Estates and Trusts Commons^™

Rejection Versus Termination: A Sublessee's Rights In A Lease Rejected In A Bankruptcy Proceeding Under 11 U.S.C. § 365(D)(4), Vivek Sankaran

Michigan Law Review

When a party files for bankruptcy under chapter 11 of the United States Code, the court typically appoints a trustee to handle all of the party's financial obligations. The trustee's responsibilities include investigating the financial condition of the debtor, the operation of the business, the desirability of continuing the business, and any other matter relevant to the disposition of the bankrupt estate. If a bankrupt party holds a commercial lease, the trustee possesses two options for dealing with the lease. One option is to reject the lease, which ends the bankrupt party's obligation to adhere to the provisions of the …

Private Trusts For Indefinite Beneficiaries, George E. Palmer

Michigan Law Review

Recently, in McPhail v. Doulton (In re Baden's Deed Trusts), the House of Lords reached a decision that marks an important change in the English law of trusts which could be important also for American law. It held that there is a single test of validity for private trusts and for powers of appointment where the issue is whether the beneficiaries of the trust or the objects of the power are sufficiently definite, and that this single test is that applicable to powers of appointment. For nearly 170 years, since the decision in Morice v. Bishop of Durham, …

Joint Tenancy: The Estate Lawyer's Continuing Burden, John E. Riecker

Michigan Law Review

The discussion which follows will be divided into three major parts. First, it will be important to see why so much real and personal property remains in joint tenancy between husband and wife or in entireties tenancy. It has been almost eighteen years since Congress eliminated the necessity of holding property in this form in order to split income therefrom for income tax purposes. Is inertia the only reason for the popularity of joint ownership, or are there other reasons? Second, we shall review the familiar but false assumptions most laymen (and even a few attorneys) commonly make regarding the …

Testamentary Option To Purchase Realty Can Be Exercised Under Anti-Lapse Statute By Heirs Of Beneficiary--Tuecke V. Tuecke, Michigan Law Review

Michigan Law Review

Testator devised his farm to his son and two daughters. The son, who predeceased his father, was bequeathed an option to purchase the daughters' two-thirds interest in the farm for a specified amount. Over the objection of the daughters, the heirs of the son sought to exercise the option under an anti-lapse statute. The trial court concluded that the son's heirs had inherited the right to purchase. On appeal to the Supreme Court of Iowa, held,affirmed. An option to purchase is a valuable property right inheritable under an anti-lapse statute.

Property-Joint Bank Accounts-The Donee's Inter Vivos Interest, David K. Kroll S.Ed.

Michigan Law Review

The use of joint bank accounts has become widespread throughout the United States in recent years and has been the source of considerable litigation and comment. The predominant importance of this type of account is that it allows funds remaining at the death of a co-depositor to pass to the survivor without the necessity of a will. This aspect of the account, causing it to be known sometimes as a "Poor Man's Will," has been the focal point of the attention given to the transaction; and today, after more than half a century of uneven treatment by the courts, all …

Chancery Practice On The American Frontier: A Study Of The Records Of The Supreme Court Of Michigan Territory, 1805-1836, William Wirt Blume

Michigan Law Review

The act of Congress of January 11, 1805, which created Michigan Territory out of Indiana Territory, provided that the new territory should have a government "in all respects similar" to that provided for the Northwest Territory by the Ordinance of 1787. The Ordinance had provided for the appointment of a court to consist of three judges who should have "a common law jurisdiction. "

Trust Administration - Apportionment And Other Remedies Of An Income Beneficiary When The Trustee's Retention Of Unproductive Property Causes A Loss Or Termination Of Income, Bruce M. Stiglitz S. Ed.

Michigan Law Review

The purpose of this comment is to examine apportionment and other remedies of a beneficiary who has been deprived of his income by the retention of unproductive property, and especially to examine the problems which arise when the trustee's retention of such assets constitutes a breach of trust.

Property - Powers - State Powers Statutes Protecting Creditors And Requiring Formal Execution, Robert A. Smith S. Ed.

Michigan Law Review

The first part of the comment considers the elevation sections of the statute-sections that change the donee's interest in the appointive or dispositive property to a fee for the benefit of creditors. The second part considers the execution sections of the statute-sections that subject the execution of powers to conveyancing requirements. These sections are of the utmost significance to estate planners.

Future Interests - Rule Against Perpetuities - Recent Statutory Amendment In New York, Paul K. Gaston S.Ed.

