REQUIREMENTS FOR A WITNESSED WILL (1 of 3)
Present intent, testamentary capacity (know property and natural objects of bounty)
REQUIREMENTS FOR A WITNESSED WILL (2 of 3)
- (1) AGE: T must be 18 years old.
- (2) SIGNED BT TESTATOR: Or by someone at T's direction and in his conscious presence (a proxy signature).
- (3) PRESENCE REQUIREMENT: T must
sign will (or acknowledge an earlier signature) in the presence of each witness (in their scope of vision), present at the same time as the T signs (or acknowledges the earlier signature).
REQUIREMENTS FOR A WITNESSED WILL (3 of 3)
- (4) NUMBER OF WITNESSES: At least TWO attesting witnesses are required under the statute.
o If one of the two witnesses is an interested party, the will is still valid, but the interested party gets nothing under the will.
o A bequest to a subscribing witness, to a person claiming under a subscribing witness, or to a spouse of a subscribing witness is void unless there are 2 additional disinterested witnesses.
These are additions to an earlier Will and are used to complement them. The codicils must be executed with the same formalities as a witnessed will or a holographic will.
REQUIREMENTS FOR A HOLOGRAPHIC WILL
- (1) HANDWRITTEN.
- (2) SIGNED by the T, or her name appears on the will (in her handwriting).
- (3) HANDWRITING: Must be wholly in T's handwriting and this must be proven by at least THREE DISINTERESTED persons.
- (4) INTENT: Must contain an indication (death talk) that the instrument is intended to be a Will.
- (5) LOCATION: The will is found in a "safe place" (among valuable papers in her safe-deposit box, or in some disinterested person's possession bc T deposited it there for safe keeping).
- Non-handwriting material is ok if written part is complete and T doesn't need to refer to typed part to complete the will.
REQUIREMENTS FOR AN ORAL WILL (1 of 2)
ORAL WILLS CANNOT MODIFY A WRITTEN WILL.
REQUIREMENTS FOR AN ORAL WILL (2 of 2)
- A nuncupative (oral) will is valid to dispose of personal property of unlimited value provided:
o (1) It is spoken in T's last illness,
o (2) Before two disinterested witnesses,
o (3) T dies from the illness, AND
o (4) It is offered for probate within 6 months of when T spoke it, OR one of the witnesses reduces the statement to writing within 10 days of when T spoke it.
PROOF OF WILLS
- To be admitted to probate, a typewritten will must be proved by the testimony of TWO ATTESTING WITNESSES who testify as to:
o (1) T's sound mind,
o (2) T's signature, and
o (3) Witnesses' attestation in T's presence.
- Where an attesting witness is dead, insane, or cannot be found, proof of the missing witness's signature will suffice.
- If the will is self-proved, there is no need to call attesting witnesses.
o The will is self-proved if there is a self-proving affidavit reciting facts of due execution acknowledged by testator and sworn to by witnesses before a notary public.
PROOF OF HOLOGRAPHS
- To admit a holographic will to probate, THREE WITNESSES must testify that the will is in T's handwriting.
o It is not necessary that the witnesses be disinterested.
- Additionally, on of the witnesses must testify that the will was found in a safe place.
Probate always begins where the D was domiciled at the date of D's death.
- All personal property passes according to the law of that domicile state.
- Real property passes according to the law where the land is located must go through ANCILLARY PROBATE in that state.
REQUIREMENTS FOR REVOCATION - - NC allows revocation by statute under the following three circumstances (1 of 3):
o (1) Physical act of destruction
Must touch the writing; includes writing touching the instrument.
Revocation by physical act requires:
• (a) Intent to revoke, AND
• (b) Physical act.
An act of revocation on one executed copy of will revokes ALL executed copies.
Presumption: Where a Will may be traced to the T's possession or control and cannot be found after T's death, a presumption arises that T revoked the Will by physical act.
REQUIREMENTS FOR REVOCATION - - NC allows revocation by statute under the following three circumstances (2 of 3):
o (2) A valid subsequent Will that expressly or impliedly revokes the previous Will and its codicils.
Any codicils revoke inconsistencies in the prior will.
