Trusts & Estates Essentials Power Point Slides Class #2: 8-14-19 National Creamsicle Day

1. Trusts & Estates EssentialsPower Point Slides Class #2: 8-14-19National Creamsicle Day

2. Music to Accompany Shapira:Barbra Streisand, The Way We Were (1974) Warning: Miami-Dade Public Schools Re-Open on Monday; Morning Traffic Will Be MUCH Worse

3. UNIT ONE: BASELINES CHAPTER 1: OVERVIEW Continued

4. Shapira v. Union National Bank • Upholds Grant Requiring Testator’s Sons to Marry Jewish Girls • Today: • Last Names O-Z: Questions after Shapira • Last Names A-C: Problem 1:1 (W4)

5. O-Z: Shapira v. Union National Bank (Note Q1) • The Maddox opinion cited in Shapira ruled that conditions on marriage are unacceptable where there is a sufficiently “small number of eligible” partners. Consider whether this is a sensible rule. If you were living in a state with that test, (a) How small a number of eligible partners would make the condition unacceptable? (b) What evidence could you use to determine the number of eligible partners?

6. SHAPIRA: Note/Q2  Q2: We’ll Explore Shapira Reasoning by Looking at Five Key Distinctions Drawn by the Opinion

7. O-Z:  SHAPIRA: DISTINCTION #1  Gift conditioned upon religious faith of beneficiary  v. Gift conditioned upon marriage to person of particular faith  Why Relevant?

8. SHAPIRA: DISTINCTION #1  Gift conditioned upon religious faith of beneficiary  v. Gift conditioned upon marriage to person of particular faith  • Coercing Belief  v. Conduct  • Administrability

9. SHAPIRA: DISTINCTION #1  Gift conditioned upon religious faith of beneficiary  v. Gift conditioned upon marriage to person of particular faith  • Coercing Belief  v. Conduct  • Note View of Marriage in 1974 • Can Use Case to Support Conditions Requiring Conduct Affecting Religious Concerns but not Coercing Belief • Administrability

10. SHAPIRA: DISTINCTION #1  Gift conditioned upon religious faith of beneficiary  v. Gift conditioned upon marriage to person of particular faith  • Administrability: Compare: • To Pigpen, so long as the kitchens and bathrooms are always kept very clean. • To Schroeder, so long as he never plays any workby Beethoven on the piano.

11. SHAPIRA: DISTINCTION #1  Gift conditioned upon religious faith of beneficiary  v. Gift conditioned upon marriage to person of particular faith  • Administrability: Compare: •  To Lucy so long as she remains a member of the Society of Friends. •  To Linus, so long as he remains a good Catholic. QUESTIONS?

12. O-Z: SHAPIRA: DISTINCTION #2  Gift conditioned upon divorce  v. Gift conditioned upon marriage to person of particular faith (maybe ) Why Relevant?

13. SHAPIRA: DISTINCTION #2  Gift conditioned upon divorce  v. Gift conditioned upon marriage to person of particular faith (maybe ) • Court: Latter not sufficient to encourage fake marriage & divorce. • Grantee can’t avoid condition by saying “I will act in bad faith” (this concern arises regarding many legal issues). • Note case looks different if son already married to Muslim woman (or maybe engaged?)

14. O-Z:  SHAPIRA: DISTINCTION #3  Conditional gift with “gift over” to third party v. Conditional gift without “gift over” Comprehensive Estate Plan (likely ) (Note: Gift Over Unrelated to Challenged Condition Probably Won’t Support Allowing Condition) v. “In Terrorem” Condition (maybe )

15. O-Z:  SHAPIRA: DISTINCTION #4  Forcing a marriage as a condition of a completed gift  v. Withholding gift until marriage made  Why Relevant?

16.  SHAPIRA: DISTINCTION #4  Forcing a marriage as a condition of a completed gift  v. Withholding gift until marriage made  • Remedy: Injunction v. Forfeiting Gift • Like case involving divorce settlement requirement that child be raised in particular faith • Won’t impose contempt/criminal sanctions for not following religion

17. O-Z: SHAPIRA: DISTINCTION #5  Quaker Men (Maddox)  v.  Jewish Women (Shapira) Why Relevant?

18. SHAPIRA: DISTINCTION #5  Quaker Men (Maddox)  v. Jewish Women (Shapira) • Quakers = Too Few Available Partners  • E.g., you must marry one of the Bronte Sisters  Questions on Shapira?

