Chapter 1: Introduction: Freedom of

Disposition

Gratuitous transfers

Succession passing of property at death

o American law of succession is organized around the donors freedom of
disposition. The donees interest in a future inheritance is a mere expectancy, one
that is derivative of the donors right to dispose of his property as he pleases, and
that is defeasible at the whim of the donor.

Probate succession

Will and intestacy

Nonprobate succession

Will substitutes

Freedom of disposition at death is subject only to wealth transfer taxation and a handful
of policy limitations.
o Limitations being: The Rule Against Perpetuities, the rule against trusts for
capricious purposes, and the rule against restraints on alienation

Dead hand control

A. The Power to Transmit Property at Death
1. Freedom of Disposition and the Dead Hand

Dead Hands: A Social History of Wills, Trusts, and Inheritance Law

o Succession includes the law of wills, the law of intestacy, the law of trusts (for the
most part), the law of charitable foundations, the law concerning death taxes,
and the law of future interests.

Summing up processes and institutions and their legal echoes, which

govern the way property moves from generation to generation and to the
living from the dead.

Shapira v. Union National Bank (Ohio Com. Pl. 1974) (Page 5)

o Facts: David Shapira, M.D., testator, conditioned his son, Daniel Jacob Shapira,
Plaintiff, inheritance under his will upon Plaintiff being married to, or marrying
within seven years of testators death, a Jewish girl with two Jewish parents.
Plaintiff filed suit alleging that such a condition was unconstitutional based upon
the premise that the right to marry is protected by the Fourteenth Amendment to
the Constitution of the United States.

*Reason aspect of the case.

S died leaving will that conditioned a bequest to his son, D, on

marrying a Jewish woman whose parents were Jewish w/i 7 years of
Ss death; otherwise to State of Israel. D was 21 & unmarried. D
asserted restraint was unconstitutional & an unreasonable restraint
on marriage that was contrary to public policy.

Written as a condition subsequent

Daniels challenge: unconstitutional and against public policy as

unreasonable restraint on marriage.

Constitutionality court addresses it in Shelley v. Kraemer,

executive branch or statute that does something like legislative
branch, maybe a judicial argument after Shelley.
o Saying the court is called upon to do something and the
court issues an order saying you shall not
o Court isnt making a judgment, just enforcing testators will
o If court was willing to enforce it, there was state action
was result of Shelley case

What was the courts view on constitutionality?

Partial restriction, theres a large pool of people

Is it permissible for Daniel to marry a catholic? Yes. He just wont

get his inheritance/bequest. Its a partial prohibition, not a total
prohibition.

This does not violate the constitution because it does not prohibit
Daniel from marrying.

Loving v. Virginia in Con Law unconstitutional based on denial of due

process.

Where is the authority for Shapira to write this provision?

State statute: wills act. Definitely doesn't say that a father can do
this but by not saying it, it permits it.

What was the argument about the provision being an unreasonable

restraint on marriage that was against public policy?

Has to involve a statute and the State or government has to be

involved

If Daniel gets married to a Jewish woman he will get his

inheritance if it was written that way then it would have been
condition precedent. This might have made it a little easier.

Why is the Hackett case different? (page 7)

It was a separation agreement case. Different because regardless of

what the daughter wants to be, if that is enforced, the court has to
enforce it.
o Thats not what this case says. It doesn't say he has to
marry a Jewish woman, just if he does.
o Father could have made a gift to him or not made a gift to
him. Testamentary freedom.

What if no marriageable Jewish women in Ds community?

o Traveling is a lot easier now. And Internet was not available
to do that.

Conditional gifts are made in trusts not in will usually incentive trusts
o To encourage education
o To encourage productive career

What restraint on marriage are a violation of public policy?

o Restraints that punish someone for getting married

o Issue: Whether a condition upon inheritance, which is based on marriage, is

unconstitutional, contrary to public policy, and unenforceable because of its
unreasonableness?
o Rule: A gift conditioned upon the beneficiary marrying within a particular
religious class or faith is reasonable.
o Holding: No. Upholding and enforcing the provisions of the decedents will
conditioning the bequests to his sons upon their marrying Jewish girls does not
offend the Constitution of Ohio or the United States. The conditions contained in
decedents will are reasonable restrictions. His unmistakable testamentary plan
was for his possessions to be used to encourage the preservation of the Jewish
faith. The condition did not pressure plaintiff into marriage by the reward of
money because the seven-year time limit is a reasonable grace period, which
would give plaintiff ample time for reflection and fulfillment of the condition
without constraint or oppression.