The same rule applies when there are 2 wills and the second does not in terms revoke the first. To the extent possible, the second will is treated as a codicil to the first. There is an implied revocation only to the extent of the inconsistency.
REQUIREMENTS FOR REVOCATION - - NC allows revocation by statute under the following three circumstances (3 of 3):
o (3) Operation of law- Divorce or annulment revokes by operation of law ALL provisions in favor of the former spouse. (slayer statute, desertion...).
Note: Divorce does not affect life insurance policies.
REVOCATION BY PHYSICAL ACT BY ANOTHER PERSON (PROXY REVOCATION)
- To be valid, the act done by another must be:
o (1) At T's request, and
o (2) In T's presence.
NC "LOST WILLS" STATUTE
- If will is improperly revoked, but has been destroyed, a will can still be probated by satisfying the "lost wills" statute. Lost will requires:
o (1) Due execution must be proved in the normal way.
o (2) Contents of will must be clearly and distinctly proved by either a copy of the will or the testimony of a witness.
o (3) Absence of the will must be explained.
Must overcome presumption of revocation.
DEPENDENT RELATIVE REVOCATION
- This doctrine allows for revocation to be disregarded when premised upon a mistake of law or fact as to the validity of another disposition.
- Since the second Will is now destroyed, how can we now probate it under DDR?
o By meeting the three-point test as to PROOF OF LOST WILLS:
REVIVING A REVOKED WILL
- Once a Will is revoked, there are ways in which it may be REVIVED:
o (1) Re-execution: Write a new Will and have it executed.
o (2) Republication: Republish the Will by codicil (probably by a holographic codicil—have to refer specifically to the revoked will).
o (3) DEPENDENT RELATIVE REVOCATION, whereby even though the Will had been revoked by physical act, the act was dependent upon the probate of another Will that was never then probated. (if ignore the revocation, we come closer to what T intended).
- No revival of revoked Wills:
o NC applies the common law rule: A legally revoked will cannot be revived simply by destroying the later Will unless:
(1) The old Will is re-executed, signed by T and two witnesses, or
(2) The doctrine of "republication by codicil" applies.
• The occurs when T executes a codicil to the old Will that makes various changes, but because it mentions the old Will after it was revoked by the new Will, it revives the old Will.
REFERENCE TO ACTS AND EVENTS
OUTSIDE THE WILL - Incorporation by Reference
- Any document extrinsic to a valid Will, not present in the Will itself when the Will was signed and thus not part of the duly executed Will, may be incorporated by reference into the will if the following are met:
o (1) Extrinsic writing must be in existence when the Will was executed;
o (2) Will must show an intent to incorporate the writing; and
o (3) Will must describe the writing with reasonable certainty, so that there can be no mistake as to the document referred to in the Will.
REFERENCE TO ACTS AND EVENTS
OUTSIDE THE WILL - ACTS OF INDEPENDENT SIGNIFICANCE
- Some property continues to change, such as "my automobile."
o These items have independent significance, and the law allows them to change between the time of execution and the death of the T.
- When a beneficiary named in the will dies before T, the gift fails and becomes part of the residue, UNLESS it is saved by the state's anti-lapse statute.
NC ANTI-LAPSE STATUTE
- Unless a contrary intention appears in the will, if a devisee/legatee is (1) a relative of T (grandparent or descendant of grandparent) and (2) the devisee/legatee is dead at the time of execution of the Will, the issue of the deceased devisee/legatee who survive T take in their place.
- If there are no descendents for the bequest to pass to, then it falls into the residuary estate.
- Class gifts: When there is a gift by will to a group of persons generically described as a class (ex: "children of X"), and some class member predeceases T and the anti-lapse statute does not apply, only the surviving class members take.
o Apply the anti-lapse statute if the predeceased member of the class is a relative.
- The words of the Will can block the application of anti-lapse.
Expenses/debts must be paid from the estate upon the death of a decedent. Take in this order:
- (1) Intestate assets.
- (2) Residuary estate.
- (3) General legacies ("I bequeath $10,000 to my nephew Ed").
- (4) Demonstrative legacies (general amount from a specific source like a sale of stock).
- (5) Specific bequests ("I devise Blackacre to my son John").
- The abetment problem:
After all claims are paid, there are insufficient assets left to satisfy all of the gifts made under the Will.
