WILLSI. INTESTACY RULES

a. Definitions i. Intestate – when a person dies without a will

ii. Decedent – A person who dies without a williii. Distributee – person who inherits property under intestate

succession iv. Issue – all persons who have descended from a common

ancestor, including those in direct line of inheritance with the decedent (children, grandchildren, etc.)

v. Administrator –a person (usually a distributee) appointed an a personal representative to administer the estate of the decedent

vi. Administration Proceeding – a proceeding initiated by a distributee to appoint an administrator and administer the property of the decedent

vii. Intestate Property – assets held in the decedent’s name alone that do not pass by operation of law or by Will and which the administrator administers in accordance with the EPTL

viii. Operation of Law – property that passes automatically because of the way the property’s title is held, regardless of the existence of a will or intestacy

ix. Residuary – the balance of the decedent’s estate after all claims, taxes and “particular” bequests have been distributed. The “rest” of the estate.

b. Application of Intestacy Rules i. The EPTL contains the rules of descent and distribution of

property (both real and personal) in intestacy, which typically apply when:

1. The decedent left no will or did not properly execute it; 2. The will does not make a complete distribution of the

estate (typically because there was poor drafting) and results in partial intestacy; or

3. A distributee successfully challenges the will, and the will is denied probate.

c. Order of Priority for Appointment as Administrator i. Surviving Spouse;

ii. Children;iii. Grandchildren;iv. Parent;v. Siblings.

d. Distribution i. Decedent survived by spouse and no children – If a

decedent is survived by her spouse but not by any children or issue of children, the surviving spouse takes the whole estate.

ii. Decedent survived by spouse and children – if the decedent is survived by his spouse and issue, whether of his current marriage or an earlier marriage, the surviving spouse takes $50,000 plus half of the residuary and the issue take the

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leftover residuary. If the estate is less than $50,000, the whole estate goes to the surviving spouse.

iii. Decedent Survived by Children Only – if the decedent is survived by children only (and no child has predeceased the decedent) it passes to the children in equal shares.

iv. Decedent Survived By Children & Issue of Predeceased Children – if the decedent is survived by children and the issue of the predeceased children it passes to the “alive children” and the issue of the dead children per capita at each generation.

1. Rule of Thumb: issue in the same generation will always have equal shares.

v. Decedent Not Survived by Spouse or Issue – the distribution is:

1. All to parents or surviving parent2. If not survived by parents: All to issue of parents (i.e.

siblings and issue of deceased siblings), who take per capita at each generation.

3. If not survived by parents or issue of parents:a. ½ to maternal grandparents OR surviving

grandparent OR (if neither is living) to their children and grandchildren, who take per capita at each generation; AND

b. ½ to paternal grandparents OR surviving grandparent OR to their children and grandchildren, who take per capita at each generation.

4. If not survived by grandparents or their children and grandchildren on one side: all to grandparents or their children and grandchildren on the other side.

5. If only survived by great grandchildren or grandparents:

a. ½ to maternal great grandchildren in equal shares; AND

b. ½ to paternal great grandchildren in equal shares. 6. If not survived by great grandchildren on one side:

all to great grandchildren on other side. 7. If not survived by grandchildren or grandparents: if

the nearest kin are great great grandchildren of grandparents OR issue of great grandparent, the estate escheats to New York.

e. Per Stirpes vs. Per Capita Distribution i. In most states the distribution is per stirpes, under which the

issue of a predeceased child takes the share that the predeceased child would have taken, if alive.

ii. In New York, the default distribution is per capita at each generation in both intestacy and in a will. A will, however, CAN override and change the default distribution per stirpes.

f. Inheritance Rights of Children i. Adopted Children

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1. Adopted children and their issue: have full inheritance rights from the adopting family and vice versa.

2. Child adopted by new family: child has no inheritance rights from birth parents or other members of birth family.

3. A child adopted by the spouse of a birth parent: CAN inherit from adopting parent AND either birth parent.

4. Child adopted by a relative (e.g., aunt, uncle): if the adopted child is related to the decedent by both a birth relationship and an adopted relationship, the child inherits under the birth relationship UNLESS the decedent was the adopting parent, then the child inherits under the adoptive relationship.

ii. Nonmarital Children 1. A nonmartial child has full inheritance rights from

mother and her family. 2. However, a nonmartial child inherits from the birth

father only if paternity is established by ONE of the following:

a. The father marries the mother after the child’s birth; OR

b. An order of filiation in a paternity suit is entered adjudicating the man to be the child’s father; OR

c. The father files a witnessed and acknowledged (before a notary public) affidavit of paternity with the Putative Father Registry; OR

d. Paternity is established by clear and convincing evidence which may include, but is not limited to evidence established by:

1. DNA; OR2. Openly and notoriously

acknowledging the child as his ownii. Paying child support itself it NOT enough.

g. Variations to Intestate Distributions i. Circumstances disqualifying spouse from taking intestate

share 1. “DISMAL”

a. Divorce: a final decree of divorce or annulment recognized as valid under New York law.

b. Invalid Divorce: the surviving spouse procured a divorce or annulment not recognized as valid under New York law.

c. Separation Decree: a final decree of separation was rendered against the surviving spouse. A separation agreement does not result in disqualification UNLESS there is specific language in the agreement waiving the surviving spouse’s rights under the EPTL. The surviving spouse is not

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disqualified if the final decree of separation was rendered against the deceased spouse.

d. Marriage is Void as incestuous or bigamous. e. Abandonment/Lack of Support: the surviving

spouse abandoned or refused to support the deceased spouse.

2. Assume that the surviving spouse predeceased and drop the shares to the children / whoever is next.

3. New York does not have a slayer statute, but that spouse will NOT inherit.

ii. Lifetime gifts to intestate distributee – advancements 1. At common law, a lifetime gift to a child was

presumptively an advancement of his intestate share, to be taken into account when distributing the estate at death. This is based on a presumption that a parent would always want to treat his children equally.

2. New York has rejected the “advancement” presumption by statute. Thus, there is no advancement unless proven by:

a. A contemporaneous writing made at the time of the gift; AND

b. Signed by the donor/donee. 3. Example. F gave his son A 10 acres on his 25th birthday

and told his other children B and C that they would get the same gift when they reach 25. Two weeks later, F wrote an note to A stating: “The land I gave you is to be considered an advance on your inheritance” Signed, F. F dies, leaving a $300,000 estate and the land F gave to A was worth $30,000.

a. Should F’s gift to A be treated as an advancement? No. The writing needed to be contemporaneous. Therefore, each child gets $100,000.

b. If the writing was contemporaneous, what is the distribution of F’s estate?

$300,000 (value of estate)+ $30,000 (value of advancement)$330,000 (total to distribute)- 3 (number of children)$110,000 (each child’s share)

A would get $80,000 and B and C would each get $110,000

iii. Disclaimer (“Renunciation”) by Intestate Distributee 1. No one can be compelled to be a distributee or to take

property by operation of law. A distributee can therefore disclaim (or renounce) her interest in the decedent’s estate in whole or part. The effect of a renunciation is that the person who disclaims is considered to have predeceased the decedent.

2. A valid disclaimer must be:

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a. In writing, signed and acknowledged (before a notary public); AND

b. Accompanied by a separate affidavit stating that no consideration was received for disclaiming; AND

c. Irrevocable; ANDd. Filed with the Surrogate’s Court within 9 months

after the date of death. 3. A disclaimer CANNOT, however, screw up someone’s

legitimate share. To avoid an inequitable result, act as if the disclaimer died one day after decedent.

