Ch.

8 protection of the family

Limitations on the freedom of disposition

- In American law, the decedent’s spouse is the only relative favored by a protection against
intentional disinheritance. The decedent’s children and possibly more remote descendants
are granted protection only against unintentional disinheritance.
I. Spouses elective share
a. The partnership theory of marriage
i. The contemporary view of marriage is that it is an economic partnership.
1. The partnership theory of marriage, sometimes also called the
marital-sharing theory, is that each spouse is entitled to an equal
share of the “marital property”—property acquired by the couple
during the marriage other than by gift, devise, or inheritance.
ii. In the community property states, property law implements the partnership
theory during the marriage. Under the community property system, each
spouse owns an undivided half interest in marital/community property,
defined as property acquired during the marriage other than by gift, devise, or
inheritance.
1. The community property states do not have or need elective share
statutes, because the marital assets have already been equalized
through the ownership rights that attached during the marriage.
b. Conventional Elective Share law
i. disinheritance of the surviving spouse at death is one of the few instances in
which the decedent’s testamentary freedom must be curtailed. No matter
what the decedent’s intent, the separate-property states recognize that the
surviving spouse has a claim to a portion of the decedent’s estate.
ii. Under traditional American elective share statutes, including the elective
share provided by the former version of the UPC promulgated in 1969, a
surviving spouse is granted a personal non-transferable right to claim a one-
third share of the decedent’s estate.
c. Uniform Probate Codes Elective Share
i. brings elective share law broadly into line with the partnership theory. The
purpose is to grant the surviving spouse a right of election that implements
the partnership theory for the division of marital property at death.
ii. Partnerships by approximation
1. adopts a mechanical system that attempts to implement the
partnership theory by approximation. It has three essential features.
a. The first, implemented by §2-202(a), provides that the elective
share percentage is fifty percent of the “marital-property
portion” of the augmented estate. The augmented estate, as
defined in §2-203(a) and then more specifically in §§2-204
through 2-208, consists of the sum of the values of four
 components: (1) the decedent’s net probate estate, (2) the
decedent’s nonprobate transfers to others,9 (3) the
decedent’s nonprobate transfers to the surviving spouse,10
and (4) property owned by the surviving spouse and amounts
that would have been included in the surviving spouse’s
nonprobate transfers to others had the spouse been the
decedent. The purpose of combining the couple’s assets is to
implement the marital-sharing theory by denying significance
to the possibly fortuitous factor of how the spouses happen
to have taken title to particular assets.
b. The second feature, implemented by §2-203(b), establishes a
schedule under which the marital-property portion of the
augmented estate adjusts to the length of the marriage. The
longer the marriage, the larger the marital-property portion.
After 15 years of marriage, all of the couple’s assets are
deemed to be marital.
c. The third feature, implemented by §2-209, is that the surviving
spouse’s own assets are counted first (or a portion of them in
marriages under 15 years) in making up the spouse’s ultimate
entitlement, so that the decedent’s assets are liable only if
there is a deficiency.
2. UPC differs from the community property regime in two ways. First,
the rights accorded a spouse under the UPC are conditioned on
surviving the decedent. In contrast, under a community property
regime each spouse has a right to control one-half of the marital
estate regardless of the order of deaths. The second difference is
that the UPC adds together and then splits all of the couple’s assets,
including assets acquired before marriage to each other and assets
acquired by gift or inheritance, rather than only acquisitions from
earnings during marriage to each other.
iii. Implementation of a support theory; Supplemental share amount
1. Another theoretical basis for elective share law is that the spouses’
mutual duties of support during their joint lifetimes should be
continued in some form after death in favor of the survivor, as a claim
on the decedent’s estate.
2. Conventional elective share law implements this theory poorly. The
fixed fraction, whether it is the typical one-third or some other
fraction, disregards the survivor’s actual needs.
3. The UPC elective share system seeks to implement the support
theory by granting the survivor a supplemental share related to the
