Sample Fact Pattern and Answer

SAMPLE FACT PATTERN Consider the following scenario: Pat and Pam are married and have three children – Sally, Sarah, and Jason. Jason is married to Carly. Carly and Jason have three children (Alex, John, and Pete). Sally is unmarried, but she has six cats that she claims are her children (Tiddlywinks, Admiral Puff Puff, Princess Sparkles, Jazzybelle, The Rev. Hissypants, and Tim). Sarah is unmarried, but has two children from a previous marriage (Grace and Aaron). Pat and Pam love their children, grandchildren and grandcats. They handwrite a will and have Sally and Jason sign it is as witnesses. They do not have an attorney review the will. Pat and Pam have an estate that consists of the family home in Indianapolis, held in fee simple absolute, valued at $800,000, $1.2 million is liquid assets, two BMW’s (valued at $35,000 each), and Pat’s collection of rare and valuable rodent skulls, valued at upwards of $200,000. In the will, Pat and Pam leave the family estate to Sally, her current cats, and any subsequent animals (feline or other) adopted by Sally (as a life estate, until the last animal dies). Jason receives the collection of rodent skulls, so as to continue the collection and passion carried by his father. Sarah is left one BMW and her favorite rodent skull, that of a capybara. The residuary is to be split amongst the remaining children, grandchildren, and grandcats per stirpes. Sally takes out a massive loan to buy a 1967 mustang fastback car. She is overwhelmed by the power of the car and crashes it within 2 hours of purchase. She is killed in the accident. Her cats, per her legally created will, are given to her best friend Julia, along with all of her assets in trust for the cats. In his grief, Pat goes on a very dangerous expedition he has been putting for decades. He goes to Antarctica to find the wild “Ratguin” – a large and ferocious bird rodent hybrid, so that he can collect it’s skull. Pat never returns, and Pam, in her grief, jumps out of the top floor of the Salesforce Tower at the annual Cranial Collector’s Club fundraiser – “It’s Skull Good”. At the probate hearing, Judge Whitey determines that the will written by Pat and Pam is valid and distributes the assets accordingly, with the estate to be held in trust for the cats with Julia as the sole trustee. Julia begins the process of selling the house immediately. Jason begins the process of selling off all the rare rodent skulls in order to make a hefty profit. Sarah contests the will. SAMPLE ANSWER Requirements and validity of the will: To begin, it is important to define what a will is and its requirements to be valid. As defined by the textbook, a will is a document executed with specific legal formalities by a testator that contains instructions about the way property will be disposed of at death. In addition, it is important to define the requirements of a will to determine its validity. The five requirements include that the will be in writing, witnessed by 2 or 3 disinterested witnesses, signed by the testator, signatures must be witnessed, and testator must publish his will. Because the will was witnessed by two beneficiaries, Sally and Jason, the validity of the will could be questioned because they are not disinterested witnesses. Because they contributed to the legal process in establishing the will, would they be able to receive any of the assets included in the estate? In addition, the prompt doesn’t mention if the will was published or how the signatures for the will were witnessed which could also impact the validity of the will. Overall, there seems to be a few elements of the will in question that could impact whether the will is valid or if the parents’ died intestacy. To ensure that the will is valid, the parents should have had the will witnessed by two disinterested individuals, not their children, and an attorney could have performed this task. If the will is not valid and the parents died intestate, then there could be a potential issue with the trust established with Sally and her best friend Julia. If someone dies intestate, then you have to look at the distribution scheme under intestacy statutes. Because both Pat and Pam died, the distribution of the estate would go to the lineal descendants. As mentioned in the book, “under intestacy statues, a person must have a relationship to the deceased person through blood or marriage in order to inherit any part of the deceased person’s property.” Could the property technically go to the cats if under intestacy? Another potential issue that could arise would be if the will is determined invalid, then the typical order for passing down property would be: spouse, children, grandchildren, parents, siblings, niblings, grandparents, aunts/uncles, cousins, and then goes to the state (escheat). Unfortunately for the cats, they would not technically be labeled as grandchildren seeing as they are pets (property). However, if the will is determined to be valid they might be able to leave the property to Sally and the cats. Difference between per