Wills and Trusts Flashcards
(83 cards)
1
Q
How do I determine someone’s death?
A
- Death certificate
- Record or report from a gov agency, or
- A person is absent from their last known domicile for a continuous period of 5 years with no explanation after a diligent search is presumed dead.
2
Q
Definition of Caveat
A
Any interested person (heir) who believes that an estate will be administered to probate without their knowledge may file a caveat with the court.
- Can be filed by a person before or after the death.
- NOTE: If caveator is a nonresident and is not represented by an attorney licensed in FL, person must designate a person residing in the county where the caveat is filed as their agent for service.
- NOTE: Creditors may only file after the death.
3
Q
“Beneficiary”
A
= an heir at law in an intestate estate or a devisee in a testate estate.
- In the case of a devise to a trust for trustee, the trustee is the beneficiary oof the estate/
4
Q
“Collateral Heir”
A
= a heir who is related to the decedent through a common ancestor but who is not an ancestor or descendant (not a parent/grandparent or child) of the descendant.
- brother, sister, cousin.
5
Q
“Descendant”
A
= children, grandchildren
6
Q
“Devise”
A
- Noun = a testamentary disposition of real or personal property.
- Verb = to dispose of real or personal property by way of a will or trust.
- NOTE: A devise is subject to charges for debts, expenses, and taxes as provided in the code or the will or trust.
7
Q
“Interested Person”
A
- Any person who may reasonably expected to be affected by the outcome of the proceeding;
- A personal representative of the state (fiduciary appointed by the court, executor); and
- Trustee of a trust.
- NOTE: A beneficiary who has received complete distribution is no longer an interested person.
8
Q
“Probate of a Will”
A
- Probate = Latin “to walk forward”
- Means to take all steps necessary to establish the validity of a will and to admit the will to probate.
9
Q
“Protected Homestead”
A
- = the property on which at the death of the owner inures to the owner’s surviving spouse or heirs under the FL Constitution.
- Just means that it passes to the spouse or heirs.
- If married, passes to spouse.
- If not married or widowed, passes to lineal descendants (children)
-
NOTE: Real property owned in tenancy by the entireties OR in joint tenancy with rights of survivorship is NOT PROTECTED HOMESTEAD.
- Kind of misleading. Homestead can of course be passed when spouses won property in tenancy by entirety. But when you die, it passes immediately too spouse fee simple absolute. If joint tenancy, passes by fee simple absolute. Just means that we’re not worried about homestead property owned in this way because its going to automatically pass (inure) to them.
10
Q
“Residuary Devise”
A
- Means a devise of the assets of the estate which remain after the provision for any devise which is to be satisfied by reference to specific property, fund, sum, or statutory amount.
- If the will contains no devise which is to be satisfied by specific property, statutory amount, etc., “residuary devise” or “residue” means a devise of all assets remaining after satisfying the obligations of the estate.
- “Whatever is left over”; “any property that remains that I didn’t give away.”
- NOTE: If no residue, passes via intestacy statute.
11
Q
“Will”
A
- A testamentary instrument, including a codicil (supplement to a will)
- Is executed by a person in a manner prescribed by law,
- Disposes of the person’s property on or after his death.
- Includes an instrument which merely appoints a personal representative or guardian or revokes or revises another will.
- Electronic wills are allowed.
12
Q
“Collateral Heirs/Descendants”
A
= people who descend from the same common ancestor as the decedent, but do not descend directly from descendant.
- siblings, cousins, nieces, nephews, aunts, and uncles.
13
Q
Spouses Share of Intestate
A
Intestate = no will.
- If no surviving descendant of the decedent:
- = surviving spouse gets entire estate.
- If decedent survived by one or more descendants, ALL OF WHOM ARE ALSO DESCENDANTS OF THE SURVIVING SPOUSE and SURVIVING SPOUSE HAS NO OTHER DESCENDANTS:
- = surviving spouse gets entire estate.
- If one or more surviving descendant of decedent but they are NOT lineal descendants of surviving spouse
- = surviving spouse gets ½ of the estate, descendants unrelated to spouse gets other half.
- If one or more surviving descendants of decedents, all of which are all descendants of the surviving spouse, and surviving spouse has one or more descendants who are NOT lineal descendants of the decedent
- = surviving spouse gets ½ of estate.
14
Q
Share of Other Heirs (How property passes)
A
= if no surviving spouse:
- Descendants (kids, grandkids)
- Parents equally
- Siblings, or then to children of pre-deceased siblings (nieces/nephews)
- Grandparents (maternal and paternal, ½ to each)
- Aunts/Uncles, or then to children of pre-deceased aunts/uncles (cousins)
15
Q
**Inheritance Per Stirpes
A
NOTE: Be sure to state that FL = Strict per stripes.
