October Notes Wills and Trusts
October 4, 1999
Finish revocation
Multiple originals
- CA law says you handle this situation by 6121 – if you revoke by physical act, one original, that acts to revoke ALL originals (assuming that was you intent and purpose in revoking the first one)
NEVER, NEVER do multiple original wills – this is a very bad idea
- a will is more like a deed than a contract; want only one copy. Deeds operate when you are alive, wills when you are dead. They are property transfer contracts. Don’t need and there is no reason why you would want more copies.
NEW TOPIC:
Will interpretation and Construction – may be necessary to give meaning to the will; careful drafting can solve most of these types of problems; if the intention is clear we do not have to do interpretation and construction
A.. these issues come before the court:
1.. pre-probate process (external integration)
2.. usually these issues arise after the will is admitted to probate
B.. who will raise these problems?
1.. executor – person appointed by the court to supervise the distribution of the property after paying the creditors;
a.. moral perspective - wants to make sure the testator’s intent is carried out
b.. selfish perspective - also do not want to get sued by the beneficiaries; money comes out of the executor’s personal funds if there is a mistake
2.. beneficiary – want to take as much as they can from the estate
C. evidence for interpretation
1.. 6111.5 – extrinsic evidence is admissible to interpret and construe a will; two circumstances when this is permissible:
a.. a will - bring in evidence to see if the instrument is a will; goes to intent mainly
b.. to determine the meaning of a provision, if the provision is unclear from the document
** in CA a greater number of rules that are usually in caselaw are in statutes
D.. CA construction rules (similar to contract rules and deeds)
1.. § 21120 - all words are given effect; will not assume that the testator wrote something that means nothing
2.. presumption against intestacy – if two possible interpretations, the court will pick the interpretation that avoids intestacy; the fact that the testator left a will indicates that the testator did not want to die intestate
3.. §21121 - construe the will as a whole; will not look at the will out of context; look at the parts and relationship to each other; do not look at parts in isolation
4.. § 21122 - give ordinary terms their ordinary and grammatical meaning unless another meaning is given; regular terms given regular, common, everyday, dictionary, type meaning
5.. if technical terms are used, then their technical meaning will be given; two exceptions:
a. if the context of the will clearly indicates a contrary meaning
b. the testator drafted the instrument and was unfamiliar with the technical meaning of the word
i.. example: I leave all my personal property to my nephew (not real property); the nephew said that when aunt used the term “personal property” she was using it in a non technical matter;
Construction Problems:
A.. Ambiguity
1.. patent ambiguity – obvious ambiguities; if you look at the will, you know it does not make sense; easy to catch; should proof read it
a.. EXAMPLE: part of a will that is written in undecipherable code; courts would then use extrinsic evidence to decode it
b.. EXAMPLE: use of strange, non-intelligible words; would use extrinsic evidence to try to figure out what it means
c.. the court will not make provisions when none exist; when there are provisions that are incomplete the court will not complete them
2.. latent ambiguity – hidden ambiguity; ambiguity that is not easily detected; will makes perfect sense on its face; a proof reader will not pick up these problems; mainly picked up when executor starts to carry out the provisions; find out that they cannot be carried out without extrinsic evidence. Fall into three main categories:
a.. beneficiary mis-description
i.. EXAMPLE: leaving money to someone who does not exist; having relatives that have the same name; to prevent this type of problem is to indicate the relationship, SSN, etc…
b.. property misdescription
i. example: giving wrong address of a house
c.. specific gifts of a general nature
i.. example: I leave my car to X (this is a specific gift of a general nature); the problem with the word car is that there are lots of vehicles that are not cars (SUV, truck, jeep, boats); motor vehicle is not good either because there could be planes, boats; better is to say “land based motor vehicle for use on public roads”
3.. no apparent ambiguity – division whether extrinsic evidence can be allowed, even if there is nothing unclear about the will
a.. example: I leave $250,00 to my Uncle Smith; then people come in and try to change the clear meaning of the will
b.. in CA the meaning must be unclear; so no apparent authority in CA; prohibits the use of extrinsic evidence when there is clear meaning (exception: technical words can use extrinsic evidence)
B.. Integration
1.. external integration – piecing together the different documents to come up with the testator’s complete will