4. Can disclaim an inheritance because of taxes and creditors, but you cannot disclaim to Medicaid.

II. WILLS a. Testacy Definitions

i. Testate – when a person dies with a willii. Testator – person who dies with a will

iii. Beneficiary – person who receives a bequest under a will iv. Executor – a personal representative named in a will to

administer the estate of a testatorv. Probate Proceeding – a surrogate court’s proceeding to (1)

judicially determine whether the testator’s will was validly executed and determine the intestate distributees; AND (2) appoint the executor to administer the testator’s estate

vi. Probate Estate – assets held in the testator’s name alone that do not pass by operation of law and which the executor administers in accordance with the testator’s will.

vii. Satisfaction of Legacy – a lifetime will to a will beneficiaryb. Requirements of a Duly Executed Will

i. “7 Point Test”1. Must be 18 years old;2. Signed by testator or by someone at the testator’s

direction and in her presence;3. Testator’s signature at the end thereof;4. Testator must sign a will or acknowledge his earlier

signature in presence of each witness;5. Publish the will, which requires the testator to

communicate to the witnesses that they are witnessing a will by declaring the document to be her “last will and testament;”

6. Must be two attesting witnesses; and a. Unless most states, New York does NOT require

that the witness sign in each other’s presence OR in the testator’s presence.

b. Attesting witnesses must attest to the testator’s signature when the testator signed the Will (or acknowledged his signature). If the testator forgot to sign when the witness signed, and added his signature in the witnesses’ presence later, the will

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is denied probate because it is not a contemporaneous transaction.

7. Execution ceremony must be completed in 30 days which starts to run when the first witness signs.

ii. Codicile – later amendment executed with same formalities. iii. Words following a signature are not given effect. An entire will

is declared invalid if the matter following the signature line is so material that giving effect to that above the signature line and not giving effect to that below the signature line would defeat the testator’s intention.

iv. Burden of Proof – Due Execution 1. The will proponent (the person who offers the will for

probate) has the burden of proving due execution. a. If one witness is not available to testify: the

testimony of one witness suffices if the other witness is dead, absent from the state, incompetent, or cannot with due diligence be found.

b. If none of the witnesses are able to testify: the will proponent must prove the signature of both the testator and one witness.

c. If the will is not self-proved: both attesting witnesses must testify as to the facts necessary to show due execution.

2. Attestation Clause – appears below the testator’s signature line and above the witnesses’ signature lines, and recites all the elements of due execution:

a. “On the above date, the testator declared to us that the foregoing instrument was her will and she asked us to serve as witnesses thereto. She ten signed the will in our presence, we being present at the same time. We then signed the will as attesting witnesses.”

b. Clause is prima facie evidence of facts presented.c. Not a substitute for live testimony: an attestation

clause is merely corroborative or the witness’s testimony. A will proponent must still call the witness to testify or prove their signatures.

d. Reasons for having an Attestation Clause: i. If the witness has a bad memory:

“Probate of a Will does not turn on the memory of attesting witnesses.”

ii. If the witness is hostile: ex., if the witness recalls signing a Power of Attorney or some other document, the Attestation Clause can be used to rebut the witness’ evidence.

3. Self-Proving Affidavit: It is attached to the back of the Will, and is a mechanism set forth by the legislature that recognizes that the validity of most Wills is not contested.

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a. What is it? Witness signs sworn statement in presence of attorney that recites all statements they would make if called to court.

b. Substitute for live testimony: Unlike an Attestation Clause, a Self-Proving Affidavit is a substitute for the live testimony of the witness. It serves the same function as a deposition or an interrogatory (i.e., it is sworn testimony).

c. Procedurei. The affidavit can be signed at any time after

the will is executed, but is usually signed at the same time as the Will.

ii. The will is admissible to probate on the strength of the sworn recitals in the Affidavit UNLESS an interested party objects, in which case the formal rules of proof of due execution apply.

1. Interested Party: An intestate distribute or Will beneficiary (current or prior) who is adversely affected by the admission of the Will to probate.

iii. The Attestation Clause and Affidavit are not legally required in any state.

c. Interested Witness Statute: i. The validity of the Will is not affected if a Will beneficiary is

also an attesting witness BUT the bequest to the witness is void UNLESS:

1. Supernumerary Rule: there were at least THREE witnesses and TWO were disinterested. Therefore, the signature of the witness-beneficiary is not needed to admit the Will to probate so that witness-beneficiary can receive their bequest; OR

2. The Interested Witness (will beneficiary) would be an intestate distributee if Testator died without a will. In which case, a “whichever is least” rule applies: The witness-beneficiary takes the lesser of:

a. The bequest under the will; ORb. His intestate share.

ii. Purpose of “Interested Witness Statute” is to avoid fraud.iii. First Ask: whether the witness would still inherit if Testator

died intestate? iv. Then Ask: If Testator had died intestate, what would the

witness’s intestate share be?v. The Will is either void or not void based upon the “whichever

is least” rule.vi. The key is the Will Is still good.

vii. If witness is interested and not intestate distribute they would lose their bequest under the will.

d. Foreign Wills Act:

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i. A will is admissible to probate in NY if it was validly executed under (“END”):

1. The law of the state where the Will was executed, regardless of the testator’s domicile at that time, OR

2. New York Law; OR3. The law of the state where the testator was domiciled,

either when the Wills was executed or at death.ii. These rules apply only to determine whether the Will is

admissible to probate in NY. Once the will is admitted to probate, NY law governs construction and application of its provisions.

e. Holographic and Nuncupative Willsi. A holographic will is entirely signed in Testator’s handwriting

but not witnessed.ii. Nuncupative will is a oral will (DVD or CD)

iii. Both are Void in NY1. Exception: Both are valid for members of the armed

forces during declared or undeclared war (but void one year after discharge) and mariners at sea (but void three years after discharge).

iv. Application of Foreign Wills Act: If a holographic will is executed in a state that recognizes them, and person later dies in NY, that is okay.

f. Lawyer Malpractice:i. No privity of contract between beneficiaries and lawyer; duty is

only to client who contracts for lawyer’s services. ii. Court of Appeals Case Derivation

1. Facts: Decedent advised to do something which increases tax liability (poor estate planning)

2. Court’s Ruling: court ruled that privity or relationship approaching privity existed between personal representative of estate and lawyer so could bring action.

3. But Remember: No privity to 3rd beneficiary III. REVOCATION OF WILLS

a. What Constitutes a Valid Revocation?i. A will can be revoked in only one of two ways:

1. By subsequent testamentary instrument executed with appropriate formalities; OR

2. By physical act (ex: burning, tearing, cutting, canceling) BUT MUST HAVE intent to revoke.

b. Express Revocation: i. The typical express revocation language in a Will is—“I hereby

revoke all Wills heretofore made by me”c. Revocation by Implication:

i. To the extent possible you read the two instruments together, 2nd will treated as codicil to first will and only revokes first will to extent there are inconsistent provisions.

ii. Exception: If the second Will is wholly inconsistent with the first (ex. The first Will leaves “all my property to Moe” and the

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second Will leaves “all my property to Larry”), the first Will is revoked by implication.

d. Revocation by Physical Act of Another (Revocation by proxy)i. The physical act must be:

1. at the testator’s request;2. in the testator’s presence; AND3. witnessed by at least two witnesses.

ii. Therefore, how many people must be in the room? 4, testator, destroyer of will, 2 witnesses.

e. Presumptions Regarding Revocation of Wills i. When a Will that was seen in the testator’s possession or

control is not found after death—Presumption: that T revoked the will by physical act w/ intent.

ii. When a Will that was last seen in the testator’s possession or control is found in a damaged condition after T’s death (ex torn in two)—Presumption: that T was one who revoked it.

1. Neither presumption arises if the Will was last seen in the possession of someone adversely effected by its contents. (ex. A person stands to inherit under the earlier Will but not under the later Will, and the later Will was last seen with that person.)

