Flashcards in Wills Deck (137):
New York Law Governing Wills and Estates
Estates Powers and Trusts Law (EPTL); Surrogate Court Procedure Act (SCPA)
When a person dies without a will
A person who dies without a will
AKA heir, next of kin: a person who inherits property under intestate successin
AKA descendant: all persons who have descended from a common ancestor, including those in direct line of inheritance with the decedent (children, grandchildren, etc.)
A person (usually a distributee) appointed as a personal representative to administer the estate of the decedent
A proceeding initiated by distributee to appoint an administrator and administer property of the decedent.
Assets held in the decedent's name alone, that do not pass by operation of law or by Will and which the administrator administers in accordance with the EPTL
Operation of Law
Property that passes automatically because of the way the property's title is held, regardless of the existence of a Will or intestacy.
The balance of the decedent's/testator's estate after all claims, taxes, and particular bequests have been distributed (the "rest" of the estate).
When a person dies with a will
A person who dies with a will
A person who receives a bequest (sometimes called a legacy or devise, for those who inherit real property) under a will
A personal representative named in the Will to administer the estate of a testator
A Surrogate's Court proceeding to judicially determine validity of will and intestate distributees, and appoint executor to administer the testator's estate.
Assets held in the testator's name alone that do not pass by operation of law and which the executor administers in accordance with the testator's will.
Satisfaction of Legacy
A lifetime gift to a Will beneficiary
Application of intestacy rules
The EPTL's rules about descent and distribution of property (both real and personal) in intestacy apply when (1) the decedent left no will, or did not properly execute it; or (2) the Will does not make a complete distribution of the estate, typically b/c of poor drafting by attorney, resulting in partial intestacy; or (3) A distributee successfully challenges the Will and the Will is denied probate.
Order of Priority for Appointment as Administrator
1. Surviving spouse; 2. Children; 3. Grandchildren; 4. Parent; 5. Siblings; 6. Any other distributee.
Distribution: Decedent Survived by Spouse and No Children/Issue of Children
Rule: Surviving spouse takes the whole estate.
Distribution: Decedent Survived by Spouse and Children
Rule: Whether the surviving children/issue are of current marriage or earlier marriage, the surviving spouse takes $50,000 plus 1/2 of the residuary. The issue share in the leftover residuary, unless the estate is less than $50,000 (then the whole estate goes to surviving spouse).
Distribution: Decedent Survived by Children Only
Rule: If the decedent is survived by children only, and no child has predeceased the decedent, the estate passes to children in equal shares.
Distribution: Decedent Survived by Children and Issue of Predeceased Children
Rule: If the decedent is survived by children and the issue of predeceased children, the estate passes to ALIVE children, and the issue of dead children by representation per capita at each generation (notwithstanding any other devise of assets at the time of dead child's death) (E.g., D has children A, B, and C. C and B died, leaving grandchildren F and G. When D dies, the property goes 1/3 to A; then the remaining 2/3 shares are divided evenly among the grandchildren F and G). Grandchildren whose parents are alive take nothing from the decedent, and in-laws take nothing.
Distribution: Decedent Not Survived by Spouse or Issue
(1) All to parents/surviving parent; if none, then (2) All to issue of parents, e.g., siblings and issue of deceased siblings, per capita at each generation; if none, then (3) One-half to maternal grandparents/surviving grandparent, or if neither is living, to their children/grandchildren, per capita at each generation; and one-half to paternal grandparents (same); (4) If not survived by grandparents or their children/grandchildren on one side, then ALL to grandparents and children/grand children on the other side; (5) If only survived by great grandchildren of grandparents, then half to maternal great grandchildren in equal shares, and half to paternal great grandchildren in equal shares; (6) If not survived by great grandchildren on one side, then all to the great grandchildren on the other side; and (7) if not survived by grandchildren of grandparents (first cousins once removed), and nearest kin are great-great grandchildren or issue of great grandparents, then the estate escheats to New York.
Per Stirpes Distribution (versus per capita)
In New York, default distribution is per capita at each generation in both intestacy and will. In most states, the distribution is per stirpes, under which the issue of a pre-deceased child takes the share that the predeceased child would have taken, if alive. A will can elect per stirpes distribution. (Note: if only one person at the first generational level died, per capita results in the same distribution as per stirpes).
Inheritance Rights of Children: Adoptive Children
Generally, adopted children and their issue have full inheritance rights both ways. Children generally lose inheritance rights from birth parents upon adoption, unless the child is adopted by the spouse of a birth parent (then inheritance rights for both are okay). In the case of a child who is adopted by a relative, the child inherits the BIRTH relationship -unless- the DECEDENT was the adopting parent in which case the child inherits the adoptive relationship. (e.g., G has three sons, A, B, and C. B dies, leaving orphaned child D. A adopts D. G dies. D takes under the BIRTH relationship (so can inherit 1/3 of the estate rather than none). However, if A dies, D takes from A under the adoptive relationship).
Inheritance Rights of Children: Nonmarital Children
A nonmarital child has the full inheritance rights from the mother and mother's family. A mnonmarital child inherits from the birth father ONLY if paternity is established by one of four tests: (1) father marries mother after birth (legitimation by marriage); (2) An order of filiation in paternity suit is entered, adjudicating the man to be the cild's father; (3) the father files a witnessed and acknowledged affidavit of paternity with the Putative Father Registry; or (4) paternity is established by Clear and Convincing Evidence, including but not limited to DNA test; open/notorious acknowledgment of child; gifts/visits/participation in life, BUT SUPPORT ITSELF IS NOT ENOUGH. Can establish paternity before or after death of father, but won't go exhuming body for DNA.