stirpes and per capita, as well as the distribution of the estate As mentioned in the prompt, the will is supposed to be divided per stirpes. Per stirpes means to split up based on direct descendants regardless of whether they are living or dead. With the will being per stripes, the assets would be divided up between the two living siblings and would be divided to Sally’s cats for whatever her portion would be. However, if the will was changed to per capita, the more modern approach, the group of persons would share the estate equally. Because Sally’s death preceded her parents, the remaining children- Sarah and Jason, would evenly divide the property 50% each. So, with this change, Julia and the cats would not receive a portion of the estate from the parents and just whatever Sally had in her own will. However, with the will being divided per stirpes, the children would each receive 33.33% of the assets. Because Sally died first, her portion would be divided among the cats if this is allowed with them also being property. However, one potential issue found would be the distribution of the estate. As described in the prompt, it seems as though Sally is receiving the family estate worth $800,000 for her and the cats. Jason is receiving the collection of rodent skulls worth $200,000, while Sarah only receives a BMW worth $35,000 and a skull whose value isn’t mentioned. The remainder of the estate, including the liquid assets of $1.2 million and a BMW are supposed to be distributed per stripes to children, grandchildren, and cats. Because of this, the distribution of the property included in the will is questionable regarding the overall fairness per stirpes. Sally took massive debt out on the Ford Mustang- would this debt be passed down? As indicated in the book, there can potentially be limitations on property disposed in a will. “A person who takes property by will takes it subject to all outstanding claims against the property.” Because Sally took out massive debt on the Ford Mustang before she passed, Julia/cats could be subject to the debt on this car as it was distributed down. If for whatever reason Sally’s liabilities and debt exceeded what she had in assets, the creditors would have claim over the property. But if Sally didn’t take the debt out on the car, this wouldn’t pose a particular issue with the trust or potentially create issues for Julia, the trustee for the cats. Although maybe not a significant issue as compared to the entire validity of the will set up by Pam and Pat, it could be something that affects her distribution of assets. Was a personal representative indicated for the will? Another piece of information not specifically included in the prompt was whether a personal representative was designated for the estate. Was this piece of information included in Pam and Pat’s will? If so, the personal representative they selected would have served as the executor which could have been one of their kids or an attorney. However, if the will is determined to be invalid then the personal representative would actually be called an administrator. The personal representative would need to take inventory of the assets, must notify any potential claimants to the property, and pay any necessary taxes. In addition, did Sally also appoint an executor to take care of her assets and what she would have been given from her parents? With Julia acting as a trustee was she also deemed to be the executor to determine what should be done with the estate and assets? Having a personal representative can ensure that the distribution of assets goes according to the will, or what is set straight by per stripes. Because the initial will had a vastly different distribution of the assets to the various beneficiaries, would this be something that a personal representative could rectify or would probate court ensure the correct distribution? How is the trust set up and is it legal? Sally also created a trust for the cats upon her death, with Julia acting as the sole trustee. Overall, a trust is a legal relationship in which a person who has legal title to the property has the duty to hold it for the use or benefit of another person. In this case, Sally is the settlor while Julia is the trustee, who holds the property for the benefits of the cats (beneficiaries). This particular trust seems to be a testamentary trust as it took effect upon the death of Sally. There are also five basic requirements to create an express trust such as capacity, intent and formalities, conveyance of specific property, proper purpose, and identity of beneficiaries. In terms of these criteria, it seems as though Sally meets the requirements needed for the creation of the trust. However, one specific factor that may be an issue would be the conveyance of specific property. Because Pat and Pam’s will has the potential to be declared invalid or may have a different distribution of assets, the property listed in Sally’s trust and will could be subject to change or she wouldn’t have the right to convey said property. As alluded to earlier, the