survivor’s actual needs. In implementing a support rationale, the
length of the marriage is quite irrelevant. Because the duty of support
is founded upon status, it arises upon the marriage.
 4. Section 2-202(b) of the UPC implements the support theory by
providing a supplemental share of $75,000. Counted first in satisfying
this $75,000 are the surviving spouse’s own ownership interests,
including amounts shifting to the survivor at the decedent’s death
and amounts owing to the survivor from the decedent’s estate under
the elective share discussed above, but excluding amounts going to
the survivor under the Code’s probate exemptions and allowances
and the survivor’s Social Security and other governmental benefits.
iv. Gender Inequality and elective share
1. UPC elective share specifically on the ground that they fail adequately
to take account of the disparity in the economic circumstances of
married men and women.
v. The partnership Theory and the problem of nonmarital property
II. Premarital and Marital Agreements
a. The right to an elective share (and other death benefits, such as homestead and
family allowances) may be waived by premarital or marital agreement. In the
absence of statute, the validity of these agreements depends upon general principles
of contract law. However, because of the confidential relationship between the
parties, the law has moved largely to the view that these agreements will be closely
scrutinized for any overreaching by either party.
b. Simeone v. Simeone
c. Restatement 3d of Property §9.4 Premarital or Marital Agreement (a) The elective
share and other statutory rights accruing to a surviving spouse may be waived,
wholly or partially, or otherwise altered, before or during marriage, by a written
agreement that was signed by both parties. An agreement that was entered into
before marriage is a premarital agreement. An agreement that was entered into
during marriage is a marital agreement. Consideration is not necessary to the
enforcement of a premarital or a marital agreement. (b) For a premarital or a marital
agreement to be enforceable against the surviving spouse, the enforcing party must
show that the surviving spouse’s consent was informed and was not obtained by
undue influence or duress. (c) A rebuttable presumption arises that the requirements
of subsection (b) are satisfied, shifting the burden of proof to the surviving spouse to
show that his or her consent was not informed or was obtained by undue influence or
duress, if the enforcing party shows that: (1) before the agreement’s execution, (i) the
surviving spouse knew, at least approximately, the decedent’s assets and asset
values, income, and liabilities; or (ii) the decedent or his or her representative
provided in timely fashion to the surviving spouse a written statement accurately
disclosing the decedent’s significant assets and asset values, income, and liabilities;
and either 443 (2) the surviving spouse was represented by independent legal
counsel; or (3) if the surviving spouse was not represented by independent legal
counsel, (i) the decedent or the decedent’s representative advised the surviving
spouse, in timely fashion, to obtain independent legal counsel, and if the surviving
spouse was needy, offered to pay for the costs of the surviving spouse’s
 representation; and (ii) the agreement stated, in language easily understandable by
an adult of ordinary intelligence with no legal training, the nature of any rights or
claims otherwise arising at death that were altered by the agreement, and the nature
of that alteration.
d. §9(a) of the UPMAA, a premarital or marital agreement is unenforceable if the party
against whom enforcement is sought proves that (1) the party’s consent was
involuntary or the result of duress, or (2) the party did not have access to
independent legal representation as defined in §9(b), or (3) unless the party had
access to independent legal representation, the agreement did not provide a notice
of waiver of rights as defined in §9(c), or (4) before signing the agreement, the party
did not receive adequate financial disclosure as defined in §9(d)
e. Probate exemptions and allowances
i. The UPC’s homestead allowance is unique, in that it provides for a lump-sum
amount rather than a right to occupy the spouses’ dwelling house as long as
the surviving spouse or minor children wish to do so.
ii. Effect of the Probate Exemptions and Allowances In Small Estates. Under the
UPC, the probate exemptions and allowances—homestead, exempt property,
and family allowance (up to the maximum that can be made without special
court order)—can be distributed to the surviving spouse without delay, other
than as may be necessary for the personal representative to locate, liquidate,
and distribute the necessary estate funds or assets in kind. Estates worth less
than this amount can be closed by distribution of these probate exemptions and
allowances, once a personal representative has been appointed. The decedent’s
