Professor Mary Radford
Email: mradford@gsu.edu
Wills, Trusts & Estates I - Law
7510
Fall, 1999
Wednesdays 6:00 p.m.-8:45 p.m.
Text: Dukeminier & Johanson,
Wills, Trusts & Estates (5th ed.) (available at
bookstore)
Statutory Supplement: Georgia
Statutory Supplement (available at bookstore)
Recommended: Atkinson, Law of Wills (2d
ed.)
Reutlinger, Wills, Trusts, and Estates: Essential Terms and Concepts
Bogert, Law of Trusts
Haskell, Preface to the Law of Trusts
Bergin & Haskell, Preface to Estates in Land & Future Interests
Course prerequisites: First-year
Required Courses
Attendance, Preparation and Participation Policies:
Students are expected to attend each class prepared to discuss
the materials and problems assigned. Extra points may be awarded
for both class participation and perfect attendance. The
professor reserves the right to refuse to permit any student who
has missed THREE or more classes to take the final exam.
Grading Policy: The final grade will be
based on the student's grade on the final examination, with the
addition of any extra points earned for class attendance and
participation. The examination will be an "open-book"
examination. Copies of past exams are on electronic reserve in
the library.
Student Appointments:
The professor is generally available to discuss course issues
with students. Please call her office (404/ 651-2088) to make a
mutually convenient appointment.
Make-up Exams: All
arrangements for make-up exams must be made through the Associate
Dean for Academic Affairs.
Course Coverage: Wills
& Intestacy; Trusts; Powers of Appointment
The following course syllabus contains a general plan for
the course. Deviations may be necessary.
Assignments
INTRODUCTION
Wednesday , August 25, 1999
Text, pp. pp. 1-3, 12-21, 27-36, 51-66, 991-98, 1018-1020
O.C.G.A. Secs. 53-1-2, 53-4-1 through 53-4-3
Vocabulary: Will, Testator, Testate, Intestate, Bequest,
Legacy, Devise, Probate, Ambulatory, Executor, Administrator,
Administrator Cum Testamento Annexo (C.T.A.) (Administrator with
the Will Annexed), Administrator De Bonis Non (D.B.N.), Personal
Representative, Probate Assets, Gratuitous Transfers,
Donor/Donee, Estate Tax, Gift Tax, Inheritance Tax, Applicable
Exclusion, Unified Credit, Equivalent Exemption, Gross Estate,
Annual Exclusion, Credit, Deduction
INTESTACY
Wednesday, September 1, 1999:
Text, pp. 67-85; Prepare Problem, p. 82
O.C.G.A. Sec. 53-2-1, 53-10-1 through -6;
"Old" UPC Sec. 2-102 (Attached as Appendix to WORKSHEET #2)
Vocabulary: Intestate Succession, Descent and Distribution,
Heir, Heir Apparent, Descendant, Issue, Escheat, Per Stirpes, Per
Capita, By Representation, Per Capita with Representation, Per
Capita at Each Generation
Wednesday, September 8, 1999
Text, pp. 85-91 (Problems 1 & 2, p. 90); pp. 120-23; 139-44 (Problems 2 & 3, p. 143)
O.C.G.A. §53-2-1; 53-1-5; 53-1-10 through -13; 53-1-20
Vocabulary: Ancestor, Collateral Heirs, Degree-of-Relationship
System (Civil Law System), Parentelic System, Half-Blood Heir,
Laughing Heir, Expectancy, Release of an Expectancy, Transfer of
an Expectancy, Advancement, Hotchpot, Disclaimer, Renunciation
Wednesday, September 15, 1999
Text, pp. 91-120; 123-26
O.C.G.A.: Secs. 53-2-2 through -6; Georgia Transfers to Minors
Act (Statutory Supp., pp. 72-76)
Vocabulary: Posthumous Children, En Ventre Sa Mere,Virtual
Adoption, Guardian of the Person, Guardian of the Property,
Custodian, Conservator
WILLS: Testamentary Capacity
Wednesday, September 22, 1999
Text, pp. 145-81, 197-204
O.C.G.A. Secs. 53-4-10 through 53-4-12; 53-4-58; 53-4-68
Vocabulary: Constructive Trust, Testamentary Capacity, Lucid
Interval, Insane Delusion, Monomania, Mistake, Ante-Mortem
Probate, Undue Influence, Caveat, No-Contest ("In
Terrorem") Clause, Confidential Relationship, Fraud
WILLS: Execution & Revocation