Circumstances Disqualifying Spouse from Taking Intestate Share
"DISMAL": DIVORCE (final decree of divorce or annulment, valid under NY law); INVALID DIVORCE (if SURVIVING spouse procured a divorce/annulment not recognized under NY law); SEPARATION (final decree of separation was rendered against SURVIVING spouse; "agreement" of separation does not result in disqualification unless there is specific language in the agreement waiving the surviving spouse's rights under EPTL. Note also that no disqualification if final decree rendered against DECEASED spouse); MARRIAGE VOID because of incest, bigamy; and ABANDONMENT/LACK OF SUPPORT (SURVIVING SPOUSE abandoned or refused to support deceased spouse. Surviving spouse not disqualified if deceased spouse abandoned or refused to support him or her).
Operation of Disqualification of Spouse
Assume the surviving spouse pre-deceased the decedent, and drop the shares to the kids who whoever is next in line.
New York has no "slayer" statutes per se, but the courts will create a constructive trust over spouse/party who kills decedent and stands to inherit. Joint tenancies are severed by one JT's killing of the other, so that the bad spouse gets only the amount he put in and not the dead spouse's share.
Lifetime Gifts to Intestate Distributee -- Advancements
At common law, a lifetime gift to a child was presumptively an advancement of his intestate share, to be taken into account when distributing the estate at death. New York has rejected this rule, so there is no advancement unless proven by (1) A contemporaneous writing, made at the time of gift, and (2) signed by the donor or donee. The rule also applies to wills.
Calculating an Advancement
EXAMPLE: Fred died with an estate valued at $300,000. Before his death, Fred executed a signed writing giving his son, Adam, a gift of $30,000 as an advance from his inheritance. Fred has two other children, Ben and Carl. Ben and Carl's share of the estate should be: ($300,000 + $30,000 = $330,000 / 3) = $110,000 each. Adam's share of the estate should be: ($110,000 – $30,000) = $80,000.
Renunciation by Intestate Distributee
No one can be compelled to be a distributee, or to take property by operation of law. A distributee can disclaim or renounce interest in the decedent's estate in whole or in part. The effect is that the disclaiming person is considered to have predeceased the decedent. A valid disclaimer must be (1) in writing, signed and acknowledged; (2) accompanied by a separate affidavit stating that no consideration was received for disclaiming (unless Surrogate's Court authorizes receipt of consideration for disclaimer); (3) the disclaimer is irrevocable; and (4) filed with the Surrogate's Court within 9 months after the date of death. SPECIAL NOTE: IF A DISCLAIMER WOULD DECREASE THE SHARE ANOTHER PARTY WOULD HAVE RECEIVED, IF THERE WAS NO DISCLAIMER, WE ACT AS THOUGH THE DISCLAIMER DIED ONE DAY AFTER THE DECEDENT (ONLY IN THIS SITUATION).
Disclaimer: Reasons and Parties
People may wish to disclaim to avoid taxes and creditors claims, but CANNOT DISCLAIM TO AFFECT RIGHTS UNDER MEDICARE/MEDICAID. Parties who can disclaim include: will beneficiaries; beneficiaries of life insurance; employment benefit plans, trusts, or other non-testamentary transfers; surviving joint tenants or tenants by entirety, to the extent the decedent furnished consideration for acquisition; and the decedent's guardian, holder of durable power of atty; or decedent's personal representative on decedent's behalf, with Court approval.
Duly Executed Will
SEVEN POINT TEST: (1) testator is >18 years old; (2) Will is signed by testator or by someone at her direction, in her presence, but proxy cannot be counting as attesting witness and must sign her name and address; (3) testator's signature is at the END THEREOF; (4) T signs the will or acknowledges earlier signature in the presence of each witness; (5) T publishes the will by communicating to witnesses that they are witnessing a Will, by declaring the document to be her "Last Will and Testament;" (6) there are at least 2 attesting witnesses, but they need not sign in each other's presence or in the testator's presence, although they must be able to attest to T's signature prior to signing; and (7) An execution ceremony is completed within 30 days, which starts to run whn the first witness, not T, signs.
A duly executed amendment to a will, made with the same seven formalities.
Location of the Signature in Will
The testator's signature on a will must be at the end thereof. Failure to sign at the END of the will means that words following the signature are not given effect, EXCEPT that the entire will may be declared invalid if the matter following the signature is SO material that giving effect to that above the signature, and not that below, would defeat the testator's intention.
Will Signature Miscellany
(1) If the signatures of witness and testator occur in the same event/meeting, it's okay that the witness signs first and T signs next as long as generally the same "transaction." (2) Assistance writing the signature is valid as long as T's act is voluntary. (3) Legibility of T's signature is irrelevant; even an "X" is okay. (4) It's okay if T doesn't sign the will in the presence of his witnesses as long as he acknowledges the earlier signature to them. (5) Witnesses don't need to sign in each other's presence. (6) Witness 2 can sign up to 30 days after Witness 1. (7) Wills are admissible to probate even if witnesses pre-decease testator.
Burden of Proof: Due Execution
The person who offers the Will for probate (usually the executor) has the burden of proving due execution. If one witness is not available to testify (dead/incompetent/cannot be found with due diligence), the testimony of the other suffices. If no witness is able to testify, the Will proponent must prove the signature of both the testator and one witness. If the Will is not self-proved, both attesting witnesses must testify as to the facts necessary to show due execution.
