from West Bus. Law Interactive CD for 8th Edition
Estate of Klauzer
Supreme Court of South Dakota, 2000. 604 N.W.2d 474..
Background and Facts
John Klauzer executed a will in 1990 and passed away in 1996. His estate was
valued at $1.4 million. The will appointed his brother Frank as personal
representative of the estate. The will disposed of the majority of his estate in a
residuary clause:
I hereby give, devise and bequeath unto my brother, Thomas Klauzer, my sister,
Agnes Blake, my sister, Anna Malenovsky Baker, my brother, Raymond Klauzer,
my niece, Jenny Culver, my niece, Judy Klauzer, my niece, Bernice Cunningham,
my nephew, Wade Klauzer, my nephew, Jim Klauzer, my niece, Debra Klauzer,
friends, Douglas Olson and Fern Olson, and my friends, William Hollister and
Shirley Hollister, my brother, Frank Klauzer, and my sister-in-law, Patricia Klauzer,
all of my property of every kind and character and wheresoever situated, in equal
shares, share and share alike. That should any of the individuals above named
predecease me, then their share of my estate shall go to their [descendants]
surviving.
Klauzer's nephew Wade asked a South Dakota state court to supervise the
administration of the estate. The court ordered in part that, under the residuary
clause, the estate should be distributed in sixteen equal shares. Frank objected
and appealed to the South Dakota Supreme Court. Frank argued that the twelve
Klauzer relatives named in the clause should take one share each while friends,
Doug and Fern Olson and William and Shirley Hollister, should receive one share
per couple, resulting in a division of the estate into fourteen equal shares.
In the Language of the Court
SABERS, Justice.
* * * *
Our goal in interpreting a will is to discern the testator's intent. If the intent is clear
from the language used, that intent controls. However, if * * *doubt remains as
to [the] decedent's intent, the language used and the circumstances surrounding
the execution of the writing will again be examined in light of pertinent rules of
construction. Our inquiry is limited to what the testator meant by what he said, not
what we think the testator meant to say.
* * *Language is ambiguous when it is reasonably capable of being
understood in more than one sense. An ambiguity is not of itself created simply
because the parties differ as to the interpretation of the will. * * * All the words
and provisions appearing in a will must be given effect as far as possible, and
none should be cast aside as meaningless. [Emphasis added.]
The [residuary] clause in John's will * * *names each individual followed by
their relationship to John. Olsons and Hollisters are referenced as follows:
"friends, Douglas Olson and Fern Olson, and my friends, William Hollister and
Shirley Hollister * * *." Each spouse is named as an individual. They are not
referred to as "Mr. and Mrs. Olson" nor as "William and Shirley Hollister."
The clause contains other language to support the position that John intended that
his estate be divided sixteen ways versus fourteen ways. After naming all sixteen
individuals, the clause provides that they should receive his property "in equal
shares, share and share alike. That should any of the individuals above named
predecease me, then their share of my estate shall go to their [descendants]
surviving."
First, John refers to his friends as individuals. Second, he requests that they
receive his property "in equal shares, share and share alike." Third, he states that
if one individual predeceases him, his or her share "shall go to their [descendants]
surviving." In this regard, it is important to point out that married couples may have
different descendants.
We determine that the testator's intent is clearly expressed within the four corners
of the document [within the document itself]. We are bound by the unambiguous
language of the will. Therefore, extrinsic evidence [evidence external to the will] is
not needed. * * *
* * * *
The structure and language of the clause itself * * *convince us that John
intended to leave one share to Douglas Olson, one share to Fern Olson, one
share to William Hollister and one share to Shirley Hollister. Therefore, we affirm
the trial court's order to distribute the estate in sixteen equal shares.
Decision and Remedy
The South Dakota Supreme Court affirmed the decision of the lower court. The
language of the will evidenced the testator's intent regarding the distribution of his
property in sixteen equal shares.

