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Texas Bar Exam: Essays > Wills & Estates Administration > Flashcards

Flashcards in Wills & Estates Administration Deck (169)
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1

A valid will determines the distribution of the decedent's _____________.

Estate.

This includes all of the real and personal property owned by the decedent at death that is NOT subject to disposition under a non-testamentary arrangement.

2

An intestate decedent is one who dies without ________.

A will.

3

T/F - The laws of intestacy determine the distribution of an intestate decedent's estate OR that portion of the estate of a decedent that is not effectively disposed of by will.

True.

4

T/F - Non-probate assets do not form part of the decedent's estate.

True.

These are governed by non-testamentary arrangements (or non-probate transfers).

Includes contracts, revocable trusts, financial accounts, life insurance policies, and certain deeds.

5

An estate is subject to a process called ___________.

Administration.

6

Who are the parties involved in a will?

1) Testator - makes a valid will;

2) Personal Representative (PR) - in charge of managing a decedent's estate;

3) Executor - the PR if the decedent names a PR in her will;

4) Administrator - PR if the decedent dies intestate or fails to name a PR in her will;

5) Devisees - those entitled to receive property under a will.

6) Heirs - those entitled to receive an intestate decedent's estate under the laws of descent and distribution.

7) Issue - Decedent's descendants, which include children, grandchildren, great-grandchildren, etc. who trace their ancestry directly through the decedent.

7

How are adopted children treated?

General Rule - Children adopted by the decedent or her descendants are ALSO treated as descendants of the decedant.

8

What are non-probate transfers? Examples?

These are "will substitutes." They do not need to comply with the execution formalities required of wills. These are NOT part of the decedent's probate estate--not subject to the costs and delays of probate administration.

EXAMPLES:

1) Revocable Trusts;

2) Bank and Brokerage Accounts;

3) Contracts; and

4) Life Insurance Policies.

9

What is a revocable trust?

Trusts where the settlor, during her life, can revoke the trust and reclaim trust property if she so desires.

When the settlor dies, the assets are distributed (or retained in trust) according to the terms of the trust, rather than according to the settlor's will.

10

What date is important for revocable trusts? Is there an exception to the rule tied to this date?

If a WRITTEN REVOCABLE TRUST is created ON OR AFTER SEPTEMBER 1, 2005 - A provision benefiting a spouse of the settlor of the trust is GENERALLY REVOKED by operation of law if the settlor and each spouse divorce after the trust is created.

The spouse is treated as having disclaimmed his or her interest.

SAME RULE APPLIES to a provision benefiting a RELATIVE of the spouse if the beneficiary is NOT also a relative of the settlor.

EXCEPTION: Automatic revocation upon divorce does NOT occur if otherwise provided by:

1) Court order;

2) An agreement between settlor and spouse; OR

3) The express terms of a trust executed before divorce.

11

What are Bank and Brokerage Accounts?

Can be established WITH SURVIVORSHIP provisions. The funds in these accounts pass outside of the probate process. Account holder must have SIGNED AN AGREEMENT providing that the funds will pass to the survivor upon the account holder's death.

Merely holding an account designated by the institution as a join tenancy or as a joint account is NOT enough to confer survivorship rights on another. NEED SURVIVORSHIP LANGUAGE.

12

How are contracts used to avoid probate?

Any form of an enforceable contract, such as a loan, pension account, or partnership agreement, can provide for the transfer of amounts owned by (or due to) one party to another upon the death of the first party.

13

How are life insurance policies used to avoid probate?

They are a means for transferring property at death outside the probate process. MUST make sure that a named beneficiary is qualified to take the proceeds upon the death of the insured (otherwise, proceeds are paid to the insured's estate).

A life insurance policy designation of an insured's spouse as the beneficiary is GENERALLY REVOKED by operation of law in Texas if the insured and beneficiary later divorce.

14

What property is subject to the Laws of Intestacy?

The laws of descent and distribution determine the distribution of:

1) An intestate decendent's estate; AND

2) The portion of the estate of a testator that is not effectively disposed of by will.

ONLY the estate is subject to descent and distribution, NOT assets governed by non-probate transfers.

15

If a decedent leaves behind a surviving descendant AND a surviving spouse, what are more remote relatives of the decedent entitled to?

NOTHING.

16

How do you determine if someone "survives" the decedent?

By STATUTE in Texas, a person is genereally treated as having survived the decedent ONLY if she survives the decedent BY AT LEAST 120 HOURS.

17

What happens if spouses die within 120 hours of each other?

1/2 of the CP is treated as if the husband died first, and 1/2 of the CP is treated as if the wife died first. The 120-hour rule does NOT apply if it would result in escheat of the estate (to Texas).

18

How is CP of the decedent distributed upon a decedent's death?

In all but ONE case, the SS is entitled to receive distribution of the decedent's 1/2 of the CP.

SPECIAL CASE - If the decedent is survived by BOTH an SS AND AT LEAST ONE DESCENDANT WHO IS NOT ALSO A DESCENDANT OF THE SS (ex: child from previous marriage), the descendants of the decedant are entitled to receive distribution of the decedent's 1/2 share of the CP.

