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Conditions and limitations of will transfers.
1. Partial, but not complete restraints on marriage are
permissible. (Shapira v. Union National Bank) The right to
receive property is a creature of the law and not a
constitutionally guaranteed right.
1. Devise applies to real property
2. Legacy applies to money
3. Bequest applies to non-money personal property.
1. May be made to establish invalidity, absence of testamentary
capacity, undue influence, defective execution, revocation, lack
of intent, fraud and mistake.
2. Standing is limited to beneficiaries. Trustees named or
presumed cannot bring a will contest, but can request
interpretation by the court. (Trustee can participate when
benefits of his beneficiaries are threatened.)
1. Per stirpes distribution- Grandchildren take only by
representation. That is, all children take equally, and
grandchildren take only if their parent (the child above)
predeceased the testator.
2. Per capita with representation (Majority rule)- The
stocks are drawn at the first generational level with a living
taker. Heirs below that first level take only by representation.
Hence A dies, had children B, C and D. B has children W,X; C has
child Y, and D has no children. B,C and D all predecease A.
hence, W,X,Y and Z all get 1/4 shares. In strict per stirpes
distribution, W and X each get 1/6, Y gets 1/3 and 1/3 escheats
Adopted children- All states treat adopted children as natural
for the purposes of inheritance rights. Adopted children may not
take as heirs of their natural parents.
Children born out of wedlock- In all states, a child born out
of wedlock inherits from his natural mother, and the mother's
kind, and they inherit from the child. Most states require
paternity to be established by subsequent marriage, adjudication
before father's death or clear and convincing proof after his
death in order to inherit from a father.
Half-bloods- treated the same as relatives of whole blood.
Rules of succession
1. When there are descendants, parents and collaterals do
not take at all. When there are no descendants, the property is
usually distributed to the parents after a spouse's share if
applicable. Collaterals take only if there are no parents left t
2. Surviving spouse (474.010 R.S.Mo.) Spouse takes entire
intestate estate if no descendants or parents of the deceased, or
the first $20,000 + half the estate if no descendants but there
are parents, the first $20,000 + half the estate if there are
descendants, all of whom are issue of the surviving spouse, or one
half the estate if there are descendants, some of which are not
issue of the surviving spouse.
3. Remainder (same statute) Children, or their descendants
in equal parts, if no children, to parents and collaterals in
4. Advancements- count only against the intestate share if
declared to be so in a contemporaneous writing.(474.090 R.S.Mo.)
5. Misconduct of spouse. Spouse loses statutory intestate
share if he leaves and lives apart for one-year with no intent of
reentering the marital relationship.(474.140 R.S.Mo.)
6. Conveyances in fraud of marital rights (474.150 R.S.Mo.)
Gifts made by a person dying testate or intestate without adequate
consideration in fraud of marital rights may be treated as a
testamentary disposition and recovered from the donee to the
extent necessary to compensate the spouse. Conveyances of real
property without signatures of both spouses are presumed to be in
fraud of marital rights.
7. Killing the decedent. Slayers get their usual
inheritance rights, but property passed thereby is held in
constructive trust for the decedent's other heirs.
Mental aspects of will creation.
1. Mental capacity test: The decedent must know (1) The nature
and extent of his property; (2) The persons who are the natural
objects of his bounty; (3) The disposition he is making; and (4)
how these elements relate to form an orderly plan for the
disposition of his property.
2. Insane delusions. A false conception of reality which the
testator adheres to against all evidence and reason to the
contrary, and affects the testamentary disposition of his property
will be sufficient to demonstrate lack of mental capacity as
regards that situtation. A will is invalid where its dispository
provisions might have been caused or affected by the delusion.