a.. to prevent these problems execute new wills instead of using codicels
b.. date every will and codicile should have a date so that they can be put into chronological order
c.. physically revoke all the old documents so that there is only one document
2.. internal integration – need to have the document become one with itself; reduces chance of fraudulent page insertion; makes it easier to prove that the pages of the will are the same; steps must be taken to achieve oneness:
a.. have testator and witnesses initial every page
b.. do not sign legal documents in black ink (too hard to tell original from
a photocopy)
c.. fasten all pages of the will together; never separate them after they are fastened together (don’t want multiple staple whole)
d.. use extoto pagination (page X of Y; page 1 of 10; etc)
e.. use same type of paper, same toner cartridge, same font
f.. avoid blank spaces; if you need blank space make sure you say it in will
g.. don’t end every page at the end of a sentence
Incorporation by Reference – having an extrinsic document being part of the will even though it is not physically part of the will
1.. example: I leave all jewelry listed on an appraisal to ___ (the appraisal is the extrinsic document)
2.. issue is whether a non-testemantary document can be used to disperse property
3.. it is okay to do this; best to think of this as making a photocopy of the external document and inserting it into the will
4.. § 6130 – basic elements of incorporation by reference
a.. intent
b.. the document that is being incorporated must be in existence at the time
of executing the will (because if we are going to make a copy of it to put into the will, it must be incorporated – the legal fiction of a copy)
-- terms of the incorporated document are frozen at the date of will execution (because of photocopy theory; a copy of the external document is in the will)
c.. the article to be incorporated must be identified sufficiently to be incorporated
- no requirement that the document be valid, dated, etc.. validity of document being incorporated is irrelevant
5.. should avoid this; because external integration brings up interpretation problems
6.. if you use codicils, you are in effect incorporating the terms of the will that are not being changed; brings the date of the entire will to the date of the codicil when you have a codicil; can have a big effect on construction issues; see example 9-11 to demonstrate this
7.. codicil can be used to incorporate an invalid will because we don’t care about the validity of the incorporated document
October 6, 1999
Interpretation of Wills, Continued
Facts of Independent Significance – something that has a legal reason for existence, other than for disposition of property at death; then does not need to have formalities of will; is independent of the will
1.. This is allowed in CA; before, after will execution, before and after testator’s death; § 6131
2.. four common situations where facts of independent significance are used
a.. determination of an item when it is a specific gift of a general nature (“I leave my car to X”); would need to bring in evidence to demonstrate what the testator meant (the exact item)
b.. “I leave my property to my spouse.” You would need to bring in extrinsic evidence to show who the spouse is. Have to go outside of the document to figure out who the spouse is.
c.. identification of members of a class gift. EX: “I leave my property to my children.” Have to look outside the will, to extrinsic evidence to determine who the children are.
d.. gift of contents of an item (much litigation in this area). EX: I leave my cedar chest to X. Generally recognized presumption is that a gift of an item does not include its contents. A gift of a container does not give away the contained contents. To give away contents, you must specify (I give the cedar chest AND its contents to X).
i.. CA has NO contents statute; some states have codified the rules with regard to content.
ii.. problems arise when the contents in the box are things like certificate to title to vehicles, stock certificates; these are usually interpreted as not being contents
iii.. gift of a house; some things are fixtures and cannot be removed from the house
iv.. contents are measured at date of death
v.. may be more than one angle to bring in the same evidence; so this is similar to ambiguity; should argue all the ways possible to bring in extrinsic evidence; this is just another way to try to bring in extrinsic evidence
Tangible personal property document – some jurisdictions have adopted this and the UPC. This allows a piece of paper that is not incorporated by reference, not a fact of independent significance, and not a will to be used as part of the will.
B.. Pour-over provision - Clause in a will giving property an already, pre-existing trust; we will come back to this when we learn about trusts; a provision in a will leaving property to a trust
C.. precatory language – language that is not mandatory (such as: I suggest, I prefer); wishy, washy language.