19

How is a decedant's separate property distributed if intestate?

1) SS AND ALSO SURVIVING DECENDANTS - SS receives 1/3 of the D's separate personal property and a life estate in 1/3 of the D's separate real property. Rest go to the descendants of D.

2) SS BUT NO SURVIVING DESCENDANTS - SS receives ALL of the D's SPP and at least 1/2 of the D's SRP. If D has surviving parents, siblings, or descendants of those, then the other 1/2 of D's SRP goes to them. If none alive, ALL SRP goes to SS.

20

How is property distributed from an intestate decedent if there is no Surviving Spouse?

In the following ORDER:

1) Decedent's children. If a child failed to survive the decedent but left descendants who did survive, those descendants take the deceased child's share by REPRESENTATION.

2) If No Surviving Descendants - Estate passes to the decedent's parents in equal shares, if both survive. If only one survives but a sibling is alive, then the parent takes 1/2 of the estate and the other 1/2 is distributed to surviving siblings (or their descendants). If no siblings (or sibling descendants) but one parent survives, then the surviving parent takes EVERYTHING.

3) If no surviving parent - Estate goes to any siblings or their descendants.

4) If no surviving parents or siblings (or their descendants) - The estate is divided into two halves (MOIETIES) with 1/2 going to the Maternal side of the dededent's family and the other 1/2 going to the Paternal side.

5) If no heir on the paternal side - Moiety passes to the maternal side under Texas case law. Likewise, if no heir on the maternal side, moiety passes to the paternal side.

6) If no heirs on either paternal or maternal sides - Estate escheats to the State of Texas.

21

How exactly is property distributed in Moiety?

Each 1/2 on the Maternal and Paternal sides is distributed as follows:

1) To the decedent's grandmother and grandfather (on each side), in equal shares (1/4 each).

2) If only one grand parent on either maternal or paternal side survives - the surviving grandparent on that side takes 1/2 of the other GPs share (total of 3/8) and the other half (1/8) goes to that GP's descendants. If no descendants, then surviving GP takes all of that GP's share (for a total of 4/8 (1/2) of the original estate.

3) If neither grandparent survives the decedent - The 1/2 of the estate that went to them passes to their descendants who survived the decedent.

4) If neither grandparent survives with no descendants - the 1/2 moiety of the estate is distributed to the next nearest lineal ancestor (ex: GREAT GRANDPARENTS) and their descendants in the same fashion. Rinse and repeat.

22

Explain maternal inheritance rights of children.

A child born biologically to a woman is generally her child for purposes of inheritance. The child inherits FROM AND THROUGH her mother, and the mother and her kindred inherit from and through the child.

23

Explain paternal inheritance rights of children.

For the purposes of inheritance, a child is considered the child of his biological father under the following circumstances:

1) Child is born to a married couple (or any other circumstances listed in the TFC);

2) Adjudicated Father;

3) Adoptive Father; OR

4) Acknowledged Father.

Child inherits FROM AND THROUGH her father, and the father and his kindred inherit from and through the child.

24

What are the inheritance rights of adopted children?

A child who is adopted generally inherits:

1) From and through her adoptive parents, who also inherit from and through the child.

2) From and through her natural parents as well, BUT THEY DO NOT INHERIT FROM OR THROUGH SUCH CHILD.

EXCEPTION: An adopted child does NOT inherit from or through her natural parents if the decree terminating the parent-child relationship so specifies.

25

What is the effect of a person being adopted as an adult?

Inherits from and through the adoptive parents, but NOT from and through her natural parents.

26

What are the inheritance rights of a child absent a formal adoption?

Child may still have some of the rights of an adopted child for purposes of inheritance if she can establish ADOPTION BY ESTOPPEL, sometimes called "equitable adoption."

27

How is Adoption by Estoppel established?

1) Intestate decedent "foster" parent must have made an AGREEMENT with the child's natural parents (or those in a similar position to adopt the child);

2) Intestate decedent must treat the child AS HIS OWN; AND

3) Also requires child's performance of services to the adoptive parent(s) consistent with a parent-child relationship;

The effect of this is that the child can inherit ONLY from the adoptive parent and THOSE IN PRIVITY WITH HIM.

28

What limitations are in place on the right to inherit by Half-Blood Collaterals?

TEXAS: Collateral relatives of the half-blood take ONLY 1/2 of the amount of an estate to which they would be entitled were they relatives of the whole blood.

However, if the surviving whole-blood sibling dies without any descendants, then the half-blood sibling takes all.

29

What does "taking by representation" mean? What is the Texas rule regarding taking by representation?

A decedent's heirs may consist of a multi-generational class of people that take the estate through representation of their parents.

TEXAS FOLLOWS PER CAPITA WITH REPRESENTATION

30

What is Per Capita with Representation?

Also known as "modern per stirpes." Here are the steps:

1) First, find at least one person surviving the decedent who is a member of the closest generation entitled to share in the decedent's estate.

2) Then, the living persons in that generation receive one share of the decedent's estate. Also, each deceased member of that same generation who leaves a surviving descendant receives a share as well. The share of the deceased member passes to that member's surviving descendants.