19. 1.2.1 State Law Last Names A-C: Problem 1:1 (W4) Max has become preoccupied with the high rate of intermarriage among young Jews. He decides that he wants to encourage his own children, Michael and Leila, to marry within the faith. Yields 3 Non-Cumulative Qs (A or B or C)

20. 1.2.1 State Law Last Names A-C: Problem 1.1 (W4) Max has become preoccupied with the high rate of intermarriage among young Jews. He decides that he wants to encourage his own children, Michael and Leila, to marry within the faith. • Michael marries a Jewish woman, but Leila marries a non-Jewish man. As a result, Max executes a will that leaves his entire estate to Michael. Could a court conclude that Max's will violates public policy and decline to enforce the condition on that basis? Why or why not?

21. 1.2.1 State Law Last Names A-C: Problem 1.1 (W4) Max has become preoccupied with the high rate of intermarriage among young Jews. He decides that he wants to encourage his own children, Michael and Leila, to marry within the faith. • Michael marries a Jewish woman, but Leila marries a non-Jewish man. As a result, Max executes a will that leaves his entire estate to Michael. Note: on face, just choosing one child over another, which is OK. Any “public policy” claim would require extrinsic evidence that will be contestable

22. 1.2.1 State Law Last Names A-C: Problem 1.1 (W4) Max has become preoccupied with the high rate of intermarriage among young Jews. He decides that he wants to encourage his own children, Michael and Leila, to marry within the faith. B. Neither Michael nor Leila is married when Max makes his will. Knowing that Erla [his wife] will disinherit any of their children who do not marry within the faith, Max's will leaves all of his property to Erla. Could a court conclude that Max's will violates public policy and decline to enforce the condition on that basis? Why or why not?

23. 1.2.1 State Law Last Names A-C: Problem 1.1 (W4) Max has become preoccupied with the high rate of intermarriage among young Jews. He decides that he wants to encourage his own children, Michael and Leila, to marry within the faith. C. Neither Michael nor Leila is married when Max makes his will. Max inserts a clause into the document that says: “I leave my property to my children, Michael and Leila, in equal shares. However, to inherit their share, my children must marry a Jew who lives in the city of Jerusalem within one year of my death.” When Max dies, Michael is 19 and Leila is 17. On what bases might a court conclude that the condition violates public policy?

24. 1.2.1 State Law Last Names A-C: Problem 1.1 (W4) C. “to inherit their share, my children must marry a Jew who lives in the city of Jerusalem within one year of my death.” When Max dies, Michael is 19 and Leila is 17. On what bases might a court conclude that the condition violates public policy? • Is pool of pot’l spouses in Jerusalem enough? • Matter that kids are in, e.g., Florida? (cf. Shapira) • Is one year too quick? • Is forcing marriage by 18/20 years old against public policy?

25. 1.2.1 State LawLast Names D-N: Problem 1:2 (W9) • Kafka: Destroy all unpublished manuscripts. • Sendak: Destroy “all of my personal letters, journals and diaries.” • A. Relevant Differences between Kafka & Sendak? • D. Relevant Differences between these and provision in Everman?

26. 1.2.1 State LawLast Names D-N: Problem 1:2 (W9) • E. What result if Sendak had directed his executor to re-purpose his country residence into a charitable nonprofit museum, with specific instructions to leave all furnishings and decorations in place permanently and never to alter the physical structure?

27. UNIT ONE: BASELINES CHAPTER 2: INTESTACY Introduction (2.1-2.2)

28. Section 2.1: Introduction to Intestacy UPC § 2-101(a): Any part of a decedent's estate not effectively disposed of by will passes by intestate succession to the decedent's heirs as prescribed in this Code, except as modified by the decedent's will. [Means “negative” will] Fl. Stat. 732.101. Intestate estate. (1) Any part of the estate of a decedent not effectively disposed of by will passes to the decedent's heirs as prescribed in the following sections of this code. (2) The decedent's death is the event that vests the heirs' right to intestate property.