The court rejected the son's premise that the condition violated the federal
or state constitutions, because the provision did not restrict his
constitutional freedom to marry, but only enforced the testator's restriction
upon his son's inheritance.

The court held that the right to receive property by will was a creature of
the law, and not a natural right or one guaranteed or protected by either the
state or federal constitutions.

Further, the court held that the provision did not violate public policy
because it constituted a partial restraint on marriage, which was a
reasonable restriction, and was therefore, valid.

o Reasoning: It is a fundamental rule of law in Ohio that a testator may legally

disinherit his children. This seems to demonstrate that from a constitutional
standpoint, a testator may restrict a childs inheritance.
o Notes:

Incentive Trusts conditional gifts typically made in trust

Conditions that encourage the beneficiaries to pursue an education

Conditions that provide what might be termed moral incentives:

incentives that reflect the settlors moral or religious outlook or
promote a particular way of living

Conditions designed to encourage the beneficiaries to have a

productive career

Earn a dollar, get a dollar arrangements

Lifetime Versus Testamentary Conditions

Restraints on Marriage prevailing rule is that a restraint unreasonably

limits the transferees opportunity to marry if a marriage permitted by the
restraint is not likely to occur.

Contrary to Public Policy the rule against a will or trust provision that
imposes an unreasonable restraint on marriage is a specific application of
the more general rule against conditions that are contrary to public policy,
which includes conditions that disrupt or discourage familial relationships.

A bequest to a surviving spouse conditioned on the survivor not

remarrying is invalid unless the purpose is to provide support while
the survivor is not married.

A provision that encourages separation or divorce is likewise

invalid, but a provision that is meant to provide

The Restatement (Third) of Trusts

Destruction of Property at Death

2. Justifying Freedom of Disposition

The Donors Prerogative

An Introduction to Death, Taxes, and Family Property

A Qualitative Theory of the Dead Hand

Freedom of Disposition and Its Alternatives

Forced Succession the decedents property could pass by simple

rule of mandatory or forced success, such as primogeniture or to
the spouse, children, or other dependents, or if the decedent has no
dependents, then the property would escheat to the state.

Freedom of Disposition the decedents property could pass in

accordance with the decedents declared wishes if they are reliably
preserved, or if not, then in accordance with a default system of
succession that tracks the probable intent of a typical decedent.

Generally, what American law uses.

Confiscation by the State the decedents property could be

confiscated by the state on the theory that the decedents property
rights are terminate on death.

History has shown this option to be problematic.

B. Concentrations of Wealth

Inheritance and Achievement in Wealth Accumulation:

The Forbes 400

Taxable Gratuitous Offers

The Current Status of the Estate Tax

Trends in the Distribution of Household Income Between 1979 and 2007

C. Human and Cultural Capital

The Uneasy Case for Progressive Taxation

The Twentieth Century Revolution in Family Wealth Transmission

3. Is Freedom of Disposition a Constitutional Imperative?

Commentaries on the Laws of England (William Blackstone)

Two Treatises of Government (John Locke)

B. The Mechanics of Succession

1. Probate and Nonprobate Property

Probate property is property that passes through probate under the decedents will or
by intestacy.

Nonprobate property is property that passes outside of probate by way of a will

substitute.