Attached to the back of the Will; a mechanism that recognizes the validity of most wills. Witnesses sign a sworn statement in the presence of an attorney reciting all statements they would make if called to testify in court about the will. This is a substitute for live testimony of witnesses and serves the same function as a deposition or interrogatory (it is sworn testimony). The affidavit can be signed any time after the Will is executed but is usually signed at the same time as the Will. The Will is admissible to probate on the strength of the sworn recitals in the Affidavit unless an interested party objects, in which case the formal rules of proof of due execution. (Not legally required in a Will).
This clause appears below the testator's signature line and above the witnesses' signature lines, reciting all the elements of due execution: "On the above date, the testator declared to us that the foregoing instrument was her Will and she asked us to serve as witnesses thereto. She then signed the Will in our presence, we being present at the same time. We then signed the Will as attesting witnesses." This is prima facie evidence of facts presented (corroborative) but is not a substitute for live testimony (a Will proponent must still call witnesses to testify or prove signatures). This is useful if the witness has a bad memory or hostile. (Not legally required in Will).
Interested Witness Statute
The validity of the Will is not affected if a Will beneficiary is also an attesting witness, BUT the bequest to the witness is void unless EITHER: (1) At least THREE witnesses signed, and two were disinterested. The signature of the witness-beneficiary is not needed to admit the Will to probate so that the witness beneficiary can receive their bequest. OR (2) The interested witness would be an intestate distributee if T died without a will and the witness beneficiary then takes the LESSER of the bequest under the will or the intestate share. The rest of the Will is still valid.
Executors and Interested Witness Statute
The executor of an estate earns his compensation. Only gifts under the Will fall under the interested witness statute.
Foreign Wills Act
"END": Execution; New York; Domiciled. A Will is admissible to probate in New York if it was validly executed under the law of the state where the Will was EXECUTED, regardless of the testator's domicile at that time; or New York law; or the law of the state where the testator was DOMICILED either when the Will was executed or at death. These rules apply only to determine whether the Will is admissible to probate in New York. Once the Will is admitted to probate, New York law governs construction and application of its provisions.
A will entirely in T's handwriting, signed, but not witnessed. This is VOID in New York, UNLESS made by a member of the armed forces during declared/undeclared war, but void one year after discharge; and mariners at sea (but void three years after discharge).
An oral will (recorded in any way). This is VOID in New York, UNLESS made by a member of the armed forces during declared/undeclared war, but void one year after discharge; and mariners at sea (but void three years after discharge).
Foreign Wills Act and Holographic/Nuncupative Wills
If the state in which the will was executed allows this type of will, then its okay.
There is no privity of contract between beneficiaries to a will and the lawyer. The duty is only to the client, who is dead. The only exception is from a recent Court of Appeals case, in which the decedent was advised to include life ins. Policies outside of estate payable to his estate to decrease tax, but this in fact increased substantially. In this case, there is privity between the executor and bad lawyer.
Revocation of Wills
A will can be revoked in only one of two ways: subsequent testamentary instrument with appropriate formalities; or physical act (e.g., burning, tearing, cutting, or other act of mutilation), with INTENT to revoke. Writing "void" at the bottom of the will doesn't count (but blackening out the signature does). \
Typical express revocation language in a Will is "I hearby revoke all Wills heretofore made by me."
Revocation by Implication
To the extent possible, read two instruments together (second treated as an amendment and only revokes to the extent of inconsistencies). But if the second Will is wholly inconsistent with the first, the first Will is revoked by implication.
Revocation by Physical Act of Another
The physical act must be: (1) at the Testator's request; (2) in the Testator's presence, AND (3) witnessed by at least two OTHER witnesses. This requires FOUR people to be there.
Presumptions Regarding Revocations of Wills
When a Will that was last seen in the Testator's possession or control is not found after death, the presumption is that T revoked by physical act. When a will was last seen in testator's possession or control is found in a damaged condition after T's death, the presumption is that T revoked by physical act.
Changes to Will After Execution
Only two ways a testator can make changes in Will. (1) Write a new will revoking first will; or (2) Make a codicil to first, changing only parts. Both must be duly executed, satisfying the seven point test. Words after signing, witnessing are disregarded; PARTIAL REVOCATION BY PHYSICAL ACT IS NOT RECOGNIZED IN NEW YORK. Any interlineations and cross-outs made BEFORE signatures of T and Ws are valid.
No Revival of Revoked Wills
If a testator executes a Will that is revoked by a later Will containing a revocation clause, the first Will cannot be "revived" by the testator merely revoking the later Will. The first Will can ONLY be revived by: (1) re-execution (signed against by T, 2 Ws); or (2) doctrine of 'republication by codicil' - validly executes codicil to first will making changes. The no revival rule also applies to codicils.
Dependent Relative Revocation (DRR)
DRR permits a revocation of a later Will to be risregarded. The effect would be to permit probate of the later Will. DRR is a common law doctrine, seeking the best solution. to give effect to the testator's intent by reviving the earlier Will
Application of DRR
The testator's revocation must be premised or dependent on a mistake of law (i.e., that revocation of the later will validates the prior Will). The disposition that results from disregarding the revocation of the later will must come close to the dispositions the testator intended when he attempted to revive the older will. DRR has been applied in ONE Appellate Division case, but never by the Court of Appeals, and a recent Appellate case said 'no way.'
Lost Wills Statute
This statute is used in two situations: a DRR; and truly 'lost' wills. The lost will proponent must prove that the lost/later will was duly executed (7 point test) AND the later will was not revoked (overcome presumption of revocation arising from Will's non-production, or prove that the revocation should be disregarded under DRR); AND the will's provisions are clearly and distinctly proven by each of at least two credible witnesses or by copy or draft of the Will proved to be true and complete.