- Claims are first paid out of PERSONAL PROPERTY in the following order:
o (1) Intestate property.
o (2) Residuary estate.
o (3) General legacies.
o (4) Demonstrative legacies.
o (5) Specific bequests.
- If after the personal estate is exhausted there are still debts and claims, then real property abates in the same order.
ADEMPTION BY EXTINCTION: Specifically devised property not in the estate at death...
- If T devises or bequeaths a "specific" item of land or personal property to an individual and that item is not in T's estate at the time of T's death, the item is "adeemed by extinction." (beneficiary gets nothing).
o This only applies to specific bequests or devises.
o NO ademption for demonstrative bequests, so if that stock is no longer in existence, the money still has to come from somewhere.
Statutory Exceptions to the Ademption Doctrine (1 of 3):
o (1) Reward/Insurance
The beneficiary takes any remaining specifically devised property AND
• Any condemnation reward for the taking of property to the extent paid after T's death.
• Any fire or casualty insurance proceeds to the extent paid after T's death.
These don't apply if paid before T's death.
Statutory Exceptions to the Ademption Doctrine (2 of 3):
o (2) Happening after T becomes incompetent
If the item is (1) sold by a guardian or conservator appointed after T is deemed incompetent, or (2) if then insurance proceeds are paid, a specific devisee/legatee has a right to a general legacy equal to the net sale price or the insurance proceeds.
Statutory Exceptions to the Ademption Doctrine (3 of 3):
o (3) Bequest of Securities
The rule is that a beneficiary takes any additional securities of the same entity because of action initiated by the entity (stock split, reorganization, dividends, takeover or merger).
• This only applies to changes to the securities after T's death.
EXONERATION OF LIENS: Specific gift of encumbered property.
- In NC, a specific devisee of encumbered property is not entitled to have the encumbrance paid out of the residuary estate unless the will shows such intent.
o A general direction in the will to pay debts does not show such an intent.
MISTAKES OR AMBIGUITIES IN THE WILL
- The "plain meaning" cannot be changed or altered. If the meaning is plain, we cannot bring in extrinsic evidence to change this even though there is oral evidence that a mistake has occurred.
- If there is a LATENT AMBIGUITY (two nephews named John), then extrinsic evidence is admissible to cure the ambiguity.
o If the evidence doesn't cure the ambiguity, then the gift fails for uncertainty.
- If there is a PATENT AMBIGUITY ("I bequeath twenty-five dollars ($25,000)"), extrinsic evidence is admissible to cure the ambiguity.
INTESTACY - SHARE OF SURVIVING SPOUSE
- If survived by spouse and no issue or parent, spouse takes:
- If survived by spouse and parent but no issue, spouse takes:
o (1) ½ interest in real property,
o (2) The first $50,000, AND
o (3) ½ of balance of personal property.
- If survived by spouse and only 1 line of lineal descent, spouse takes:
o (1) ½ interest in real property,
o (2) The first $30,000, AND
o (3) ½ of balance of personal property.
- If survived by spouse and more than one line of lineal descent, spouse takes:
o (1) 1/3 interest in real property
o (2) The first $30,000, AND
o (3) 1/3 of balance of personal property.
SHARE NOT GOING TO SPOUSE OR ALL OF ESTATE IF NO SPOUSE SURVIVES
- (1) All to issue, if any.
- (2) If no issue, then to surviving parents.
- (3) If no issue or parents, to siblings or their issue.
Note: You cannot disinherit your heir by FIAT if there is a partial intestacy for some reason, your heir takes even though you have expressed otherwise in your will.
PER CAPITA DISTRIBUTION
- Issue, whether of decedent or his siblings, take per capita at each generational level.
o Distribute evenly at each generational level.
MEANING OF PROBATE ESTATE
- The intestacy statute only applies to the "probate estate."
o It does not include life insurance, property held in trust (even if revocable), right of survivorship property, or property that T did not own at death.
- A non-marital child has full inheritance rights from the biological mother. In addition, the child can inherit from the biological father, but only if paternity is proven:
o (1) Legitimized by marriage.
o (2) Formal acknowledgement by father.