3. Undue influence, test: A gift in a will, or an entire will
may be set aside if it was the result of undue influence-mental
coersion that destroyed the testators free agency and forced him
to embody someone else's intentions in place of his own. The
evidence must establish, (1) that undue influence was exerted on
the testator; (2) that the effect of the influence must have been
to overpower the mind and will of the testator; and (3) that the
influence must have produced a will or gift in the will that
expresses the intent not of the testator, but of the one exerting
the influence, and that would not have been made but for the
4. Presumptions of undue influence. Such can be presumed from
a sexual relationship between an attorney and a client, even when
a third party draws up the will. It will also be presumed when
the testator is a person easily swayed, and the will in indicative
of such swaying.
5. Fraud. Two types: (1) fraud in the execution, where the
testator was tricked into signing a will he didn't know was a
will, or where one will was substituted for another; (2) Fraud in
the inducement occurs where a testator makes a disposition in
exchange for a false promise. Fraud also occurs where a testator
is physically prevented from signing a will or revoking one. In
such cases a constructive trust is applied in favor of the
intestate heirs or the persons who can demonstrate they would've
collected but for the interference with the decedent.
Execution of wills
1. Witnesses. R.S.Mo. 474.320 requires at least two. A will
may be self proved if signed by two witnesses and acknowledged by
a notary. (474.337) 474.330 provides that the witnesses must be
disinterested. A will witnessed by an interested witness does not
fail, but the witness forfeits any bequest to the extent it
exceeds that person's intestate share. Creditors of the estate,
named executors and others are not interested witnesses unless the
will gives that person some personal and beneficial interest.
Witnesses which observed the testator affix his signature may
themselves sign later, even after testator's death if the time
period is not unreasonable (18-months is unreasonable) Witnesses
must witness testator sign the will in their presence and the
presence of each other. (Groffman.)
2. Signature of testator. Testator must sign the will.
Accidently signing a will not his will invalidate the wills, even
if the will signed was for the spouse, and the spouse signed his.
3. Holographic wills (not Missouri). A will is valid under the
U.P.C. and in most states if the material provisions are written
entirely in the handwriting of the testator and signed by him.
4. Nuncupative wills (R.S.Mo. 474.340). A will may be made
orally to two witnesses in contemplation of death provided a
written memorial is made within thirty days. Such a will may only
dispose of personal property worth no more than five hundred
5. Revocation. (R.S.Mo 474.400) Revocation of a will may be
made by a subsequent will in writing, or by burning or otherwise
destroying the document by the testator or at his direction in his
presence. A revocation does not revive a prior will unless there
is a clear contemporaneous declaration to the contrary. (474.410)
Such a declaration may be made subsequently, so long as it
manifests clear intent. Writing upon a will that it is void is
not sufficient to cancel or revoke that will, unless wholly in the
handwriting of the testator (not MO) or unless witness in the
fashion required of wills. The theory of dependent relative
revocation and revival states that if a second will is revoked in
the mistaken belief that the first be reinstated, the second will
remains valid. (Probably not relevant in MO.)
Republication by Codicil: The above may be avoided by a new
codicil to the first will, which, if holographic or properly
witnessed has the effect of republishing the first will as of the
date of the new codicil. In U.P.C. states, a holographic codicil
may even revive a will not properly executed (no witnesses,
etc...) under the doctrine of republication by codicil.
6. Changes of condition. In Missouri (474.420), divorce serves
to invalidate gifts to the spouse, who is treated as having
predeceased the testator. Other changes in condition do not
affect the validity of the will. Some states invalidate wills
upon marriage, or other conditions specified by statute.
7. Integration and incorporation. Matters not incorporated
into a will may not be added as a seperate writing. A will which
does so state, may incorporate any extrinsic writing which can be
clearly identified, even though the extrinsic writing was not
properly executed. (i.e. property distribution lists) The
extrinsic writing must be in existence at the time of the will, or
if made later, validated by codicil republishing the original will
to bring it's date contemporaneous with the extrinsic writing.