Any intestate property not passing to the decedent’s surviving spouse is passed per stripes to his descendants, or if his descendant predeceased him, to their descendants.
16
Q
**Half-Blood Collateral Descendants
A
- NOTE: Only applies in intestate to collateral descendants (siblings, nieces, nephews, cousins, aunts, uncles)
- Half-blood siblings share one but not both parents.
- A half blood sibling will take half a much as a whole blood sibling.
- If all are half-bloods, they shall have whole parts.
Ex. Three brothers, A, B, and C. A and C are full siblings, B and C are half-siblings. C dies intestate, no direct decedents. 100% of his estate goes to his siblings A and B. However, A will get twice as much of C’s estate as B. (A gets ⅔, B gets ⅓.)
17
Q
After-Born Heirs
A
Heirs of the descendant conceived before his or her death, but born thereafter, inherit intestate property as if they had been bored in the decedent’s lifetime.
18
Q
Intestate Succession: Adopted Kids and Kids Born Out of Wedlock
A
Adopted Kids
= Treated as a natural child of the adopted parents AND as natural kindred of the adoptive parent’s family.
- NOTE: Will no longer be able to inherit from their natural family, and their natural family will no longer be able to inherit from them.
- NOTE: If a person adopts the natural child of his/her spouse – child can still inherit from natural parent as well as step parent and their families.
- NOTE: If adopted by a close family member (sibling, aunt/uncle, grandparent) can still inherit from their natural parents and vise versa.
Kids Born Out of Wedlock
= will always inherit from their natural mother and vise versa. Will not inherit from its natural father unless:
- Natural parents participated in a marriage ceremony before or after the birth EVEN IF the attempted marriage is void (Ex. Fact patterns when father was already married to someone)
- Paternity was adjudicated before or after the death of the father (DNA or blood test); OR
- Paternity is acknowledged in writing by the father.
19
Q
Right to Elective Share
A
= a portion of the decedent’s estate that his surviving spouse is entitled to take regardless of the terms of the will.
- The surviving spouse of a person who dies domiciled in Florida has the right to an elective share of the decedent’s estate. Rule 732.201
- The elective share is 30% of the elective estate. Rule 732.2065
(NOTE: NOT THE PROBATE ESTATE - THEY ARE NOT THE SAME THING).
Elective Estate = Decedent’s probate estate plus additional assets outside of the probate estate. Includes decedent’s interest in property passing by right of survivorship, death benefits paid under retirement plans, etc.
- TIMING: Must be filed within 6 months after of service of the Notice of Administration (filed by the personal rep to let creditors and heirs know they are probating the estate) OR 2 years after decedent’s death, whichever is earlier. Rule 732.2135
20
Q
Pretermitted Spouse
A
NOTE: Pretermit = to omit or fail to mention.
= when a person marries after making a will and dies leaving the surviving spouse, spouse shall receive a share of the estate equal to what he/she would have received if the decedent had died intestate, UNLESS:
- Pre-nup or post-nup agreement waiving any rights they may have;
- Spouse is provided for in the will; OR
- The will contains an intention not to make provision for the spouse.
NOTE: In reference to #3, surviving spouse can elect to take an elective share of 30% of the elective estate.
21
Q
Pretermitted Children
A
= when decedent omits to provide by will for any children born or adopted after making the will. Child will receive a share of the estate equal in value to what he would have received if decedent died intestate, UNLESS:
- It appears from the will that the omission was intentional; OR
- Decedent had one or more children when the will was executed and devised substantially all of the estate to the parent fo the pretermitted child and that parent survived the decedent. (Child gets nothing because it is expected that the surviving parent will provide to that child)
22
Q
How Does Homestead Property Pass?
A
- Decedent Owns Homestead Solely in Decedent’s Name: Homestead is passed in the same manner as intestate property. (NOTE: Usually the fact pattern on the exam).
- If owned as joint tenants in entirety: Spouse gets property in fee simple absolute.
- If owned as joint tenants with right of survivorship (ex. son): Joint tenant takes in fee simple absolute.
- If decedent is survived by spouse and one or more descendants: Surviving spouse gets a life estate in the homestead, with a vested remainder to the descendants in being at the time of the decedent’s death, and will pass strict per stirpes.
- NOTE: In lieu of a life estate, the surviving spouse may elect to take an undivided ½ interest in the homestead as tenants in common with the surviving descendants of the decedent, and will pass strict per stirpes.
23
Q
Advancements
A
= A gift made by the decedent during his or her life and given to a potential heir with the intention that the gift be in place of or part of that heir’s share of the estate.
MUST BE IN WRITING!
-
A gift will be deemed an advancement if:
- The delivery of the gift is accompanied by a writing designating that the gift is to be counted against the recipient heir’s share of the intestate estate; OR
- The recipient heir acknowledges in writing that the gift is an advancement of his share of the intestate estate.