1.. usual interpretation is that this will not work; extrinsic evidence can be brought in, however, to show that the testator always talked that way and that the precatory language was mandatory; a way of interpreting language according to its ordinary meaning
a.. not recommended to use precatory language in a will
b.. if the client really wants it to be mandatory, then one of
the best way to get this stuff enforced is to do it in another way, such as a trust
c.. if it is recommendation only, you should have client make these recommendations some other way (a letter, video, etc..)
d.. if you use precatory language with regard to administrative matters it is more likely to be given affect (I would like my executor to serve without bond)
D.. class gifts – a gift by a generic description; most common example is “to my children” grandchildren, nieces, nephews, employees
1.. if you make a gift and use class and specific names, the general interpretation is that the gift is to the specific people mentioned and not the class
2.. in CA most of the interpretations for class gifts are codified
a.. § 21113 – class gifts go to present interest, it is when the testator dies
b.. posthumous class members fit in the class if they were perceived for present interest . . . CHECK THIS (this is analougous to intestacy rule). If inception occurred within relevant time, then that person comes into the class
c.. § 21115 – how to determine the included person in class; just follow intestacy rules to tell if they are in or not; one exception/special rule: if non parent leaves property to your children, then subsection B; prevents people from taking advantage; cannot adopt friends just to get property; have to have lived while the minor was a regular member of the household
3.. Anti-lapse statute (§ 21110(a)) – applies to class gifts, unless the class member was already dead at time of will execution AND the testator knew the person was already dead
4.. class gift is presumed to be divided evenly between members of the class
5.. words such as next of kin, heirs, etc. § 21114 – terms such as next of kin, relatives, family, when these terms are used as class gift designations, it simply means the people who would take by intestacy
6.. should ask client what he means and explain it
E.. Dead person’s statute – limitation of evidence that you can admit; this is different that what we have been looking at, because instead of a way to get evidence in, this is a way to keep evidence out
1.. common law rule precluded testimony of a party to the will because a party would be biased, might lie about testator’s intent; testator is not there to contradict what the party says
2.. most states have gotten rid of this and instead, they admit the testimony and let the fact finder decide; modern approach is to allow the testimony in and then it is up to the fact finder to determine credibility
3.. CA does not have a dead-person’s statute; used to have one, but no longer; been gone for a long time; evidence code says the testimony is admissible
--- - - - - - -
October 13, 1999
Two main categories of people who bring will contests (§8270(a))
Heirs that would take more under intestacy
Beneficiaries of prior wills that would take more under earlier wills then the current will
When can this be done?
1.. before it gets to probate (§ 8004)
2.. after the will is admitted to probate (§ 8270) - within 120 days (in the statute)
Burden of proof
1.. the proponent of the will has the burden of proof to show that it was validly executed
2.. in a normal non-contest case the proponent can show this by bringing the self proving affidavits of the witnesses
3.. if there is a contest then we do need to bring the witnesses in
I.. Major grounds used by people that are contesting a will
A.. the will does not meet the requirements for a will in the first place (lack of:
testamentary capacity, legal capacity, intent, formalities)
B.. insane delusion - presumption that the person has capacity (know what the
will does, the property they own, and how the property will pass)
1.. then show that the will is so contaminated by the delusion that the will
is no longer effective (6100(a)(5))
2.. delusion - a belief in a state of proposed facts that do not exist, and no
rational person would believe
3.. delusion must happen at time of will execution
C.. Undue influence - person with full testamentary capacity, but that capacity is
subject to a dominant influence or power; person is manipulated by another (§ 6104); will render the will ineffective
1.. statute does not define undue influence so we look at caselaw for
elements
a.. influence must exist and be exerted
b.. the influence must subvert the testator’s mind (loss of self will)
c.. causation - testator executes a will that he would not have
executed but for the influence
2.. burden of proof is on person contesting the will
3.. how to show undue evidence (have direct or circumstantial)
a.. usually done in private so it is hard to show in litigation because
person influencing is dead; the influencer would want most likely lie
b.. circumstantial evidence that should be considered
i.. motive - want to become a beneficiary
ii.. untraditional disposition - cut out close family, friends
iii.. opportunity and access - want person close by
iv.. relationship between testator and influencer
v.. susceptibility and ability to resist
vi.. was the beneficiary connected with making the will
c.. not enough to show that undue influence was merely asserted; only becomes undue when person looses free will
4.. situations under CA where the statute automatically voids the gift (§
21350 - 21356)
a.. prohibited transferees - cannot leave property to these people of
the will is automatically invalid (the attorney who is drafting the
will cannot include these people’s in the will) (21356 ??)