Revoking a Codicil
Revoking a codicil does not revoke the entire Will. Provisions in the Will that were not changed by the codicil remain in effect.
Death of a Beneficiary During Testator's Lifetime
Rule of Thumb: a testator CANNOT make a gift to a deceased person. If a beneficiary dies during testator's lifetime, the gift to the beneficiary lapses to the estate unless the anti-lapse statute applies.
The gift does not lapse, but vests in the deceased beneficiaries' ISSUE, IF: (1) the pre-deceased B was T's issue, brother, or sister (NOT spouse); the pre-deceased B leaves issue who survive the testator.
Anti-Lapse and Disclaimer
Disclaiming parties are deemed to have pre-deceased beneficiaries, so anti-lapse statute can apply to qualifying disclaimants.
If the statute applies, the gift goes to the ISSUE of the beneficiary, not the party to whom the deceased beneficiary devises his estate.
Note that if the gift specifically conditions a gift on the beneficiary surviving the testator, then anti-lapse doesn't apply.
Death of "Adopted-Out" Child: Recent CAP Case. Testator's son adopted by non-relative but testator still named son as beneficiary in will. The son pre-deceased T, leaving children who survived T. Although an adopted child has no inheritance rights from birth parents or other members of the birth family, the Court ruled that despite the adoption, because the father specifically named the adopted-out son, the anti-lapse statute saved the testator's devise to the adopted-out son's issue.
Lapse in Residuary Gift
Surviving residuary beneficiaries rule. Absent a contrary provision in the Will, if the testator's residuary estate is:
(1) Devised to two or more persons; and
(2) The gift to one of them fails or lapses for any reason; and
(3) The anti-lapse statute does not apply, THEN --
the other residuary beneficiaries take the entire residuary estate in proportion to their interests.
Class Gifts in General
Absent a contrary provision in the will, if a will makes a gift to a group of persons described as a generic class (e.g., 'children,' 'siblings,' etc.) and some members of the class predeceases the testator, the class members who survive the testator in equal shares. Determining the members of the class who take is by looking at who is alive at T's death. However, anti-lapse applies IF the gift is to issue/brother/sister with surviving issue.
Class Gifts and Adopted-Out Children
IF a child is adopted by a new family, the adopted out child does not take as a beneficiary of a class gift made in the Will of a member of the child's birth family.
Rule of Convenience
Later-born class members (born after Testator dies): the class closes at the time a distribution to the class must be made. Later-born class members are excluded from taking as members of the class, unless the gestation principle applies (this is a common law presumption that there are 280 days from conception to birth).
Class Closing: Outright Gift by Will
Class closes on T's death
Class Closing: A life estate or income interest with remainder to "class of beneficiaries"
Class closes at death of life tenant or income beneficiary.
The Revised Uniform Simultaneous Death Act (RUSDA) says that absent a will provision to the contrary, if a person dies under circumstances where there is insufficient clear and convincing evidence to prove that such person is to have survived the other by 120 hours (5 days), the property of that person is distributed as though he or she predeceased the other person. In other words, if 2 people die within 120 hours of each other, if there is no proof that one survived MORE than 120 hours of the hour, the presumption is that each pre-deceased the other depending on whose estate is being distributed.
RUSDA and Jointly-Held Property
RUSDA theoretically severs the right of survivorship in cases of jointly-held property, so that the property passes as though a tenancy in common was created. EX: H and W are married and joint tenants with right of survivorship in Blackacre. W has two children, A and B, from a prior marriage; and a son, C, with H. H has no other children. The distribution is: W's half to A, B, and C; H's half to C.
Family Changes: Testator Marries After Will
No effect on the validity of the Will but may affect gifts and distributions under the will (right of election).
Family Changes: Testator "Unmarries" After Will
If the court renders a final decree of divorce, annulment, or separation AFTER the execution of a Will, all gifts and fiduciary appointments in favor of the former spouse are revoked by operation of law (treat as if spouse pre-deceased). MUST be a final decree. BUT: all gifts and fiduciary appointments in favor of the issue of the former spouse are not revoked by operation of law (e.g., stepchildren) AND appointment of former spouse as guardian of couple's children is NOT affected. Also remember that the rule only revokes gifts to T's former spouse, not her relatives OR the former spouses of T's relatives (e.g., T's brother in law who divorces the sister).
Family Changes: Testator "Re-Marries" Old Spouse After Will
If the couple reconcile and remarry, all provisions in favor of the former spouse are restored.
Family Changes: Testator's Child Born or Adopted After Will is Executed
EPTL does not protect children who are alive when the Will is executed, but protects PRETERMITTED children who are not provided for by any settlement and neither provided for, nor mentioned in, the will: (1) If the testator had one or more children when will was executed and they are not provided for in the will, the pretermitted child gets nothing; (2) if the will made gifts to other children, the pretermitted child shares with all as if class gift made; (3) if the testator's intention was to make only a limited provision to the children living at the time the Will was executed, the pretermitted child takes his intestate share; (4) If the T had no children when will was executed, the afterborn takes his intestate share. Frozen embryos don't count. Child's share comes out of the children's share. EX: T devises to A ($1m) and B ($5m). Thereafter, C is born. C receives: 1+5 / 3 ($2m share); A and B get their proportional amounts. Note: if, between the Will and a codicil republishing the will a child is born, the child is not considered pretermitted and not entitled to this protection.