Contracts relative to wills
1. Contracts to make a will. A testator may enter into a
contract to make a will, or die intestate provided that (1)
provisions of a will state the material provisions of the
contract; (2) an express inference in a will confirming the
contract and extrinsic evidence thereof; (3) a signed writing by
the decedent confirming the contract. Construction of joint or
mutual wills without more, does not rise to the level of a will
contract. Joint wills may be made irrevocable when the provisions
indicate that the survivor agrees to be bound by the terms
2. Life insurance. A person may not make a contract to
designate a successor beneficiary of a life insurance policy. That
is entirely within the province of the terms of the policy.
Similarly, a testator cannot change the beneficiary in a life
insurance contract by will.
Bank accounts/joint tenancies. Multiple party accounts may be
held as joint and survivor accounts, POD agreements, agency
accounts and savings account trusts. Evidence of lack of donative
intent will sever a joint tenancy but not in stocks.
1. Gifts of real property where the testator retains a life
estate with power to revoke are invalid as a testementary
2. Gifts of personal property must be delivered actually or
constructively, and the donor must have intended to make a present
gift A gift causa mortis requires that the gift be made in
comtemplation of death and may be revoked and the property
recovered if the donor survives.
Extrinsic evidence. Extrinsic parol evidence may be admitted to
correct a latent ambiguity in a will which makes the will open to
more than one meaning, only one of which is correct. The trend is
to also allow such evidence in construing wills with a defect on
its face (patent ambiguity). Extrinsic evidence is not admissible
to contend that the writer made a mistake in transcription, etc.
Exception exists if the intent of the testator can be inferred
from other provisions of the will which bear out the mistake.
Missouri Anti-Lapse Statute: (474.460) When any estate is
devised to any relative of the testator who predeceases the
testator, that share is given to the lineal descendants of the
beneficiary. If no lineal descendants, the devise fails and
enters the residuary estate. (474.465).
Missouri anti-ademption rule for stocks. A devise of stocks does
not adeem if there is a simple exchange for other stocks, bonds,
notes, etc. of the same corporation. If there is a stock split,
the devise shall convey the same proportional representation as
conveyed by the will at the time of its writing. (474.463).
Lapse of class gifts: When a devise is made to a class of
persons, the fact that one or more members of that class
predecease the testator does not create a devise in favor of that
person's descendants, but passes equally to the surviving members
of the class. If a gift is made to a class and a named
individual, that individual is treated as a member of the class
and if he predeceases the testator, his descendants do not take
his share, but it is proportionally divided among the surviving
members of the class.
Gifts of encumbered property. (R.S.Mo. 474.450) A gift of
property secured by mortgage or other security interest is
conveyed subject to that encumbrance unless the encumbrance was
acquired after the decedent's death, in which case the property
passes free of the encumbrance unless the will specifically
provides that the note is to be paid out of the encumbered
property. In similar fashion, a will may direct the note on
encumbered property be paid out of the general estate prior to
transfer to the devisee.
Rights of the surviving spouse.
1. Election to take against will (474.160). When a married
person dies testate as to any part of his estate, a right of
election is given to the surviving spouse as follows:
The spouse receives, upon election, all exempt property under
474.260, and one half the remaining estate, subject to claims, if
there are no descendants, if there are, the spouse takes exempt
property plus one-third of the remaining estate.
***Any homestead allowance taken pursuant to 474.290 is
deducted from the share taken under this section.
2. How estate valued. (474.163) The estate consists of all
money and property owned by the decedent at death, reduced by
funeral expenses and administration costs, exempt property, family
allowances and enforcable claims against the estate, increased by
the value of all money and property taken by the survivor by non-
probate transfer. These offsets are subtracted from the elective
3. Exempt property (474.250). The surviving spouse or
unmarried minor children get, the family bible and other books,
one automobile, all wearing apparel of the family, all household
appliances, all musical instruments and amusement devices, all
household furninshings and supplies.
4. Family allowance (474.260). In addition to the above the
surviving spouse or unmarried minor chidren get money or
equivalent property in the amount necessary to maintain the
standard of living of the family for one year. This amount may
not be reached by creditors of the estate.