- NOTE: The value of the advancement is determined by the value of the property AT THE TIME THE ADVANCEMENT WAS MADE, NOT AT THE TIME OF DECEDENT’S DEATH.
24
Q
Advancements: Hotchpot Estate
A
Hotchpot = the process of determining the value of the decedent’s intestate estate and the value of the intestate share of the heir who has received and advancement.
Hotchpot = the value of the probate estate + value of the advancement.
- To determine the advanced heir’s share of the hotchpot estate:
- Value of probate estate + value of advancement = hotchpot estate.
- Value of hotchpot estate / number of surviving heirs = share of each beneficiary .
- Share of each beneficiary - value of advancement received = advanced heir’s share of intestate estate.
25
Simultaneous Death
If it is not possible to determine which of two persons died first, the property of each decedent will pass **as if the other died first.**
**If proven that one spouse survived the other by even a few minutes, the decedent will inherit from the other as any surviving heir.**
**NOTE: If the beneficiary of a life insurance policy and the insured died simultaneously, the proceeds of the policy are distributed as if the INSURED survived the BENEFICIARY.**
26
Slayer Statute
A person who **unlawfully and intentionally** kills the decedent forfeits all death-related benefits that they would have derived from the decedent.
* **Slayer is treated as if they predeceased the decedent**.
* Child of the slayer may still take the killer's share by representation.
* **Applies to:** Intestate distributions, elective shares, shares of pretermitted spouse or child, survivorship interests in joint tenancies and tenancies in the entirety and life insurance proceeds.
* **Must have conclusive proof** (i.e., a murder conviction) or, in the absence of a conviction, court finds that slayer did it by a **preponderance of the evidence.**
27
Spousal Rights When Marriage is Obtained by Fraud, Duress, Undue Influence
* **In General:** Spouse who is found to have procured a marriage through frauds, duress, or undue influence is NOT entitled to rights for benefits under the FL Probate code.
* Applies to: Right to inherit by intestacy, right to an elective share, homestead rights and protections, and rights as a pretermitted spouse.
* **EXCEPTIONS:**
* When the surviving spouse who procured marriage by fraud/duress/undue influence is provided for by name in the document.
* When the surviving spouse and decedent voluntarily lived together with knowledge of the facts constituting the fraud, duress, etc., OR
* the marriage was subsequently ratified by both spouses.
28
Disclaimers
= a heir may disclaim an intestate share. If properly made, the property will then pass as if the disclaiming heir had predeceased the decedent (can still pass to the disclaiming heir's descendants).
* **NOT PERMITTED IF**:
* Beneficiary has already accepted the benefit of gift;
* Beneficiary has voluntarily assigned, transferred or encumbered the property;
* Property has been sold pursuant to judicial process; or
* The beneficiary is dissolvent.
* **Disclaimer become effective on date of decedent's death.**
* When heir is a minor, disclaimer can be made by a parent or guardian **unless the guardian would take as a result of the disclaimer.**
* **REQUIREMENTS:**
* In writing
* Identifies the property to be disclaimed
* Signed by disclaiming heir
* Is witnessed and acknowledged.
* Should also be recorded in the county in which the property is located.
29
Testamentary Intent
| (Testacy: Execution of Wills)
At the time of execution, testator must have testamentary intent. (Present intent to make a will at the time of execution.)
* **Conditions Precedent:** Distinguished from a condition precedent; lacks the prerequisite intent. (Ex. A will that provides it shall go in effect "**if** I die as a result of the surgery next week")
* HOWEVER If the court considers language to merely be an expressions of the testators motive for executing the will, the condition precedent will be considered as having the prerequisite intent. (Ex. **_Because I might die_** as a result of the surgery next week, I execute this will.")
30
Will Requirements
| (Testacy: Execution of Wills)
1. In writing, signed at the end by the testator (or another person who signs the testator's name in the testator's presence);
1. Can be a symbol for initials.
2. Other person, as testator's agent, can also serve as a witness.
3. Signature need not be at the actual end of the document; just at the end oof the process of executing a will.
2. Must be signed i**n the presence of** at least two witnesses;
1. **Any competent person; Need not be 18 or older**, just able to understand and observe the process.
2. **Need not be disinterested**.
3. **“In the presence of”**: Line of Sight test, or Conscious Presence test.
3. Must be signed by each witness in the presence of the testator and at least one other witness.
31
Out-of-State Wills
| (Testacy: Execution of Wills)
Out-of-State wills recognized in FL if they satisfied the will requirements of the state it was executed in.
**TWO EXCEPTIONS:**
1. Holographic wills (handwritten, signed wills that are not witnessed) not recognized / admitted into probate even if valid in the state is was executed in.