- The father, pursuant to statute, has acknowledged himself to be the father of the child and properly filed the acknowledgment during the lifetimes of himself and the child.
o (3) Adjudication of paternity before death
- This can be done through a civil action for that purpose, or a proceeding against him for non-support.
- Notice of claim to succession must be filed with the personal representative of the putative father's estate within 6 months of the first notice to creditors.
STRANGER ADOPTION OF CHILDREN
- This is where parents adopt a child that has no relationship to either of them.
o Once this type of adoption is finalized, the child and the child's descendant's have full inheritance from the adoptive family, and vice versa.
o The child no longer has inheritance rights from the biological parents or their kin.
STEP-PARENT ADOPTION OF CHILDREN
- Whenever a child is adopted by the spouse of a biological parent, the child loses his inheritance rights from the other biological parent, AND gains inheritance rights from the new adopting stepparent.
- Step-children have no rights to inheritance unless they are adopted.
o Consider adoption by estoppel unperformed agreement to adopt.
SIMULTANEOUS DEATH: 120-hour Rule
- NC has adopted the UPC's "120-hour rule" which requires that in order to be a survivor for purposes of inheriting under a will, through intestacy, or under any non-probate transfer, the beneficiary under any of these must survive by at least 120 hours (5 days).
o Ex: If joint tenants die within 120 hours of each other, the right of survivorship is not triggered. Thus, one-half of what is owned passes through A's estate as though A survived B, and one-half though B's estate as though B survived A.
o Words of a will trump the 120-hour rule.
- ONLY applies when D dies intestate.
- Advancements are lifetime gifts to any HEIR with the intent that it be applied against any share that the heir may be entitled to receive from T's estate.
o Presumption: In NC, all gifts are presumed NOT to be advancements, unless shown to be one. Moreover, a gift to a spouse is NOT an advancement unless stated in writing by the donor to be one at the time of the transfer.
If the donee successfully rebuts the presumption, the donee's gift must go into what is called "hotchpot."
o Hotchpot: Method of accounting for the advancements made to an heir.
Step 1: Value of the advancement + Value of intestate estate.
Step 2: Using this value, distribute the estate according to intestacy rules.
Step 3: Reduce the donee's share by the value of the advancement.
- The DOCTRINE OF SATISFACTION applies when there IS a Will.
o ONLY applies when there is a Will.
o In NC, Gifts to T's CHILDREN (but not to other persons) are presumed to be in satisfaction of the children's interest under the decedent's will.
Note: This presumption only applies where the subject matter of the gift is the same as the subject matter of the devise or bequest under the will.
If you are asked to discuss the rights of a surviving spouse, consider:
- (1) SS's right to a year's allowance.
- (2) SS's right to an elective share.
- (3) SS's right to take statutory dower.
SURVIVING SPOUSE'S RIGHT TO A YEARS ALLOWANCE
- SS is entitled to an allowance of $10,000 for one year after decedents death.
o This allowance is in addition to an intestate share, but is charged against any share under decedent's will.
- An additional allowance of $2,000 per minor child (or child under 22 who is a full-time student) is also available.
- Total allowances may not exceed ½ of decedent's avg income for final 3 years of life.
- The allowances are EXEMPT from the claims of general creditors.
SURVIVING SPOUSE'S RIGHT TO AN ELECTIVE SHARE
- An SS who is dissatisfied with the decedent's will has a right to claim an elective share.
- Amount of Share
o The amount of the elective share is 1/3 of the net assets if the decedent was survived by two or more lines of lineal descent; otherwise the share is ½.
o Exception where descendants of former spouse survive: If the decedent left one or more descendants of a former spouse, the 2nd spouse's elective share is only ½ of the amount described above (1/6 or ¼)
- Meaning of "Net Assets"
o The elective share is a share of the decedent's "net assets." Net assets is the sum of the probate estate (reduced by funeral and administration expenses, debts, claims, and the year's allowance) PLUS:
(1) Property other than wrongful death proceeds payable to the decedent's personal representative because of the decedent's death.
• Ex: The value of insurance proceeds on the decedent's life where the estate is the beneficiary.
(2) ½ of any right of survivorship property held by the decedent and spouse, and ALL of any right of survivorship property held by the decedent and other persons.