a. Inter Vivos Trust when property is put in trust, the trustee holds it for the benefit of
one or more named beneficiaries. Trustee distributes the property to the beneficiaries in
accordance with the terms of the trust. Property put in an inter vivos trust during the
decedents life passes in accordance with the terms of the trust, avoiding probate
administration.
b. Life Insurance the proceeds of a life insurance policy on the decedents life are
paid by the insurance company to the beneficiary named in the insurance contract. The
company pays upon receipt of a death certificate of the insured. Life insurance is thus a form
of pay-on-death contract that operates independently of probate administration.
c. Pay-On-Death (POD) and Transfer-On-Death (TOD) Contracts Bank,
brokerage, pension, and retirement accounts commonly allow for a POD or TOD beneficiary
designation under which the account custodian distributes the property at the decedents
death to the named beneficiary. To collect property held under a POD or TOD arrangement,
all the beneficiary need do is file a death certificate with the account custodian.
d. Joint Tenancy the decedents interest vanishes at death. The survivor owns the
whole property free of the decedents participation. No interest passes to the survivor at the
decedents death. In order for the survivor to perfect title to real estate, all the survivor need
do is file a death certificate with the local registrar of deeds.
2. Probate Terminology

Personal representative

Fiduciary

Testate

Will

Executor

Administrator

Probate courts

Devise/Devisees

Bequeath

Legatees

Descend to heirs

Distributed to next of kin

3. Probate Administration

Probate performs 3 core functions:

o Provides evidence of transfer of title to the new owners, making the property
marketable again
o Protects creditors by providing a procedure for payment of the decedents debts

o Distributes the decedents property to those intended after the decedents creditors
are paid.
a. Opening Probate and Choice of Law

The law of the state where the decedent was domiciled at death governs the disposition of
personal property, and the law of the state where the decedents real property is located
governs the disposition of real property.
o Primary or domiciliary jurisdiction
o Ancillary probate

b. Common Form and Solemn Form Probate

c. Formal and Informal Probate
d. Supervised and Unsupervised Administration
e. Barring Creditors
f. Closing the Estate
4. Is Probate Necessary?
Class Notes 8/22/16:
Intestate when a person dies without a valid will
Formalities necessary for the proper execution of the will
A testator can direct the distribution of her assets anyway she pleases. The limitations in this
country are fairly limited.
-

Statutes and judges usually cannot change that

Limitations:
o for the surviving spouse = forced share if decedent doesn't leave me this
portion, I have a right to elect against the will and force the estate to give me this
much
o for children a child who is not born at the time the will is written. Some
protection
o for creditors before distributing assets, creditors have to be paid.

Shapira v. Union Natl Bank

-

deal with the reason why I didn't leave anything to my kid

C. Professional Responsibility
1. Duties to Intended Beneficiaries
o Simpson v. Calivas (N.H. 1994) (Page 52)

o Facts: The intended beneficiary brought an action for negligence and breach
of contract alleging that his father's lawyer failed to draft a will that
incorporated the father's actual intent to leave all his land to the intended
beneficiary in fee simple. The trial court dismissed the claim and held that a
lawyer who drafted a will owed no duty to intended beneficiaries.
o The probate court construed the will to provide Roberta with a life
estate in all the real property.
o The probate court found the term homestead ambiguous, and
in order to aid construction, admitted some extrinsic evidence
of the testators surrounding circumstances.
o However, the court did not admit notes taken by the defendant
during consultations with Robert Sr. that read: House to wife
as a life estate remainder to son, Robert H. Simpson, Jr.
Remaining land to son Robert.
o C drafted will for Sr; left all of estate to Jr, except for a life estate in our
homestead which went to his wife (Jrs stepmother); question arose as to
whether word homestead as used in the will referred to house only, or to the
house plus surrounding 100 acres with buildings (used in family business);
wife & Jr filed petition in probate court to determine Srs intent; court found
the word homestead to be ambiguous and allowed extrinsic evidence but did
not allow evidence of Cs notes, which showed Sr. said life estate in house
to wife; court held that homestead included house & 100 acres; Jr brought
action in superior court on 3rd party beneficiary theory & negligence grounds.
o Does lawyer have duty to beneficiaries of will or is duty limited by privity of
contract with testator?
o There may be a duty that goes beyond the testator to the heirs.
o Third party beneficiary contract the contract is so expressed as to
give the promisor (lawyer) reason to know that a benefit to a third
party is contemplated by the promise as one of the motivating causes
of his making the contract. (54)
o Why are there different rules on admission of evidence in probate and superior
courts?
o Probate = Can admit something that doesn't contradict it. The court
said house contradicts homestead.
o Its a malpractice situation and lawyers develop rules that will solve
malpractice issues. A change in the probate
o Issue:
o (1) Whether the trial court erred in ruling that under New Hampshire
law a drafting attorney owes no duty to an intended beneficiary.