2. Evidence is admissible to rebut the presumption of revocation when the Will cannot be found (ex, the Will was left with an attorney for safekeeping and the attorney cannot find it) OR is found in a damaged condition (ex. The testator told witnesses that the destruction of the Will was accidental

f. Changes on the Fact of the Will after it has been Executed. i. The only 2 ways a testator can make changes in Will are:

1. Write a new will revoking the first; or2. Make a codicil to first will changing only parts

a. Both must be duly executed (7 point test)g. Bar Exam Twists

i. Words added to will after signed and witnessed are disregarded ii. Partial revocation by physical act is not recognized in NY.

h. NO Revival of Revoked Wills:i. If testator executes a Will that is revoked by a later Will

containing a revocation clause, the first Will CANNOT be “revived” by the testator merely revoking the later will.

ii. The first Will can only be revived in one of two ways:1. Re-execution: signed by testator and two witnesses (7

point test); OR2. Doctrine of “republication by codicil”: T validly

executes codicil to first will making changes.iii. The “no revival” rule also applies to codicils. iv. Rule of Thumb: You need a validly executed document to

make a change. v. Dependent Relative Revocation (DRR)

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1. DRR permits a revocation of a later Will to be disregarded. The effect would be to permit probate of the later Will.

2. DRR is common law doctrine, sometimes called the “second best solution doctrine”.

3. The best solution, which is giving effect to the testator’s intent by reviving the earlier Will, is just not possible usually under NY Law.

4. Requirements For Application of DRR:a. The testator’s revocation must be premised or

dependent upon a mistake of law (ex. That revocation of the later will validates the prior will).

b. The disposition that results from disregarding the revocation of the later Will must come close to the dispositions the testator intended when he attempted to revive the earlier Will.

5. In New York: DRR has been applied in one appellate division case, but never by the Ct. of Appeals.

6. “Lost Wills” Statute: a. The statute is used in 2 situations: (A) DRR;

and (B) truly “lost” wills. b. The “Lost Will” proponent must prove that—

i. The “lost” or later will was duly executed: Refer to 7 point test.

ii. The “lost” or later will was not “revoked”: Thus, the “Lost Will” proponent must—

1. Overcome the presumption of revocation that arises from the Will’s non-production; OR

2. Prove that the revocation should be disregarded under DRR.

iii. The Will’s provisions are: “clearly and distinctly proven by each of at least two credible witnesses, or by a copy or draft of the Will proved to be true and complete.

c. Revoking a codicil does not revoke the entire Will. Provisions in the Will that were not changed by the codicil remain in effect.

IV. DEATH OF A BENEFICIARY DURING THE TESTATOR’S LIFETIME a. Anti-Lapse Statute:

i. If a beneficiary dies during the testator’s lifetime, the gift to the beneficiary lapses (fails) UNLESSS the gift is saved by the state’s anti-lapse statute. Can see on MBE—not wills question.

ii. New York Anti-Lapse Statute: The gift does not lapse but vests in the deceased beneficiary’s issue IF BOTH of the following conditions are satisfied:

1. Pre-deceased beneficiary was T’s issue, brother or sister; AND

2. Pre-deceased beneficiary leaves issue who survives T.

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a. Disclaimer Revisited: Under intestate rules, a disclaimant is considered to have predeceased the decedent. Similarly, under testate rules, a disclaimant is considered to have predeceased the testator.

b. Rule of Thumb: A condition to a bequest (ex “if he survives me”) trumps anti-lapse.

iii. Death of “Adopted Out” Child—NY Court of Appeals Case1. Facts: The testator’s son was adopted by a non-relative

but the testator still named the son as a beneficiary in his will. The son predeceased the testator, leaving children who survived the testator.

2. Recap: an adopted out child has no inheritance rights from the birth parents or other members of the birth family.

3. Court’s Ruling: Even though the son was adopted out, because the testator specifically named the adopted out son, the anti-lapse statute saved the testator’s devise to the adopted out son’s issue.

b. Lapse in Residuary Gift—“Surviving Residuary Beneficiaries” Rule

i. Absent a contrary provision in the Will, if the Testator’s residuary estate is:

1. Devised to two or more persons; AND2. The gift to one of them fails or lapses for any reason;

AND3. The anti-lapse statute does not apply,

ii. Then the other residuary beneficiaries take the entire residuary estate in proportion to their interests.

iii. Rule of thumb: Anti-lapse trumps the “surviving residuary beneficiaries” rule”

V. CLASS GIFTSa. Class Gifts in General

i. Absent a contrary provision in the Will, if a Will makes a gift to a group of persons described as a generic class (“children”, “siblings”, etc) and some members of the class predecease the testator, the class members who survive the testator take in equal shares.

ii. Rule of construction based on presumed intent. Since the testator was “group minded” in making the gift, he wanted the class of persons (and no one else) to take in equal shares).

iii. How to Determine the Members of the “Class”1. Look who is alive at T’s death to determine takers

of a class gift. iv. When Testator Names Beneficiaries Individually, Not as a Class

1. IF the named person predeceases then goes to the residuary.

2. Rule of Thumb: Anti-lapse trumps the “class-gift” rule. v. Construction of a Class Gift Implicating an “Adopted Out”

Child

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1. If a child is adopted by a new family, the “adopted out” child does not take as a beneficiary of a class gift made in the will of a member of the child’s birth family.

2. The adopted out child is entitled to a share in a class gift is she is adopted by a member of the birth family

b. Rule of Convenience:i. The class closes at the time a distribution to the class must be

made. Later-born class members are excluded from taking as members of the class.

ii. Used to determine the takers of a class gift and the minimum share of each class member. A distribution can be made with certainty that a rebate or refund would not be sought later on.

iii. Limitation to Rule: Later born class members are NOT excluded from taking as members of the class if the “gestation” principle applies. This is a common law presumption that there are 280 days from conception to birth.

c. When the Class Closesi. Outright Gift by Will: The class closes on T’s death.

ii. A Life Estate or an Income Interest with a Remainder to a “Class of Beneficiaries” : Class closes at death of life tenant or income beneficiary.

VI. SIMULTANEOUS DEATHS a. Revised Uniform Simultaneous Death Act (RUSDA) – absent a

will provision to the contrary, if a person dies under circumstances where there is insufficient clear and convincing evidence to prove that such a person is to have survived another person by 120 hours (5 days), the property of that person is distributed as though he or she predeceased the other person.

i. The key to RUSDA is to look at whose estate you are distributing.

b. Jointly-held property (i.e. joint tenants, tenants by entirety, and joint bank accounts) passes as though each co-owner survived the other. Thus, the property passes as if tenancy in common was involved. Theoretically, RUSDA severs the right of survivorship in cases of jointly held property.

i. Example. H and W married soon after W’s divorce from E. H and W die simultaneously (or within 120 hours of each other) and are joint tenants with right of survivorship to a hotel, which they bought together prior to the marriage. W has two children, A and B, from her prior marriage to E and a son, C, with H. H has no other children. What is the distribution? W’s Estate: Act as if W had survived and her half drops to A, B, and C. H’s Estate: Act as if H had survived and his half drops to C, his only child.

V. CHANGES IN TESTATOR’S FAMILY AFTER THE WILL IS EXECUTED a. Testator Marries

i. Marriage after the execution of a will has no effect on the validity of the will, but is may affect gifts and dispositions under the will.

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ii. New York law provides for a “right of election” so that a testator cannot disinherit his spouse.

b. Testator Divorcesi. If the court renders a final decree of divorce, annulment, or

separation after execution of a will, all gifts and fiduciary appointments in favor of the former spouse are revoked by operation of law.

ii. In effect, read the will as if the spouse predeceased the testator.

iii. Exclusions:1. All gifts and fiduciary appointments in favor of the

issue of the former spouse are not revoked by operation of law.

2. An appointment of the former spouse as guardian of the couple’s children is not revoked by operation of law.

3. If the couple reconciles and remarries, ALL provisions in favor of the former spouse are restored.

iv. In addition, New York passed a statute that declares that the divorced/annulled/separated spouse will NOT received proceeds that would pass by operation of law (such as life insurance proceeds, Totten Trust funds, or joint bank account funds).

c. Child of Testator Is Born/Adopted i. The EPTL does not protect children who are alive when the will

is executed. The EPTL protects only pretermitted children (children born AFTER the will is executed) who are: (1) not provided for in any settlement; AND (2) neither provided for nor mentioned in the will.

