Will Substitutes

Question 1

Inter vivos gift

Answer 1

Gratuitous transfers made during life that cannot be revoked

Question 2

Inter vivos gift requirements

Answer 2

Intent, delivery, acceptance

Question 3

Gifts causa mortis

Answer 3

Gifts made in the anticipation of death, extra requirement: PERIL OF DEATH

Revocable (automatic if they survive, can be volitional before death too)

Question 4

Tenancy by the entirety

Answer 4

Marriage, time, title, interest, possession

Question 5

Joint tenancy

Answer 5

Time, title, interest, possession

Question 6

Tenancy in common

Answer 6

Possession alone

Question 7

Right of Survivorship

Answer 7

T/E + J/T

when one party dies, their interest vanishes while the other party’s interest swells

T/E: divorce/death

J/T: severed into T/C

Question 8

Problem with concurrent interest

Answer 8

Partitions by sale

Question 9

Pay on death contracts

Answer 9

“When I die, pay X”

Title changes at death

Revocable and amendable

Question 10

Problem with POD contracts (common law)

Answer 10

Testamentary in nature, not valid unless executed under conditions set out by the Wills Act (which they typically were not)

Question 11

POD contracts (UPC 6-101)

Answer 11

Are valid even though they are testamentary in nature and not executed in compliance with the Wills Act

Question 12

First exception to the Wills Act

Answer 12

Life insurance

Question 13

Can life insurance beneficiary designations be changed by divorce?

Answer 13

Yes - automatically under some statutes

UPC 2-804 - Yes, automatic

Question 14

Hillman v. Marietta

Answer 14

Under federal employee life insurance, federal law preempts state law and a former spouse wins if that
is who was designated.

UPC does not like this case

Question 15

Can life insurance beneficiaries be changed by a will?

Answer 15

Yes in some states

Question 16

Cook v. Equitable Life Assurance Society

Answer 16

Terms of the life insurance policy controlled over a holographic will

Question 17

Costs of the Cook rule?

Answer 17

Cannot control all of your clients assets in a will, complicating estate planning

Rule leads to injustice when D thought things were changed

Question 18

Benefits of Cook Rule

Answer 18

Immediate payment of the proceeds

Less litigation

Question 19

POD mutual funds account

Answer 19

Work a lot like a will

Stake chooses market-index funds with no load and low fees

Question 20

POD brokerage accounts

Answer 20

Also work a lot like a will

Owner can control the investments within the range of publicly traded securities, mutual funds, and ETFs

NO PROPERTY INVOLVED

Question 21

POD bank/brokerage accounts disputes

Answer 21

1) True J/T (some of the asset could be a lifetime gift, and some at death by will subs.)

2) POD account

3) Convenience or agency account

4) T/C

Question 22

Medical savings account

Answer 22

tax benefits, make payable to spouse to keep the tax advantage

Question 23

IRAs

Answer 23

contain POD clauses

defined contribution of a personal pension

Question 24

Do wills change a POD designation in an IRA?

Answer 24

Some states: yes

Terms of the IRA: often NO

Question 25

Egelhoff v. Egelhoff

Answer 25

ERISA has no provisions for IRAs designation after divorce, and the state law cannot overtake it

Question 26

Majority in Egelhoff benefit:

Answer 26

Pension law uniform across state lines

Reduces cost of plan administration

Speeds up payments

Question 27

Dissent in Egelhoff approach benefit:

Answer 27

Intent is met

Divorce agreement is followed

WA law followed

UPC followed

Courts would not have to create a new rule to deal with areas of law not covered by ERISA

Question 28

Benefits defined pensions v. defined contribution accounts

Answer 28

Employee worries less about investing

To get some secure benefits, a DB costs less with more benefits