Bielat v. Bielat
Supreme Court of Ohio, 2000. 87 Ohio St.3d 350, 721 N.E.2d 28..
Background and Facts
In 1983, Chester Bielat opened an Individual Retirement Account (IRA) with Merrill
Lynch, Pierce, Fenner & Smith, Inc. In the "Adoption Agreement" that he signed to
open the account, Chester named his sister, Stella, as the beneficiary of the
account on his death. Later, Chester executed a will that gave all of his property to
his wife, Dorothy, on his death. In 1993, Ohio enacted its version of the Uniform
Transfer-on-Death Security Registration Act, which provided that "[a]ny
transfer-on-death resulting from a registration in beneficiary form. . . is not
testamentary." This exempted such transfers from the formalities that apply to
testamentary dispositions. The act applied to registrations in beneficiary forms
made "prior to, on, or after the effective date of this section." After Chester's death
in 1996, Dorothy discovered that Stella was the beneficiary of the IRA. Dorothy
filed a complaint in an Ohio state court against Stella, claiming that she was
entitled to the IRA. She argued in part that because the state constitution
prohibited the legislature from passing retroactive laws and protected "vested
rights" from "new legislative encroachments," the act did not apply to Chester's
IRA beneficiary clause. Dorothy asserted that the court should apply the law in
effect when Chester executed his will, which, according to Dorothy, would void the
designation of Stella as the beneficiary of the IRA. Stella responded with a motion
to dismiss, which the court granted. Dorothy appealed to a state intermediate
appellate court, which affirmed the lower court's judgment. Dorothy appealed to
the Ohio Supreme Court.
In the Language of the Court
COOK, J., Justice.
* * * *
Dorothy cannot claim a vested right to the proceeds of the IRA under the law of
contracts, for she was in no way connected to the IRA Adoption Agreement that
Mr. Bielat executed with Merrill Lynch. * * *The Adoption Agreement signed by
Mr. Bielat and Merrill Lynch placed valid contractual obligations upon them, with
Merrill Lynch bound to pay the IRA balance to the beneficiary that Chester
designated. The IRA Adoption Agreement created no rights or obligations for
Dorothy. Dorothy thus had no vested contractual right impaired by the retroactive
application of the disputed statutes; she had no contractual rights to impair.
Likewise, at the time of the [Uniform Transfer-on-Death Security Registration]
Act's effective date, Dorothy had no vested right to the IRA proceeds as the sole
beneficiary under Chester's will. * * * Until a will has been probated, the
legatee under such will has no rights whatever. A mere expectation of property
in the future is not a vested right. * * *If Dorothy had no vested rights in the
contract that Mr. Bielat executed with Merrill Lynch, and no vested rights in
Chester's probate estate until his death, then the Act did not impair any vested
rights of hers when it applied retrospectively to validate the pay-on-death
beneficiary clause in Chester's preexisting contract with Merrill Lynch. [Emphasis
added.]
* * * *
* * *Dorothy [also] submits that to resolve this dispute, we should apply the law
in effect at the time Mr. Bielat executed his will, since that is the law that frames
the intent of the testator. Dorothy argues that since Chester executed his will prior
to the existence of the Act, he must have done so with the expectation that the
designation of Stella as the transfer-on-death beneficiary of his IRA was void,
since the Act was not yet in place to explicitly validate it. * * *[This argument]
represents a correct statement of the law of interpreting wills, but we are not
interpreting Chester's will in this case. This is not a will contest action, where the
true intent of the testator may be at the heart of the dispute, nor is it a situation
where an unclear testamentary provision requires construction by the court.
Rather, we are faced with two equally unambiguous acts by Mr. Bielat: (1) the
designation of his sister Stella as the beneficiary of his IRA in his contract with
Merrill Lynch, and (2) the clause in his will leaving all of his property to Dorothy.
Decision and Remedy
The Ohio Supreme Court affirmed the judgment of the state intermediate
appellate court. The state supreme court reasoned that Dorothy's rights were not
impaired by the state's version of the Uniform Transfer-on-Death Security
Registration Act because she had no right to the IRA proceeds or to Chester's
estate before he died. The court also explained that because the case did not
involve the interpretation of a will, those legal principles did not apply.