i.. yourself (the attorney)
ii.. relative within the seventh degree (by blood or
marriage)
iii.. to person you cohabitate with
iv.. employee
v.. partners, shareholder, employee of your firm
vi.. person in a fiduciary relationship which has an interest
b.. exceptions (21351)
i.. if the testator is related to the beneficiary
ii.. have the will reviewed by an independent attorney
(includes the form 21351(b))
c.. if you don’t fall within the exceptions the will is invalid and the property passes as if you predeceased; an easy way around the statute is to use the form in the statute to have another attorney review the will
d.. have to make these allegations within 120 days
e.. if you write a will where you are the beneficiary you risk loosing your law license (a gift to yourself, parent, child, or spouse)
i.. exceptions: if client is related to donee
ii.. best not to write wills for your family members because
of possibility of undue influence
iii.. good way to help is to write the will, and then send it to
an independent attorney for the will signing ceremony
D.. duress - using threats of force or violence (unlike undue influence where it is messing with person’s mind)
1..
- - - - - - - - - - - - - - - - - - -
October 18, 1999
§ 253 - in any case not covered by the other slayer provisions, any acquisition of property as a result of the killing of the decedent shall be treated in the same way
Other grounds for contesting a will
I.. false representation
A.. beneficiary that lies to the testator
B.. person that lies KNOWS that they are making a lie (knowledge of falsity
C.. the lie is reasonably believed by the testator
D.. the lie causes the testator to do something
II.. fraud
A.. Fraud in defactum
1.. testator is deceived as to the identity of the instrument in the first place; or deceived as to the contents of the will
B.. Fraud in execution - causes use to lack testamentary intent
C.. Fraud in inducement - causes will to be invalid as written (CHECK THIS)
D.. if fraud in the inducement is proven what happens?
1.. § 6104 - fraud is a ground for deeming the execution ineffective in whole or in part;
III.. Mistake - no evil conduct; testator is unilaterally mistaken; or innocently misled by someone else who was mistaken
A.. mistake in fact of execution - person signs something without knowing it is a will
1.. the will is not valid because there is no intent
B.. mistake in inducement - someone mistakenly tells testator a certain fact, and
the testator mistakenly bases his will on that mistaken fact;
1.. the court will not do an equitable remedy because there is no unjust enrichment to fix
2.. the courts will not fix a mistake in a will
a.. dependant relative revocation - the old will was revoked based on a mistaken fact; therefore the old will should be used
Remedies in a will contest case (review)
I.. most common remedy is to invalidate the will and the property passes through intestacy or under a prior will
II.. partial invalidity - § 6104 says that this can happen. Part of the will will be valid and part not. Difficult to get partial invalidity.
Ways to recognize and enhance the likelihood of a will contest.
Will contests are quite rare (2 - 5% of wills are contested)
- people that benefit - heirs that would take more by intestacy or beneficiaries from prior wills
Factors that make an Enhanced likelihood that a will is contested:
1.. disinheritance of close family members (spouse, children)
a.. juries in close cases don’t like to disinherit close family members
b.. this more likely to happen with today’s changed families multiple divorces)
2.. unequal treatment of children
3.. sudden or significant change to the estate plan, especially one made close to time of death
4.. imposition of excessive restrictions on gifts
a.. common for people to put restrictions on gifts
b.. the more restrictions on beneficiaries the more likely there will be a contest
5.. if the testator is old or disabled - the older the testator is, the more likely the will will be contested
6.. a testator who acts in a peculiar matter - the more weird a person is the more likely there will be a contest
If we encounter one of the above situations there are many ways to try to make sure the will, will not be contested:
1.. no contest provision (in terrorum) - provision that says if the beneficiary contests the will, the beneficiary get nothing
a.. §21101 - applies to wills, trusts, deeds or any other similar instrument
b.. enforceability - jurisdictions vary
i.. some states - will never enforce them
ii.. other states - always enforce them
iii.. CA - in the middle; enforces these provisions with a few exceptions
(but few states have such extensive provisions like CA)
a). § 21303 - will contest provisions are enforceable
b). § 21304 - will contest provisions will be interpreted strictly
c).. the exceptions only apply if you have probable cause to bring the contest; good faith exceptions (limited to ones listed):
i).. forgery
ii).. revocation
iii).. gifts to drafters
d).. § 21320 - can get an anticipatory judgment whether your
contest would trigger the no contest clause (a way of protection) if person were to contest the will
c.. make sure that the person has something to loose if they contest the will and a no-contest provision is being used
i.. if there is legal action, make sure you figure in attorney’s fees
d.. be clear in how they are drafted because they are strictly construed
e.. indicate who takes the property if the contest is not successful (who takes the gift that the beneficiary would have got had he not contested)
i.. also that way the testator gets someone on his side (or from the other perspective an adversary of the person contesting the will)
ii..