1. If the testator had one or more children when the will was executed and:

a. No provision is made for any child: the pretermitted child inherits nothing.

b. The will made gifts to the other children: the pretermitted child shares in the amount of the other children as if a class gift was made.

i. If the testator devises a different amount to each child, add the total amounts and divide by the total number of children. The pretermitted child will get that share from the other children proportionately.

c. The testator made a “limited provision” to the other children: the pretermitted child takes his intestate share, which would come from all other beneficiaries proportionately.

2. If the testator had not children when the will was executed: the pretermitted child takes his intestate share.

VI. NEGATIVE BEQUESTS a. Common Law –words of disinheritance in the will are

ineffective with respect to property passing by intestacy.

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b. New York’s Negative Bequest Rule – words of disinheritance are given full effect in partial intestacy. Treat the beneficiary as if she predeceased the testator.

VII. VARIATIONS TO TESTATE DISTRBUTIONS a. Lifetime Gift to Beneficiary

i. Satisfaction of Legacies is the will equivalent to advancements in intestacy

ii. At common law, a lifetime gift to a beneficiary named in the testator’s will was presumptively made in partial or total satisfaction the legacy, to be taken into account when distributing the testator’s estate at death.

iii. New York has rejected the satisfaction of legacies presumption by statute. Thus, there is no satisfaction of legacy unless proved by: (1) a contemporaneous writing; and (2) signed by the donor/donee.

b. Reference to Facts and Events Outside the Will i. In most states, the terms of an extrinsic document can be

incorporated by reference if (1) the document was in existence when the will was drafted, (2) the will shows an intent to incorporate the document, and (3) the document is clearly identified by the language in the will.

ii. New York does NOT recognize incorporation by reference. Everything must be duly executed (7 point test).

c. Acts of Independent Significance (Nontestamentary Acts)i. Acts performed by the testator after the will is executed that

have a purpose of motive independent of any testamentary purpose are given full effect when distributions are made.

1. Example. T executed a will that bequeathed that “automobile I own at death” to his Nephew and the “furniture and furnishings in my living room” to my Niece. Later, he trades his Taurus for a Porsche and removes a Rembrant from his wall and mounts it in the living room. The niece and nephew take the Porsche and rembrant.

ii. Title documents (e.g., deeds, stock certificates, etc.) can ONLY be transferred as mandated by law.

VIII. CHANGES IN DISTRIBUTION OF TESTAMENTARY GIFTS a. Abatement (Reduction) of Legacies

i. If there are more claims against the estate than there are assets to cover all gifts made under the will, the gifts will abate (not be given effect to).

ii. Order of Abatement – absent a provision in a will, the order in which a testator property abates is:

1. Intestate Property – where partial intestacy results and the will has no residuary clause. I give $5 million to my son. Son predeceases Testator.

2. Residuary Disposition – I give the rest of my estate to my son.

3. General Gift – a general amount. I give $5 million to my son.

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4. Demonstrative Gift – a general amount, but the testator designates a specific source from which the amount is to be paid from. I bequeath $5 million to be paid from the proceeds of sale of my GM stock to my son.

5. Specific Gift – I devise Blueacre to my soniii. Example. T’s estate is worth $200K at his death, but his debts

total $100K. The provisions of his will provide: (1) “I devise Greenacre to Alex.” (specific gift); (2) “I give $50K from my account at Bank to Betsey.” (demonstrative gift); (3) “I give $50K to Carl.” (general gift); and (4) “I give the rest of my estate to Daniel.” (residuary). Greenacre is worth $50K, what is the distribution? Daniel gets nothing (residuary worth $50K); Carl gets nothing (general gfit worth $50K). Betsey and Alex get their gifts.

b. Ademption (Failure of Gift)i. If a testator makes a specific gift of property, and the property

cannot be found or is no longer owned by the testator, the gift fails under ademption.

ii. A demonstrative legacy does not adeem. Instead, it will turn into a general gift if there is no cash available from the source designated. In other words, other assets will be sold to satisfy a demonstrative legacy.

iii. Three statutory exclusions 1. Insurance proceeds for lost, damaged or destroyed

property: beneficiary takes insurance proceeds to the extent that they were paid after death of the testator.

2. Proceeds received under an executory contract: beneficiary gets the proceeds paid after death or the testator.

3. Proceeds from a guardian or conservator’s sale of specifically bequeathed property: beneficiary is entitled to receive money or property into which the proceeds from the sale can be traced. If the proceeds cannot be traced, then the gift adeems.

c. Specific Gifts of Encumbered Property – No Exoneration of Liens

i. Under the common law rule, if a testator makes a specific gift of property that is subject to a mortgage or other lien on which the testator is personally liable, the beneficiary is entitled to have the lien exonerated (discharges any encumbrances on specifically bequeathed property using the residuary estate).

ii. In New York, liens on specifically devised property are not exonerated UNLESS the will specifically directs exoneration. A general provision for payment of debts does NOT work to exonerate liens (must be specific).

d. Bequests of Shares of Stock & Other Securities i. Gifts of shares of stock in Publically-Traded Corporations

are general gifts that do NOT adeem. Gifts of shares of stock in

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publically traded corporations are specific gifts if the testator bequeaths “my . . . stock”.

ii. Gifts of shares of stock in closely held corporations are specific gifts that adeem if they do not exist.

iii. Gifts of shares of stock where a stock split occurs are treated as a specific gift for purposes of the split. It is irrelevant when dealing with stock splits whether the testator used “my” language and/or whether the stock was publically traded or closely held.

iv. Example. At the time her wrote his will, T owned 100 shares each of Google, IBM, and Kodak stock. T executes a will that includes the following clauses:

1. “I give $50K to be paid from the proceeds of the sale of my Google stock to my son.” He later sold the Google stock and used the proceeds to buy a Jaguar.

a. The son takes $50K from other assets. Ademption does not apply because it was a demonstrative gift. If T owned the Google stock at his death, the executor would be under a duty to sell it to raise $50K.

2. “I give my 100 shares of IBM common stock to my daughter.” He sold the IBM stock and used the proceeds to buy AT&T stock.

a. The daughter gets nothing. This is a share of stock in a publically traded company, so it would be a general gift, BUT the use of the language “my IBM stock” made this a specific gift. Because the IBM stock does not exist anymore, ademption applies.

3. “I give 100 shares of Kodak common stock to my bother.” He sold the Kodak stock and used the proceeds to buy Nikon stock.

a. The brother gets the value of 100 shares of Kodak stock from other assets. This is a share of stock in a publically traded company, so it is a general gift, to which ademption does NOT apply.

4. Suppose instead that T did not sell the Kodak stock, but it split 2 for 1. Brother would take all 200 shares because it still exists.

IX. NON-PROBATE ASSETS a. Probate Asset – property that a testator owned solely in his name at

the time of death, which is disposed of pursuant to the terms of his will or passes by intestacy.

b. Non-probate Assets – interests in property that are not subject to the disposition under the will or via intestacy.

c. Categories of Non-Probate Assets i. Property passing by right of survivorship (e.g., joint bank

account, joint stock account, or payable on death benefits)ii. Property passing by contract (including life insurance policy or

employee benefits)iii. Property held in trust

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iv. Property over which decedent held power of appointment (POA)

X. Elective Share Statute a. Elective Share in General

i. Purpose of the Statute – to protect the surviving spouse against disinheritance by giving him/her a minimum share of the testator’s probate estate.

ii. Elective Share equals the GREATER of $50K or 1/3 of the estate.

iii. Payment of Elective Share Amount1. Calculation of amount – in theory the elective share is

only applied to the testator’s net probate estate (value of the estate after payment of debts, but before payment of estate taxes).