2. Nuncupative (oral) wills not recognized / admitted into probate even if valid in the state it was executed in.
32
Testator Competency
| (Testacy: Execution of Wills)
1. Testator must be at least **18 years or older** OR **be an emancipated minor**
2. Testator must be of **_sound mind_**: **TEST: MUST HAVE KNOWLEDGE OF:**
1. The _nature and extent of the testator property_;
2. The persons who are the natural objects of testator's bounty (huh??)
3. The _dispositions the testator is making_; **AND**
4. _How the above elements related to form an orderly plan for disposition_ of the testator's property.
3. **Testator presumed to be of sound mind, but capacity may be challenged.**
1. _GROUNDS FOR CHALLENGING COMPETENCY:_
1. Will was produced by an **insane delusion** (must prove testator believed in non-existent facts)
2. **Physical and Mental Infirmity**: Does not by itself negate testator capacity as long as testator still understands nature of his estate and disposition.
3. **Undue Influence:** (**NOTE:** Proving a confidential relationship creates a presumption of undue influence). See next slide.
4. **Fraud**
5. **Mistake**
33
Challenging Capacity: Undue Influence
| (Testacy: Execution of Wills)
**FIRST: Prove there was a confidential relationship.**
**(NOTE:** If a confidential relationship is proven, it creates a presumption of fraud.)
* **Confidential Relationship TEST**: Whether the person allegedly exercising undue influence:
1. **Was a substantial beneficiary of the will**; OR
2. Had a **confidential relationship with the testator** AND **was actively involved in procuring the will.**
**SECOND: Determine whether there was undue influence**:
* **TEST:** Whether a **party exercised control** over the mind of the testator **so as to overcome testator's free will** and cause the testator to do what he/she would not have otherwise done but for that control.
1. **NOTE:** When trying to prove undue influence in absence of a confidential relationship, look for a **suspicious circumstance coupled with an “unnatural gift”** (ex. a non-relative favored over a close relative).
34
Challenging Capacity: Fraud
| (Testacy: Execution of Wills)
**2 Types of Fraud:**
1. **Fraud in the Inducement**: When testator knows that he is executing a will but has been fraudulently induced by a third person to include or exclude a provision in the will.
1. Ex. Person fraudulently represents to testator that he will care for her kids if she includes him in the will when he actually had her intention off caring for the kids.
2. **Fraud in the Execution (fraud in the facts):** Third party fraudulently induces testator to execute an instrument which they did not know was a will.
**NOTE:** Any portion of the will procured by _fraud in the inducement_ is **STILL VALID AND NOT RENDERED VOID**.
Any portion of the will procured by f_raud in the execution_ is **VOID.**
35
Challenging Capacity: Duress
| (Testacy: Execution of Wills)
1. Any provision of the will procured by duress = VOID.
36
Challenging Capacity: Mistake
| (Testacy: Execution of Wills)
1. A **mistake of omission** occurs when the testator executes a will under a mistaken belief of fact that causes the testator to EXCLUDE a gift provision that the testator would have included otherwise.
1. Ex. Testator believes a particular relative is dead
2. **Reformation:** Under FL Statute, an interested person who wants reformation of the will based on mistake may petition the court to reform the terms of the will to match the testator's intent.
1. Court will reform IF petitioner proves by **clear and convincing evidence**:
1. The _testator's intent_; AND
2. The terms of the will were _affected by a mistake of fact or law in the inducement_. (Petitioner may introduce evidence even if it contradicts the unambiguous language fo the will.)
3. NOTE: Mistake in the execution renders the will VOID.
37
Revoking a Will
Will may be revoked or amended at any time before the testator's death.
**_MUST BE DONE WITH INTENT! If you accidently rip up a will, NO INTENT._**
**Revoke via Writing:**
1. Will may be revoked via writing. **NOTE:** Writing revoking will must satisfy requirements of executing a will.
2. **ADDITIONALLY**, revocation via writing must state **intent to revoke the wil**l OR be a **subsequent will that contains provisions which contradict / are inconsistent with** provisions of the prior will.
3. **Revoke via Physical Act:**
1. FL statute allows a will to be revoked via physical act such as burning, tearing, defacing, or otherwise destroying.
2. Act must destroy an operative part of the will (can't just burn the corner).
3. Act must be done by the testator or someone acting under his direction. **HOWEVER, IF DONE BY ANOTHER, MUST BE IN THE TESTATOR'S PRESENCE.** _See APlusBooks question # 25, set # 2._
4. **NOTE:** **FL does NOT permit partial revocation by physical act. (Ex. Cannot cross out one** provision in a will.)
4. **Revocation by Operation of Law:**
1. Applies in cases of annulment, divorce, or dissolution of marriage (but not separation)
2. Any portion of the will with respect to the testator's former spouse is revoked.
3. Former spouse is treated as having predeceased the testator.
38
Revoking a Will: Special Cases
1. **Cases Where Multiple Copies of a Will**: Multiple copies of an executed will, and one will was physically revoked, all the other copies are also presumptively revoked.