Common law rule: words of disinheritance in the Will are ineffective with respect to property passing by intestacy; but words of disinheritance ARE EFFECTIVE IN NEW YORK, even in partial intestacy. Note that anti-lapse would apply if the disinherited party is issue/brother/sister and has issue, wherever part of the estate falls into intestacy and would otherwise go to the disinherited party.
Satisfaction of Legacy
Same thing as "Advancements" in intestacy. At common law, a lifetime gift made after the Will's execution to a beneficiary named in T's will, was presumptively made in partial or total satisfaction of the legacy, to be taken into account when distributing the testator's estate at death. In New York, there is no presumption, and thus no satisfaction of legacy unless proved by (1) a contemporaneous writing made at the time of the gift; and (2) signed by donor/donee.
Incorporation by Reference
In almost all states, the terms of an extrinsic document can be incorporated by reference if (1) the document was in existence when the Will was drafted; and (2) the Will shows an intent to incorporate the document; and (3) the document is clearly identified by the language in the Will. New York DOES NOT recognize incorporation by reference except for pour-over gifts to a trust.
Acts performed by the testator after the Will is executed which have a purpose or motive independent of any testamentary purpose are given full effect when distributions are made. (E.g., Will bequeaths to B "the car I own at my death;" after will execution, T buys a porsche instead of his Ford. The gift takes full effect). There is an exception for TITLE DOCUMENTS (deeds, stock certs, etc.) that can only pass as mandated by law.
Classification of Gifts
ORDER: 1- Specific gift ("I devise Blueacre to Seth"); 2- Demonstrative gift ("I bequeath $5m to be paid from my GM stock to Diane"); 3- General legacy ("I devise $100 to Melanie"); 4- Residuary Disposition ("I give all the rest, residue, and remainder of my estate to Gary"); 5- Intestate property ("I give $5m to my good friend, Frank" who pre-deceases T).
Abatement (Reducation) of Legacies
If there are more claims against the estate that there are assets to cover all gifts made under the will, gifts will abate (not giving effect to gifts so that creditors' claims can be satisfied). The order of abatement is: a- intestate property; b- general legacies; c- demonstrative legacies; d- specific gifts; and only then e- items that qualify for the estate tax marital deduction.
Failure of a gift. If a testator makes a specific gift of property, and the property cannot be found or is no longer owned by the testator at the time of death, the gift fails under the doctrine of ademption (without regard to T's probable intent). This only applies to SPECIFIC GIFTS. Demonstrative legacies do not adeem even if there is no cash available from the designated source.
1- insurance proceeds for lost/damaged/destroyed property to the extent they are paid AFTER death, go to the beneficiary; 2- proceeds received under an executory contract, to the extent the proceeds are paid after death, go to the beneficiary; 3- proceeds from a guardian or conservator's sale of specifically-bequeathed property, which the beneficiary is entitled to receive to the extent that the proceeds from the sale or transfer can be traced.
Specific Gifts of Encumbered Property
Rule in NY: there is NO exoneration of liens on specifically devised property unless the will directs exoneration of that specific property. At common law, if a testator makes a specific gift of property subject to a mortgage or other lien on which testator is personally liable, the beneficiary is entitled to have the lien exonerated.
Bequests of Shares of Stock and Other Securities
1) Publicly-traded corps: gifts are GENERAL, not specific, and do not adeem, unless the testator specifically says "MY shares of X stock" rather than just "X shares of X stock"; 2) Close-Corps: specific, adeem if they no longer exist; 3) shares of stock where stock split occurs: specific bequest for the purpose of the split, irrespective of whether stock is public/private or "my" language is used. EX: I give 100 shares of Kodak common stock to Benjy. At the time of T's will, T owned 100 shares of Kodak stock, which then split 2-1. At T's death, Benjy gets specific gift of 200 shares. \Shares in FORM not substance do not alter (E.g., ATT merges into IBM stock, no ademption).
Interests in property that are not subject to disposition under Will or intestacy. This includes: a- Property passing by right of survivorship; b- Property passing by contract, including life insurance police, payable to a beneficiary other than decedent/decedent's estate; c- Property held in trust; d- Property over which decedent held power of appointment.
Elective Share Statute
To protect surviving spouse against disinheritance by giving him or her a minimum share of the testator's probate estate. The elective share, which passes to spouse notwithstanding contrary provisions in the will, is the greater of $50,000 or 1/3 of the estate. The amount comes from the net probate estate, and if the elective share amount is not satisfied for surviving spouse then other beneficiaries contribute proportionally/pro rata. (Contrast with intestate share: no issue, then entire estate; issue, then $50,000 plus half balance of estate).
Since the elective share applies only to T's probate estate, a testator intent on disinheriting his/her spouse could defeat the protection of the elective share statute by transferring non-probate assets to other persons. To prevent this, the elective share includes the probate estate AND testamentary substitutes ("the elective share estate"): Testamentary Substitutes need a LEG UP. TOTTEN TRUSTS; SURVIVORSHIP ESTATES created after 9/1/66 (watch for pre-post marriage scenarios); LIFETIME TRANSFERS WITH STRINGS ATTACHED (retention of power to revoke, invade, consume, dispose of principal, name new beneficiaries, or irrevocable transfers with T retaining life estate); EMPLOYEE PENSION, PROFIT-SHARING, AND DEFERRED COMP PLANS if designated beneficiary after 9/1/92; GIFTS MADE WITHIN 1 YEAR OF DEATH in excess of $14,000 OR causa mortis; US GOV'T BONDS AND OTHER PAY ON DEATH ARRANGEMENTS; or POWERS OF APPOINTMENT. If T has an interest in property still, it's usually a T-Sub.