2. If the elective share is not satisfied for the surviving spouse, other beneficiaries must contribute pro rate.

3. Beneficiaries under the will, beneficiaries of “testamentary substitutes,” and/or intestate distributees contribute to the payment.

iv. Surviving spouse’s elective vs. intestate share – under intestacy, the surviving spouse takes the entire state (if the testator is not survived by issue) OR $50,000 plus ½ the balance of estate (if testator is survived by issue). Thus, if the decedent died without a will, the surviving spouse’s intestate interest share will always be LARGER than his or her elective share, unless testamentary substitutes are involved.

b. Testamentary Substitutes (“T-Subs”)i. Since the elective share, theoretically, only applies to the

testator’s probate estate, a testator intent on disinheriting their spouse could defeat the protection of the statute by transferring non-probate assets to other persons.

ii. To prevent a testator from defeating the elective share statute, the elective share includes probate estate AND testamentary substitutes (“elective share estate”)

iii. Testamentary Substitutes: (“T.S. LEG UP”)1. Totten Trusts 2. Survivorship Estates (watch for pre/post marriage

scenarios)3. Lifetime transfers with strings attached

a. Transfer where the T retains the power to revoke, invade, consume, or dispose of the principal, or naming new beneficiaries; AND

b. Transfers (irrevocable) made during the marriage, where the testator retained a life estate.

4. Employee pension/profit-sharing/deferred compensation plans (if the plan is qualified, only ½ is a T Sub)

5. Gifts made within one year of death a. Gifts in excess of $13,000; and

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b. Gifts causa mortis (made in fear of impending death, regardless of amount of gift).

6. U.S. Government Bonds 7. Powers of Appointment (property over which the

testator held a presently exercisable general power of appointment)

iv. Nontestamentary Substitutes 1. Life Insurance 2. ½ of a qualified pension and profit-sharing benefits 3. Gifts of less than $13K made within one year of

death 4. Pre-marriage irrevocable transfers 5. Irrevocable transfers made more than one year

before death 6. Irrevocable transfers made during marriage, where

testator retains a life estate v. Calculating the Elective Share Estate: Full value of a T-Sub

is included EXCEPT:1. Survivorship estates involving the testator and a

third party: consideration furnished test applies. Surviving spouse has the burden of proving the amount of the dead spouse’s contribution to the asset.

2. Survivorship estates involving the testator and the surviving spouse: ½ is automatically a T-Sub.

vi. Example. W married H in 1999. In 2002, W and her sister S acquired title to the Brooklyn Bridge, taking title as joint tenants with the right of survivorship. In 2003, W and H opened a joint bank account. W died in 2008, leaving a net probate estate of $300K. W’s will devised Central Park (worth $75K), which she owned solely in her own name, to H and her remaining estate (cash in the amount of $225K) to S. H filed for an elective share.

1. Distribution of the W-S joint tenancy? T sub between dead spouse and third party, so H has the burden of proving amount of consideration furnished by W for the property.

2. Distribution of W-H joint account? T-Sub between W and H. Half is a T-Sub.

3. Assume that there is $60,000 on deposit on the W-H joint bank account. Assume also that the W-S joint tenancy property is worth $150,000 at W’s death. If H is able to prove that all of the funds used to buy the joint tenancy were contributed by W, what is H’s elective share?

a. $150,000 joint tenancy property with a third party TEST: consideration furnished $150,000

b. $60,000 joint bank account with surviving spouse theoretically severed joint tenancy; ½ to dead spouse; ½ to surviving; ½ in, ½ out $30,000

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$300,000 Net probate estate ($75K + $225)+ $30,000 Joint H-W account (1/2 is a T-Sub) (1/2 in)+ $150,000 Joint Tenancy with 3rd Party (T-Sub: all funds)$480,000 Elective Share Estate

$160,000 Elective Share Amount (1/3 )4. How is H’s elective share satisfied?

a. (- 75K) Amount (Central Park) passing under will

b. (-30K) Amount passing to H (NY fiction, ½ of joint account) (1/2 out)

c. $55K amount needed to satisfy the elective share vii. Survivorship estates created BEFORE MARRIAGE

involving the testator and a THIRD PARTY 1. The consideration furnished test applies only to ½ of

the property value as a T-sub because pre-marriage gifts are not T-Subs.

2. When the testator acquired the property in joint tenancy, the testator made an irrevocable gift of ½ interest to the other tenant. Since this is a pre-marriage irrevocable transfer, the third party joint tenant’s ½ is not a T-Sub.

viii. Elective Share and Intestacy 1. Example. Healtcliff died and is survived by his wife

Whitney. They had no children. Healthcliff left $100,000 in a bank account in his name in trust for his cousin, Claude. Her had no other assets solely in his name. Healthcliff did, however, have a joint bank account with his “friend” Felicia that he created after his marriage to Whitney. Healtcliffe contributed all the money to this joint account. At the time of his death, the balance was $140,000. What is Whitney entitled to?

a. Under intestacy, NOTHING. There are no assets other than the bank accounts. But you cannot screw your spoue in death.

b. Via elective share, T-Sub: Totten Trust -- $100,000 T-SubL Joint Account -- $140,000 Total = $240,000 in T-SubsW gets 1/3 or $80,000

2. Example. Suppose H also left real property (worth $120,000) that he purchased and held with W as tenants by the entirety. What is W entitled to?

a. Under intestacy, NOTHING. That property passes by operation of law.

b. Via elective share. Same T-Subs as above. ½ of the joint property is a T-Sub. So, $300,000 elective share. 1/3 of that is $100,000. Half in

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half out. What is W entitled to? $100,000 - $60,000 = $40,000.

3. Example. In addition to the tenancy by the entirety property, suppose he also left intestate property solely in his name of $90,000.

a. Under intestacy, will get the full $90,000. Still have to look for T-Subs.

b. Via Elective Share, i. $100,000 (Totten Trust)

ii. $140,000 (Joint Account with 3P)iii. $60,000 (T by Entirety) (1/2 is a T-Sub)iv. $90,000 (Intestate Property)v. $390,000 Elective Share Estate

vi. 1/3 ($390K) = $130,000 Elective Share Amount

vii. How is W’s Elective Share Satisfied?viii. (- $60,000) (Amount passing to W as a T-

Sub)(1/2)ix. (-$90,000) (Amount passing to W under

intestacy)x. (-$20,000) W’s elective share is satisfied

c. If the surviving spouse’s elective share is satisfied, the spouse has NO right of election.

4. Example. H left a $300K probate estate after payment of debts and expenses. His will bequeathed Google stock worth $50K to W, $50K to his Son, $50,000 to his Brother, and his residuary estate worth $150K to his Friend. No T-Subs are involved. W files for an elective share. The elective share amount is $100K. W takes the Google stock. The net elective share to which she is entitled is $50K. How should it be satisfied?

a. All beneficiaries contribute pro rataThe $50K we need to come up with ($50K)Amount in remaining assets ($250)

= 20% of remaining assets must be paid to W

Son pays 1/5 of $50K = $10KBrother pays 1/5 of $50K = $10KFiona pays 1/5 of $150K = $30K

= $50K b. Beneficiary does not have to give back the asset,

just the money from somewhere. c. Elective Share Trusts Do Not Satisfy the Surviving Spouse’s

Right of Election i. Testators who DIED before September 1, 1994 could defeat the

right to an elective share through the use of an elective share trust, which gave the surviving spouse a life estate as long as he or she was given at least $50K outright. If the sum or the outright disposition $50K AND the principal of the trust

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equaled or exceeded the 1/3 elective share amount, then the surviving spouse had no right of election.

ii. For estates of decedent dying on or after September 1, 1994, a life estate will NOT satisfy the surviving spouse’s elective share entitlement.

1. The date of the testator’s death, not the date the will was executed is controlling.

iii. On the bar, you could be given a will that contains an elective share trust, with the testator dying after 9/1/94.

iv. Effect on the trust if the survivor spouse files for an elective share, you read the trust as though the surviving spouse predeceased the testator, as though there was NO life estate in the surviving spouse and accelerate to the remainderman.

v. Example. H died leaving a will that devises Purpleacre outright to W, and half the balance of his estate in trust “income to W for life, remainder to my Son is he survives W, otherwise to my Daughter.” The will devises the remaining half of H’s estate to Daughter. The net value of his estate is $450,000, which includes the value of Purpleacre (worth $50,000) and the trust funded with assets worth $200K. No T-Subs are involved.