2.. do not explain the reasons for the gift - someone can try to say that it is not true
3.. do not use the will as the last opportunity to say what you really feel about the beneficiaries; people hurt emotionally will fight harder than those hurt financially; also risk testamentary libel
4.. use a holographic will as backup; get an affidavit from witnesses
5.. document transactions with testator indicating intent
a.. get this in writing; have people write letters
6.. obtain evidence of the testator’s actions
a.. example: hateful letter to children / parent
b.. collect medical records - might help establish incapacity
7.. enhanced will execution ceremony
8.. select good witnesses - see above (where we talked about if contest likely)
9.. videotape the will execution ceremony
a.. preserves the words, but also demeanor and more
b.. can backfire - don’t do this if the testator would not appear good on tape
10.. preserve the prior will - save old will; might be useful as an unrevoked prior will
a.. have the client come in every six months a sign the identical will; this way there will be tons of identical wills that someone will have to fight every single will
11.. avoid extremes
12.. avoid non-probate transfers
13.. make a significant inter vivos gift to person that you think will contest the will on the same day that the will is executed
14.. talk to the person that is going to contest the will and ask how much money it will take to make sure that a person will not contest; person then should sign a contract where they promise not to contest
15.. anti-mortum probate - ability to get the will declared valid while testator is alive (only ND, ARKansas, Ohio have this); like a declaratory judgment; if contested at that time, resolve it; then the will can not be contested later
a.. this is where in the extreme case you would want the client to move to one of
these states to get the will declared valid and then they could move back
16.. family settlement arrangement - mediation, ADR type of thing; solve the contest after it occurs.
Will contests can last a long time (up to 20 years sometimes)
- - - - - - - - - - - - - - - - - --
October 20, 1999
Miscellaneous will topics
Conditional wills - one which is to operate or not operate based upon whether a certain even has occurred
a.. are allowed in CA
b.. merely stating the reason you are writing the will is a statement of inducement
only and not a statement of condition
Conditional gifts - now we are just conditioning a gift, not the entire will
1.. examples of what gifts can be conditioned on:
a.. the occurrence or nonoccurrence of an event
b.. the conduct of the beneficiary
c.. truth of a given statement
2.. types of conditions
a.. condition precedent - condition must occur before you get the gift (he calls it the reward condition: I leave you X if you do ___ ) the condition must be satisfied before you get the item
b.. condition subsequent - you get the property, and only if you violate the condition do you loose the property (this is the punishment condition)
i.. I leave you my house, but if you ever do __ then you loose the house and it goes to X
ii.. courts like this better
iii.. presumption that favors condition subsequent - beneficiary has the property and only if the condition is violated then the property will be taken away
c.. conditions dealing with personal habits
i.. example: you can have X if you smoke 5 cigarettes a day - the court did
not enforce this because it is against public policy
d.. marriage restrictions - against public policy
3.. techniques for carring out conditional intent
a.. make sure the wording is very clear
b.. have an alternate option in case the condition is breached
c.. be careful about conditions because they are often contested
Combination wills
1.. Joint will - one document that contains the wills of more than one person
a.. most typical situation that arises is between spouses
b.. used more commonly in the past
i.. people did not get diverced as much
c.. joint will increases chance that the will was executed as a contract
d.. this is something you should NEVER do in real life (other thing is don’t do
multiple originals of wills)
2.. reciprocal will (also called mutual will) - separate wills that contain parallel dispositive provisions; most common situation is between spouses leaving all to other spouse (both spouses put this in their will)
a.. these are often used in families
b.. make sure you get all the names correct in the wills
3.. contractual will - three basic types of contracts:
a.. contract to make a will
b.. contract not to revoke a will
c.. contract to die intestate (not to make a will)
Types of writings
a.. will itself contains contract
b.. will expressly says there is a contract
c.. the contract itself
There are a few CA cases that have allowed in evidence of a contract without a contract:
Because of vested contract rights, the law that is in effect is the law at date of writing. May run across situations where the old law applies (if made before Dec 31 1984)
- better ways to carry out clients intent than to write a contractual will; often lead to litigation
Election Will
- gives the beneficiary options; either keep something don’t get the money. Or give up something and get the money
Will context - all about disclaimer
- - - - - - - - - ---- - -
October 25, 1999
Estate administration
- 3 multiple choice questions on this material; no essays on it; not heavily tested on our exam
I.. Estate Administration
A.. two legal issues that arise upon death
1.. proof of transfer of title - need proof that they are new owners
2.. creditor payment - take care of the creditors
B.. who takes care of this stuff - the personal representative
1.. person appointed by the court to administer decedent’s estate
2.. testator has the ability to name a person to serve in this role
a.. when a will is involved this person in called the executor or the executrix
3.. who will be picked? This is not an honor; need to talk with client about who to pick. It is an obligation.