LOGPIT: Life insurance, whether payable to surviving spouse or third party; One-half of a qualified pension and profit-sharing benefits made before 9/1/1992 with no changed beneficiary; Gifts of less than $14,000 made within one year of death except causa mortis; pre-marriage irrevocable transfers; irrevocable transfer made >1 year before death; and transfers during the mariage, where T retains a life estate but transferred before 9/1/92.
Calculating the Elective Share Estate
Full value of T-sub included EXCEPT: survivorship estates involving T and third party-- then, the consideration furnished test applies, so that surviving spouse has burden of proving decedent spouses's contribution to the asset and the T-sub includes that amount. If the survivorship estate involves the testator and the surviving spouse, the T-sub consists of half of the estate presumptively. If the JT acquisition with the third party was made BEFORE the marriage, then the presumption is of an irrevocable 1/2 interest gift, so the most that can be in the T-SUB is 1/2 of the JT no matter what the spouse's contribution was. Note that the beneficiary doesn't have to give an actual asset back, just needs to give the money.
Elective Share and Intestacy
Even if the decedent dies without a will, the elective share estate still applies to T-subs, and the share (to 1/3) is calculated the same way, taking into account whatever the spouse receive in intestacy. If the surviving spouse's elective share is already satisfied in intestacy, then no right of election.
Elective Share Trusts
Historically, testators (who died before 9/1/94) could defeat the right to an elective share through the use of an elective share trust that gave the spouse an interest in income for life, as long as she was given at least $50,000 outright AND the principal of the trust equaled or exceeded the 1/3 amount TODAY, for anyone dying on or after 9/1/94, the life estate or other terminable interest will not satisfy the surviving spouse's elective share entitlement. In such a situation, where there is a trust and the surviving spouse files for elective share, red the trust as though the surviving spouse pre-deceased T and accelerate to the remaindermen (trust killed, becomes a T-sub that goes into calculating elective share estate estate). HOWEVER, if W is given her 1/3 share outright, don't kill the trust.
Elective Share Quick Formula
Net Probate Estate + T-Subs (full value) + T-Subs with Surviving Spouse (1/2 in) + T-Subs with 3P (consideration furnished unless pre-marriage then 1/2) = Elective Share Estate. Spouse entitled to 1/3 of this amount, calculated by elective share amount – amount surviving spouse receives under will/intestacy – T-Subs with surviving spouse (1/2 out) = net elective share. Beneficiaries contribute pro rata.
Procedural Rules for Filing for Elective Share
Filing - if the estate is admitted to probate, notice of election must be filed within six months after the Letters are issued by the Surrogate's Court at the start of the probate proceedings. If there is no estate administration, the notice of election must be filed no more than two years after the testator's death.
Elective Share - Transferability, Devisability of Right
The elective share is PERSONAL to the surviving spouse and no one else can elect besides the spouse.
Waiver of Elective Share
Elective share can be waived with or without consideration in a writing, signed and acknowledged before a notary public (e.g., in a pre-marital agreement): before marriage, and as to a particular will or testamentary substitute, or as to all Wills and testamentary substitutes in general. This does NOT waive right to specific gifts under the will (although they can be explicitly waived in same type of writing, including exempt property).
Multijurisdictional Wills and Elective Share
Only a spouse of a decedent DOMICILED IN NEW YORK AT TIME OF DEATH has the right to an election, except that surviving spouse can claim elective share with regard to testator's real property in New York IF the testator expressly states in his Will that the disposition of property is to be governed by NY law. Otherwise, the will is admitted to probate and the entire estate is administered in his state of domicile, but "ancillary administration proceedings" will be required in New York to clear title of the New York property (under the 'situs rule'). However, where a New York domiciliary's Will devises out-of-state property, the property will be governed according to the New York rules.
Property which surviving spouse gets first, off the top, before any of the estate is administered: In addition to the elective share, the surviving spouse is entitled to: one car up to $25,000 in value; furniture, appliances, electronics, etc., up to $20,000 in value; cash allowances, not subject to creditor's claims, other than claims for funeral expenses, up to $25,000; animals/farm machinery/tractors, etc., up to $20,000; books, DVDs, CDs, software, etc., up to $2,500. In any question involving a surviving spouse, mention this, but don't add the money (up to $92,500) into the numbers unless specifically put in play b/c it'll mess with the numbers.
Circumstances Disqualifying Spouse from Taking Elective Share and Exempt Property
See DISMAL (for intestacy): divorce (final decree); invalid divorce procured by surviving spouse; separation DECREE (not agreement) rendered against surviving spouse; marriage is void (as incestuous/bigamous); abandonment and lack of support by surviving spouse).
Powers of Appointment: definitions
Donor = creator of power; Donee = person given power to use (can be both); power of appointment = authority created in or reserved by a donee enabling the donee to designate, within limits prescribed by the donor, the persons who shall take the donor's property and the manner in which they take it. Takers in default = persons who take property if donee fails to exercise power.
Power of Appointment: purpose
Allows someone to look at facts in existence at a later date for the disposition of property (e.g., to decide who should get property or if a person is qualified to take property).
General Power of Appointment
A donee can appoint to herself, her creditors, or her estate as if she owned property itself.
Special Power of Appointment
Donee cannot appoint herself (also called "limited power of appointment")
Presently Exercisable Power of Appointment
A presently exercisable appointment, maybe in an inter-vivos trust
Testamentary Power of Appointment
Donee can appoint only by will
Power of Appointment: scope
Look very closely to what the power gives you. E.g., can say, "to such of D's descendants as she appoints by a Will that specifically refers to this power." And D must, by will, devise SPECIFICALLY property over which THAT PERSON gave power. Exercisable by will unless the power EXPRESSLY excludes exercising the power by will (e.g., during lifetime --> can be exercised by will unless specifically says can't).
