WILLS, ESTATES, AND TRUSTS OUTLINE

Alternative Approaches to Disposing Property

• During life

• Gift: avoids probate

• Joint tenancy: avoids probate

• Spend it!

• After death

• Will: Doesn’t necessarily avoid probate

• Trust

• Pay on death K

• Stocks, life insurance, bank account

Pass Property through a will

• Testate Estate: D died and left a will

• To Die Testate: D devises real property to devisees AND

bequeaths personal property to legatees

Devise: 1-201(10): Testamentary disposition of real and

personal property

• Intestate Estate: D dies and left no will

• Estate passes through the intestacy statutes on descent and distribution

Who can you disinherit?

• Can’t totally disinherit a spouse. Spouse always gets some of the estate

• Can totally disinherit kids

Why write a will?

• To make sure that people who are entitled to property get it

• D gets to appoint the personal rep/executor of the estate

• Guardianship: Who do you want to take care of your minor kids why you die?

Advantages of writing a will

• Orderly method of disposition

• D decides who the personal rep will be

• If D dies intestate, there’s a list (preference list) as to who the rep will be

• Requirement and expense of a fiduciary bond can be eliminated

New Michigan Probate Code: EPIC

• Estates and Protected Individuals Code

• Decedents estates

• Living individuals

• Legally incapacitated individuals and minors

Hodel v. Irving: Right to pass property at time of death is a constitutionally protected right

3 prong test to “taking” cases

• Economic impact of the regulation

• Is there an interference with investment-backed expectations?

• Crc of govt. action

• Interference with one’s bundle of rights

Shapira v. Union National Bank: What a Testator wants done with his estate is not a decision for the judge. Duty of Court is to honor testator’s intention within the limitations of the law and public policy.

• Parent has the right to place conditions on their children before children can get a piece of the estate. ***There is no constitutionally protected right to receive property from a parent’s estate***

• Interrorum Clause: A gift conditioned upon the act of another controlled by the Testator.

• If condition is filled and is broken after kid gets the $, then he still keeps the $

• Controlling hand from the grave!

• Reasonableness looked at at time of testator’s death

• Generally, Cts disfavor these clauses

IE: If my son divorces and marries a 2^nd time, then no money. Upheld

IE: There’s no fundamental right to stay single. Public policy favors marriage

IE: Kid gets money only if he doesn’t marry X. Not upheld. Cannot restrict based on a particular person

IE: Restrictions on personal habits. Upheld bcz of public policy

IE: Kid gets money only if he graduates from law school. Upheld if the child is capable of graduating from law school. ***Cts look at the reasonableness of the condition***

IE: Kid gets $ only if he never speaks to Uncle Joe. Not upheld. Can’t have a restriction that interferes with a family relationship and can’t encourage divorce.

• Gift Over Clause: Money will be given away if condition is not met.

Transfer of Decedent’s Estate

• Probate Property

• Probate Cts handle these

• To “go through” probate means to have an estate administered in one of these Cts

• Ct can be used for dispute resolution and the orderly distribution of property

• Passes under decedent’s will or through intestacy statutes

• WILL: 1-201(3)

• Testamentary instrument

• Appoints executor

• Revokes or revises a previous will

• Nominates guardian

• Limits right of individuals or class to succeed to property of D by intestate succession

• TRUST:

• Created by D

• While alive

• May by revocable or irrevocable

• Rev: Valid in all states

• Assets go to beneficiary directly from D

● Non Probate Property

• Passes under an instrument other than a will which became effective before D’s death

• Joint Tenancy: D’s interest vanishes at death and survivor gets all

• Life Insurance: Paid to bene when D dies

• Ks payable on Death: Pension plans, tax deferred investment plans

• Interests in Trusts: Trustee holds property for benefit of named bene in accordance with terms of trust