o (2) Whether the trial court erred in ruling that the findings of the
probate court on testator intent collaterally estopped the plaintiff from
bringing a malpractice action.
o Rule: A duty runs from a drafting attorney to an intended beneficiary, and as
such, an identified beneficiary has third party beneficiary status.
o A drafting attorney owes a duty of care to an intended beneficiary,
notwithstanding lack of privity, due to the foreseeability of injury to
the intended beneficiary.
o Holding: The court reversed and remanded the decision of the trial court,
which issued a direct verdict and summary judgment for a lawyer in the
intended beneficiary's action for negligence and breach of contract.
o Reasoning: On appeal, on an issue of first impression, the court reversed and
remanded the case.
o The court held that although there was no privity between a drafting
lawyer and an intended beneficiary, the obvious foreseeability of
injury to the beneficiary demanded an exception to the privity rule and
that an identified beneficiary had third-party beneficiary status.
o The court further held that an intended beneficiary stated a cause of
action simply by pleading sufficient facts to establish that an attorney
negligently failed to effectuate the testator's intent as expressed to the
attorney.
o The court found no basis for collateral estoppel because a finding of
actual intent by the probate court was not necessary for that judgment.
o The trial court erred in excluding the appraisal values in the probate
inventory.

(1) Duty to Intended Beneficiaries:

o A drafting attorney owes a duty of care to an intended
beneficiary, notwithstanding lack of privity, due to the
foreseeability of injury to the intended beneficiary.

(2) Collateral Estoppel: Collateral estoppel is only applicable if the

finding in the first proceeding was essential to the judgment of that
court.
o Courts determination that testators intent as expressed in
language of will was to leave second wife life estate in all of
his property did not collaterally estop intended beneficiary
from suing attorney who drafted will in tort and contract, on
theory that testators actual intent was to leave second wife
life estate in house only, since finding of actual intent was not
necessary to probate court judgment.

o Notes:
2. Conflicts of Interest
o A. v. B. (N.J. 1999) (Page 57)
o Facts: The estate planning section of Hill Wallack, a mid-size New Jersey law
firm, represented both husband, B, respondent, and wife, W. Both executed
mutual wills transfer all the property to the survivor with the reasonable
expectation that each would provide for their children. Meanwhile, the family
law section of Hill Wallack mistakenly took on another client plaintiff, A, a
woman who sued B for paternity. The existence of the additional child was
vital to the defendants and Ws estate plan. The firm withdrew from
representation in the paternity suit and ordered the defendant to tell his wife W
of his other child or the firm would notify plaintiff. The defendant sued Hill
Wallack to prevent disclosure.
o H (B) & W went to a law firm to have reciprocal wills drafted; under Ws will,
if W dies first, residuary of her estate goes to B & when he dies, it goes to his
issue (vice versa under Bs will); they signed engagement letter explaining
conflicts; it did not expressly waive confidentiality that would allow firm to
disclose.
o A engaged same firm to represent her against B in paternity suit; firm didnt
realize its conflict (spelling error) & discovered info about paternity claim
against B; firm later realized conflict & withdrew; another firm represented A;
B refused to tell W about paternity.
o Firm wants to inform W about paternity. Why?
o If H dies first, goes to wife; but if H has paternity payments (child
support) it significantly lessens the money that W will get.
o Conflict of 2 duties: (1) duty of confidentiality to a client & (2) duty to inform
client about material facts
o Rules of Professional Conduct allow firm to disclose info in order to rectify a
fraud. Is Bs act fraudulent?
o Courts decision on whether to disclose?
o The law firm is entitled to disclose whatever they deem necessary. They may
disclose it to the W but they do NOT HAVE to disclose it.
o Issue: Whether a firm that represents a husband and wife may disclose to the
wife their knowledge that the husband fathered another child by another one
of their clients.
o Rule: A firm that represents a husband and wife may only disclose to the wife
the fact that the husband had fathered another child but may not disclose the
identity of the other woman or the child.
o Holding: Yes. Where a firm represents a husband and wife and another
woman who has a child by the husband, the firm may disclose to the wife that