5. Homestead allowance (474.290). The parties above also get
one half the residual estate exclusive of exempt property or
$7500, whichever is greater. This amount is not reachable by
creditors of the estate.
Trust creation and types.
1. Intent. The settlor must have the intent to create a trust,
although no specific language is required.
2. Present property. The trust cannot exist without trust
property. Any type of property will suffice. A writing promising
to make a trust in the future is not effective. A gift made of
property not in existence, at the time the gift is made may be
valid if gift is of a right which could be established by gift:
ex: A gives B 5% of royalties of product not yet produced.
3. Constructive trusts are established to prevent unjust
enrichment. The beneficiaries of a gift are considered trustees
to convey the property to the persons rightfully entitled to it.
General requirements are (1) confidential relationship; (2) a
promise, express or implied; (3) a transfer of property in
reliance on that promise; (4) resultant unjust enrichment of the
transferee. Courts may also establish constructive trusts in
other situations to correct manifest injustice and unjust
4. Identification of trust beneficiaries. If at the time the
trust becomes effective, the beneficiaries are indefinite and
impossible to ascertain, the trust fails and reverts to the
settlor. Unborn persons may be made beneficiaries, or a class may
contain such members provided that they are ascertainable at the
time the trust becomes effective. Ex: a trust may not provide for
the trustee to pay the income to such of settlor's friends as he
5. Trusts in favor of animals. Honorary trusts can be created,
but bind only the conscious of the trustee, since there is no
beneficiary capable of enforcing the trust.
6. Conveyances by oral trust. An oral trust in real estate may be
created, but most courts require a writing if the transferee was
not in a confidential relationship with the transferor. In such
cases (of confidential relationship) a court may impose a
constructive trust in favor of a transferor where a transferee
renigs on his promise to reconvey the property. Oral trusts
recognized in a will may be accepted by some courts if they can be
6. Powers in revocable trusts. The settlor may retain
significant controls, but if too many, the trust may be ruled
illusory, or an invalid testamentary disposition.
7. Reach of creditors. Creditors may reach a trust in which
the settlor retains powers of revocation or amendment, or in which
he may direct the disposition of the principal and income thereof.
Assets which pour over into the trust, over which the settlor did
not have control during his life may not be reached by creditors.
Creditors may not reach a support trust except to the extent a
provider of a necessity may be paid directly by the trustee. A
beneficiary's interest in a discretionary trust are not reachable
while under the discretion of the trustee. Once released to the
beneficiary, they vest in him and are then reachable.
7. Duties of trustee. The trustee in a discretionary or
mandatory trust must act for the purposes of the trust. The
interests of remaindermen are not an appropriate reason for a
trustee to deny allocations or amounts to a life beneficiary.
8. Spendthrift trusts. May not be alienated or be reached by
creditors. Statutes may proscribe this general rule for child
support and spousal obligations.
9. Modification may be ordered by the court in response to
unforseen circumstances which make it impossible for the trust as
created to effectively carry out the wishes of the testator.
10. Termination may be had by consent of the settlor and all
beneficiaries privided that the material purpose of the trust is
not defeated by so doing.
1. Must be public in nature (as opposed to ascertainable class
standard of private trusts.)
2. Must be for the relief of poverty, advancement of education,
religion, health, or other charitible purpose.
3. Cy Pres. The court may modify a public trust when the
bequest becomes impractible, in order to properly carry out the
intent of the testator. Ineffective philanthropy, inefficiency of
the expenditures in the manner provided by the testator do not
provide adequate grounds for cy pres. The object must have become
illegal impossible or impractible of performance.
4. Gender/sex based trusts, which if made by a state actor
would violate the equal protection clause are not invalidated
simply because of administration by a court (i.e. state actor.)
Powers of Appointment. Created by a donor, to a donee, for the
benefit of objects.
1. General and Special Powers. General powers may be
exercisable for any reason, including the benefit of the holder.
Special powers are for the benefit of specified objects.