1. W takes: Purpleacre ($50K) and $200K in trust 2. D takes: $200K (remainder of estate)3. S takes: The remainder of the trust (current value $200K)

after W’s life estate ends. 4. Is W entitled to file a notice of election?

a. If H died before 9/1/94, W would NOT have a right of election. But if H died on or after 9/1/94, W would have a right of election because she needs to get 1/3 outright.

5. If W files a notice of election, what is she entitled?$450K Net Probate Estate$0 T-Subs$450K Elective Share Estate

$150K Elective Share Amount (1/3 of estate)(-$50K) Amount passing to W under will$100K Amount W will receive from others W takes: $150K elective share comprised of Purpleacre worth $50K and $100K from other beneficiaries.D takes $200K directly (the remaining half of the estate)S takes $200 K from “killing the trust” to Wmand accelerating to him as the remainderman.

a. Each must contribute pro rata $50,000 to make her whole.

b. If surviving spouse is given 1/3 outright, don’t kill the trust!

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ELECTIVE SHARE QUICK FORMULA

Net probate estate/intestate estate + T-Subs (full value)(e.g., Totten Trust)+ T-Subs with surviving spouse (1/2 in)+ T-Subs with 3P ( consideration furnished) Elective Share Estate

1/3 of elective share estate = elective share amount

Is the Surviving Spouse Satisfied?

Elective Share Amount - Amount surviving spouse receives under will/intestacy- T-Subs with surviving spouse (1/2 out)Net Elective Share

Remember: if the surviving spouse is not fully satisfied, all other beneficiaries contribute pro rata. Also, watch out for elective share trusts.

d. Procedural Rules Governing Elective Share i. Filing

1. If the estate is admitted to probate: the surviving spouse’s notice of election must be filed within six months after Letters (either Letters Testamentary or Letters of Administration) are issued by the Surrogate Court at the start of the probate proceedings.

2. If there is no estate administration: the notice of election must be filed no more than two years after the testator’s death.

ii. Personal Right – the right of election is personal to the surviving spouse because the purpose of the elective share statute is to protect the spouse, not her heirs. Therefore, although an executor or administrator cannot elect, the guardian or conservator of an incapacitated person may elect with court approval.

iii. Waiver – the right of election can be waive, with or without consideration, in a writing, signed and acknowledged before a notary public:

1. Before or after marriage; and2. As to a particular will or testamentary substitute, or as to

all wills and T-Subs in general. a. An explicit waiver of all rights in the testator’s

estate waives the surviving spouse’s right to an elective share or intestate share, but does not waive his or her right to specific gifts under the testator’s will. There must also be an explicit waiver of such bequests.

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e. Multijurisdictional Problems i. Only a spouse of a decedent domiciled in New York at the

time of his death has a right of election. ii. Exception. The surviving spouse can claim an elective share

with regard to the testator’s real property in New York if the testator expressly states in his will that the disposition of that property is to be governed by New York law.

iii. Otherwise, the T’s will is admitted to probate and his entire estate is administered in his state of domicile, but “ancillary administration proceedings” will be required in New York to clear title of the New York property (“Situs Rule”).

1. Example. H, a domiciliary of Florida died and is survived by his W and two children. At the time of his death, he owned real property in New York. His will is admitted to probate in Florida. Can his wife claim an elective share under the EPTL with respect to the New York property? No, H is not domiciled in New York. So W has no New York right of election.

2. Example. H, a domiciliary of New York died and is survived by his W and two children. He owned real estate in Florida. His wife files a notice of election to take 1/3 of H’s estate. Does the H’s net probate estate include the value of the probate estate? Yes. Even though the New York courts cannot adjudicate the ownership of the Florida property, New York rules govern the will.

f. Exempt Property i. Exempt property are items that the surviving spouse or children

under the age of 21 if there is no surviving spouse gets first. ii. Exempt personal property set-aside: in addition to the

elective share, the surviving spouse is entitled to exempt personal property up to $92,500 in value, including:

1. One Car (up to $25K)2. Furniture, appliances, electronics, etc. (up to $20K)3. Cash allowances (up to $25K)

a. ONLY TIME CREDITORS CLAIMS DO NOT COME FIRST

4. Animals, farm machinery, etc. (up to $20K)5. Books, DVDs, CDs, etc. (up to $2.5K)

iii. IN ANY QUESTION INVOLVING A SURVIVING SPOUSE, MENTION THE EXEMPT PERSONAL SET ASIDE LAST

g. Circumstances Disqualifying Spouse From Taking Elective Share (“DYSMAL”)

i. Divorceii. Invalid Divorce/Annulment (by surviving spouse)

iii. Separation decree (NOT agreement)iv. Marriage is void v. Abandonment and Lack of Support (by surviving spouse)

XI. POWERS OF APPOINTMENT a. Definitions

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i. Donor – creator of the powerii. Donee – person who is given the power to use

iii. Power of Appointment – an authority created in (or reserved by) a donee enabling the donee to designate, within limits prescribed by the donor, the persons who shall take the donor’s property and the manner in which they take it.

1. When a person reserves a power in herself, she is both the donor and the donee of the power.

iv. Takers in Default – persons who take the property if the donee fails to correctly exercise the power.

b. Purpose of a POA – allows someone to look at facts at existence at a later date for distribution of property.

c. Classification of Powers i. General Power of Appointment – a donee can appoint to

herself, her creditors, or her estate. As if she owned it herself. ii. Special Power of Appointment – donee cannot appoint to

herself. Usually there is a limited class to whom the donee can appoint

iii. Presently Exercisable Power of Appointment – donee can exercise it right now, in her lifetime.

iv. Testamentary Power of Appointment – donee can appoint only by will.

d. Exam Tip – in any power of appointment question, first classify the power.

i. Example. T’s will creates a trust, “Income to my daughter for life and on her death the principal shall be distributed to such persons as she appoints by will, including her estate. If daughter does not exercise this power, the principal shall be distributed to her children.”

1. T is the donor; Daughter is the donee of a general testamentary POA. Daughter’s children are takes in default.

2. Daughter IS NOT limited in the class of beneficiaries to whom she can distribute the trust property. By her will, she can appoint herself, her estate, or her creditors.

ii. Example. Suppose T’s will provided “. . . and on Daughter’s death, the trustee shall distribute the principal to such of Daughter’s decedents as Daughter appoints by her will.”

1. Daughter is the donee of a special testamentary POA. 2. Daughter IS LIMITED in the class of beneficiaries to

whom she can distribute her trust property. By her will, she can only appoint to her descendants, and cannot appoint to herself, her estate or her creditors.

iii. Example. Daughter dies some years later, leaving a will that devised “all the rest, residue, and remainder of my estate to my children, Scott and Rachel.” Daughter’s will made no reference to her testamentary POA. Did daughter exercise the testamentary power of appointment by her will, even though the will makes no mention of the POA?

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1. Yes. A general will provision, even a residuary clause, exercises all POAs held by the donee unless the donor called for its specific reference in the donee’s will. For example, if T’s will gave the remainder to “such of her descendants as Daughter appoints by a will that specifically refers to this power.”

iv. Example. Suppose T’s will provides: “The trustee shall pay the income to my daughter for life. However, during her lifetime, daughter can appoint the trust property to anyone, including herself, by a written instrument delivered to the trustee.”

1. This is a general presently exercisable POA. If she does not exercise it on her death, the trustee will either distribute the principal of the trust property to either her will via the residuary clause or if there is no will via intestacy.

v. Example. Suppose T’s will gives D a presently exercisable POA. D dies some years later. Leaving a will that devises “all the rest of my estate, including any property over which I might have POA, to my children.” Did D exercise her POA by her will?

1. Yes, unless T’s will expressly excluded exercising the POA by will.

e. Powers of Appointment & Elective Share i. Example. D is married to H. D dies. H files for an elective

share to take 1/3 of her probate estate. Which of the following would be a T-Sub?

1. General presently exercisable POA (During her lifetime, D can appoint the trust property to anyone, including herself, by a written instrument delivered to the trustee.)? This is a T-Sub. She can get to the trust property during her lifetime. You look to see who and when the property is appointed to and you follow your regular T-Sub rules.