2. **Cases Where Will is Missing or Destroyed**: Will is presumptively revoked if not found or destroyed.
**NOTE:** **To get over presumption, you need either:**
* The _testimony of two or more disinterested witnesses who knew the terms of the will_; OR
* The presentation (not a draft) of _an exact copy of the will_ AND the testimony of _one disinterested witness._
3. **Wills with Codicils:** If a will is revoked, so is any attached codicil. If the codicil is revoked, it does NOT automatically revoke the will it is attached to.
4. **Testator Revokes Will, Intends to but Dies Before Executing New Will OR New Will was Deemed Invalid:**
* Court will consider the revocation of first will ineffective if it finds:
* that the testator **revoked the first will with the intention to execute a new, valid will** AND
* there is a **similar distribution scheme as in the first will.**
39
Satisfaction of Devises
| (Distribution Under a Will)
**NOTE: This concept is parallel to the concept of advancement in intestate distribution.**
= If a testator makes a gift to a beneficiary under a will during the testator's lifetime, the gift is considered to be in whole pro partial satisfaction of the testate gift in each of the following three situations:
1. Testator's **will states** that the inter vivos (during lifetime) gift satisfies the devise;
2. Inter vivos gift is **accompanied by a writing confirming** that it is intended to be in satisfaction of the devise;
3. **Recipient of the inter vivos gift acknowledges** **gift was made in satisfaction** of the devise.
40
Disclaimer of a Will Devise
| (Distribution Under a Will)
= Subject to the same rules as a disclaimer under intestacy (SEE SLIDE #28)
* **REQUIREMENTS:**
* In writing
* Identifies the property to be disclaimed
* Signed by disclaiming heir
* Is witnessed and acknowledged.
* Should also be recorded in the county in which the property is located.
41
Construction of Will Provisions - Negative Wills
(Distribution Under a Will)
**Negative Wills:**
* A will that precludes a person from tasing a share of the estate (whether through testate or intestate distribution).
* NEGATIVE WILLS ARE NOT PERMITTED IN FLORIDA.
42
Construction of Will Provisions - In Terrorem Clauses
(Distribution Under a Will)
**In Terrorem Clauses:**
* = a clause in a will providing that, if a potential beneficiary challenges the will or any provision, then that potential beneficiary forfeits any gift made pursuant to the will.
* IN TERROREM CLAUSES ARE NOT ENFORCEABLE IN FLORIDA.
43
Construction of Will Provisions - Incorporation by Reference
(Distribution Under a Will)
A testator may incorporate into this will another written document.
1. Other writing **must be in existence when the will is executed**; AND
2. The l**anguage of the will must clearly manifest the intent to incorporate and must describe the writing sufficiently.**
3. **NOTE:** Incorp. by Reference is rarely used; Moreover, if the incorporated writing is a trust, incorporation by referenced is replaced by a Pour-Over Trust.
* **Pour-Over Trust:**
* **= a trust into which a testator's will, at the time of their death, “pour assets over" into a trust.**
* Is distinct from a testamentary trust; is created by a writing that is distinct from the testator's will.
* MUST be established before, or concurrently with, the execution of the will.
* The trust document MUST be identified in the will; AND
* The trust terms MUST be set forth in writing.
44
Construction of Will Provisions - List of Tangible, Personal Property
(Distribution Under a Will)
FL permits the incorporation of a list disposing of tangible property that is not otherwise disposed of in the will.
* These lists, if incorporated, are effective to dispose of the property **EVEN IF** not executed within the formalities of a will.
* **To be effective:**
* The will MUST refer to the list with sufficient specificity;
* The list MUST BE SIGNED by the testator; AND
* The list must describe the property to be disposed of.
45
Construction of Will Provisions - Acts of Independent Significance
(Distribution Under a Will)
After the execution of a will, a testator may act in a way that will affect property to be distributed under the will even when there is no intent to effect the will.
Ex. Testator bequeaths all of her furniture of her daughter. After executing the will, testator replaces her sofa with a new one, adds a desk, and throws away a bookshelf. The bequest will include all of the furniture, including the new sofa but will exclude the book shelf.
46
Changes in Property and Beneficiaries:
## Footnote
**Annulment & Lapse**
**Annulment, Divorce, or Dissolution of Marriage:**
* Revokes all provisions in a will that benefit the former spouse.
**Lapse:**
A testamentary gift may lapse if the beneficiary predeceases the testator.
* **Anti-Lapse Statute:** Only applies if the pre-deceased beneficiary is a grandparent or a lineal descendant.
* If the pre-deceased beneficiary is a grandparent/lineal descendant, the testamentary gift goes to a lineal descendant of the beneficiary strict per stirpes.