Administration of Probate Estate

The first step is to appoint a personal rep (1-201)(36)) to handle D’s affairs

• Inventory and collect D’s assets

• Manage assets during administration

• Receive and pay claims of creditors and tax collectors

• Distribute assets to those entitled

Important Definitions

Probate: System of carrying out the disposition of property after death

• Must follow certain procedures

• It’s not wrong to avoid probate if you do it reasonable

Streamline: Can do it in about 5 months, average is 1 year. IRS will Q it if more than 2 yrs

Cost has been curtailed: Legal fees: Hourly rate with a detailed justification of time

• Can take into account factors like difficult family members and litigation

• MICH: Atty fees must be approved by a Probate judge

Fiduciary: 1-201(16): Personal rep, guardian, conservator, trustee

• Owes a greater duty of care/higher std of care

• Activities will be scrutinized by the Ct

• MICH: Includes temporary rep, successor, etc

Devise: Gift of real or personal property given to devisee

Bequest: Given to legatee during D’s life

Beneficiary: 1-201(3): Benefits under will, trust, ins. Policy, etc

• Has present OR future interest in another’s assets

• Whether by will or intestacy

Distributee: 2-201(13): One who received property of D other than a creditor or purchaser

Executor: D dies and leaves a will naming the personal rep. Executor is a male personal rep

Executrix: Female personal rep

Administrator: Personal rep is not named in the will. This is the male admin.

Administrator CTA: “Cum Testamento Annexo”: “with will annexed”

• This is an administrator who’s not the original (or first) appointed personal rep

Administrator DBN: Administrator gets appointed to finish off what the original admin started

IE: where executor or orig admin started probate, but can’t finish it for some reason

Administratrix: Female administrator

Interested Person: 1-201(24): Includes heirs, devisees, children, spouse, creditors, benes, and any other person having a property right in or claim against a trust estate or D’s estate, a ward’s estate, or protected person. Child of D not named in will is also an interested person, but if a child is cut out, then he’s not an interested person! (too bad)

TEST: Who’s an interested person depends on which petition is getting filed.

IE: When filing a petition for confirmation of sale of D’s real estate, a creditor is an interested person. Usually, we look at unpaid creditors: they must receive notice of sale.

Heir: 1-201(2): Closest people to D. Spouse, child, parents, and so on.

1-201(2): The intestacy statute that defines persons entitled to succession of D’s property

Next of Kin: Everyone is D’s next of kin

NOTE: All heirs are next of kin and not all next of kin are heirs. An ex-spouse is neither

Consanguinity: Relationship by blood affinity

• The only heir that does not have consanguinity is a spouse

• Adopted relative is treated as blood relative

Issue: One’s children, grand children, great grand children, etc. (descendents) They descend from D

The Probate Process (not on exam but will need this for writing assignment)

• STEP 1: We have assets and a D

1. Start with jurisdiction: There are 2 types of location for estates

1. Domiciliary estate: Estate opened where D is domiciled

IE: I live in Wayne County, so my estate will go through Wayne County Probate Ct

2. Ancillary estate: Estate opened where D is not domiciled but owns property

You must open a domiciliary estate and then send notice to the ancillary jurisdiction

2. What kind of estate will you open?

3. Formal: Conducted before a judge w notice to all interested persons

4. Informal: Conducted w/o notice to interested persons. Prof doesn’t like this one

5. Formal/Supervised: Do this if you’re dealing with a dysfunctional family

6. Formal/Unsupervised: Recommended in majority of states

Not on exam, these are just dfrn types of estates that you can open

NOTE: In general, do it as unsupervised as possible

3. What kind of documents do you need when you go to Probate Ct to open up the estate?

7. The original will and whether there’s a will or not, take a copy as well

8. Fill out your “Petition for Formal Administration”

1. On petition, you choose formal or informal

2. Give name of personal rep on the petition

3. There’s a chart on the petition where you need:

1. Name of heir

2. Relationship to D

3. Age (if 18 or over, put “full”)

4. Who are you requesting to be appointed administrator of the estate?

9. Need “Testimony of Interested Persons” form

1. Need same info as first petition

2. Q/answer format

3. Goes through definitions as to who heirs are

4. Petitioner’s sig must be notarized

5. Testimony (form) gives info under oath w/o having to stand in front of a judge

10. If you have a will that leaves assets to someone other than D’s immediate family member, then you’ll need a “Supplemental Testimony” form

