards to a pension plan designation?
Valid
What rule applies to designation of a contingent beneficiary under an installment sale K?
sometimes held invalid
