What were the facts in
Martin B.?, p. 126



Martin B. died in 2001, survived by his wife,
Abigail, and a son, Lindsay. Lindsay had two
adult children.
Martin’s other child, James, predeceased Martin
by seven months. James was survived by his
wife.
James’ widow used his frozen sperm to have two
children, born in 2004 and 2006
1
In re Martin B.,
In
re
Martin
B.
841 N.Y.S.2d 207 (N.Y. Surr. Ct. 2008)
Abigail B.
Nancy
James
Mitchell
James
Warren
Martin B.
Lindsay
Adult
Child 1
Adult
Child 2
2
What were the relevant
terms of Martin’s trusts?




Martin B. left seven trusts that gave the trustees
authority to sprinkle principal among his issue
while his wife, Abigail, was alive
Martin also gave Abigail a special power of
appointment to determine the distribution of the
principal upon her death
If Abigail did not exercise her power of
appointment, the trustees had authority to
sprinkle the principal among Martin’s issue
Should the posthumously-conceived children of
James count as the issue of Martin?
3
Could the two children
inherit from James?

No. Under NY law, posthumously-conceived children
do not share in the intestate estate (p. 127).


Similarly, if James had left a will, the children would not
take as “after-born” children unless he stated otherwise in
his will (p. 127).
What result under the UPC?

You have a 45-month window to give birth to the child.
James died on January 13, 2001, and the first child was
born on October 15, 2004, which is 45 months and 2 days
after James’ death. If Nancy could show that she
conceived by January 13, 2004, then the first child would
count as an heir under the UPC.
4
But we’re dealing with a
third-party’s trust


The rules that govern James as decedent do not
necessarily apply to Martin
Moreover, the trust interests are future interests. We
don’t have the need to wind up a decedent’s estate
in a timely fashion (p. 128)

The relevant statutes for future interests include
posthumously-born children in the definition of issue, but
they did not anticipate posthumously-conceived children
5
Are James’ children eligible
for trust sprinklings?


General trusts and estates principles hold that a child
of assisted reproduction should be treated as any
other child of the decedent if the decedent
considered the child as his or her own (pp. 128-129)
In this view, the two boys are part of Martin’s
bloodline, and Martin intended the trusts to benefit
all the members of his bloodline

The court observed that under the trust instruments,
Martin’s intent was to have the trust “benefit his sons and
their families equally” (page 129)
6
Advancements: hotchpot
Hotchpot Example
example
Testator ($50,000)
Daughter A ($10,000)
1. Testator’s estate
at death:
plus
advancements
Daughter B ($0)
Daughter C ($0)
$50,000.00
3. Daughter A's share
$20,000.00
$10,000.00
minus advancements
$10,000.00
Total hotchpot
$60,000.00
2. Hotchpot divided
by 3 heirs:
$20,000.00
$10,000.00
4. Daughter B's share
$20,000.00
minus advancements
$0.00
$20,000.00
5. Daughter C's share
$20,000.00
minus advancements
$0.00
$20,000.00
7
Presumption against treating lifetime
gifts as advancements—gifts may
reflect a desire to favor the recipient

UPC § 2-109(a) treats gift as an advancement only if



(i) the decedent declared in a contemporaneous writing or the heir
acknowledged in writing that the gift is an advancement or
(ii) the decedent's contemporaneous writing or the heir's written
acknowledgment otherwise indicates that the gift is to be taken into
account in computing the division and distribution of the decedent's
intestate estate
Ind. Code § 29-1-2-10


(1) the decedent declared in a writing or the heir acknowledged in a
writing that the gift is an advancement; or
(2) the decedent's writing or the heir's written acknowledgment
otherwise indicates that the gift is to be taken into account in
computing the division and distribution of the decedent's intestate
8
estate.
Guardianship of Minors

Guardianship of the property


Conservatorship


A guardian of property with investment powers similar to those
of trustees, more flexible than guardianship.
Custodianship


Subject to burdensome and costly judicial supervision and
should be avoided.
A person is given property to hold for the benefit of a minor
under the UTMA or UGMA. Useful for modest funds.
Trusts

Flexible and highly customizable property management
arrangement.