IE: If there’s a gift to charity or $’s going into a Trust

11. Take an “Acceptance of Appointment” form AND an “Order” appointing a personal rep

6. Signed statement by personal rep that s/he will adhere to the jurisdiction of the Ct

12. May or may not need a Bond: Depends on 3 factors

7. What kinds of assets are going into Probate?

8. What kind of estate is being opened?

9. What’s in the will?

1. If it’s just a house, then no need for a bond

2. If it’s assets that can be liquidated, then you’ll need a bond bcz with liquidated assets, someone can liquidate them and run off to Mexico with the $!

BOND: Says “if personal rep steals the money and runs, the surety will replace the $” (like an insurance company) NOTE that most companies will not give a bond to someone who is not represented by an atty

13. Now that you have all of the above, pay the $100 filing fee at the window

10. You’ll need a check for 100 and one for 10 bucks for each additional letter of authority (get a few extras)

14. Now you go see the Analyst

11. Analyst is like a referee who will review the paperwork and the personal rep will be appointed without seeing the judge

12. NOTE: You might need a Waiver or Consent by the interested persons

13. Sometimes, there might even be a hearing and you must serve notice to all IPs

3. By mail: at least 14 days before the hearing

4. By person: at least 7 days before the hearing

Step 2: Bring a Notice of Publication

• You must publish for creditors. Creditors get 4 months to make a claim against the Estate

• Wayne County: You don’t need one, Ct clerk will do it for you’

• Creditors: Include banks where D had credit cards, hospital if there’s a bill, mtg bank, GMAC, etc (Anyone that D owes a debt to at the time of death)

• Statute of Limitations: There’s no definite start date for S/L

• It’s not self actuating

• It’s within control of family

• As such, actual notice must be given to Creditors

• MICH: Go through D’s records for 2 years before the date of death to see of D owes $ to anyone. Must go where there’s an outstanding, unpaid bill!

• How do you know if one is a “reasonably known” creditor?

• As long as you can show that it was not unreasonable for you not to know of the Creditor is the TEST

Step 3: Start Gathering and Preparing the Assets and Inventory

What do you put on the Inventory “Form” and what Value do you put on the property?

Inventory: Will be sent out to all interested persons with a cover letter

Same inventory forms is used for Conservatorship and Decedent’s Estate

Value: Is on the D’s date of death for D’s estate, even if there’s no will and D has been dead for 15 years

Value: Is on the date you were appointed conservator for a Conservatorship

NOTE: List only assets that are D’s name alone and don’t list jointly held property!!!

1. Bank accounts

15. Get copy of statements from Bank as of date of death (DOD)

14. Need name of bank, acct #, type of account (in the assets column) and amount of acct in the Value column

5. What about checks that cleared after the DOD or deposits that posted after the DOD?

1. These will be taken care of when you do an accounting and will count as income

2. Soc Sec checks that come in after DOD must be sent back!

2. Stocks

16. Need stock name, # of shares, and type of shares (ie: common stock)

15. You can call Detroit Public Library for some of this info

16. Use high selling price and low selling price average on the DOD

6. If DOD is on the weekend or holiday, then average the high and low of stocks on the day before death, day after death, and then average these two figures

7. You can get these #s from the newspaper

8. If there’s a negative balance, then it does not go on the Inventory

3. Savings Bonds

17. Listed as face value

18. You can go to any bank and get the calculated value of bonds issued by month and year

4. Real Estate

19. Need full, legal description

20. Need street address

21. There are 3 methods for Value

17. Double State Equalized Value SEV

9. You’ll need the tax bill for SEV: take copy with you

10. This is an approximation of what the selling price of the house is or what it would go for on an open market

3. Therefore, on Inventory side, put “Double SEV of $25,500 and put $51,000 on the Value side

1. NOTE: If there is a balance owed on the mtg, you must deduct the amount owed from the SEV. This must be a secured lien, not an unsecured lien