47
Distribution Under a Will:
## Footnote
**Class Gifts**
**A class gift = a testamentary gift to a group of people.**
* If testator identifies the specific people in the group, it is NOT a class gift, but a gift to the individuals.
* Ex. “To my children” = class gift. “To my children, Ann and Bob” = a individual gift to Ann and Bob, not all of the children if he has others.
**Lapse Within a Class:**
* Class gifts generally vests soon the death of the testator unless will states otherwise.
* Ex. “To my brothers, Bob and Tom." Testator's parents give birth to one more brother before testator dies. The new brother joins class.
* If a member of the class predeceases the testator, the **other members of the class will absorb the share of the predeceased member** (protected by the anti-lapse statute).
* Also applies to residue. If a member of a residue class predeceases the testator, the other members will absorb the residue.
48
Distribution Under a Will:
Ademption by Extinction
Ademption = when the testamentary gift no longer exists when the testator dies.
**Ademption by Extinction:** Occurs when a will devises an asset but at the time fo the testator's death, the asset is no longer a part of his estate.
Exceptions (by statute): Beneficiary will receive the proceeds of the particular assets no longer a part of the estate.
1. Any balance of the purchase price still owing at the time of the testator's death;
2. Any balance from a condemnation award from a taking of property still due at time of death;
3. The net sale price of property sold by a guardian
4. Etc.
49
Distribution of a Will:
## Footnote
**Accessions and Ademption with Respect to Securities**
If a testator intended a specific devise of certain securities, rather than a general devise, the beneficiary of the specific devise only gets as much of the devised securities as the testator owned at death.
* Ex. “**My** 100 shares of ABC corp to Will.” Testator only owns 50 shares at death. Will can only get the 50 shares owned.
* In contrast, “100 shares of ABC Corp to Will.” General devise, Will will get the 50 shares, plus the personal representative would have to purchase an additional 50 shares using the assets of the estate.
If stock split of specifically devised stock, beneficiary of the stock will get all of the shares split that were still owned at death.
50
Family Allowance
A family allowance of up to **_$18,000_** (**in addition to their share of the estate**) may be claimed by the surviving spouse and lineal descendants, and descendants whom the decendent was obligated to or supported.
51
Exempt Personal Property
**Exempt personal property is taken free of claims of unsecured creditors.**
If a decedent was domiciled in FL at the time of his or her death, the surviving spouse has a right to the following as exempt property:
* Household furniture, appliances up to $20,000;
* Up to two automobiles (each not to exceed weight 15,000 lbs) held in decedent's name;
* Florida prepaid college contracts; and
* Certain benefits paid on the death of school teachers and administrators.
52
Satisfaction of Claims (8 Different Classes)
Properly filed creditor claims are paid BEFORE the distribution of gifts, and are satisfied in the following order:
1. **Class One:** Costs/expenses of administration, compensation of personal representatives and their attorneys fees
2. **Class Two**: Reasonable funeral, grave marker expenses
3. **Class Three:** Debts/taxes with preference under federal law
4. **Class Four:** Reasonable and necessary medical expenses of decedent during the last **60 days** of their illness
5. **Class Five:** Family Allowances ($18,000)
6. **Class Six:** Arrearage from court-ordered child support
7. **Class Seven:** Debts acquired after decedent's death by continuation of the decedents business
8. **Class Eight:** All other claims, including those founded on judgments rendered against decedent during his lifetime
53
Procedure for Satisfying Creditors Claims
1. The personal representative must promptly notify creditors of the decedent.
2. **Notice of Probate** must be published _one a week for two weeks_ in a newspaper in the county which the estate is being probated.
54
Time for Filing Claims
**Creditor served w/ a copy of the notice of administration** must file claim with the court:
1. _within three months_ after the date of first publication of the notice of administration; or
2. _30 days_ after the date of service of the notice (whichever is later)
**Unknown and unascertainable creditors** must file their claims within _three months_ after the date of first publication of notice of administration.
* If no notice is published, all claims must be filed within two years of death.
* Claims not filed within the above time periods are forever barred.
55
Objections to Creditor Claims
Personal representative must file a written objection o object to a claim:
1. **Within four months** of the first publication of the notice of administration; or
2. **30 days** from the filing of a timely claim
whichever is later.
56
Personal Representative: Breach of Fiduciary Duties
If personal rep exercises his power improperly or in bad faith, he is liable to interested parties for damages or loss resulting from a breach of a fiduciary duty, to the extent of a trustee of an express trust.
57
Testamentary Gifts of Lawyers
The probate code now includes a provision that embodies the Rule of Professional Responsibility making it unethical for a lawyer to draft a will that makes a testamentary gift to his or herself (UNESS LAWYER IS MEMBER OF DECEDENT'S FAMILY).