Wednesday, September 29, 1999
Text, pp. 205-29, 248-55, 261-85
O.C.G.A. Secs. 53-4-20 through -24, 53-4-40 through 53-4-50;
State Bar Advisory Opinion #91-1 (Statutory Supp., p. 68)
Vocabulary: Statute of Frauds, Statute of Wills, Wills Act,
Attestation, Line of Sight Test, Conscious Presence Test,
Nuncupative Will, Self-Proved Will, Conditional Will, Statutory
Will, Holographic Will, Express Revocation, Implied Revocation,
Dependent Relative Revocation, Revival, Republication, Codicil,
Substantial Compliance Doctrine
WILLS: Components; Substitutes; Construction
Wednesday, October 6, 1999
Text, pp. 285-88, 303-17, 324, 333-34, 337 (Begin with Notes & Problems) - 41, 413-39
O.C.G.A. Secs. 53-4-30 through 33, 7-1-810 through 8-812
(Statutory Supp., p. 70 et seq.), 53-4-55 through -57
Vocabulary: Integration, Republication by Codicil, Incorporation
by Reference, Acts of Independent Significance, Mutual Wills,
Joint Wills, Joint and Mutual Wills; Joint Tenancy with Right of
Survivorship, Agency Account, Payable on Death Account, Plain
Meaning Rule, Personal Usage Exception, Patent Ambiguity, Latent
Ambiguity, Doctrine of Probable Intent
Wednesday, October 13, 1999
Text, pp. 439-41, 444-50, 462-72
OCGA Secs. 53-4-64 & -65, 53-4-59, 63, -66, -67
Vocabulary: Lapse, Anti-Lapse Statute, Uniform Simultaneous Death
Act, Class Gifts, Ademption by Extinction, Specific Bequest,
General Bequest, Demonstrative Legacy, Abatement, Ademption by
Satisfaction, Exoneration
WILLS: Restrictions on Disposition
TRUSTS: Creation, Effects, Characteristics
Necessity of Trust Property
Wednesday October 20, 1999
Text, pp. 472-89, 513-19, 558-61, 563-83
OCGA Secs. 53-3-1 through -20, 53-4-58, 53-12-1 through -6,
53-12-20 through -27
Vocabulary: Homestead, Family Allowance, Year's Support, Elective
Share, Augmented Estate, Pretermitted Heir, Trust, Active Trust,
Passive Trust, Private Trust, Charitable Trust, Express Trust,
Settlor, Trustor, Grantor, Inter Vivos (Living) Trust,
Testamentary Trust, Declaration of Trust, Deed of Trust, Trustee,
Fiduciary, Beneficiary, Revocable Trust, Life Estate, Precatory
Language, Equitable Charge, Trust Property (Res)
TRUSTS:
Necessity of Trust Beneficiaries
Oral Trusts
Testamentary Trusts
Wednesday, October 27, 1999
Text, pp. 584-96, 599-618
O.C.G.A. Secs. 53-12-90 through -94
Vocabulary: Implied Trust, Resulting Trust, Purchase Money
Resulting Trust, Constructive Trust, Oral Inter Vivos Trust of
Land, Secret Trust, Semi-Secret Trust, Honorary Trust
TRUSTS: Revocable Trusts
Discretionary Trusts
Spendthrift Trusts
Wednesday, November 3, 1999
Text, pp. 618-30, pp. 631-46
OCGA Sec. 53-12-28
Wednesday, November 10, 1999
Text, pp. 344-87
OCGA Sec. 53-12-71
Vocabulary: Totten Trust, Farkas v. Williams Trust, Control
Trust, Pour-Over Will, Life Insurance Trust - Funded and
Unfunded, Grantor Trust, Mandatory Trust, Discretionary Trust,
Spray (Sprinkle) Trust, Income, Principal (Corpus), Spendthrift
Trust, Support Trust
PLANNING FOR INCAPACITY
Wednesday, November 17, 1999
Text, pp. 387-89, 405-412
Vocabulary: Durable Power of Attorney, Health Care Directive,
Health Care Power of Attorney, Living Will, Uniform Anatomical
Gifts Act
WEDNESDAY, NOVEMBER 24, 1999: No Class - Thanksgiving
Holiday
POWERS OF APPOINTMENT
Wednesday, December 1, 1999
Text, pp. 701-36 (skip discussion of generation-skipping transfer
tax on pp. 710-11)
Vocabulary: Power of Appointment, Donor, Donee, Object,
Appointee, Taker in Default of Appointment, General Power of
Appointment, Special Power of Appointment, Power to Consume,
Exclusive Power, Nonexclusive Power, Fraud on the Power
WORKSHEET #1 PERSONAL REPRESENTATIVES
a) Mary Smith's will names John Smith as executor and no
successor executor is named. John predeceases Mary. Who will
administer her estate?