18. Appraisal

11. Formal real estate appraisal for value on DOD

12. Can be used for any real estate, like a home, land, etc.

13. You appraisal IF

4. You must file form 706 for IRS

5. On Inventory side, put “Appraisal at …” see attached

2. Always attached copy of appraisal

19. Actual Selling Price w/in One Year of DOD, less the mtg owed

14. Use if real estate is going to be put up for sale and not given away or

15. If you sell the real estate w/in 1 year of DOD

6. Be sure to attach the Closing Statement

5. Vehicles

22. IE: 1998 Buick, VIN #

20. Need copy of title for verification of VIN #

21. For Value, use “Red Book”: see VIN # for model #

16. You’ll get the retail value

17. Use publication that covers your DOD

18. House, trailer, boats, etc. Each kind has its own Red Book

6. Personal Property

23. Household and personal effects

22. For an average estate, use $1000 for all, including furniture and kitchen appliances

23. If there’s expensive jewelry, get it appraised before distribution to family mbrs

24. NOTE: You don’t need a Ct order to distribute these

25. NOTE: After discovered personal or real property, you’ll need to re-open the estate if you need a Ct order to distribute the after discovered property or get D’s name cleared off of real estate

NOTE: If there’s a shoebox full of $25,000: If wife finds it, she keeps it regardless of amount bcz if married, there’s a presumption that it’s jointly owned. However, if it’s a bro or sis that finds it, then the TEST is the further distant the relative and the larger the amount, then the Q is reasonableness

Step 4: When the Inventory is in Final Form

1. Get the orig signed by the personal rep

2. Take it with you to Ct so you can pay the inventory fee and take orig back with you, give

Ct a copy. Put a copy in the file to prove that you included everything individually

owned by D

3. Pay claims

4. Distribute assets

5. If there is income coming into the Estate, apply for a federal tax id # for the Estate and

prepare a 1041: A fiduciary income tax return

6. Prepare a Final Account

24. Send this to all IPs to show them that they got what they were entitled to

25. Final Acct: NEED Inv. #

+ Receipt #

Gross Estate

• Distribution

= Net

26. Get a Receipt from all IPs saying that they received their share

7. File a “Closing Statement” and Ct will issue a “Certificate of Completion”

Attorney Fees: MCR 8.303

• Need written atty fee agreement with client

• Includes hourly rate

• How often you will bill the Estate

• You’ll send a copy of this to all IPs with the first notice you send them

• If they have a problem with it, they can file a petition with the Ct and the Judge will decide on it

• You must send a copy of all bills to all IPs

• If it’s a Supervised Estate, your atty fee must be approved by the Ct.

Probate from Small Estates

• This only takes hours!

• IE: For Stock with a value of $2500, use form “Small Estate Under $15,000”

• You’ll need

• Assets

• Heirs

• Copy of paid funeral bill w/who paid the funeral expenses. This person gets reimbursed first

Universal Succession: NOT in MICH

• Heirs or residuary devisees succeed to the title of all D’s property and no personal rep is appointed by Ct

• Natural heirs/family mbrs step into shoes of D. They take title to his property and are responsible for his debts

• Need written agreement amongst all heirs

• If D has 3 heirs, they’ll hold the property as Tenants in Common

• U.S. in the UPC: 3-312 through 3-322

• Universal successors have full power of ownership to deal with estate’s assets

• They assume creditor and tax liability: they are personally liable

MICH: EPIC 700.3914: Family Agreement Statute

• If all heirs agree in writing to a distribution dfrn from the intestacy statute or the will, the Ct. can approve the agreement

• Personal rep must follow the agrmt

• Minors or legally incapacitated ppl: Ct will approve it as long as the agrmt is fair to these ppl. Ct will appoint a guardian to sign the agrmt on minor’s behalf

Limitations of Distribution

• Rule Against Perpetuities

• Taxes

• Estate taxes start at 39% and go up to 55%!