* Gift is void in most circumstances
* **However**, if there is a subsequent purchaser for value who takes the gift from the lawyer, the subsequent purchaser will take free and clear without liability.
58
Probate Process
= The process of administering the decedent's will.
* Circuit court has exclusive jurisdiction over probate process
* Probate process is commenced with the filing of the will
59
Lost or Destroyed Wills
* If a will is lost or destroyed, any interested person may establish the terms of the will and offer the will into probate.
* **Requires either one copy of the will, and the testimony of one uninterested witness, OR testimony of two uninterested witnesses.**
* If will or codicil is discovered after administration of an estate has commenced but before it has closed, the will/codicil may be admitted to probate via petition of any interested party.
60
Personal Representative Requirements
1. Must be 18 years or older
2. Have mental capacity
3. Have no felony convictions.
4. **Generally required to be a Florida resident, but a non-resident may be representative if descendant of the decedent, or spouse of such descendent.**
**NOTE:** If representative is no longer qualified to serve, he or she must file a notice of his inability to serve.
61
Personal Representative Duties and Powers
1. Right to take possession of the property in the estate
2. Power to hire professionals to assist in the administration of the estate
3. May sell, lease, or otherwise dispose of realty without a court order if decedent's will confers a specific power to sell or mortgage realty, r a general power to sell any asset of the estate.
4. If the homestead is not occupied by the person entitled to take the homestead, the rep may take possession of, and expend sums for, the preservation of the homestead.
5. Duty to manage, settle, and distribute the estate per the terms of the will and the probate code, as expeditiously and efficiently as is consistent with the best interests of the estate.
6. Rep MUST file an inventory of estate assets, including the fair market value of each item as of the date of the decedent's death.
7. Duty to avoid a conflict of interest in the sale or encumbrance of estate property.
62
Will Substitutes
1. Joint Tenancies and Tenancies by the Entirety: Both carry a right of survivorship; often a will substitute.
2. Totten Trusts: “Payable on death bank accounts”; Created when a depositor opens a bank account in the name of another person. Beneficiary won't have access to the account while depositor is alive.
3. Joint Tenancy Bank Account: If two or more persons own a bank account, a right of survivorship is presumed
63
Totten Trusts
* “Payable on death bank accounts”
* Will substitute
* Created when a depositor (decedent) opens a bank account in the name of another person (beneficiary).
* Depositor can make withdrawals or deposits during his lifetime
* Beneficiary won't have access to the account while depositor is alive.
64
Lapse Within a Class
If a member of a class predeceases the testator, the other members of the class will absorb the share of the predeceased class member, unless the predeceased member is protected by the anti-lapse statute.
65
Liens on Property of Decedent: Exoneration
* If devised property is encumbered by a lien at the time of death, the lien is subject to exoneration. Exoneration requires satisfaction of the lien from the residuary assets of the estate.
* **Under FL law, devises are not subject to exoneration UNLESS the will expressly provides for exoneration.**
66
Elective Share
**NOTE**: Not the same as an allowance, which is $18,000
* Florida protects the surviving spouse by allowing him or her to elect to take against a will executed by his or her deceased spouse
* The elective share is **30%.**
* **DEADLINE: Election must be made by the earlier of:**
* **Six months after date of service of notice of administration** on the surviving spouse; or
* **Two years** after the date of decedent's death.
67
Pretermitted Spouse
= a spouse that was omitted from the will; married decedent after his or her will was made,
* A pretermitted spouse may take an intestate share unless:
* Waived the right via a prenup
* Is provided for in the will in contemplation of marriage; or
* The will expresses an intent not to provide for the spouse.
68
Trusts: Revocability
Under the FL Trust Code, unless the trust instrument provides that the trust is irrevocable, the trust may be amended or revoked by the settlor.
69
Express Private Trust (6 Requirements)
An express private trust requires the following elements:
1. **Settlor** (party who created the trust, NOTE: Settlor can also be trustee)
2. **Intent**
3. **Trustee** (holds trust for the beneficiary)
4. **Trust res** (the subject matter of the trust; can be real, tangible, or intangible property)
5. **Ascertainable beneficiaries** (now or in the future); and
6. **A valid purpose**.
70
Trustee Requirements, Compensation and Resignation
* Must be 18 years or older and competent to acquire or hold property in his own right.
* A bank may also serve as a trustee.
* May receive reasonable compensation for performance of his or her duties.
* Can resign by giving 30 days notice of intent to resign to settlor (if alive), co-trustees and beneficiaries; OR by obtaining court approval.
71
Removal of Trustee
FL Courts have jurisdiction over a removal of a trustee for the following reasons:
1. Trustee committed a serious breach of trust;
2. Trustee becomes incapacitated; or
3. Trustee is unfit to continue in the position.
72
Trust Res (Definition and Requirements)
= the subject matter of the trust
* Can be real, tangible, or intangible property
* The trust res must be in existence for the trust to be enforced
* Must be sufficiently specific, identified and described.