distribution of assets seems disproportionate between the stated beneficiaries which could pose problems with the trust. In addition, Julia would have specific duties as the trustee to act in a manner that benefits the beneficiaries. For a trustee, they have the duty to act in a manner with a “reasonable degree of skill, judgment, and care.” Julia would also have the duty of loyalty in that she must administer the trust for the benefit of the cats and avoid any personal interests. As mentioned in the prompt, Julia began the process of trying to sell the estate, one might question if she is acting in a way that benefits the beneficiaries and if she has the ability to do so. Julia also has the duty to distribute the principal and income from the trust to the beneficiaries in how it was specified in the trust. Was selling the estate the intended purpose behind the creation of the trust? Does she have the authority to do so even though she wasn’t a listed beneficiary of the estate, only acting in a way that benefits the cats? Lastly, another issue that could arise would be that the cats themselves are also considered property. If Sally had a child of her own, the passing down of the property would be far less complicated. However, probate court may find issues passing down the estate to the cats if the will was determined invalid due to the intestacy statues mentioned prior. Cats are not listed as a potential party that could receive part of the estate, which could simply have the property pass to Sally’s siblings. Life estate for cats? As indicated in the prompt, Pat and Pam’s estate was held in fee simple absolute, meaning that they had full ownership of the land and could possess for an unlimited time and could dispose of all or some rights. Pat and Pam left the family estate to Sally as a life estate or until the last animal dies. As defined in the text, a life estate “gives a person exclusive rights to possess and use property for a time measured by that or another person’s lifetime.” The text also explains that after death, the property will revert to the person who gave the estate or some other designated person. Because Sally died before her parents and as well as her pets, was the estate deemed to go somewhere else after the passing of the cats? And could the life estate simply exist for the pets even with Sally’s untimely death? If Sally would have lived after the death of her parents, the issue of the life estate wouldn’t be a problem as she could have continued to use the family home. However, her passing can create potential issues with it being left to the cats or sold by Julia as the trustee for the pets. Conclusion In this discussion, I mainly focused on the various problems associated with the prompt such as the equal distribution of the assets, per stripes vs per capita, what constitutes a valid will as well as a trust, personal representatives, and associated problems with debt. However, in terms of the will contest, I believe the validity of the will and the distribution of assets are the most important factors for determining how the will contest will go. Overall, I believe Sarah has a valid will contest that could potentially go her way. Because the will was witnessed by two beneficiaries and not disinterested witnesses, the overall validity of the will could be questioned. The prompt itself doesn’t mention if the will was actually published, or if the signatures were properly witnessed as an attorney was not present. In addition, there were several potential factors mentioned above that could demonstrate how the current distribution, per stirpes, did not equally result in assets being distributed to the various beneficiaries. The addition of the cats having a life estate being put in a trust also creates an additional wrench as one may question the ability to leave an estate, money and assets, to pets who are also property. Sally left Julia as a trustee but only left her cats as beneficiaries, posing a potential problem as well. I believe the will contest will go in favor of Sarah due to the several outlying factors. Lastly, if the will is not determined to be valid, I believe that the distribution of property will more than likely go with Jason and Sarah. While the assets could potentially go to the grandcats, there is the question of whether these cats would actually “receive” the assets in a trust as they are also property. If Sally’s trust and will is determined to be invalid, I believe her property would transfer to her siblings as she doesn’t have any have any of the following: spouse, children, grandchildren, parents. I think the distribution of both personal and real property would be on a more fair basis with the siblings getting an equal share instead of the vastly ranging distributions. I think Sarah would be distributed more of the estate than what she currently was getting and Sally would have received less than the original share. Overall, I think the assets and property would be passed down equally and then would continue down to the grandkids with the will being per stirpes.