University of South Dakota School of Law
Dukenminier & Johanson, 6th Ed.
Chapter 1. Introduction to Estate Planning
Section A. The Power to Transmit Property at Death, Justification & Limitation
1. Jefferson’s Works -
2. Blackstone, Commentaries -
3. Hodel v. Irving - (1987) Indian land was being divided under an allotment policy and fractional ownership developed. People were owning 1/100th of a parcel of land and rental income bookkeeping was expensive. So congress said anyone who’d inherit less than 2% or income and less than $100 a year lost his inheritance and it escheated to the tribe. Irving sued because it was taking his property right to give it to his descendants. HELD: While congress could theoretically abolish inheritance, there is policy in favor of allowing inheritance, and a general right to transmit property or not with what is your own. Here rights to property disposal at death would be totally eliminated even if you could make a complex trust do the same thing. 4. Notes:
a. Investment backed expectation affected? Did the Indians expect anything? b. Benefits & burdens analasys? Is it worthwhile to take these rights? c. Gingiss - Trusts need not be complicated for only a few pieces of property. d. Court here holds the right to bequeath as a separate and distinct right, taxable. 5. Halbach - Inheritance is the least objectionable means to deal with property at death. Tax levels are going up to over 3 million by 2010, infinite by 2011…back to 1 million by 2012 (because congress didn’t have the votes for permanence) Marital Deduction - (Not on the exam) you can leave your spouse unlimited amounts tax free, until that spouse dies. Folks like to create 2 trusts, one for the maximum tax free amount, and one for the Marital Deduction that will only be taxed later.
5. Bentham -
6. Oliver -
7. Ascher - We no longer expect inheritances during our productive lives. 8. Note: Inheritance in the Soviet Union
9. Blum & Kalven, Progressive Taxation -
10. Langbien -
11. Shapria v. Union National Bank - Will said son only got money if they married good jewish girls, otherwise the money goes to Israel. Sons argued that this was contrary to p. policy and unconstitutional under the 14th amendment (Shelly v. Kramer racial covenant, states cannot limit marital freedom), so neither should private action. Son lost. Held: The provision is constitutional, does not overly limit property, and since the decedent’s intent was to benefit judaism, not force his son to act in a certain way, and thus not contrary to p.p. (This is a lot like those federal funding blackmail things.) There is no constitutional right to receive property.
Section B. Transfer of the Decedent’s Estate
1. Probate & Non Probate Property
Probate - Property that passes by will or intestate succession, Performs 3 functions a. Provides evidence of transfer of title
b. Protects creditors by requiring payment of debt c. Distributes the decedent’s property to those intended after debts paid.
Non Probate - Other stuff, like Joint tenancy, life insurance, contracts payable at death, interests in trust…
1. Administration of Probate Estates
a. History & Terms - When probate is required, a personal representative is appointed to inventory & collect assets, manage them during administration, see to debts & creditors of the estate, and distribute the remaining assets to those entitled. If a will is written, the representative may be chosen. Representative must give bond unless the will waives it. Devise - leaving real property to devisees...