You have more of a bundle of rights w/regard to your property when you are alive.

Ct. can interfere with what D wants done with his property after death

IE: What if I want my personal rep to burn my money and sprinkle it over my grave?

Most judges will uphold this

IE: What if I want to be buried in my farari?

Upheld

IE: Burn my original Picasso?

Not upheld

TEST: Cts look at the interest of the preservation of the item that D wants destroyed after death (particularly a societal interest with regard to the Picasso)

IE: Destroy my pet!

19. Are pets property?

20. Do we recognize them as living beings?

NOTE: Animal rights groups have no standing to object to an order such as this in the will unless they have possession of the animal.

Professional Responsibility

Simpson v. Calivas: An atty who drafts a will owes a duty of reasonable care to intended benes. This duty arises out of relationship btn the parties and protection against reasonably foreseeable harm. TEST: Focus on forseeability of injury to the intended bene

NOTE: Duty of a general practitioner is to refer client to a specialist if he can’t handle the matter with reasonable skill and care. If he fails to do so, then he’ll be held to std of care of a specialist in that area.

NOTE: For a negligence action against atty, see

DUTY: Is there a duty owed to will contesters where D wanted an amendment to the will, but D died and couldn’t sign the amended will in time?

NO. There’s no status as a 3^rd party bene here. Can’t bring in parol evid of D’s conversation with atty who drafted the will.

If no duty, stop here. If yes duty, go to Breach, Causation, and Damages

NOTE: Could use a properly signed letter authorizing an amendment to D’s will

WILLS: Interpreted by 4 corners approach. Parol evid is inadmissible whereas in a negligence action against atty, parol evid is admissible

Hotz v. Minyard: A/C relationship is a Fiduciary relationship. Since the bene to a will was also the atty’s client for other matters, atty owed her a fiduciary duty to act in good faith, where D told atty not to tell bene about the amended will. Atty was suppose to advise client that ethics will not allow him to breach his fiduciary duty to his client and he should have withdrew from representation bcz of a conflict of interest

Ch. 2: Die Intestate UPC 2-102

Examples:

Spouse (surviving spouse)

No issue

No parents

Spouse gets 100% under UPC and EPIC

Spouse

Kids from this mrg

Spouse had no other issue as well

UPC: Spouse gets 100%

EPIC: Spouse gets first $150,000 and ½ of remainder

Issue: Share the other ½ equally

Spouse

D and spouse’s kids (D’s issue)

Spouse’s issue (D’s step kids)

UPC and EPIC: Spouse gets first $150,000 and ½ the remainder

Issue split the other ½ equally

D’s step kids get nothing!

**Theory behind step kids getting nothing is that their biological parent will leave them something when she dies

Spouse

Issue from this mrg (D’s issue)

D’s other issue from a previous mrg or out of wedlock

UPC: Spouse gets first $100,000 and ½ the rest

Issue from this mrg (D’s issue) get ???????????

EPIC: Spouse gets first $150,000 and ½ the rest

Issue from this mrg (D’s issue) split the other ½ equally

Spouse

Issue from D’s first mrg

No issue from this mrg

EPIC: Spouse gets first $100,000 and ½ rest the rest

Spouse

No issue

Surviving parents

UPC: Spouse gets first $200,000 and ¾ the rest

Parents split the other ¼ equally

EPIC: Spouse gets first $150,000 and ¾ the rest

Parents split the other ¼ equally

NOTE: If there’s only $80,000 in the estate, then it all goes to the spouse

The law looks to D’s strongest relationships

**Whenever there are issue, the parents get nothing!!!!!!**

UPC 2-103 and EPIC 2103

Examples

No spouse

No parents

Have issue

Issue take all

No spouse

No issue

Have surviving parents

Parents take all

No spouse

No issue

No parents

Surviving siblings split all equally

Note: If one of the siblings is dead, then the dead sibling’s kids will split his share equally

