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Unformatted text preview: TRUSTS & ESTATES NOTES Class #1 August 21, 2007 CHAPTER 1: Introduction to Estate Planning Section A: The Power to Transmit Property at Death: Its justification and limitations. 1. The Right to Inherit and the Right to Convey a. In Irving Trust Co. v. Day the S.Ct. said: Rights of succession to property of a deceased, whether by will or by intestacy, are of statutory creation, and the dead hand rules of succession only by sufferance. Nothing in Federal Constitution forbids the legislature of a state to limit, condition, or even abolish the power of testamentary disposition over property within its jurisdiction. (Over ruled) b. Case: Hodel v. Irving (Consolidation of Indian Land by Escheat) i. Abolishing both descent and devise of these property interests without compensation, even when the passing of the property to the heir might result in consolidation of propertyGOES TOO FAR. - 207 held unconstitutional ii. Notes and Questions: 1. Courts opinion seems to seek compensation for the abolished rights. 2. Types of IV transfers that serve the same function as a will (widely used): a. Joint tenancy b. Gift of remainder interest c. Reserving a life estate, often in revocable trust d. Designating a death beneficiary on a K, pension plan, or bank account. 3. Amended 207 was also held to be unconstitutional. 2. The Policy of Passing Wealth at Death 3. An Introduction to the Problem of the Dead Hand a. Restatement (Third) 10.1: Donors intention determines the meaning of a donative document and is given effect to the maximum extent allowed by law. i. Property owners have the nearly unrestricted right to dispose of their property as they please. 1. Restrictions occur only to the extent that the donor attempts to make a disposition or achieve a purpose that is prohibited or restricted by an overriding rule of law. 1 a. Ex: spousal rights, creditors rights, unreasonable restraints on alienation or marriage, provision promoting separation or divorce, impermissible racial or other categoric restrictions, provisions encouraging illegal activity, and the rules against perpetuities and accumulations. ii. Unless disallowed by law, the donors intention not only determines the meaning but also the effect of a donative document. b. Case: Shapira v. Union National Bank (inherit only if married to a Jewish girl or marries Jewish girl within 7 years) i. Court held that this condition was NOT unconstitutional because it did not deprive son of right to marry it deprived son of his inheritance if the condition was not met. ii. Court held that this was a partial restraint on marriage and not a covenant to restrain the freedom of religious practice. iii. Notes and Questions: 1. Dead Hand a hand that does not have a live mind controlling it and making continuously informed judgment as circumstances change, that can no longer be affected by the opinions of mankind, and that does not suffer the consequences....
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