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another child exists, however the firm may not disclose the identity of the
other woman or the child.
o Reasoning: The Court will allow the firm to tell the wife that her husband has
a child by another woman because it is crucial to her needs in her won estate
planning. However, it must protect the confidentiality of its client, the other
woman, because it also owes her a duty because they had formerly
represented her.
o The court held that respondent's deliberate omission of the existence of
his illegitimate child constituted a fraud on his wife.
o When discussing their respective estates with the firm, the couple
reasonably could expect that each would disclose information material
to the distribution of their estates, including the existence of children
who were contingent residuary beneficiaries.
o Respondent breached that duty.
o The court concluded that appellant was permitted to inform the wife of
the existence of the illegitimate child.
o Notes:
Class Notes 8/30/16:
Testate person dies with a will
o Testator (male version)
o testatrix (female version)
Intestate person dies without a will
Probate property assets that pass under a decedents will or pass by intestacy law
Non-probate property assets not subject to probate process (ex: joint tenancy or tenancy by
the entirety, inter vivos trust, testamentary trust, POD, pension plan benefits)
Inter vivos trust a trust that a person creates when he or she is alive, so doing their lifetime
Testamentary trust one that is created in the persons will
Pension plan benefits not part of probate estate.
POD bank accounts can be a joint tenancy,
Personal representative person who administers the probate estate
o Executor if person dies testate
o Administrator if person dies intestate
Probate court generic name for the court that administers the probate process
Will and testament how to distribute my assets

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o In a will, testator devises real property (a devise) to a devisee and bequeaths personal
property (a bequest or legacy) to a legatee
o In intestacy, real property descends to heirs and personal property is distributed to next of
kin. At common law there are separate rules for descent and distribution, but today
descent and distribution are unified under a single set of rules. For all practical purposes,
next of kin are now heirs.
Reasons for probate process:
o Provides evidence of title most common situation is chain of title
o Protects creditors pays off debts before distributions are made to people in will
o Assure distribution in accordance with decedents intent or in accordance with the
intestacy law
What states/substantive law applies?
o Personal property- decedents domicile
o Real property where real property is located (situs)
Executor obtains letters testamentary executive authority to act
Administrator obtains letters of administration
Primary probate jurisdiction state of domicile
Ancillary probate jurisdiction situs of real property, if not in state of domicile
Under UPC, a will may be proven in either informal or formal probate proceedings
o Informal
o Formal
At common law, a will could be proven in common form or solemn form probate proceedings
(terms still used in some states)
Executor brings a will to court and starts a formal legal probate proceeding, court will then make
a decision about whether or not it is admitted to probate
After will is proven, it may be administered in either supervised administration or unsupervised
administration
o Supervised executor has to get court approval for payment of debts, appraisal of
estate, has to be a formal accounting before the final assets can be distributed
o Unsupervised does not required most of that. Dont have to go back to court to get
approval, can pay debts, get appraisal and distribute assets to beneficiaries and fill out an
affidavit.
o Most commonly used is informal, unsupervised
Statutes of non-claims:
o Self-executing statute

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o Executor has 4 months to pay

Closing estate has to be closed within a reasonably short period of time
Transfer by affidavit value has to be no more than $25k
Summary administration
Transfer of non-probate property
Extra-legal divvying up of estate?
Page 50: a probate administration problem:
1.
a. Might not have to go thru probate process, joint bank account passes outside probate, life
insurance is not part of probate, pension is not part of probate. The issue is going to be about the
furniture. If furniture is jointly owned, then it passes outside of probate. Leaves with car and
mutual fund. That's $25k-93.50 = 15kwhich is less than 25k. Can be done by transfer of
affidavit.
b. half of 15k goes to kids and half goes to wife. If you go thru formal proceedings. On other
hand, kids could say dont worry about it and let her take the entirety of the mutual fund
c. definitely going to need to be probated. Has real property so cannot be done by transfer of
affidavit.
d. yes probably. Not absolutely, but you should. He owns real property so it would have to go
thru administration. If he doesn't have a will, the wife is only going to receive half of it.
Class Notes 8/29/16
o Professional responsibility cases in wills and trusts will be confidentiality or conflicts of
interest issues
o

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