2. General testamentary POA (On D’s death, the principal shall be distributed to such persons as she appoints by will, including her estate.) Not a T-Sub because she cannot get to it during her lifetime and the property was not hers to begin with.

3. Special POA (On D’s death, the trustee shall distribute the principal to such of D’s descendants as D appoints by her will.”). Not a T-Sub. D cannot get to it during her lifetime or ever.

f. The Donee’s Creditor’s Rights to the Donor’s Property i. Example. D has a general presently exercisable POA. Can her

creditors reach the appointed assets even if she does not exercise the power? Yes. She can reach them, so can creditors.

ii. Example. D has a special presently exercisable POA. She died leaving a will that exercised that power. Creditors cannot get to the assets because she could not get them herself, it was limited to a special class.

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iii. Example. D can a general testamentary POA. Can creditors of D’s estate reach assets that are subject to the POA? No, unless (1) she is both the donor and donee; or (2) she exercises it in favor of her assets.

XII. POWERS OF APPOINTMENT AND RAP a. Recap

i. RAP1. Deals with vesting only2. For an interest to be valid under RAP, it must vest within

the lives in being at the time of the grant (LIB), plus 21 years

3. Look at the facts to ensure that there is no way that vesting could occur outside the perpetuities period. If there is any chance, the interest is void.

ii. Suspension Rule 1. Deals with the possible suspension of the ability to

transfer a fee simple2. For an interest to be valid under the rule, there must be

identified persons who together convey a fee simple absolute within LIB plus 21 years.

3. Look at the facts to ensure that there are persons identified and alive who could join to theoretically convey a fee simple absolute. If not, the interest is void.

iii. Statutory Spendthrift Rule 1. Income beneficiaries cannot assign or convey their

income interest iv. Remember, the NY Perpetuities Reform Statute saves gifts from

RAP and Suspension Rule violations by reducing age contingencies to 21 years.

b. Step-By-Step Analysis i. First, identify the type of power.

ii. Second, is the power itself valid?iii. **Third, are the interests created by the power valid?

c. Powers to Appoint: Remainder Interestsi. Example. T dies, leaving a will that devised property in trust:

“Income to my daughter D for life and on her death, the principal shall be distributed outright or in further trust to such of D’s issue as she appoints by will, and in default of such appointment, to D’s issue.” D dies 2 years later, leaving a will that distributes the principal outright “to such of my children as live to attain the age of 30.”

1. First, identify the type of POA. Here, we have a special (“to D’s issue”) testamentary (“by will”) POA.

2. Second, is the power valid? To be valid, a special or general POA must be exercised with a LIB plus 21 years. Here, the power is valid because D was an LIB when the power was created.

3. Third, are the interests created by the power valid? To be valid, interests created by a special or general POA

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are measured from the date of the instrument creating the power, NOT the date of the powers exercised.

a. Under NY law, we treat the donee of the power as the donor’s agent. The donee is merely “filling in the blanks” in the donor’s will or trust.

b. Here, we “fill in the blanks” and read T’s will as though it read, “to D for life, then to such of her children as live to attain the age 30.”

c. The remainder interest violates the RAP and Suspension Rule. However, we are aided by the second look doctrine or the wait and see doctrine. Under that rule, to determine the validity of interests created by the exercise of either a general testamentary POA or a special POA, we “wait and see” what happens: and look at the time the POA is exercised. We “fill in the blanks” looking at facts in existence when the donee exercises the power.

4. Example. At D’s death, all of her children are ages 9 or older. Is the remainder appointment to Dana’s children valid? If we look at the creation, it is not valid. We don’t know how old D’s children are when the power was created. But we get to look at facts at existence at D’s death by using the second look doctrine. Because the children are 9+, their interests will vest within LIB plus 21 years.

5. Example. Suppose that at her death, Dana has four children ages 9 or older but one child who is younger than 9. Is the remainder appointment to D’s children valid? No. It is void initially. Everyone might die tomorrow and Z’s interest wont vest within LIB plus 21 years. But we apply the New York Reform statute and reduce the age contingency with respect to Z.

d. Powers to Appoint: Income Interests i. Example. Assume that T died 20 years ago, leaving a will that

devised property in trust: “Income to my daughter Dana for life.” That will also provided that Dana may appoint the trust principal to anyone during her life or by will. Later, Dana dies not having exercised her POA, but her will provides as follows: “Income shall be paid to my son Zack for life. Upon his death, the trustee shall continue to pay income to Zack’s children until the youngest reaches age 35, at which time the principal shall be paid to his children equally.”

1. First, identify the type of POA. Here, the income interest is a presently exercisable POA.

2. Second, is the power valid? Here, a. To be valid, a general presently exercisable

POA must be certain to be acquired with an LIB plus 21 years.

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b. Here, the power itself is clearly acquired and thus valid because Dana was a LIB when the power was created.

3. **Third, are the interests created by the power valid?

a. To be valid, interests created by the exercise of a POA that is both general and presently exercisable are measured from the date of the instrument exercising the power, not from creation.

b. When the POA is both a general and presently exercisable POA, we do not “fill in the blanks” in the donor’s will or trust.

c. Here, we start measuring LIB plus 21 years when Dana dies, as this is when the POA is exercised. We read the POA exactly as it reads in Dana’s will.

d. The will creates two income interests and one remainder interest.

e. First income interest: “Income shall be paid to my son Zack for life.” Does not violate RAP/Suspension because Zack is a LIB at the time of Dana’s death.

f. Second Income Interest: “Upon his death, the trustee shall continue to pay the income to Zack’s children until the youngest reaches age 35.” Does not violate RAP. All interests must vest within LIB plus 21 years. But here, the interests of Zack’s children are valid. The interests vest upon their birth and (since we use Zack as the measuring life) all the children will be alive at the time of Zack’s death.

g. Rule of Thumb: when you are dealing with RAP and you have:

i. An income interest built on a prior income interest, the second income interest is usually valid.

ii. As income interest built on a prior income interest conditioned upon reaching a certain age is usually void, but saved because the NY Reform Statute will force vesting within LIB plus 21 years

h. This does violate the suspension rule. This appointment created an income interest in unborn beneficiaries. Zack’s children, who by definition cannot be counted as “lives in being.” Therefore, Zack’s children’s income interest can continue for longer than LIB plus 21 years.

i. Under the NY Statutory Spendthrift Rule, which prevents an income beneficiary from assigning his income interest, an unborn child could not join

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with others in a theoretical conveyance of his interest within LIB plus 21 years.

j. Rule of Thumb: When you are dealing with the suspension rule and you have an income interest built on a prior income interest, the second income interest is usually invalid.

k. Can the income interest be saved now? Wouldn’t all of Zack’s children be living if we used Zack as the measuring life of Dana’s appointment. Yes, he cannot have anymore children on his death. Even though the interest provides age 35, the NY Reform Statute saves the interest.

l. Would the second look doctrine save the second income interest? We don’t apply the second look doctrine to general presently exercisable POAs.

m. Remainder Interest: “At which time the principal shall be paid to Zack’s children.” Violates RAP and Suspension but the NY reform statute saves all the interests including the remainder interest by reducing the age contingency.

n. What if the income interest cannot be saved? Throw out the part that is bad, and accelerate to the remainder.

RAP AND SUSPENSION RULE CHECKLIST (*4 rule / 6 rule / 10 rule)

(1) *Identify the interest (2) Determine whether you are “measuring” from date of creation or date

of exercise(3) Determine whether the “second look doctrine” applies(4) *Give the RAP rule(5) Find a LIB and run with it(6) *Most likely, apply the NY Reform Statute (7) *Give the Suspension Rule (all have to join together and convey a

fee simple)(8) Look to see if there is an income interest in an unborn

beneficiary, and state that the income interest is void; OR(9) Go further by stating the Statutory Spendthrift Rule, and state that

the income interest is void (Might be saved by NY Reform Statute)(10) Don’t forget to deal with the remainder interests

XIII. WILL CONTESTS a. Mistake

i. Absent suspicious circumstances, it is conclusively presumed that the testator read the will and intended its consequences. Thus, the plain meaning of the will won’t be overturned by extrinsic evidence.

