Assignment #2

Succession as a Mode of Acquiring Ownership

Succession is a legal concept whereby ownership of property is transferred from one person to
another upon the death of the former. It is a vital mode of acquiring ownership and ensures the
orderly and legal transfer of assets from the deceased to their heirs or beneficiaries. Succession
can be either testate (with a will) or intestate (without a will). Each type has specific legal
requirements and implications, particularly in terms of taxation.

Kinds of Succession

1. Testate Succession:
o Definition: Testate succession occurs when a person dies leaving a valid will that
outlines how their property should be distributed.
o Process: The will is presented to a probate court, which authenticates it and
oversees the distribution of assets as per the decedent’s wishes.
o Elements:
 Will: A legal document specifying the distribution of the decedent's
property.
 Executor: A person appointed to execute the will’s instructions.
 Probate Court: The legal body that validates the will and supervises the
distribution of the estate.
2. Intestate Succession:
o Definition: Intestate succession occurs when a person dies without a valid will.
o Process: The distribution of the decedent’s property is handled according to the
laws of intestacy, which vary by jurisdiction but generally prioritize close
relatives.
o Elements:
 Administrator: A person appointed by the court to manage and distribute
the estate.
 Intestacy Laws: Statutory guidelines that determine the distribution of the
estate among surviving relatives.
3. Mixed Succession
o Transmission of the decedent properties shall be partly by virtue of a written will
and partly by operation of law.

4. Legal Succession (Ab Intestato)

o Definition: This type of succession can occur when there is no valid will or when
the will does not dispose of all the deceased's property.
o Elements: It involves the transfer of property according to statutory rules that
determine the order of inheritance among legal heirs.
o Legal Framework: Governed by laws that provide a hierarchy of heirs based on
familial relationships and sometimes include provisions for non-family members
in certain circumstances.
Elements of Succession

1. Decedent: The individual whose death triggers the succession process. Their property
forms the estate to be distributed.
2. Estate: The total property, rights, and obligations left behind by the decedent. It includes
real property (land and buildings), personal property (jewelry, cars), financial assets
(bank accounts, investments), and liabilities (debts).
3. Heirs/Beneficiaries: Individuals or entities entitled to receive portions of the decedent’s
estate. In testate succession, they are named in the will. In intestate succession, they are
determined by law.
4. Executor/Administrator: The person responsible for managing the estate, ensuring
debts are paid, and distributing the remaining assets. The executor is named in the will,
whereas the administrator is appointed by the court in intestate cases.
5. Probate Court: A judicial body that oversees the administration of the decedent’s estate.
It validates wills, supervises the estate’s administration, and resolves disputes.
6. Transfer of Rights: Succession involves the transfer of the deceased person's rights and
obligations to their property.
7. Effective Date: The transfer of ownership typically occurs upon the death of the
decedent, triggering the process of succession.
8. Legal Formalities: Depending on the type of succession (testate or intestate), there are
legal formalities that must be followed to ensure the validity and enforceability of the
transfer.
9. Inheritance: Succession often involves inheritance of not just assets but also liabilities
and obligations associated with the property.
10. Legal Protection: Laws governing succession provide protections for rightful heirs and
ensure the orderly transfer of property.

Taxation in Succession

The transfer of ownership through succession has significant tax implications, including
inheritance tax, estate tax, and gift tax. These taxes are levied to generate revenue for the
government and to ensure fair distribution of wealth.