Zeigler v. Cardona
United States District Court, Middle District of Alabama,, 1993. 830 F.Supp.
1395..
Company Profile
Liberty National Life Insurance Company markets its policies for life, accident,
and health insurance in rural regions to lower-income customers. Liberty National
life insurance costs three times more than other insurers' life insurance and ten
times more than others' group coverage. But Liberty National sells policies without
a physical examination and offers a personal, monthly premium-collection service.
Liberty National is the ninth largest life insurer in the United States; in the early
1990s, its profit margin was twice as high as that of the average life insurance
company. Liberty National is owned by Torchmark Corporation (
http://www.torchmarkcorp.com), a diversified insurance and financial services
company headquartered in Birmingham.
Background and Facts
Antonio Suarez, Sr., purchased a $50,000 insurance policy on his life from Liberty
National. The only designated beneficiary was Suarez's mother, Guarina
Cardona. At the time the policy was issued, Suarez was living with his aunt, Ruby
Zeigler. Suarez, Winifred Hamilton (the insurance agent), and Zeigler met to
change the beneficiary on the policy from Cardona to Zeigler. Suarez made clear
that he wanted the proceeds of the policy used for the benefit of his two children,
Antonio (aged nine) and Ebony (aged eight). Apparently owing to a clerical error,
Liberty National never changed the name of the beneficiary on the policy. During
the months that Suarez lived with Zeigler, Zeigler paid the insurance premiums.
Following Suarez's death, a suit was brought to establish who had rights in the
insurance proceeds. Because of Liberty National's error, Cardona was the only
beneficiary of record. Antonio and Ebony sought to have the proceeds placed in a
constructive trust on their behalf, as Suarez had intended.
In the Language of the Court
DE MENT, District Judge
* * * *
* * *As it relates to changing of beneficiaries, the law of equity regards as
having been done that which ought to be done and the courts will give effect to the
intention of the insured by holding that a change of beneficiary has been
accomplished where he or she has done all that he or she could do in order to
comply with the provisions of the policy. * * *
* * *[It] is the court's opinion that Mr. Suarez did all that he could do in order to
effectuate [bring about] the change to name Ruby Zeigler as his primary
beneficiary. Having found that Mrs. Zeigler is the proper beneficiary on the policy,
the court now directs its attention to the issue of constructive trust.
* * * *
* * *The evidence is undisputed that Mr. Suarez wanted the proceeds of his
life insurance policy to go to the benefit of the children. * * *There was no
discussion with Mr. Suarez as to the exact manner [in] which the money should be
divided between Mrs. Zeigler and the children. The children clearly have an
equitable interest in the proceeds of t he policy since it was their father's intent
that the policy proceeds be used for them. A constructive trust may be imposed
on life insurance proceeds even though the designated beneficiary is not guilty of
fraud or wrongdoing.
Decision and Remedy
The court held that Zeigler was entitled to $10,000. A constructive trust on the
remainder of the proceeds was imposed for the benefit of Antonio and Ebony.
Cardona received nothing.

Updated cases on Wills, Trusts, and Estates

Concept Summaries

Wills

Terminology

1.Intestate
--Describes one who dies without a valid
will.
2.Testator
--A person who makes out a will.
3.Personal representative
--A person appointed in a will or by a
court to settle the affairs of a decedent. A
personal representative named in the will
is an executor; a personal representative
appointed by the court for an intestate
decedent is an administrator.
4.Devise
--A gift of real estate by will; may be
general or specific. The recipient of a
devise is a devisee.
5.Bequest, or legacy
--A gift of personal property by will; may
be general or specific. The recipient of a
bequest (legacy) is a legatee.
Requirements for a
Valid Will

1.The testator must have testamentary
capacity (be of legal age and sound mind
at the time the will is made).
2.A will must be in writing (except for
nuncupative wills).
3.A will must be signed by the testator; what
constitutes a signature varies from
jurisdiction to jurisdiction.
4.A nonholographic will normally must be
witnessed in the manner prescribed by
state statute.
5.A will may have to be published--that is,
the testator may be required to announce
to witnesses that this is his or her "last will
and testament." Not required under the
UPC.
Revocation of Wills

1.By physical act of the maker
--Tearing up, canceling, obliterating, or
deliberately destroying part or all of a will.
2.By subsequent writing
--
a.Codicil
--A formal, separate document to
amend or revoke an existing will.
b.Second will, or new will
--A new, properly executed will
expressly revoking the existing will.