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1. Example. C instructs M to draft her will and give her friend N 30 bottles of Dom Perignon to drown her sorrows on C’s death. M made a mistake and wrote the figure as “20 bottles of Dom Perignon” which C did not notice when she signed the will. At her death, C owned 30 bottles of Dom Perignon. What does N take under the will? N gets the 20 bottles because the plain meaning of the will wont be overturned by extrinsic evidence.

b. Ambiguity i. Latent Ambiguity

1. Latent ambiguity is a mis-description. The error is not evident by looking at the will.

2. Example. T’s will provides “I give $10K to my nephew John Paul Johns.” He has a nephew named James Paul Jones and Harold Paul Jones. Who takes the $10K?

3. Extrinsic evidence is admissible to clarify or refine the meaning of T’s words.

a. Facts and circumstances evidence is admissible (e.g., evidence about the testator, his family, the claimants under the will, etc.)

b. Evidence of the testator’s declarations of intent to third parties is admissible (e.g., T told a friend he had give $10K to James)

c. Evidence of the T’s statements to the attorney who prepared the will is admissible.

4. If the extrinsic evidence does not cure the ambiguity, then the gift fails.

ii. Patent Ambiguity 1. A patent ambiguity is an obvious error on the face of

the will2. Example. P’s will provide “I give the sum of twenty five

dollars ($25,000) to my good friend C.” 3. Extrinsic evidence is admissible

a. Facts an circumstances evidence is admissible b. Evidence of the T’s declarations of intent to third

parties IS NOT admissible. Because with patent ambiguities, we will not allow 3P evidence that contradicts what a will said.

c. Evidence of T’s statements to attorney is admissible.

c. Conditional Wills i. A will that expressly provides that it will be operative only if

some condition is met. ii. Example. D duly executed a will, which provides “I am going

on a fishing trip in the Bermuda triangle. If anything happens to me on the trip, I leave all of my property to my good friends C and J in equal shares.” He did not die and returned.

iii. On the bar, you have to argue both ways. 1. Argument 1 – the will is a conditional will. Probate

would be denied because the condition did not occur.

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2. Argument 2 – D’s reference to the trip merely reflects his motive or inducement for making a will.

d. Contract to Make a Will i. Joint will – will of two people in one document

ii. The issue is whether a joint will was executed pursuant to a contract that the survivor would not revoke the joint will after the death of the other spouse.

iii. A contract to make a will or not revoke a will can only be established by an express statement of intent

iv. The court will not find that a contract of non-revocation was intended merely because the joint will uses possessive pronouns (we, us, our) in making dispositions of the combined estates.

v. If a Joint Will is a contractual will and the survivor breaches the contract by executing a later will with inconsistent provisions:

1. Step 1, probate the new will, even though the first will is written as a contract (the law relating to will controls to this extent)

2. Step 2, impose a constructive trust in favor of the original intended beneficiaries

3. WHY? You may have other assets in will #2 going to beneficiaries

4. A contractual joint will can be revoked by an agreement between the parties while they are both alive, but the deceased spouse’s estate cannot revoke a contractual will on behalf of a deceased spouse

e. Testamentary Capacity i. A testator must have sufficient capacity to

1. Understand the nature of the act (he must understand he was writing a will);

2. Know the nature and approximate value of his property;3. Know the “natural object of his bounty” (he must know

his family members and loved ones); and 4. Understand the dispositions/gifts he was making.

ii. Case Law Application 1. Facts. Six months before she executed her will, the T

was adjudicated incompetent and a guardian was appointed.

2. Court’s Ruling: the surrogate court entered a directed verdict that the T lacked capacity to make a will on that basis.

3. The ruling was NOT proper because capacity to make a will requires less capacity than required for any other legal instrument. Thus, the court could have found that the T executed the will during a lucid interval.

iii. Insane Delusion – the T is generally of sound mind, but has a persistent belief in supposed facts that are against all evidence, probability, and control, which affect the T’s testamentary act.

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iv. Undue Influence – the T has testamentary capacity but is subject to, and controlled by a dominant influence of power.

1. The will contestant has the burden of proving:a. The existence and exertion of an influence;b. The effect of such influence was to overpower the

mind and the will of the T; ANDc. The product is a will or gift in a will which would

not have happened but for that influence.2. Influence is not undue unless the free agency of the

testator was destroyed such that the will produced is essentially a will, not of the T, but of the one exerting the influence.

3. E vidence of undue influence. While evidence of undue influence is usually circumstantial, these situations alone are not enough to constitute undue influence:

a. The opportunity to exert influence;b. Susceptibility to influence because of

age/illness;c. Unequal dispositions.

4. Inference of undue influence. A will contestant can satisfy his burden of proof by an inference of undue influence if:

a. A will make a gift to one in a confidential relationship; AND

b. That person was active in preparing the will. 5. Bequests to Drafting Attorney – even if no objection is

filed, the Surrogate Court’s automatically inquires into whether a bequest to a drafting attorney was voluntarily made: (Putnam Scrutiny).

6. Appointments of drafting attorneya. Example. Nicole executes a will that names her

lawyer Venice as executor of her estate. b. Under New York,

i. A drafting attorney who is named an executor of the testator’s estate must give written disclosure to the testator that:

1. Any person can be named an executor; AND

2. The executor receives a statutory commission; AND

3. The attorney will also be entitled to legal fees for representing the estate.

ii. The testator must sign the written disclosure in the presence of two witnesses

iii. If the drafting attorney fails to comply with the statute, the attorney would receive only half of the statutory commissions.

v. No Contest (“In Terrorem”) Clauses 1. A no contest clause is a clause in a will that says if

anyone objects to my will, they will get nothing.

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2. In most states, no contest clauses are given full effect unless the court finds that the contest was brought in good faith and with probable cause.

3. In New York, the clause is given full effect even if there was probable cause to challenge the will. The rationale is that a T should be permitted to protect his testamentary plan and his reputation against post-death attack.

4. Exceptions to the New York Rule. No contest clauses are not enforced if the will contest is:

a. Claiming forgery or that the will was revoked by a later will if the court finds there was probable cause for the contest;

i. The exception will not apply if the will contest is on the ground that the testator’s will was revoked by the physical act.

b. Filed on behalf of an infant/incompetent c. A construction proceeding to construe the willd. Objection to the jurisdiction of the court.

5. ***Safe Harbor Provisions – a person who is considering contesting a will that contains a no contest clause may examine:

a. The person who prepared the will;b. The attesting witnesses;c. The will proponents; and d. The nominated executors.

XIV. POWERS OF ATTORNEY, HEALTH CARE PROXIES & LIVING WILLS a. Powers of Attorney – a power of attorney is a written authorization

for an agent (known as attorney in fact) to act on behalf of the grantor of the power. They may be general or specific, with as many variations as the drafter of the power wishes to contrive under the circumstances.

i. Non-Durable Powers of Attorney – a power of attorney that is revoked operation of law by either the grantor’s death or incapacity. The power of attorney remains valid until notice of the death or disability is received by the attorney in fact.

ii. Durable Powers of Attorney – a power of attorney that extends beyond the grantor’s capacity unless it has specific language that it is terminated by the grantor’s incapacity.

b. Health Care Proxies – a health care proxy is a type of durable power of attorney that appoints an agent to make health care decisions. It does not become effective until the grantor becomes incapacitated and it remains effective despite the incapacity. A health care proxy must be: (1) in writing; (2) signed by the grantor or another at his direction; and (3) witnessed by at least two adults. The health care proxy must state that the grantor appeared to execute the proxy free from duress.

c. Living Wills – a living will generally states an individual’s desires, should be become terminally ill, regarding whether to administer,

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withhold or withdraw: (1) life sustaining procedures; (2) artificial nutrition or hydration; and (3) treatment to alleviate pain. The NY Court of Appeals has held that a patient’s right to decline treatment is guaranteed by the common law.

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