a.. family member is an often choice
i.. benefits - serve for free (lower costs), knowledgeable
about the family situation and the property,
ii.. problems - lack of experience or skill necessary to do a
good job
b.. perhaps a professional should be named (lawyers, banks,
corporation)
i.. greater expertise
ii.. problems - more costly
c.. traits to look for in the executor:
i.. someone who is honest
ii.. someone who has common sense and will
exercise good judgment
iii.. financially responsible person; someone that is not in
financial trouble
iv.. someone with experience and skill in dealing with
property; should look at the type of assets the testator has to determine which type of experience is needed
v.. someone who is aware of legal issues
vi.. someone with a fiduciary personality; person
who can handle dealing with all the different parties; need to be able to handle everyone in an even tempered, calm
manner
v.. look for longevity; person that is young; a stable corporation
vi.. proximity - pick someone close to where the decedent lives; this way it is much easier to deal with the estate
vii.. someone that will not be distracted by other tensions (divorce, company in mist of a takeover, etc.)
d.. make sure you have client talk with person that they want to
name as executor of the will to make sure they agree to doing it; name at least one successor to be executor
4.. administrator with the will annexed (administrator CTA) - if there is no executor named or available, the court will appoint this person
5.. administrator - if the decedent died intestate this is the term for the person to be appointed to deal with the estate
a.. the statute spells out a priority order to be used by the court in determining who to appoint as the administrator
C.. what does the personal representative do? (big picture)
1.. collect all of the decedent’s assets (cannot get non-probate assets, but can reach everything else)
2.. manage the property after it is collected
3.. pay the creditors (one of the primary reasons for the estate
administration process)
4.. after creditors are paid, any remaining property goes to heirs or beneficiaries
II.. Basic overview of estate administration process
A.. begin the process of probating a will
1..
2.. pick a good and reliable custodian for the will
a.. if no custodian, check with friends, attorneys, the court
3.. after you have decided whether there is or is not a will, you file a petition for probate
a.. CA has approved forms that you use for petition
4.. file it with the Superior Court (§ 7050)
a.. need to know which one in which to file it (which has venue): county in which the decedent was domiciled at the time of death (§ 7051)
5.. pay the filing fee (in Santa Clara County it costs $193)
6.. give notice that the petition has been filed
a.. types of notice (range from lots to little notice)
i.. CA is near the lots of notice edge
ii.. Texas has very little notice requirement
b.. types of notice (CA)
i.. publication (§8120) - must be published 3 times; many requirements (not on consecutive days, have a certain amount of time between publication); first publication must be at least 15 days before court hearing; publish in city or county where decedent lived at time of death (in urban county it is published in legal newspaper; rural area it is in daily paper because no legal papers)
--.. in addition there must be mail or personal notice to heirs, beneficiaries, alternate executors(§ 8110)
7.. if the will is uncontested and there are self proving affidavits of the witnesses, then the hearing before the judge is likely to go very fast
a.. must have the proposed order prepared and give it to the judge to sign
B.. type of administration you will have (CA)
1.. court supervised administration - everything personal representative must be approved by the court; lots of hearings, expensive, and very time consuming; very few administrations are done in this method
2.. independent administration - personal representative can do most things without court approval; almost all administrations will be independent
a.. exceptions: need court permission to pay attorney, approve self dealing transaction, approve final distribution of estate
C.. personal representative must qualify to serve
1.. sign a duties and liabilities of personal representative form - is a list of the duties and responsibilities of the personal representatives
2.. take oath of office - just sign the form (in CA)
3.. have to post bond - have to put up a sum of money that is equal to the
value of the estate; most people don’t have enough, so they buy a bond from an insurance company; pay premiums