Only maternal and paternal grandparents are living

½ goes to maternal grandparents to split equally

½ goes to paternal grandparents to split equally

then aunts and uncles

then cousins

If there are no aunts, uncles, cousins on maternal side, then that share will go to the paternal side and vice versa. If none there, then the estate escheats to the state

UPC 2-107 and EPIC 2107: Half Blood Siblings

Relatives of the half blood take the same as relatives of the whole blood. Therefore, when you get a problem with ½ siblings, look for a common parent

4 Prong Test for Common Law Marriage:

1. Clear and convincing evidence of a present agrmt to live as H and W

2. Both must be free to marry. One can’t be living in bigamy

3. Must be openly cohabitating to the public

4. Must have begun the arrangement before 1957

1. There’s no set time on how long the couple has lived together. There’s a reasonable std here

2. Most states still recognize CL mrgs

3. If CL mrg is established under the laws of another state and then the couple moves to Mich, Mich will recognize the CL mrg

For surviving spouse under UPC 2-802 and EPIC 2801: you need a valid mrg cert

When is spouse that’s named on the mrg cert NOT a surviving spouse?

1. Divorce

2. Annulment

3. Decree of separation that doesn’t terminate the status of H and W

4. Living in a bigamous relationship with another (eff. 04/2000). Cheat gets 0! Even if property is jointly owned by H and W

5. Individual who has done one or more of the following is NOT a surviving spouse:

4. Willful absence from spouse

5. Deserted spouse for one year or more

6. Willfully neglected or refused to provide support if required to do so by law

UPC 2-804 and EPIC 2806, 2807, and 2-808

Divorce revokes any right to receive a piece of the estate

• If divorced, you are now revoked out of receiving anything that you were entitled to had you still been married

• Divorcee can’t be pers rep, executor, trustee, can’t get bene $ from life ins

• Divorce sethers jointly owned property. Property held by H and W: H and W become Tenants in Common

If H has 2 alleged surviving spouses, the presumption is in favor of W #2

Uniform Simultaneous Death Act: (USDA) Repealed in MICH

• If there’s no credible evidence that one spouse died before the other, then their deaths are deemed to be simultaneous.

• If a person dies simultaneously with his heirs or devisees, then the bene is deemed to have predeceased the benefactor

MICH LAW: 120-hour rule

UPC 2-702 and EPIC 2702 for Testate Estates

UPC 2-104 and EPIC 2104 for Intestate Estates

• You must survive your spouse, heir, or devisee by 120 hours in order to be considered the survivor

Janus v. Tarasewicz: Std of survivorship is “by a preponderance” Burden of sufficiency of evid (b. of production) may be met by evid of a positive sign of life in one body and absence in the other

TEST 1: positive sign of life

TEST 2: Brain death test

Irreversible cessation of the circulatory function: if these stop, you’re dead

There are 3 systems of Distribution

1. Per Stripes: Start at the root level (first one after T)

2. Per Capita: If all descendants at first level are dead, then move to next level where ppl are alive. This system equalizes the division to an equal distribution scheme

3. Waggoner System: MICH: At every level of distribution, the issue split equally what’s left over

SEE DIAGRAMS IN NOTES FOR EXAMPLES OF THESE

Table Of Consanguinity

• Each line is called a “Parentela”

• Parentelic System: Intestate estate passes to grandparents and their descendents. If none, then it passes to great grandparents and their descendents.

• Degree of Relationship System

• NOT in MICH and only in Louisiana

• Intestate estate passes to the closest of kin, counting degrees of kinship

• See Table of Consanguinity

• UPC 2-103 and MICH: does NOT permit inheritance by intestate succession beyond grandparents and their descendents. If there are no survivors at all, then estate will escheat to the State

Posthumous Children UPC 2-108 and EPIC 2108

• These are children that are born after the death of their father

• Only men have posthumous children

• Treated as living at the time of their father’s death as long as kid is living for 120 days after the father dies

• So, if mom is pregnant at the time dad dies, child is utero is presumed to be that man’s child so long as the child lives for 120 days after the dad dies

• C/L: Child born to a woman w/in 280 days of the death of her H, the kid is presumed to be that man’s child

• MICH: There is no dead line for when the child has to be born (after the dad dies) It’s okay as long as the child is born w/in a reasonable time after dad’s death

How do we treat kids that are born after their fathers’ death?