Powers of Appointment and Elective Share
A GENERAL, PRESENTLY EXERCISABLE POWER OF APPOINTMENT is a testamentary substitute b/c holder can appoint to spouse or self. A general testamentary power of appointment is NOT a T-sub because Dana can't touch the property during her lifetime. Any special powers of appointment are not T-Subs because D cannot get to it during her lifetime.
Powers of Appointment and Donee's Creditors' Rights
Creditors can access appointed assets over which a D has a general, presently exercisable power of appointment, but NOT special presently exercisable powers of appointment and NO testamentary powers of appointment UNLESS: D is both donor and donee of the POA -or- D exercises the POA in favor of the estate.
Rule Against Perpetuities and Powers of Appointment
1) RAP; 2) Suspension Rule; 3) Statutory Spendthrift Rule
Step-by-Step Analysis for POA RAP problems
(1) Identify type of power (e.g., special testamentary power). (2) Decide whether the power is valid: a special or general testamentary power of appointment must be certain to be exercised within LIB + 21 years. The power is VALID if the power is given to a person who is a LIB at the time the power is created. (3) Decide whether the interests CREATED by the power are valid (see other cards).
Powers of Appointment: Remainder Interests
Special or general testamentary power of appointment. Is the interest created by the power valid? The interests are measured from the date of the INSTRUMENT CREATING THE POWER, not the date of the powers' exercise, treating the donee's exercise of power as "filling in the blanks" of the donor's Will or trust. E.g., if Trent gave Dana a general testamentary power of appointment, and by will devised to such of her children as live to attain 30, it's treated as though TRENT revised: "To Dana for life, then to such of her children as live to attain the age of 30." THEN, if violates common law RAP, apply the second look doctrine (only to POA, not regular trust) by waiting and seeing whether the interest IN FACT violates RAP at Dana's death; in which case it will be saved. If it STILL violates RAP, reduce age contingency to 21 years and save it.
Powers of Appointment: Income Interests
General presently-exercisable POA. To be valid, interests created by the exercise of a power of appointment that is both general and presently exercisable are measured from the date of the instrument exercising the power, not the creation of the power. We do not "fill in the blanks" in donor's Will or Trust. The LIB + 21 years begins to run when the D dies, e.g., Income shall be paid to my son Zach for life, and upon his death, the trustee shall continue to pay the income to Zach's children until the youngest reaches age 35 (Does not violate RAP b/c Zach is LIB and at his death we know all of the children he is going to have). So, income interests build on PRIOR income interests are usually void; but income interests built on prior income interests conditioned upon reaching a certain age are usually VOID because the NY Reform Statute will force vesting within LIB + 21 years. SECOND LOOK DOCTRINE DOES NOT APPLY TO THIS BUT REFORM STATUTE DOES REDUCE AGE CONTINGENCY.
All income interests must be able together to convey a fee simple absolute within LIB plus 21 years. The income interest shouldn't continue for longer than LIB plus 21 years.
NY Statutory Spendthrift Rule
Prevents an income beneficiary from assigning his income interest b/c an "unborn" child cannot assent to a conveyance within LIB + 21 years. When you are dealing with the Suspension Rule and you have an income interest built on a prior income interest, the second income interest is usually invalid b/c dealing with unborn beneficiaries.
POWERS OF APPOINTMENT RAP CHECKLIST:
1) Identify the interest; 2) Determine whether you are measuring from date of creation or date of exercise; 3) Determine whether the "Second Look" Doctrine applies; 4) Give a RAP Rule; 5) Find an LIB and run with it; 6) Most likely, apply NY Reform Statute; 7) Give the Suspension Rule; 8) Look to see if there is an income interest in an unborn beneficiary, and state that the interest income is void; or 9) Go further by giving the Statutory Spendthrift Rule and state that the income interest is void (might be saved by NY Reform); 10) don't forget to deal with remainder interests.
Will Contests: Presumption of Validity
Absent suspicious circumstances, it is conclusively presumed that T read the will and intended its consequences. Thus, plain meaning of will won't be overturned by extrinsic (outside) evidence.
A latent ambiguity is a mid-description, an error not evident by looking at the will (e.g., names a nephew John Paul Jones, but there is no such nephew; there is a nephew Harold Paul Jones) -- extrinsic evidence IS admissible to clarify the meaning of T's words and declarations of intent to third parties. Evidence of T's statements to the attorney who prepared the Will is admissible as well. If extrinsic evidence does not cure the ambiguity, the gift fails because there is no ascertainable beneficiary.
A patent ambiguity is an obvious error on the face of the will (e.g., "I give the sum of twenty-five dollars ($25,000) to my good friend Steve"). Extrinsic evidence IS admissible; facts and circumstances evidence is admissible; evidence of T's declarations of intent to third parties is not admissible because with patent ambiguities we won't allow third party evidence to contradict what the will said. Evidence of the testator's statements to the attorney who prepared the Will IS admissible.
"I wish" and "I desire" is NOT devising language.
A will that expressly provides it will be operative ONLY if some condition is met. If you see something like this on the exam, argue both ways (one, that it is a condition will and probate is denied b/c condition did not occur; two, that is is not a conditional will and the reference to a "condition" only reflects the motive or inducement for making the will in the first place).