a.. CA - bond is required (§ 8480) - protects heirs and beneficiaries against personal representatives
b.. testator can waive it in the will, and the heirs and beneficiaries can agree to waive it
i.. waiving bond - saves money, less fighting among heirs and beneficiaries about whether to waive it or not; about 95% of testators waive bond in their wills; does not protect the personal representative - just protects the heirs and beneficiaries
D.. Letters - a one page document that shows that the personal representative has officially qualified; badge of authority
1.. types of letters
a.. letters testamentary - if intestate
b.. letters of administrations - if for a will
2.. good idea to get a lot of originals because lots of different agencies might want ones
E.. duty
1.. held to a high standard of fiduciary duty; will be personally liable
2.. prepare an inventory and appraisal - list of all property in the estate and
what it is worth
a.. probate referee - court appointer person to assist in assigning value to the property
b.. must be done within 4 months of the time when you got you letters
c.. this is how you can see how much is in the estate
3.. property that may be free from some claims of heirs, beneficiaries
a.. homestead - minor children, surviving spouse can posses the family home for 60 days after the inventory is filed
i.. the court can give extended occupancy rights as well (for
a minor - until he reaches 18; surviving spouse - until the surviving spouse dies)
ii.. in some states this right is automatic; in CA it is
discretionary
iii.. this right is superior to the true title owner (the heirs or
beneficiaries); like a statutory life estate for the surviving spouse in the house
iv.. some states have limits of how much in the homestead is exempt from creditors; in CA - the amounts of money range between $50,000 to $125,000 depending on the family situation; renters get the raw end of the deal because they have no protection like this
b.. exempt personal property
i.. for 60 days after inventory is filed the surviving spouse and minor children can keep it (§6500)
ii.. some of this property might also be exempt from creditors (car up to $2,000, $2,000 of materials to repair home, etc)
c.. exempt family allowance (§6540-45)
i.. surviving spouse, minor children, adult disable kids, are
automatically entitled to it
ii.. non-disabled, adult, dependant child might get it with
court’s discretion - only get the family allowance, if you don’t have money from other sources; based on need; goes on only while estate is being administered
F.. Notice to creditors - must give written notice to all known or reasonably ascertainable creditors within 4 months of time inventory is filed; accelerates statute of limitations on creditors claims - once they have notice must bring claim more quickly
1.. if not enough to pay off creditors, there is a priority order in §7420 (don’t need to know the order)
G.. final distribution
1.. must be approved by court
2.. heirs and beneficiaries must be given at least 15 days notice
3.. estate must remain open for at least four months
a.. if everything goes great, 7-9 months, but a year is more realistic; can go on longer if there are problems
4.. if small value estate ($100,000 or less, or everything to surviving spouse) there are simpler estate administration that can be used
H.. Costs
1.. bond premiums
2.. fee for personal representatives
a.. follow instructions in will if any
b.. court has ability to grant more compensation as well (if the will
says personal rep will serve for free)
c.. statutory fees (CA has this) - percentage of estate depending on the value of the estate (§10800)
i.. $10,000 - $400 fee
ii.. million dollar estate - $21,150 fee
iii.. Court can grant more if you prove that you deserve it
3.. fee for attorney
a.. same as statutory for personal representative
b.. §1084 - if attorney is personal representative you only get one
fee
4.. costs of probate
a.. CA is in the middle of costs of the states
----------------
October 27, 1999
Non-probate transfers - ways in which persons can have property disposed of but is not through a will or intestacy
Many people have the bulk of their estate in non-probate property
Reasons why people would use a non-probate transfer
1.. non-estate planning benefits gratuituous and nongratutitous transfers
2.. accelerate asset distribution
3.. reduce estate planning and administration expenses
a.. expense to plan the estate initially
MOST OF TODAY’S NOTES IN OUTLINE to start with so not much today
(7 pages of outline)