(3) Donative transfers made by the decedent during life where the decedent retained either the right to the income or the possession of the property or the decedent retained the right to revoke the transfer.
(4) Gifts (to the extent that they exceed $10,000 per donee) made without the spouse's consent during marriage to persons other than the spouse within the 6-month period before decedent's death.
- Reduction for property passing to the Surviving Spouse
o The elective share as determined above is reduced by the sum of the following:
- (1) ½ the value of property passing to the spouse by right of survivorship.
- (2) Property (other than Social Security Benefits) passing to the spouse under the decedent's will, by intestacy, or by beneficiary designation, including life insurance.
- (3) The year's allowance awarded to the SS.
- (4) The value of any gifts made to the spouse by the decedent for which a gift tax return was filed.
- (5) The value of any property passing in trust for the exclusive benefit of the spouse during the balance of his or her lifetime, but only if the trust has a non-adverse trustee.
- (6) The net value of the marital estate awarded to the spouse after decedent's death.
- Other Points Re: Elective Share
o The elective share is not automatic; SS must elect to take it within 6 months of the issuance of letters of administration.
- The right is personal to the SS. The election is lost if the SS dies before taking it.
o The right to the elective share may be waived in whole or in part by a written and signed waiver.
- The waiver need not be supported by any consideration.
- It is unenforceable, however, if it was not voluntary or if there was not fair and reasonable disclosure.
SURVIVING SPOUSE'S RIGHT TO TAKE STATUTORY DOWER
- As an alternative to the elective share (or to a spouse's intestate share), the SS may elect to take (to the exclusion of creditors) either (but not both) of the following:
o (1) A life estate in the usual dwelling house plus absolute ownership of household furnishings; OR
o (2) A life estate in 1/3 of all real property owned by the decedent during marriage.
This right is inchoate. It extends to land owned during coveture (marriage) that was transferred by the decedent during life without the joinder of the SS.
PRETERMITTED (OMITTED) CHILD:
- NC provides by statute for pretermitted children, defined as those children who are born or adopted after the execution of T's Will and no provision is made for them in the will. The statute provides that:
o (1) If T had no other child living when the Will was executed, then the pretermitted child receives what the child would have received under intestate succession.
o (2) If T has a living child when the Will was executed, and the Will made a bequest to that child then in existence, then any pretermitted child would receive the lesser of what the child would receive if T had dies intestate, or the equivalent of the largest bequest to any child to which a bequest was made in the Will.
- A pretermitted child is entitled to take his intestate share UNLESS:
o (1) It appears from the will that omission was intentional.
o (2) The will provides for the child (amount of provision is not relevant).
o (3) T had other children at the time he executed his will and the other children don't take anything under T's will either.
o (4) T leaves his entire estate to his SS.
o (5) T made other provision for the child outside of the will by a transfer that takes effect at death (ex: life insurance).
- Watch for situations where a will is republished by codicil, which has the effect of re-dating the will.
o If the child was born before the new date, then he is no longer considered a pretermitted child.
Situations where a party is barred from sharing in the estate:
- (1) A person loses inheritance rights and the right to a forced share or dower if the person engages in uncondoned adultery or if the person willfully abandons his spouse.
- (2) A parent forfeits intestacy rights in the estate of his child if he willfully abandons the child.
- (3) A person who is convicted of (or pleads guilty or nolo contendere to) willfully and unlawfully killing the decedent forfeits all rights in the estate of the victim.
o The victim's estate is distributed as if the slayer predeceased the victim.
o In the case of a will, the gift to the slayer passes by intestacy unless it is saved for the slayer's issue by virtue of the anti-lapse statute.
o Right of survivorship property passes half to the victim's estate and half to the slayer for life with remainder to the victim's estate.
- An heir, devisee, or appointee of a power of appointment may renounce his or her interest in writing in whole or in part within 9 months after the death of decedent.
o Renunciation results in property passing as if renouncing party predeceased the decedent, unless the will provides otherwise.
- In NC, contracts to make a will are valid if they comply with contract law.
- To the extent that they deal with real property, contracts to make a will, not to revoke a will, or to die intestate, must be:
o (1) In WRITING,
o (2) Supported by adequate consideration,
o (3) After a fair disclosure.