b) Mary Smith's will names John Smith as executor and no
successor executor is named. John serves for one month but then
dies.
c) Mary Smith's will names John Smith as executor and no
successor executor is named. John predeceases Mary so Susan Jones
is appointed Administrator C.T.A. However, Susan becomes
incompetent to serve.
d) Mary Smith left a will but did not name an executor.
e) Mary Smith died intestate and Susan Jones was appointed
Administrator of her estate. Susan resigns two weeks later.
WORKSHEET #2 Intestacy: Surviving Spouse Page 1
> What does D's surviving spouse take if D dies
leaving:
old UPC new UPC GA.
1) no issue,
no parents
2) no issue,
parents
3) "joint" kids
& neither D nor
S have other
kids
4) joint kids +
D's kids from
1st marriage
(S has no other
children)
5) joint kids +
s has other kids
Worksheet #2 -- p. 2
Pre-1990 UPC Sec. 2-102: Share of Spouse
The intestate share of the surviving spouse is:
(1) if there is no surviving issue or parent of the
decedent, the entire intestate estate;
(2) if there is no surviving issue but the decedent is
survived by a parent or parents, the first [$50,000] plus
one-half of the balance of the intestate estate;
(3) if there are surviving issue, all of whom are issue
of the surviving spouse also, the first [$50,000] plus one-half
of the balance of the intestate estate;
(4) if there are surviving issue one or more of whom are
not issue of the surviving spouse, one-half of the intestate
estate.
WORKSHEET #3
FACTS: Decedent has three children: A, B, & C
A has two children: D & E
B has one child: F
C has three children: G, H, I
Answer each of these questions under the three systems of distribution:
a) PER CAPITA WITH REPRESENTATION
b) PER CAPITA AT EACH GENERATION
c) PER STIRPES
1) What if Decedent is survived by all of her children
and all of her grandchildren?
a)
b)
c)
2) What if no children of Decedent survive her but she
is survived by all of her grandchildren?
a)
b)
c)
3) What if Decedent is survived by A and all of the
grandchildren?
a)
b)
c)
WORKSHEET #4
A. D dies survived by her brother and by two nieces, Anne
and Beth, who are the daughters of D's predeceased sister Susan.
B. D was one of three sisters. D's sister Susan
predeceased D, leaving one son Tom. D's sister Louise predeceased
D. Louise had had two children, Bob and Barry. Bob survived D.
Barry predeceased D, but he was survived by his two children
Kathy and Peggy. D dies survived by Tom, Bob, Kathy, Peggy, and
her (D's) grandmother.
C. D dies survived by his mother and his brother.
D. D dies survived by these maternal relatives: D's uncle
Joe and Joe's son Lew and the two children of D's deceased Aunt
Jane (Kathy and Mike).
E. D dies survived by his Uncle U, his first cousin (Aunt
A's son) and his great-grandfather.