IE: Children born by reproductive technology

IE: Invetro kids: See Davis v. Davis

Some states won’t allow these kids to inherit

IE: Surrogate parenthood

IE: Same sex parents: Held in Mass that kid can inherit through both mothers as the child of each

These legal issues with posthumous kids come up very often in Estate Planning!

Half Blood Relatives: Treat them as whole blood relatives UPC 2-107

Adopted Children

Hall v. Vallandingham: Whether children who are adopted lose the right to inherit from a natural relative since they would have inherited had they not been adopted (after the death of biological parent)

UPC 2-114(b) and EPIC 2114: Step parent adoption does not terminate the rights of the adopted kid to receive through a deceased parent’s family

NOTE: UPC 2-113: One who is related to D through two lines is entitled to only one share

UPC 2-114: Parent and Child relationships

• Children born out of wedlock are still children of the parent for inheritance purposes

• Adopted kid is still child of the adopting parents for inheritance purposes

• NOTE: rights of adopted kids vary from state to state

• NOTE: Vol or invol termination of parental rights terminates that child’s right to inherit from the parent whose rights were terminated

Adult Adoption: only persons who have standing to challenge a will are those persons who would take if the will were denied probate. If T adopts a child, T’s collateral relatives can’t contest the will since now, they can inherit nothing by intestacy.

O’Neal v. Wilkes:

• Equitable Adoption

• You need substantial compliance with the adoption K

• An equitable adoption will estop the rest of the surviving family mbrs from contesting to the adopted child’s right to inherit from parent’s estate

• MICH recognizes equitable adoption as a CL principle, it’s not statutory

• EA protects the adopted child and no one else! It works one way since the child is the innocent party in finalizing the adoption. Parent, bro and sis, etc can’t inherit from a child’s estate where the child was equitably adopted, only the child’s kids can inherit.

Children Born out of Wedlock: To what extent can we establish paternity?

Uniform Parentage Act: Can establish paternity by:

• While kid is minor, he’s raised by the man as if the kid were his child OR

• Father acknowledges paternity in writing with the appropriate Ct OR

• The man marries the child’s mother

• Problem with UPA: It’s very vague. Under 3, any man who marries the child’s mother is that kid’s father!

UPC and EPIC (a)(1): 4 ways to establish paternity

• Father signs a written acknowledgement that’s recorded in the Probate Ct where the child resides

• Man and woman jointly request the issuance of a substituted birth cert, in writing, putting the man’s name on the birth cert

• Man and child mutually acknowledge the parent/child relationship before child turns 18 AND it continues until one of them dies

• HOW do you prove this?

• Testimony

• Affidavits that father and son held themselves out as such to the community

• Holiday and birthday cards (to son, from father, etc)

Sharonbock Case: MICH (unpublished): Held that a 34-day-old child cannot acknowledge father

• Man is determined to be the child’s father and of order of “Filiation” is entered. Usually, man is hauled into Ct here

EPIC 211(a): Child born OR conceived during a mrg is presumed to be the child of both parent’s (and the husband’s child even if mom cheated)

• This is true even if mom gets pregnant while single and then marries the man

• Only legal father and mother can request testing to determine if the man is the child’s biological father

• Only the legal parents can challenge paternity and the child CANNOT

• ***Zubair requested testing that J’s kids were really his***

• In the eyes of the law, mrg means that the married man is the child’s father!