Contract to Make a Will
A joint will can be executed by two people. There can be a contract between the parties to the joint will in which the surviving spouse agrees not to revoke the joint will after the death of the other spouse. A contract not to revoke can only be established by an EXPRESS statement of intent that the will's provisions are intended to constitute a contract between the parties not to REVOKE (just using plural language isn't enough). Breach of the agreement by making later, inconsistent will --> probate leases new will despite the contract, BUT a constructive trust is imposed on the funds in favor of the intended beneficiaries of the first contract. We may have other assets in Will 2 that can be validly distributed so Will 2 does go to probate. A CONTRACTUAL JOINT WILL CAN BE REVOKED BY AGREEMENT BW THE PARTIES WHILE THEY ARE BOTH ALIVE BUT THE DECEASED SPOUSE'S ESTATE CANNOT REVOKE A CONTRACTUAL WILL ON BEHALF OF THE DECEASED SPOUSE.
A testator must have sufficient capacity to: (1) understand the nature of the act (that he is writing the will); (2) know the nature and approximate value of the property; (3) know the natural objects of his bounty (family members and loved ones) and (4) understand the disposition of the gifts made.
Testamentary Capacity versus Other Capacity
An adjudicated incompetent who has a guardian to manage affairs can still have capacity to execute will; capacity for a will requires less capacity than for any other legal instrument. The court could find the will was executed during a "lucid interval."
The testator is generally of sound mind but has a persistent belief in supposed facts that are against all evidence, probability, and control, which cause or effect the testamentary act. An insane delusion will not invalidate the entire will but may affect certain provisions.
The testator has testamentary capacity, but is subject to and controlled by a dominant influence of power. The will contestant has the burden of proving: (1) existence and exertion of influence; (2) effect of influence was to overpower the mind/will of testator; (3) the gift/will would not have happened that way without the influence. "Influence is not undue unless the free agency of the testator was destroyed such that the Will produced is essentially a Will, not of the testator, but of the one exerting the influence."
Evidence of Undue Influence
While evidence of undue influence is usually circumstantial, the following situations alone are insufficient to constitute undue influence: - opportunity to exert influence; - susceptibility b/c of age, illness; - unequal dispositions
While evidence of undue influence is usually circumstantial, the following situations alone are insufficient to constitute undue influence: - opportunity to exert influence; - susceptibility b/c of age, illness; - unequal dispositions
A will contestant can satisfy his burden of proof by an inference of undue influence, if: (1) A will makes a gift to one in a confidential relationship; and (2) Person was active in preparing a will, UNLESS the inference is rebutted.
Bequests to Drafting Attorney
Even if no objection is filed, the Surrogate's Court automatically inquires into whether a bequest to the drafting attorney was voluntarily made. This is called "Putnam Scrutiny." Good idea to get another attorney to make the will if you want to devise something to yours.
Appointments of Drafting Attorney
Naming the drafting attorney of the Will to be the executor comes along with certain requirements: First, the drafting attorney named executor must disclose, in writing, that (1) any person (not just an attorney) can be named executor; (2) the executor receives a statutory commission; (3) the attorney is entitled to legal fees associated with the estate as well. Second, the testator/client must sign the written disclosure in presence of 2 witnesses. Failure to comply results in receipt of only half the commission.
No-Contest "In Terrorem" Clauses
Clauses that attempt to cancel any bequest to a party who objects to the testator's will. In New York, such a clause is given full effect even if there was proable cause to challenge the will. In most states, the no-contest clauses are given effect UNLESS there is a finding that the contest was brought in good faith with probable cause.
Exceptions to the NY No-Contest Rules
No-contest rule doesn't apply to forfeit a bequest, if the will contest is: (1) Claiming FORGERY or that the will was revoked by a later will (NOT revoked by physical act) and there was probable cause for the belief; (2) If the contest action was filed on behalf of an infant/incompetent; (3) If the objection is to construe the provisions of the will; or (4) if the objection is to the court's jurisdiction.
Safe Harbor Provisions
A person who is considering contesting a will that contains a no-contest clause may examine, in discovery, the person who prepared the will; the attesting witnesses; the will proponents; and the nominated executors; plus in special circumstances a person with information of potential value or relevance, BUT a no-conset clause can preclude these provisions if the Testator chooses.
Powers of Attorney
A power of attorney is a written authorization for an agent to act on behalf of the grantor of the power. They may be general or specific, with as many variations as the drafter of the power wishes to contrive under the circumstances. Powers of Attorney can be durable (extending beyond the grantor's incapacity, unless it has specific language terminating the power by grantor's incapacity); or non-durable (revoked by operation of law by grantor's death or incapacity, and the power remains valid until notice of death or disability is received by the attorney-in-fact).
Health Care Proxies
A health care proxy is a type of durable power of attorney that appoints an agent to make health care decisions on behalf of the grantor. It does not become effective until the grantor becomes incapacitated, and it remains effective despite the incapacity. A health care proxy must be (1) in writing; (2) signed by the grantor or another at his direction; and (3) witnessed by at least two adults. The health care proxy must state that the grantor appeared to execute the proxy must state that the grantor appeared to execute the proxy free from duress.
A living will generally states an individual's desires, should he become terminally ill or be in a persistent vegetative state, regarding whether to withhold, administer, or withdraw life sustaining procedures, artificial nutrition, or hydration, and treatment to alleviate pain. NY Court of Appeals has held that a patient's right to decline treatment is guaranteed by common law.
Date of will
in cases in which it is important to determine the date on which the will is deemed to have been executed, the will is treated as having been executed on the date of a validly executed codicil thereto.