F. D dies survived by Uncle Joe and Great-Aunt Marie.
G. D dies survived by Cousin Jane and Great Uncle Jim.
H. D dies survived by Brother B, Mother M, and
Grandparent GP.
I. D died intestate, leaving neither a spouse nor lineal
descendants surviving her. On her mother's side, only D's first
cousin (A) survived. On her father's side, D's first cousin's
daughter (B) survived and D's great uncle (C) survived. Who takes
what share of D's property under each of the following systems:
(1) new UPC; (2) Georgia; (3) Degree of Relationship (Civil Law)
System; (5) Massachusetts (Parentelic Preference) System?
WORKSHEET #5 - Will Revocation
Answer the questions using the laws indicated in each question.
1. On Jan. 1, 1998, T writes a will leaving her house to A and
the residue of her estate to X. On July 1, 1998, T writes Will #2
which does not revoke Will #1. Will #2 leaves
her house to C and the residue of her estate to X. If T dies on
Jan. 1, 1999, what happens? (GA.)
2. Suppose that Will #1 left T's house to A, $10,000 to B and the
residue to X. Will #2 leaves her house to A, $100,000 to B, her
jewelry to C and the residue to X. (GA.)
What happens to the house?
What happens to the jewelry?
What happens to the residue?
What does B get?
What would happen if new UPC Sec. 2-507 were applied?
3. T executes Will #1, leaving everything to her son and
disinheriting her daughter, whom she detests. She is incorrectly
informed that her son has abandoned his children (her
grandchildren) so she expressly revokes Will #1 in its entirety
with Will #2 which leaves everything to her grandchildren. She
finds out that her information was incorrect, so she revokes Will
#2 by tearing it up, telling witnesses that she really wants her
son to get her estate after all. What result?
5. Mary Smith tells her lawyer that under no circumstances
does she want her relatives to get any of her estate. She has the
lawyer write a will leaving her estate to her friend John. One
month later, she calls the lawyer and asks her to prepare a new
will leaving everything to John and her friend Susan in equal
shares. The lawyer calls back to tell her that the new will is
signed and ready for her signature. Mary destroys her old will
before leaving for the lawyer's office and is killed in a car
accident on the way there. (Doctrine of Dependent Relative
Revocation)
6. Thomas Testator has executed a will leaving one-half of the
estate to his friend Peter and one-half to his friend Cynthia. He
has told the lawyer that he wants to leaves nothing to his
relatives. One night, Thomas has a fight with Peter, so he
crosses out Peter's name on the will and inserts the name of
another friend Joseph. (new UPC)
7. Louise writes a will leaving $100,000 to her friend Chris and
the residue of her estate to her spouse Jack. She also names Jack
as the executor under her will and names Chris as the successor
executor in the event Jack predeceases her or is otherwise unable
to serve.
a) What happens when the first child of Louise and Jack is
born? (GA., new UPC)
b) What happens, instead, if Jack and Louise divorce before
having any children? (GA., new UPC)
8. Peter and Paula have two children. Paula writes a will
leaving her entire estate to Peter but, if he does not survive
her, "to my children". After the will is executed,
Peter and Paula have two more children.
A) What happens if Peter does not survive Paula?
B) What happens if Peter does survive Paula?
WORKSHEET #6 - Non-Probate Assets
1. Debra Demise purchases a life insurance policy on her own life
and one on the life of her brother Herbert. The face value of
each policy is $75,000. Debra names her estate as the beneficiary
of the policy on her life and herself as the beneficiary of the
policy on Herbert's life.
a. What happens to the life insurance policy on Herbert's life
if Debra predeceases him?
b. What happens if Debra dies with a will that provides the
following: "I hereby bequeath the proceeds of the insurance
policy on my life to my nephew Ned." (She never bothered to
change the beneficiary on the policy itself.)
2. Molly Morte opens a bank account with $5000 and registers it in the names of "Molly Morte or Peter Penny."
a. During Molly's life, who owns the money in the account? Who can withdraw the money in the account?
b. When Molly dies, who takes the money under the account?
c. What if the account instead was registered as "Molly Morte, P.O.D. to Peter Penny." Who owns the account during Molly's life? What happens when Molly dies? What if Peter predeceases Molly?
d. What if the account had been registered as "Molly
Morte, Trustee for Peter Penny." Who owns the account during
Molly's life? What happens when Molly dies? What if Molly writes
a will leaving "everything I own, including all my bank
accounts, to my nephew Ned"?