3.By operation of law
--
a.Marriage
--Generally revokes a will written
before the marriage to the extent of
providing for the spouse.
b.Divorce or annulment
--Revokes dispositions of property
made to the former spouse under a
will made before the divorce or
annulment.
c.Subsequently born child
--It is inferred that the child is
entitled to receive the portion of the
estate granted under intestacy
distribution laws.
Probate Procedures

To probate a will means to establish its validity
and to carry the administration of the estate
through a court process. Probate laws vary from
state to state. Probate procedures may be
informal or formal, depending on the size of the
estate and other factors, such as whether a
guardian for

Trusts

Definition and
Essential Elements

A trust is any arrangement by which property is
transferred from one person to be administered
by a trustee for another's benefit. The essential
elements of a trust are (1) a designated
beneficiary, (2) a designated trustee, (3) a fund
sufficiently identified to enable title to pass to the
trustee, and (4) actual delivery to the trustee with
the intention of passing title.
Types of Trusts

1.Living ( inter vivos) trust
--A trust executed by a grantor during his
or her lifetime. A living trust may be
revocable or irrevocable.
2.Testamentary trust
--A trust created by will and coming into
existence on the death of the grantor.
3.Charitable trust
--A trust designed for the benefit of a
public group or the public in general.
4.Spendthrift trust
--A trust created to provide for the
maintenance of a beneficiary by allowing
only a certain portion of the total amount to
be received by the beneficiary at any one
time.
5.Totten trust
--A trust created when one person
deposits money in his or her own name as
a trustee for another.
Implied Trusts

Implied trusts, which are imposed by law in the
interests of fairness and justice, include the
following:

1.Constructive trust
--Arises by operation of law whenever a
transaction takes place in which the
person who takes title to property is, in
equity, not entitled to enjoy the beneficial
interest therein.
2.Resulting trust
--Arises from the conduct of the parties
when an apparent intention to create a
trust is present

Law on the web - Wills, Trusts, and Elder Law


Legal Research Exercises on the Web

Activity 50-1: Wills and Trusts

URLs:
http://mtpalermo.com/HTTOC.HTM

http://www.estateattorney.com

The first URL given above will take you to the Table of Contents for attorney Michael T. Palermo's "crash course" in
wills and trusts.

First, click on "I. THE DISPOSITION OF PROPERTY, WITH OR WITHOUT A WILL." How does the attorney answer
the question, "Do I Need a Will?" What are some common "excuses" that people give for not making a will?

Using the "Back" function on your browser, return to the Table of Contents and select "II. THE PROBATE
PROCESS." List the three basic steps involved in the probate procedure. What are some factors to consider in
appointing an executor? What is one of the executor's "first and most important duties" in administering the
estate of a deceased person? Now scroll down to the last subsection in the document on this Web page
discussing a "few more facts" about wills and probate. What will result, in many states, if a witness to a will is
also a beneficiary?

Return to the Table of Contents, and select "VI. DISPOSITION OF PROPERTY OUTSIDE PROBATE." Here the
attorney lists and discusses five ways in which property can be transferred to others outside the probate process.
Describe three of the ways in which this can be done. What are the advantages of transferring property outside
the probate process? Is the property transferred outside probate included in the decedent's estate for tax
purposes?

Return once again to the Table of Contents, and click on "III. TRUST BASICS." What is the difference between a
"living trust" and a "testamentary trust"? Describe what is meant by a "revocable trust" as opposed to an
"irrevocable trust."

Go to the second URL given above, which will take you to attorney Robert Clofine's "Estate Planning Page."

List five topics covered in the Table of Contents for this page. How does each topic relate to estate planning?

Click on the "What's New&?" entry. List and describe at least two new developments in this area of the law.

Return to the Table of Contents, using the "Back" function on your browser, and select "Living Trust Myths." Does
the average person need a living trust? Might other options sometimes be better?