• EPIC 2114(4): Inheritance through a child is precluded unless the natural parent has actually been a parent to that child

• IE: Kid abandoned

10 years later, kid hit by car and wrongful death suit filed

Now PFT parent wants money

Held, too bad parent! In the eyes of the law, the natural parent is no

longer that child’s legal parent due to abandonment

Hecht v. Superior Ct: A decedent has a property interest in the sperm that he deposited at a sperm bank before his death. As such, he had the right to dispose of this property in his will in any matter that he pleased

Advancements

At CL, there existed a presumption that parents wanted to treat all kids equally w/re disposing their assets at time of death. If parent gave a lifetime gift, then this was considered an advance pmt of that child’s share of his parent’s estate

TODAY: We reversed the CL rule

If parent gave a lifetime gift to child, we don’t make up the difference UNLESS the parent indicated that this WAS in fact an advancement and not merely a gift

UPC 2-109 and EPIC 2109: If parent wishes for the gift to be an advancement, there must be a signed writing acknowledging such by the parent OR the child

Advancement only if:

• Grantor OR Grantee acknowledges the property as a gift in writing OR

• Grantor OR Grantee’s writing indicates that the gift is to be taken into acct in computing the division and distribution of the Estate

IE: Parent has 3 kids: A, B, and C. Parent gives A 10 grand during life. Parent then dies. At time of death, B and C each get 10 first and then the rest of the estate is split equally

Hotchpot

IE: D has no spouse, but has 3 kids: A, B, and C. During life, parent gave a 10 grand. Parent dies with 50 grand in Estate. To calculate the shares in the Estate, A’s gift of 10 is added to the 50 and the total of 60 is split equally.

• If instead, A had received property worth 34 grand, then she would NOT have to give it back at D’s death

• A gets property worth 34 grand during Parent’s life

• At death, there’s 50 grand in Parent’s estate

• B and C will split it equally and each get 25 grand

• Don’t look to A to reimburse B and C

• A got more, oh well!

• To avoid hotchpot, child has burden of proving that the $ or property was in fact a gift and is not to be counted against the child’s share of the Estate

• If Parent give A money and A’s kid money during life, then if at the time of Parent’s death, A, B, C, and A’s kid are alive, don’t count A’s kid’s share bcz the kid is not an heir since his parent is still alive. For hotchpot, only look to what was given to the actual heir

Expectancy

Children expect that their parents will leave inheritance to them equally

• There’s no gy that parents will leave estate to their kids

• There’s no gy that the parents will even have money to leave

You have a right to assign your future interest

Spend thrift trust prevents one from selling or assigning a future interest

Release of Expectancy

• Done btn parent and child

• Where child gives up his entire interest in parent’s estate

IE: Child says “Pay me 10 grand now and I’ll give up my right to any other $ I would have received at your death”

• Valid in USA

• Writing

• Signed by child

• Must be done for a fair consideration

• Consider fairness at the time and date the release is signed

• NOTE: If there’s only one child, the Probate Ct will undue the release

Transfer of Expectancy

• Selling your interest to a 3^rd party

• 3^rd party will pay child $ today for the expectancy of receiving child’s interest in child’s parent’s estate (or a piece of it)

• 3^rd party will greatly discount the value of it

• 3^rd party runs the risk bcz parents can lose their $ during life

Managing a Minor’s Property

Minor: EPIC 5102

Person w/ Disability 3918 (legally incapacitated individual)

What do you do in the minor is expected to cash in?

If the sum of $ is more than $5000, a Conservator must be apptd for the minor

Conservator

• Appted (can be a parent unless parent can’t manage the money)

• When appted, Conservator might be require to file a bond with the Ct in the amount of the money being held (in case Cons runs off with the $)

• Money must be in FDIC insured bank

• Bank must sign an agreement to replace the $ if someone withdraws w/o a Ct order

• Supervised by Ct

• Handles assets

• Preserves and invests funds for minor

• Prudent Investor Rule: allows Conservator to invest the minor’s $ as a reasonable and prudent person would invest his own

• Makes sure $ is not spent w/o Ct’s approval until kid is 18

• It’s not like the $ is locked away. If money is needed, Conservator or child over 14 can file a petition with the Ct

• $ can be spent on things like private school tuition

• What if kid is 16 and wants to buy a used car? (working p.t. and has after school sports)

• TEST: Is the request reasonable??