1. Estate Tax:
o Definition: A tax on the total value of the decedent’s estate before distribution to
the heirs.
o Calculation: The estate tax is calculated based on the net value of the estate after
debts and expenses are paid. It often includes exemptions and progressive rates.
o Implications: High estate taxes can significantly reduce the amount passed on to
heirs, affecting wealth distribution.
2. Inheritance Tax:
o Definition: A tax imposed on the beneficiaries who receive assets from the
decedent’s estate.
o Variation by Jurisdiction: The tax rate can vary depending on the relationship of
the heir to the decedent (e.g., children may have lower rates compared to distant
relatives).
 o Exemptions: Some jurisdictions offer exemptions or lower rates for immediate
family members.
3. Gift Tax:
o Definition: A tax on the transfer of property or assets during the decedent’s
lifetime, which can be part of estate planning to minimize estate taxes.
o Annual Exclusion: Many jurisdictions allow an annual exclusion amount that can
be transferred tax-free.
o Lifetime Exemption: There is often a lifetime exemption amount that applies to
the total value of gifts made.

Succession, in the context of acquiring ownership, refers to the transfer of rights,

interests, and obligations from one person to another either by operation of law or by the will of
the parties involved. It is a fundamental concept in property law and can occur in various forms,
each with its own characteristics.

In essence, succession as a mode of acquiring ownership ensures that property rights are
transferred in a manner that respects legal norms and the wishes of the property owner, whether
expressed in a will or determined by law in the absence of one. It plays a crucial role in
maintaining continuity of ownership and protecting the interests of both the deceased and their
heirs. Succession is a fundamental legal process for the transfer of ownership upon death,
ensuring the decedent’s wishes are respected or, in the absence of a will, that the estate is
distributed according to legal guidelines. Understanding the kinds and elements of succession is
crucial for effective estate planning and compliance with taxation laws. Tax implications, such as
estate and inheritance taxes, play a significant role in the financial impact of succession on heirs
and must be carefully managed to preserve the estate’s value.
Assignment#3

1. Holographic Will - A holographic will is a will that is entirely handwritten and signed by the
testator (the person making the will). It may or may not require witnesses depending on the
jurisdiction. The key characteristic is that it must be entirely in the testator's own handwriting to
be valid.

Qian is stranded in a remote cabin during a hiking trip, realizes she might not survive due to a
sudden snowstorm. She quickly writes a will on a piece of paper, leaving her personal
belongings to her best friend and appointing her sister as guardian for her dog. She signs and
dates it, but there are no witnesses available. After Qian tragically passes away, her family
discovers the handwritten will and wonders about its validity under state laws.

Capacity to Make One: Qian must have the mental capacity to understand the nature of her
assets and the implications of her decisions when she writes the holographic will. This includes
being of sound mind and having the legal ability to make a will.

Capacity to Succeed: Qian’s best friend and sister, as beneficiaries and guardian, must have the
legal capacity to accept the inheritance and guardianship roles. The probate court will evaluate
the validity of Qian's will and the eligibility of the beneficiaries to succeed.

2. Formal Will (Attested Will) - A formal will, also known as an attested will, is the most
common type of will. It is typically prepared with the assistance of a lawyer. This type of will is
usually typed and signed by the testator in the presence of witnesses who also sign the will in the
presence of the testator and each other. The number of witnesses required can vary by
jurisdiction.

JD, a retired professor, decides to update his will to include a charitable donation and adjust
distributions among his grandchildren. He visits his lawyer's office, where the will is typed
according to his wishes. Two witnesses from the lawyer's office are present when Michael signs
the will, and they also sign as witnesses. This formal will ensures clarity and validity under local
legal requirements.

Capacity to Make One: JD must have the mental capacity to understand the nature and extent of
his property and the implications of his bequests when signing the formal will. This includes
being of sound mind and understanding the impact of his decisions.

Capacity to Succeed: JD's grandchildren and the charity must have the legal capacity to receive
their inheritances. The probate court will confirm the validity of the will and the eligibility of the
named beneficiaries to inherit.

3. Nuncupative Will (Deathbed Will) - A nuncupative will, also known as an oral or deathbed
will, is one that is spoken by the testator before witnesses, rather than being written down. It is
generally only valid under specific circumstances, such as when the testator is facing imminent
death and unable to create a written will. There are often strict requirements regarding the
number of witnesses and the time within which the will must be reduced to writing after it is
spoken.

