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Unformatted text preview: D ECEDENTS , E STATES & T RUSTS Stephen Hunt, Jr. E STATES AND T RUSTS D OBRIS & S TERK I.C HAPTER O NE : I NTRODUCTION A.Probate vs. Non-Probate Transfers 1.Probate- include: a. Intestate Succession- when a person dies without a valid will. b.Transfers by Will 2.Non-Probate- include: a.Contracts- transfers during life: 1.Inter vivos gifts - *side note - if surviving spouse has excessive control, then it may become part of her elective share of the decedents estate. 2.Multiple party accounts a.Joint with survivorship b.Payment on Death (P.O.D.)/ brokerage accounts c.T.O.D securities / mutual funds c.Trust- dividing up the legal and equitable titles to the estate. It is a private document, and it operates without court intervention/action 3.Life insurance- this may be used in order to pay the taxes that will be due upon the transfer of the estate (usually associated with a non-liquid asset) 4.Annuities 5.Retirement plans b. Joint ownership- transfers at death which never pass through the probate estate: 1. Joint Tenancy with Right of Survivorship- two or more co-owners who take identical interests simultaneously by the same instrument, and upon death the death of the first, the decedents share passes automatically to the survivor. If more than two parties share in the property, then the decedents share is divided equally among the survivors. 2. Tenancies by the Entirety- a joint tenancy between husband and wife B.Purposes of Avoiding Probate: 1.Speed 2.Simplicity 3.Expense 4.Privacy- a will is a public document, so anyone can see it C.Gifts 1. Causa Mortis- a gift made upon contemplation of ones death, and which is irrevocable upon recovery of the donor. Elements include: a.Made in light of donors present illness or peril b.Donor must not recover c.Delivery 2. Inter Vivos- a gift made during the donors lifetime and delivered with the intention of irrevocably surrendering control over the property. If the intention is to make a testamentary disposition effective only after death, then the gift is invalid unless made by a will. Elements include: a. Intent to Make a Present Transfer- even if it is a present gift of a future interest b. Delivery- sufficient to divest the donor of dominion and control over the property 1. Actual- the act of giving real and immediate possession to the donee 2. Constructive- an act that amounts to the transfer of title by operation of law when actual transfer is impractical or impossible. c. Acceptance- the law will presume acceptance *The difference between these two types of gifts is that a gift inter vivos is irrevocable, but a gift causa mortis is revocable. D.Joint Accounts 1.Reasons to have a joint account include: a. Incapacity- the depositor (especially an elderly one) fears that he will be physically unable to do his own banking b. Avoid Probate- depositor wants to make sure that the account passes to the joint holder at the depositors death 1 without the need to go through probate c. Use of Funds by Joint Holder...
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- Spring '08
- The Republic