2. Contracts to exercise appointment powers which are not
presently exercisable are not valid.
3. Special powers exclusive or not exclusive. Exclusive powers
permit the donee to select and exclude certain members of the
class. If no such power to select or exclude exists, the power is
4. Failure to exercise power. The gift then passes to the
default beneficiary if named, and if not, to the donor's estate or
the objects if they are an ascertainable limited class.
5. Release. The donee of a testamentary power of appointment
may release it, which has the effect of removing the uncertainty
behind who the objects will be, since the release acts to give the
default objects an indefeasibly vested remainder.
6. Allocation and Capture. If an invalid disposition is made,
and there are other assets which have been comingled with the
property covered by the power, allocation will work to amend the
dispositions to conform to the intent of the donor of the power,
by reshuffling assets to make sure non-objects get non-power
property, and objects get property subject to the power. Capture
allows the property to be given to the donee's estate if an
invalid disposition was made but the donee's clear intent was to
maintain dominion and control over the property for his benefit.
Gift Taxes. Post 1976 gifts are cumulative. A gives B 20,000 in
1988, he pays tax on $10,000 ($10,000 exemption). In 1989, he
gives B $20,000. He then pays tax on $20,000 subtracted by the
previously paid tax.
1. Trusts. If the power is revocable, exercisable wholly in
favor of the settlor, there is no present taxable gift. If,
however, the settlor retains none of the incidents of ownership,
it is a taxable gift.
2. Annual exclusion s. 2503(b) permits a $10,000 exemption per
person per year. There is a total exemption for gifts made as
payment of tuition or medical expenses paid directly to the
3. Unified estate and gift tax. There is one $192,800 credit
against the unified tax. A portion is used each time a gift tax
is required. It amounts to a lifetime exclusion of $600,000
4. Transfers to minors considered a completed gift even if held
up in a trustee, guardian or custodian until the child reaches
majority, or if the money may be expended for his benefit before
5. Gifts of present interests (not life estates) are not
taxable under the gift tax.
The Estate Tax.
2033 Property owned at death
2035 Transfers of insurance and other interests within three
years of death
2036 Transfers with retained life estate or controls
2037 Transfers taking effect at death
2038 Revocable transfers
2039 Annuities and employee benefits
2040 Property passing by ROS/Tenancy by Entirety
2041 General powers of appointment
2042 Life insurance
2043 Transfers for only partial consideration
2044 Property for which previous marital deduction applied.
= GROSS ESTATE
- 2053 Administrative expenses, debts, funeral
2054 Deduction for casualty losses during admin.
2055 Charitable deduction
2056 Marital deduction
= TAXABLE ESTATE
+ ADJUSTED TAXABLE GIFTS (OTHER THAN ACCOUNTED FOR ABOVE)
= TENTATIVE ESTATE TAX BASE
- Gift taxes on gifts made after 1976
- 2010 Unified estate tax credit
2011 Credit for state death taxes
2012 Credit for pre-1977 gift taxes on property included in
2013 Credit for taxes on prior transfers
2014 Credit for foreign death taxes
=FEDERAL ESTATE TAX
2035, Transfers within three years of death
1. Includes tax paid on gifts
2. Includes value of life insurance policies given away
within three years of death.
2036 Marital deduction: must be a non-terminable interest
That is, it cannot be a life estate. There are four exceptions to
1. Limited survivorship requirement (not >6mo.)
2. Life Estate + General Power of Appointment
Qualifications: (1) must be entitled to all income for life; (2)
payable at least annually; (3) General power in favor of spouse
or estate; (4) exercisable in all events (although may besolely
testamentary); (5) cannot divert property to third parties.
3. Estate trust. A to husband B for life, then to his
4. Qualified Terminable Interest Property (QTIP) Trust.
Qualifications: (1) Spouse entitled to income for life; (2) Income
payable to spouse at least annually; (3) No third party can get at
it. Children take as remaindermen, although spouse may exercise
general or special powers to detertime the distribution thereto.
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