Mrs. Watsons, hospitalized due to a sudden illness, dictates her final wishes to her family
gathered around her bedside. She states that she wants her antique collection to go to her niece
and her savings to be split equally between her siblings. Three witnesses, including a nurse and
two family members, hear her wishes and sign a document attesting to what they heard. She
passed away shortly afterward. Her family submits the nuncupative will to probate court, where
its validity is assessed based on state regulations regarding oral wills.

Capacity to Make One: Mrs. Watsons must have the mental capacity to understand the nature of
her assets and the legal implications of her verbal instructions when she makes the nuncupative
will. This includes being of sound mind despite her critical condition.

Capacity to Succeed: Mrs. Watsons 's niece and siblings, as beneficiaries, must have the legal
capacity to inherit according to the nuncupative will. The probate court will review the
circumstances and witnesses' statements to determine the will's validity and the beneficiaries'
eligibility.

4. Joint Will - A joint will is a single will created by two or more testators (usually spouses or
partners) that disposes of their combined estates. It is less common and can create complexities
upon the death of one of the testators because the surviving testator may be bound by the terms
of the joint will and unable to change it unilaterally.

H and M, a married couple with no children, decide to create a joint will. They want all their
assets to go to a specific charity upon the death of the surviving spouse. They meet with their
lawyer and sign a single document outlining their wishes. The joint will specifies that neither
can change the will independently after the first spouse's death. Upon the death of the second
spouse, the charity receives their entire estate as outlined in the joint will.

Capacity to Make One: H and M must both have the mental capacity to understand the nature
and extent of their combined assets and the legal consequences of their decisions when creating
and signing the joint will.

Capacity to Succeed: The charity must have the legal capacity to receive the inheritance. The
probate court will verify that both H and M had the necessary capacity when making the joint
will and that the charity is a valid beneficiary.

5. Conditional Will - A conditional will is a will that specifies that its provisions are only
effective if certain conditions are met. For example, the distribution of assets might be contingent
upon the beneficiary reaching a certain age, marrying, or fulfilling another specified requirement.
Conditional wills require careful drafting to ensure the conditions are clear and legally
enforceable.

Rozmar, a young entrepreneur, drafts a conditional will that specifies her assets should be
divided among her siblings only if they complete their college education by a specified age. If
any sibling fails to meet this condition, their share will go to a scholarship fund for
underprivileged students. Rozmar consults with her lawyer to ensure the conditions are legally
enforceable and clearly stated in the will.

Capacity to Make One: Rozmar must have the mental capacity to understand the nature of her
assets and the implications of the conditional provisions when drafting and signing the will.

Capacity to Succeed: Rozmar 's siblings must meet the specified conditions (completing their
college education) to have the legal capacity to inherit according to the will. The probate court
will ensure that the conditions are clear and that the siblings' compliance with these conditions
is verified.

6. Pour-Over Will - A pour-over will is used in conjunction with a trust. It directs that any
assets not already transferred to the trust during the testator's lifetime should be transferred
(poured over) into the trust upon the testator's death. This type of will ensures that all assets are
ultimately governed by the terms of the trust, which may include provisions for managing and
distributing the assets according to the testator's wishes.

Rendon, a wealthy businessman, establishes a trust during his lifetime to manage his investments
and ensure smooth inheritance for his children. He creates a pour-over will that directs any
assets not already transferred to the trust to be added to it upon his death. This ensures that all
his assets are managed according to the trust's terms and provides continuity in wealth
management for future generations

Capacity to Make One: Rendon must have the mental capacity to understand the nature of his
assets and the purpose of the pour-over provisions when creating and signing the will.

Capacity to Succeed: Rendon’s children, as beneficiaries of the trust, must have the legal
capacity to receive the assets as outlined in the trust. The probate court will ensure that the
pour-over will is valid and that the assets are transferred to the trust according to Rendon’s
wishes.