29. Section 2.1: Introduction to Intestacy • Covers situations where there is no will or where the will does not dispose of all of the decedent’s property (“partial intestacy”) • Every State has detailed statutes governing Intestacy • Structure similar but wide variations on details • Statutes all provide sequence of “IF”s • Unsurprisingly, strong bias to immediate family • Most people would prefer • State interest in resources going to care for dependents

30. Section 2.1: Introduction to Intestacy • Most Americans die intestate. Evidence suggests this is mostly due to procrastination (often fueled, at least in part, by discomfort of considering own death) rather than because of knowing acceptance of intestacy distribution regime. • What are some of the disadvantages of dying intestate?

31. Section 2.1: Introduction to Intestacy • Disadvantages of dying intestate include: • Distribution may not match decedent’s individual preferences • Often property goes to minors, necessitating appointment of guardians chosen by court, not decedent • Often interests in land are fragmented, complicating management • Personal representative chosen by court per statutory preferences, not by decedent

32. Section 2.2: Who Gets & How Much? Generally on Disposition of Property • Takers are generally spouses and blood relatives • EXCEPT: Some states as last resort, to step-children or other relatives of deceased spouse • EXCEPT: A few states recognize certain spouse-equivalents • See Hawaii (Reciprocal Beneficiaries) • See Vermont (Parties to Civil Union) • Maybe Historic Anomaly (Statutes Pre-Same-Sex Marriage) • Escheat: If no Qualified Taker Under Statute, Goes to State • We’ll look at spousal share first, then other takers

33. Section 2.2: Who Gets & How Much? (Spousal Share) Generally on Disposition of Property & Spouses • Spousal Share Seems Small in Some States BUT • Spouse often co-owner of key assets, so gets all of those • In Community Property States, everything earned during marriage is essentially co-owned and automatically goes to survivor • Often separate statutory provisions protecting spouse re household goods & car (especially if minor children) • NOTE that UPC $150,000-300,000 start point for limited spousal inheritance will eat up many estates completely. • Loss of Spousal Status: Death, Annulment, Divorce (pending proceedings generally don’t terminate rights).

34. Section 2.2: Who Gets & How Much? (Spousal Share)UPC 2-102 v. Fl. Stat. 732.102 All of the decedent's surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent: UPC: Spouse = 100% FL: Spouse = 100%

35. Section 2.2: Who Gets & How Much? (Spousal Share)UPC 2-102 v. Fl. Stat. 732.102 • No descendant of the decedent survives the decedent AND • No parent of the decedent survives UPC: Spouse = 100% FL: Spouse = 100% • One or both parents of the decedent survive(s) UPC: Spouse = $300,000 plus 3/4 of any balance FL: Spouse = 100%

36. Section 2.2: Who Gets & How Much? (Spousal Share)UPC 2-102 v. Fl. Stat. 732.102 Cinderella Stories • If all of the decedent's surviving descendants are also descen-dants of the surviving spouse & the surviving spouse has one or more surviving descendants who are not descendants of the decedent: UPC: Spouse = $225,000 plus 1/2 of any balance FL: Spouse = 50% • If one or more of the decedent's surviving descendants are not descendants of the surviving spouse: UPC: Spouse = $150,000 plus 1/2 of any balance FL: Spouse = 50%

37. Section 2.2: Who Gets & How Much? (Spousal Share)Under Both UPC 2-102 v. Fl. Stat. 732.102: • D dies, survived by a spouse, S, and no children or parents. • D dies, survived by spouse, S, one parent, and one child from the relationship with S. • D dies, survived by spouse, S, both parents, and thirteen children from the relationship with S. • D dies, survived by a spouse, S, both parents, twenty children from the relationship with S, and twenty-five grandchildren from those twenty children. • In allof these scenarios, spouse gets entire intestate estate. (In 2, 3, and 4, all of D’s descendants are also S’s descendants).

38. Section 2.2: Problem 2:1 • P & W = male couple married in Canada before same-sex marriage was legal in US • No descendants but a beloved CAT • Relationship strained so living separately, though P continues to support W financially • P’s only blood relative is estranged sister. A. What would happen to Petr's estate if he died without a will, survived by Wendell, his cat, and his sister? B. What, if any, relevance is the fact of Petr's separation from Wendell?

