Bars to Succession

Report
Bars to succession

Heirs may lose their inheritance either
because they forfeit their rights through
misconduct or because they voluntarily
relinquish their rights

Similar principles apply to devisees in a will
or beneficiaries of a trust
1
Two key bars to succession


Slayer rule—if you kill the decedent, you
lose your entitlement as an heir, devisee
or beneficiary (forfeiture)
Disclaimer—you may voluntarily
relinquish your entitlement as an heir,
devisee or beneficiary (waiver)

Usually done to reduce taxes or avoid having
one’s share of an estate go to one’s
creditors
2
What were the facts in
Mahoney, p.146?


Charlotte Mahoney was convicted for manslaughter
after the death of 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 $25,000 + ¾ of remainder; Howard’s parents split ¼
of remainder
May Charlotte inherit?
3
In re Estate of Mahoney,
In re220
Estate
of (Vt.
Mahoney
A.2d 475
1966)
Mother
Charlotte
Mahoney
Mark
Mahoney
Howard
Mahoney
4
Slayer rules (p.146)



Slayer inherits—inappropriate to impose an
additional penalty for the crime, plus constitutional
prohibition against corruption of blood (Art. 3, § 3)
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)
5
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)
6
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)
7
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
8
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)
9
Disqualification for other
misconduct in some states



Abandonment of spouse
Failure to support
Abuse or neglect of parent or child
10
Disclaimer: O’s estate goes to sister A; if A
disclaims, property goes to niece B,
avoiding A’s ordinary creditors, gift and
estate taxes and possibly income taxes—
note 9-month time limit for disclaimer
under federal tax code (Note 1, page 153)
O
Note that lawyers may
need to advise clients of
their option to disclaim.
Sims case, page 153
A
Disclaims
B
11
Disclaimer and representation,
p. 154
What shares do A1-A4 and C take?
C takes 1/2 and A’s children
each take 1/8, 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
O
A2
B
A3
A4
C
12
Drye v. United States,
528 U.S. 49 (1999), p.155
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
Unless Irma
created a “secret
trust” by extracting
Theresa’s promise
13
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)
The surviving spouse . . . is entitled from the estate to an
allowance of twenty-five thousand dollars ($25,000).

Ind. Code 29-1-4-1(a)
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

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