ADMINISTRATION OF ESTATES (1 of 3)
Generally, the duties, powers and liabilities of a personal representative are identical to those of trustees. Be aware, however, of the following special rules:
- A person who has a "private interest, whether direct or indirect, that might tend to hinder or be adverse to a fair and proper administration" is disqualified from serving as PR.
- The PR files any action for wrongful death, but the damages pass by intestacy not by the decedent's will.
- Absent a contrary provision in the will, a PR cannot sell real property without a court order.
ADMINISTRATION OF ESTATES (2 of 3)
- The PR is required to mail or personally deliver notice of administration to all known or reasonably ascertainable creditors, and to publish notice (once a week for 4 consecutive weeks) to all other creditors.
o This notice starts a short (3 month) SOL that bars all creditors who do not present their claim within the 3-month period.
Exceptions exist for secured claims, claims for which the decedent held insurance, claims of the U.S. Government, and tax claims of NC
o If the PR fails to publish notice, the SOL is 3 years.
This period is tolled during the minority of the claimant.
ADMINISTRATION OF ESTATES (3 of 3)
- If the assets of an estate are not sufficient to pay off all of the decedent's creditors, the creditors may reach some non-probate assets, including:
o (1) Money in a Totten trust.
o (2) Gifts causa mortis (death bed gifts).
o (3) Deposits in joint bank accounts.
o (4) Lifetime transfers made with the intent of defrauding creditors.
- Only an "interested party" can bring a Will contest.
o An interested party is defined as persons with economic interest that would be adversely affected by the will's probate.
LACK OF TESTAMENTARY CAPACITY
- NC presumes that a T possessed testamentary capacity. Whenever a testator lacks testamentary capacity at the time of execution of the Will, the entire Will is to be denied probate.
- BURDEN OF PROOF: The burden of proof is on the one alleging lack of capacity to show that, at the time of the execution of the Will, T did NOT possess testamentary capacity by a preponderance of the evidence.
TEST FOR CAPACITY
At the time of execution, did T have sufficient capacity to:
o (1) Understand the nature of the act he was doing?
o (2) Know the nature and extent of his property?
o (3) Know the natural objects of his bounty?
- An prior adjudication of incapacity is not sufficient to establish that T lacked testamentary capacity, one test is different from the other.
- Insane delusion:
A distinct form of testamentary incapacity.
- If the allegation of undue influence is proven, only those elements of the Will affected by the undue influence are denied probate. (Under any lack of testamentary capacity, the entire Will is denied probate).
- The burden of proof begins with the contestant, someone with standing, who must prove:
o (1) Influence was exerted.
o (2) The effect of the influence was to overpower the mind and will of T.
o (3) The influence resulted in a will that would have not been made but for the influence.
- The burden shifts if they can prove the T and the beneficiary under the Will were in a CONFIDENTIAL RELATIONSHIP.
There are 5 confidential relationships:
o Once the contestant proves a confidential relationship, the presence of the benefit to that person in that relationship + suspicious circumstances (such as a radical shift in the Will's provisions, there arises a PRESUMPTION OF UNDUE INFLUENCE.
PRESUMPTION OF UNDUE INFLUENCE
To rebut the presumption, the beneficiary must provide by a preponderance of the evidence that T was able to resist undue influence and make her own decisions (mind was able to resist).
POWERS OF APPOINTMENT
- Often a testator/settler will give another person a life estate and ask that at the end of that life estate, that person "pick someone" to receive the remainder. This is giving a POWER OF APPOINTMENT.
o Purpose of a POA: permits the life income beneficiary to designate the remaindermen.
POWERS OF APPOINTMENT - Language
o The testator is the DONOR of the POA.
o The life estate holder has a TESTAMNETARY POWER OF APPOINTMENT and can only exercise her power at death.
o The life estate holder is the DONEE of a general testamentary POA because she is not limited in the class of beneficiaries to whom she can appoint.
She can appoint the property to anyone, including herself, OR her estate, OR her creditors.
If the donee is limited in the class of potential beneficiaries, then it is called a special power of appointment.
o The T should name takers in default incase the donee does not exercise the POA.
o In order to exercise the POA, you have to explicitly refer to the power. It can be exercised by implication as well.