will is rendered irrelevant in such cases.
iii. the UPC clarifies a matter on which many non-UPC statutes are silent, which is
whether the exemptions and allowances are in addition to or are charged
against devises to the persons entitled to the exemptions and allowances. The
UPC does not charge the exemptions and allowances against devises unless the
decedent’s will directs otherwise. Nor are they charged against the elective
share.
iv. Homestead
1. UPC- from a uniquely American contribution to laws giving a decedent’s
dependent survivors limited protection in the family home.
2. prevalent American homestead legislation, though framed primarily in
terms of exempting the homestead from the claims of the owner’s
creditors during his or her lifetime, commonly grants a decedent’s
spouse or minor children a right of occupancy in certain real estate of
the decedent that may continue for much longer periods.
3. The UPC homestead allowance shifts the exemption from a right of
occupancy of realty to a money substitute. In doing so, the UPC
protects all surviving spouses and minor children, including those of
renters, owners of mobile homes not classified as real estate, and
decedents who owned no interest in a residence of any sort.
 a. The fact that the UPC’s homestead allowance does not grant
a right of occupancy does not mean that a surviving spouse
has no prospect of remaining in possession of realty in the
name of the deceased spouse. With the cooperation of the
personal representative, a spouse’s right to money from an
estate can readily be converted into a title to real estate—as a
distribution in kind to the spouse, as a sale of land to the
spouse, or as some combination of the two. In this
connection, it may be noted that under the UPC, the surviving
spouse has priority either to serve as the personal
representative or to choose who serves, unless a probated
will nominates someone else who qualifies and accepts the
appointment.
v. Omitted Child (Pretermitted Heir) Statutes
1. children may be intentionally disinherited in every American state
2. Nearly all states have statutes, called “pretermitted heir” statutes,
that grant children a measure of protection from being unintentionally
disinherited.
3. Most statutes, like the UPC, protect only a child who became a child
of the testator after the execution of the will;37 a few protect any
omitted child. The UPC appears to have broken new ground by
providing that nonprobate transfers to a child can defeat that child’s
statutory protection.
4. two basic changes were made. First, if the testator had no child alive
when the will was executed, an omitted child takes no portion of the
estate if the testator devised all or substantially all of the estate to
another parent of the omitted child and that parent survives the
testator and is entitled to take the property. This extends the rule of
the pre-1990 version of §2-302, namely that an omitted child does not
receive an intestate share if at the time of execution the testator had
one or more children and the testator devised substantially all of the
estate to the other parent of the omitted child. Whether or not a
testator has children at the time of execution, a devise of the bulk of
the estate to another parent of the omitted child usually indicates
that the testator trusts that surviving parent to use the property to
benefit the child. The other major change concerns situations in
which the testator had one or more children alive when the will was
executed and devised property to at least one of the then-living
children. An omitted child does not take a full intestate share in this
situation but only a pro rata share of the property devised to the then-
living children.
5. Azcunce v. Estate of Azcunce
 The homestead allowance provided for by UPC §2-402 is derived, in
name at least, from a uniquely American contribution to laws giving a
decedent’s dependent survivors limited protection in the family home

Chapter 7: Revocable Trusts & Other Will Substitutes

I. Revocable Trusts: The Present Transfer Test
a. Property law recognizes the validity of a revocable inter vivos trust, even one in which
the person creating the trust (called the “settlor”) retains the right to income for life.
It does so on the basis of the so-called “present transfer” test: Upon creation of the
trust, the settlor transfers an equitable remainder interest in the trust property
(“corpus”) to the remainder beneficiary. The fact that the remainder interest is
subject to divestment does not jeopardize the validity of the trust.
b. present transfer of a remainder interest—even one subject to divestment by the
settlor’s exercise of the power to revoke—satisfies the present transfer test and
obviates the necessity of memorializing the trust in a document that is executed in
accordance with the formalities for a valid will. The transfer is treated as inter vivos,
not testamentary.