Transcript Clarkson, Business Law 12th ed (2012)


Will provides for a Testamentary
disposition of property.
 A will is the final declaration of how a
person desires to have his or her
property disposed of after death. 
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
Person who dies with a will, dies
testate (intestate without a will).
 Executor: personal representative
named in a will.
 Administrator: personal representative
appointed by the court when person
dies without a will.
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
Laws Governing Wills.
 Probate Laws (vary widely among
states).
 To probate a will means to establish its
validity and carry the administration
of the estate through a process
supervised by a probate court.
 Uniform Probate Code.
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
Gifts by Will. Devise: gift of real estate.
Bequest or Legacy: gift of personal
property.
 Types of Gifts: specific, general, or
residuary .
 Abatement.
 Lapsed Legacies.
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
Requirements for a Valid Will.
 Testamentary Capacity and Intent:
requires a “sound-mind” and
testamentary intent.
 CASE 52.1 Shaw Family Archives, Ltd.
v CMG Worldwide, Inc. (2007). Why
didn’t Monroe have the capacity to
bequeath the right of her likeness?
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
Requirements for a Valid Will
(cont’d).
 Writing Requirements: can be
handwritten, or holographic will (but
nuncupative (oral) will is possible).
Signature Requirements: at least two
witnesses, so will is ‘self-proving.’
 Witness Requirements. 
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
Requirements for a Valid Will
(cont’d).
 Publication Requirements: not
required under the UPC.

Revocation of Wills: executed will is
revocable by the maker anytime before
death.
 Revocation by Physical Act. 
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
Revocation of Wills (continued).
 CASE 52.2
Peterson v. Harrell (2010).
Can a provision be canceled without
revoking the entire will?
 Revocation by Subsequent Writing:
called a codicil.
 Revocation by Operation of Law.
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
Rights under a Will. The law imposes
certain limitations on the way a person
can dispose of property in a will.
 Beneficiaries can renounce (disclaim)
their shares.
 Spouses in some states can renounce
what is given them in the will and elect
to take the forced share.
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
Probate Procedures.
 Informal Probate Proceedings: Family
Settlement Agreements, and Small
Estates.
 Formal Probate Proceedings: larger
estates, guardianship appointment,
and trusts for minors or incompetent
persons.
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
Property Transfers outside the
Probate Process.
 Living Trusts.
 Joint Ownership of Property.
 Gifts Intervivos (while one is alive).
 Life Insurance Policies.
 Individual Retirement Accounts (IRA).
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Statutes of descent and distribution
which attempt to carry out the likely
intent and wished of the decedent
who died without a will.
 Surviving Spouse and Children.

 Surviving spouse usually receives ½ of
the estate if there is a surviving child.
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
Surviving Spouse & Children (cont’d).
Surviving spouse usually receives only ½ of
the estate, 1/3 if two or more children, 1/2
if one surviving child, or entire estate if no
children or grandchildren.
 If no surviving spouse or child the order of
inheritance is: lineal descendants, and
then collateral heirs (if no lineal
descendants).

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
Stepchildren, Adopted Children,
and Illegitimate Children.
Stepchildren -- not considered children of
deceased.
 Adopted children -- considered children of
deceased.
 Illegitimate -- must prove paternity.

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
Distribution to Grandchildren.
 Per stirpes distribution: heirs take the
share their deceased parent would
have taken had that parent lived. 
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
Distribution to Grandchildren.
 Per capita distribution: each person
takes an equal share of the estate.
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A trust is any arrangement whereby
property (real or personal) is held
by one party for the benefit of
another.
 Essential Elements: designated

beneficiary, designated trustee, funds
sufficiently identified to enable title to pass
to the trustee, actual delivery to the trustee
with the intention of passing title.
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
Express Trusts.
 Living Trusts: revocable living trusts,
irrevocable living trusts.
 Testamentary Trusts.
 Charitable Trusts.
 Spendthrift Trusts.
 Totten Trusts.
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
Implied Trusts.
 Constructive Trusts: arises by
operation of the law in the interest of
equity and fairness.

CASE 52.3 Garrigus v. Viarengo (2009).
What circumstances prompted the court to
create a constructive trust?
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
Implied Trusts (continued).
 Resulting Trusts.

The Trustee: person holding trust
property.
 Trustee’s Duties: honesty, good faith,
and prudence in administering the
trust and high degree of loyalty to
beneficiaries. 
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
The Trustee (continued).
 Trustee’s Powers: state law governs in
the absence of specific language in
will or instrument.
 Allocation Between Principal and
Income. 
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
Trust Termination.
 Trust ends when expressly specified in
trust; if trust does not provide
specification of termination, trust
doesn’t end at death of beneficiary or
trustee, when its purpose has been
fulfilled, or when purpose becomes
illegal or impossible.
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
Power of Attorney.
 Durable Power of Attorney.
 Health Care Power of Attorney.

Living Will: advanced health directive
that allows a person to control what
medical treatment they will receive
after a serious accident or illness.
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