WORKSHEET #7
LAPSE PROBLEM (Answer questions using GA. law & UPC)
T's will leaves her home to S, her son; her jewelry to D, her
daughter; and the residue of her estate to her friend, X. S has
one child (S-1). D has one child (D-1). X has one child (X-1).
What happens if:
a) S predeceases T?
b) D predeceases T?
c) X predeceases T?
d) D predeceases T and leaves no surviving children?
e) T's will said, "My home to S if he survives me" and
S does not survive her?
f) X predeceases T and leaves no surviving children?
g) X & Y are the residuary beneficiaries and X predeceases T?
h) S & T die in a common accident and it cannot be determined
who died first?
i) T's will left all to her children, A, B, & C and B
predeceases T leaving surviving issue?
WORKSHEET # 8
Selected Provisions from the Will of Jane Doe:
ITEM FIVE
I give, bequeath and devise the following items of personal
and real property to the persons herein named:
a) my Rolex watch to Harry Doe;
b) my vacation home in Hiawassee, GA. to Louise Jones;
c) my Chinese silk rug to Suzanne Jones;
d) $10,000 to Jack Jones;
e) $50,000 to the United Way of Atlanta, Inc., to be paid from
the proceeds of the sale of my personal residence;
f) 100 shares of Coca-Cola stock to Jennifer Smith;
g) my 25 shares of IBM stock to Jill Smith.
ITEM SIX
I give, bequeath and devise the remainder, rest and residue of
my estate to my beloved law professor, Mary F. Radford.
WORKSHEET #9 TRUSTS: TAX CONSEQUENCES
p.1
Two types of tax consequences:
1.
2.
a.
b.
1. INCOME TAX CONSEQUENCES
Grantor (G) transfers $1,000,000 to a trust, instructing the
trustee at his discretion to pay any or all of the income to
Beneficiary (B) in annual installments. In the first year, the
trust earns $75,000 in income. Who pays the income taxes due on
this income?
Three possible tax-paying entities:
1.
2.
3.
Under former tax laws, this left much room for manipulation of
the income:
New tax laws:
1.
2.
2. TRANSFER TAX CONSEQUENCES
A. GIFT TAX:
ANNUAL EXCLUSION:
PRESENT INTEREST RULE:
Suppose parent wants to transfer $10,000 to a child - under
the "present interest rule", parent has two options:
1.
2.
Is there any way parent can give the money to the child and
still take the annual exclusion?
1. Section 2503(c) Trust: (p. 947-48)
a.
b.
2.
3.
B. ESTATE AND GIFT TAX MARITAL DEDUCTION
How much may an individual transfer during life and at death
to his or her spouse without incurring any transfer tax
liability?
In order to qualify for the marital deduction,
what type of transfer must be made to the spouse?
TERMINABLE INTEREST RULE:
Is a LIFE ESTATE a terminable interest?
CASE #1: Suppose the donor spouse transfers property in trust
to the donee spouse, to pay the income to donee spouse for life
and then, at donee spouse's death, the property is to be paid out
to those persons named as recipients in donee spouse's
last will and testament - does this transfer qualify for the
marital deduction?
CASE #2: The donor spouse in CASE #1 tells you that he is
still not satisfied because he does not trust his spouse
and he is afraid that she will exercise the power of appointment
in favor of someone other than their children (perhaps her
current lover?) So donor spouse tells you that he wants to set up
the trust this way: income to his wife for life (and the trustee
may use the principal if necessary for the wife's benefit), and
at wife's death, the property is to be distributed to their
children. Now does wife have a terminable interest?
P.3
> Will this type of trust qualify for the marital
deduction?
> Why?
> What is the QTIP exception?