Don’t expire when child reaches age 18 or 21
9
C. Bars to Succession
10
Two key bars to succession


Slayer rule—if you kill the decedent,
you lose your entitlement as an heir or
beneficiary (forfeiture)
Disclaimer—you may voluntarily
relinquish your entitlement as an heir or
beneficiary (waiver)

Usually done to reduce taxes or avoid
having one’s share of an estate go to one’s
creditors
11
What were the facts in
Mahoney, p.146?


Charlotte Mahoney murdered her husband, who
died intestate.
If her husband had died of natural causes,
Charlotte would have been the sole heir of her
husband’s estate.


If there had been a larger estate, the husband’s
parents also would have been heirs
What result under Indiana’s intestacy rules?


Charlotte ¾, Howard’s parents split ¼
May Charlotte inherit?
12
In re Estate of Mahoney,
In re220
Estate
of (Vt.
Mahoney
A.2d 475
1966)
Mother
Charlotte
Mahoney
Mark
Mahoney
Howard
Mahoney
13
Slayer rules (p.146)



Slayer inherits—inappropriate to impose an
additional penalty for the crime, plus constitutional
prohibition against corruption of blood
Legal title does not pass to slayer—no one should
be able to profit from own wrongdoing
Slayer receives share in “constructive trust” for
heirs next in line—avoids the rewriting of the
statutory laws of descent but ensures that slayer
does not profit from wrongdoing (UPC and Ind.
Code § 29-1-2-12.1)
14
Indiana slayer rule

A person is a constructive trustee of any
property that is acquired by the person or
that the person is otherwise entitled to
receive as a result of an individual's death,
including property from a trust

Ind. Code § 29-1-2-12.1(a) (emphasis added)
15
Non-probate transfers

Slayer rules include non-probate transfers.
In Indiana,

A person is a constructive trustee of any property
that is acquired by the person or that the person
is otherwise entitled to receive . . . including
property from a trust


Ind. Code § 29-1-2-12.1(a) (emphasis added)
See also Heinzman v. Mason, 694 N.E.2d 1164
(Ind. Ct. App. 1998) (imposing constructive trust
on proceeds from life insurance policy and
retirement account)
16
Who counts as a slayer?

Usually have to have acted intentionally

In Indiana, one is a slayer if the person has
been found guilty, or guilty but mentally ill, of
murder, causing suicide, or voluntary
manslaughter

Ind. Code § 29-1-2-12.1(a)
17
What happens to the
slayer’s share?


Some states will let the slayer’s share pass to
the slayer’s heirs
Other states (including Indiana) do not let
the slayer’s heirs take
18
Constructive trust without
a conviction

A criminal conviction is a sufficient and
conclusive basis for imposing a constructive
trust but not a necessary basis—can
demonstrate guilt by a preponderance of the
evidence in a civil proceeding to impose a
constructive trust (e.g., when killer commits
suicide after the murder or when killer is
acquitted)


UPC § 2-803(g)
Heinzman v. Mason, 694 N.E.2d 1164 (Ind. Ct.
App. 1998)
19
O’s estate goes to sister A; if A disclaims,
property goes to niece B, avoiding gift and
estate taxes and possibly income taxes—
note 9-month time limit for disclaimer under
federal tax code (Note 1, page 153)
O
A
Disclaims
B
20
Disclaimer and Representation,
p. 154
O
C takes ½ and A’s children
each take ¼, even if we’re
in a modern per stirpes
state—don’t want A to be
able to reduce C’s share
A
Disclaims
A1
A2
B
A3
A4
C
21
Drye v. United States,
528 U.S. 49 (1999)
Irma
Disclaims
Rohn
Cannot use disclaimer to
evade a federal tax lien—but
note that the IRS could not
have seized Irma’s estate had
she left it to Theresa in a will
Sue
Theresa
22
Indiana intestacy law
Except as otherwise provided in subsection (c), the surviving
spouse shall receive the following share:
(1) One-half (1/2) of the net estate if the intestate is
survived by at least one (1) child or by the issue of at
least one (1) deceased child.
(2) Three-fourths (3/4) of the net estate, if there is no
surviving issue, but the intestate is survived by one (1)
or both of the intestate's parents.
(3) All of the net estate, if there is no surviving issue or
parent.

Ind. Code 29-1-2-1(b)
23