* A mere expectancy (e.g., an anticipatory testamentary gift) CANNOT serve as the trust res
* Certain future rights MAY serve as trust res (e.g., future earnings from an existing contract
* Must be delivered to the trustee if the trustee is a different person than the settlor.
73
Trustee
* A trust must demonstrate a separation between the legal and equitable interests of the trust. This is accomplished by appointing a trustee.
* If a person is the sole trustee and the sole beneficiary of a trust, the interests merge, which destroys the required split between the equitable and legal interests.
74
Types of Trusts: Pour-Over Trusts
= Is designed to catch property that person did not put into trust during his or her lifetime, letting the court know you want those assets transferred to your trust after you die.
**Requirements:**
1. Trust may be created before or concurrently with the execution of the will
2. MUST be identified in the will
3. The trust terms must be in writing.
75
Types of Trusts: Charitable Trusts
= created to benefit a charitable purpose, such as religion or education.
* May designate a charity or indefinite group as a beneficiary (an ascertainable beneficiary is not required such as in an express trust)
* May be perpetual; not subject to he rule against perpetuities.
76
Types of Trusts: Honorary Trusts
= no beneficiaries and is not created for a charitable purpose.
Ex. A trust to take care of S's pet. The trustee is NOT required to carry out S's goal, but has the power to carry it out “on his honor”.
77
Types of Trusts: Resulting Trusts (Implied Trusts)
= a type of implied trust that comes into existence by operation of law.
Occurs when:
* An express trust fails or does not completely dispose of the trust property; OR
* Property is being held for someone by an unrelated third person.
* “Trustee” holds legal title of property, but equitable title remains with the "settlor"
* Presumed that trustee holding legal title was intended to hold the property for the intended person.
* Result is that property results back to settlor.
* Ex. A purchases a farm for $100,000 and directs the seller to make the deed out to a third person. Nothing further appears concerning the purchaser's intention, and no relationship exists between the purchaser and the third person. A resulting trust is therefore created.
78
Types of Trusts: Constructive Trusts (Implied Trusts)
= type of implied trust used to prevent unjust enrichment resulting from a breach of fiduciary duty.
* Created when a person in a fiduciary capacity (such as an executor or trustee) breaches a duty owed to a Plaintiff (such as an estate).
* Ex. When a beneficiary can prove that a trustee took property in a trust that was intended for the beneficiary. Court can compel the trustee to surrender the wrongfully obtained property, or if that property was exchanged for money, a constructive trust can be created over whatever the individual used the money to purchase.
79
Types of Trusts: Secret Trusts
= Created when property is left to a person under a will with the understanding that they will hold the property as trustee for the benefit of another person (beneficiary) who is not named in the will.
* Can be fully secret (will does not mention trust at all) or semi-secret (will mentions trust, but does not name the beneficiary.
* Generally discouraged under trusts law.
* **NOTE:** Courts will generally impose a _constructive trust as a remedy for a fully secret trust_, and and a _resulting trust as a remedy for a semi-secret trust._
80
Types of Trusts: Spendthrift Trust
= designed so that a beneficiary is unable to sell or give away her equitable interests in trust property.
* Trustee is in control of the trust property
* Beneficiary is not in control of the property and his/her creditors cannot reach those assets. Can only receive income from the trust, but cannot withdraw principal.
* Can limit access completely OR allow beneficiary to withdraw a limited amount of money each month.
PROS:
* Prevents creditors and lawsuits from attaching to the beneficiary's assets
* Can provide a steady scream of income
* Prevents irresponsible spending
* Preserves assets for future generations
CONS:
* After trust proceeds have been paid to beneficiary, creditors can come after it.
* Can be reached by a beneficiary's child, spouse or former spouse who has a court order against the beneficiary for support and maintenance, but only as a last resort, upon a showing that traditional methods of enforcing the claim are insufficient.
* Can also be reached by a claim by Florida or under Federal law.
81
Types of Trusts: Discretionary Trusts
= Trustee has full discretion to make payments under the trust. Trustee has full control over assets, but still bound by fiduciary duties.
82
Types of Trust (8 total)
1. Express Trust
2. Pour-Over Trust
3. Honorary Trust
4. Charitable Trust
5. Totten Trust (Bank account; will substitute)
6. Resulting Trust (Implied)
7. Constructive Trust (Implied)
8. Discretionary Trust
9. Secret Trust (Fully or Semi; resulting or constructive trust imposed as remedy)
83
Trustee Duties
**GENERAL: A trustee must administer the trust prudently and in good faith, according to the terms of the trust and the interests of the beneficiaries.**
* Duty of Loyalty: Trustee prohibited from self-dealing. Unless stated in the trust terms, trustee CANNOT