QUALIFIED TERMINABLE INTEREST PROPERTY
If instrument (usually a trust) has these provisions:
a.
b.
then the trustee or executor may elect to
treat the property as QTIP property and thus take the marital
deduction
> Where does the trustee or executor make this election?
LAST WILL AND TESTAMENT
OF
JOHN WINSTON ONO LENNON
I, JOHN WINSTON ONO LENNON, a resident of the County of New York, State of New York, which I declare to be my domicile do hereby make, publish and declare this to be my Last
Will and Testament, hereby revoking all other Wills, Codicils and Testamentary dispositions by me at any time heretofore made.
FIRST: The expenses of my funeral and the administration of my
estate, and all inheritance, estate or succession taxes,
including interest and penalties, payable by reason of my death
shall be paid out of and charged generally against the principal
of my residuary estate without apportionment or proration. My
Executor shall not seek contribution or reimbursement for any
such payments.
SECOND: Should my wife survive me, I give, devise and bequeath to her absolutely, an amount equal to that portion of my residuary estate, the numerator and denominator of which shall be determined as follows:
1. The numerator shall be an amount equal to one-half (1/2) of
my adjusted gross estate less the value of all other property
included in my gross estate for Federal Estate Tax purposes and
which pass or shall have passed to my wife either under any other
provision of this Will or in any manner outside of this Will in
such manner as to qualify for and be allowed as a marital
deduction. The words "pass", "have passed",
"marital deduction" and adjusted gross estate"
shall have the same meaning as said words have under those
provisions of the Untied States Internal Revenue Code applicable
to my estate.
2. The denominator shall be an amount representing the value of my residuary estate.
THIRD: I give, devise and bequeath all the rest, residue and remainder of my estate, wheresoever situate, to the Trustees under a Trust Agreement dated November 12, 1979, which I signed with my wife YOKO ONO, and ELI GARBER as Trustees, to be added to the trust property and held and distributed in accordance with the terms of that agreement and any amendments made pursuant to its terms before my death.
FOURTH: In the event that my wife and I die under such circumstances that there is not sufficient evidence to determine which of us has predeceased the other, I hereby declare it to be my will that it shall be deemed tat I shall have predeceased her and that this, my Will, and any and all of its provisions shall be construed based upon that assumption.
FIFTH: I hereby nominate, constitute and appoint my beloved wife, YOKO ONO, to act as the Executor of this my Last Will and Testament. In the event that my beloved wife YOKO ONO shall predecease me or chooses not to act for any reason, I nominate and appoint ELI GARBER, DAVID WARMFLASH and CHARLES PETTIT, in the order named, to act in her place and stead.
SIXTH: I nominate, constitute and appoint my wife YOKO ONO, as the Gurdian of the person and property of any children of the marriage who may survive me. In the event that she predeceases me, or for any reason she chooses not to act in that capacity, I nominate, constitute and appoint SAM GREEN to act in her place and stead.
SEVENTH: No person named herein to serve in any fiduciary capacity shall be required to file or post any bond for the faithful performance of his or her duties, in that capacity in this or in any other jurisdiction, any law to the contrary notwithstanding.
EIGHTH: If any legatee or beneficiary under this will or the trust agreement between myself as Grantor and YOKO ONO LENNON and ELI GARBER as Trustees, dated November 12, 1979 shall interpose objections to the probate of this Will, or institute or prosecute or be in any way interested or instrumental in the institution or prosecution of any action or proceeding for the purpose of setting aside or invalidating this Will, then and in each such case, I direct that such legatee or beneficiary shall receive nothing whatsoever under this Will or the aforementioned Trust.
IN WITNESS WHEREOF, I have subscribed and sealed and do publish and declare these presents as and for my Last Will and Testament, this 12th day of November, 1979.
/s/
John Winston Ono Lennon
THE FOREGOING INSTRUMENT consisting of four (4) typewritten pages, including this page, was on the 12th day of November, 1979, signed, sealed, published and declared by JOHN WINSTON ONO LENNON, the Testator therein named, as and for his Last Will and Testament, in the present of us, who at his request, and in his presence, and in the presence of each other, have hereunto set our names as witnesses.
(The names of the three witnesses are illegible.)