39. Section 2.2: Problem 2.1 • P & W = male couple married in Canada before same-sex marriage was legal in US • No descendants but a beloved CAT • Relationship strained so living separately, though P continues to support W financially • P’s only blood relative is estranged sister. C. What would happen if Petr created a trust leaving his entire estate in trust for the benefit of his cat? D. What would happen to Petr's estate if he divorced Wendell and then died, survived by Wendell, his cat, and his sister?

40. Section 2.2: Who Gets & How Much? (Other Takers)UPC 2-103 v. Fl. Stat. 732.103 FL & UPC mostly the same except for form of representation (we’ll do next time): • Descendants. • Parents. • Descendants of Parents. • Split Equally between Paternal & Maternal Kin • Grandparents • Descendants of Grandparents (NOTE: Some states go further) • All to one side of family if none qualified on other side

41. Section 2.2: Who Gets & How Much? (Other Takers)UPC 2-103 v. Fl. Stat. 732.103 FL & UPC both do relatives of deceased spouses next. Differences between?

42. Section 2.2: Who Gets & How Much? (Other Takers)UPC 2-103 v. Fl. Stat. 732.103 FL & UPC both do relatives of deceased spouses next. • Which deceased spouse? • UPC: All (each deceased spouse’s family gets an equal share) • FL: “Last” deceased spouse • Which relatives of deceased spouse? • UPC: Descendants only • FL: Anyone who could take under the Intestacy statute

43. UNIT ONE: BASELINES Return to CHAPTER 1: OVERVIEW 1.4: Preliminary Topics on Death & Dying

44. Section 1.4: Preliminary Topics on Death & Dying1.4.1 Determination of Death • A matter of state law. Usually statutes provide: • Physiological definition(s) of death • A mechanism for declaring that a missing person is legally dead • Sample New Jersey statutes follow; specific language won’t be tested.

45. Section 1.4: Preliminary Topics on Death & Dying1.4.1 Determination of Death • Physiological definition(s) of death: • An individual who has sustained irreversible cessation of all circulatory and respiratory functions, as determined in accordance with currently accepted medical standards, shall be declared dead. N.J. Stat. 26:6A-2 • NOTE that this definition won’t cover a person whose circulatory and respiratory functions continue because of machines, thus….

46. Section 1.4: Preliminary Topics on Death & Dying1.4.1 Determination of Death • Physiological definition(s) of death: • An individual who has sustained irreversible cessation of all circulatory and respiratory functions, as determined in accordance with currently accepted medical standards, shall be declared dead. N.J. Stat. 26:6A-2 • NOTE that this won’t cover a person whose circulatory and respiratory functions continue because of machines, thus…. • [A]n individual whose circulatory and respiratory functions can be maintained solely by artificial means, and who has sustained irreversible cessation of all functions of the entire brain, including the brain stem, shall be declared dead [by a physician]. N.J. Stat. 26:6A-3

47. Section 1.4: Preliminary Topics on Death & Dying1.4.1 Determination of Death • A mechanism for declaring that a missing person is legally dead • A resident or nonresident of this State who absents himself from the place of his last known residence for a continuous period of 5 years, during which he has not been heard from, and whose absence is not satisfactorily explained after diligent search or inquiry, is presumed to be dead. His death is presumed to have occurred at the end of the period unless there is sufficient evidence for determining that death occurred earlier. N.J. Stat. 3B:27-1(a) • Under a statute like this, Natalie Holloway (whose story is described in the text) would be considered dead as of five years from the date of disappearance.

48. Section 1.4: Preliminary Topics on Death & Dying1.4.2 Incapacity & Planning for Death • Important to be aware of importance of this kind of planning, but you don’t need to know in detail • Vocabulary you Need to Know • Conservatorship • Durable Power of Attorney • Inter Vivos Trust [= becomes operative while settlor alive] • I’ll Take Qs on Section or Vocabulary in Class #3

49. Section 1.4: Preliminary Topics on Death & Dying 1.4.3 Digital Assets (NOTIO) • Complex & changing area. Right to allow access is not clearly established. (RUFADAA is a Uniform Act, not an adopted statute although adopted in some form in several states since casebook published)) • RUFADAA §4 allows online users to designate a recipient for some or all digital assets (a) Can use an online tool (which overrides a contrary direction by the user in a will, trust,…or other record.) (b) Can use a will, trust…or other record (Casebook says includes e-mail; compare with will formalities) (c) Both (a) or (b) override a contrary provision buried in a terms-of-service agreement .