Michigan Law Review

After 128 years of criticism and confusion and enormous amounts of litigation, New York has amended its statutory rule against perpetuities. The old rule provided that the absolute power of alienation could not be suspended for longer, than "two lives in being" at the creation of the estate plus a minority exception in some cases. Under the new rule the absolute power of alienation can be suspended for a period measured by any number of "lives in being" at the creation of the estate so long as they are not "so designated or so numerous as to make proof of …

Wills - Execution - Attestation, Max H. Bergman

Michigan Law Review

Prospective witnesses to a will saw the testatrix standing in an adjoining room engaged in writing. Soon thereafter, the testatrix asked them to come in and sign a paper. Her name had already been written on the document, and she neither signed it in the witnesses' presence nor in any manner indicated the writing to be her will. The witnesses read enough of the document, however, to know it was a will, before subscribing it in the presence of the testatrix and one another. Three of the testatrix' sons objected to the probate of the will on the ground that …

The Martial Deduction And Equalization Under The Federal Estate And Gift Taxes Between Common Law And Community Property States, Paul E. Anderson

Michigan Law Review

In 1948, as the culmination of much dissatisfaction with the treatment of community property under the federal estate and gift tax laws, Congress adopted a new formula for the treatment of gifts and bequests between spouses; this formula was known as the marital deduction. It has remained practically unchanged since its adoption and still stands as an integral part of our federal estate and gift tax structure.

The basic purpose of the deduction was to provide equalization in estate and gift tax treatment between spouses residing in community property states and those residing in common law property states. The plan …

The Wills Branch Of The Worthier Title Doctrine, Joseph W. Morris

Michigan Law Review

It is the purpose of this article to examine the history and origin of the wills branch of the worthier title doctrine, to ascertain the extent of its application and the manner of its application, to determine the legal consequences flowing therefrom, and to consider the desirability of its continued existence.

Simes: Public Policy And The Dead Hand, W. Barton Leach, John H.C. Morris

Michigan Law Review

A Review of PPublic Policy and the Dead Hand. The Thomas M. Cooley Lectures, Sixth Series. By Lewis M. Simes.

Real Property - Elimination Of The Straw Man In The Creation Of Joint Estates In Michigan, Edward H. Hoenicke S.Ed.

Michigan Law Review

That joint ownership is a popular form of holding title to real property is undeniable. A husband and wife are especially likely to consider this form of ownership as "natural" and desirable because it emphasizes the concept of marriage as a partnership and gives both partners control over and ownership in the family property. In addition to these factors, joint ownership is popular because of the right of survivorship which is incident to it. In this feature the layman sees, or thinks he sees, the opportunity to avoid a probate proceeding, the estate tax, and the lawyer's fee. It is …

Is The Rule Against Perpetuities Doomed?, Lewis M. Simes

Michigan Law Review

Few rules of the common law have shown such amazing vitality as the rule against perpetuities. Emerging in the Duke of Norfolk's Case in 1682, as a rule to restrict unbarrable entails in land, it is now applied, not only to interests in land, legal and equitable, but also to personal estate, tangible and intangible, including beneficial interests in trusts. It is regarded as a part of the common law of nearly every English speaking country, except a few of the United States where statutory substitutes have been provided. Since 1930, statutory substitutes have been abolished and there has been …

Rights Accruing To A Husband Upon Marriage With Respect To The Property Of His Wife, James W. Day

Michigan Law Review

Attention is directed in this article to the principles of the common law and the features of the subsequent developments that are believed to be of greatest current value either because the particular doctrine still persists or because it aids in the evaluation of a precedent for use in a legal background that differs from that of the period or jurisdiction in which the decision was rendered.

Advancements: I, Harold I. Elbert

Michigan Law Review

The purpose of this monograph is to consider the afore-mentioned topics and other questions inherent in the doctrine of advancements. Different interpretations in the various states will be discussed. The principal objectives of the work are to make a comparative study of advancement legislation and to state the law as it actually exists as a basis for determining whether it can be improved.

Real Property-Construction Of Deeds-Effect Of Phrase "And/Or Survivor" Following Names Of Grantees, Gene E. Overbeck S.Ed.

Michigan Law Review

The receiver of a bank deeded land "to Alfred Carothers and Delarma Hackett, or survivor." Plaintiff, Hackett's grantee, brought an action for construction of the deed. On appeal, held, the deed conveyed a moiety to each for life with remainder to the survivor in fee, and neither grantee, by a conveyance during his lifetime, could cut off the contingent remainder. Rowerdink v. Carothers, 334 Mich. 454, 54 N.W. (2d) 715 (1952).

Real Property-Tenancy By Entireties-Creation By Deed From Husband To Husband And Wife, Richard P. Matsch S. Ed.

Michigan Law Review

H owned real estate in fee simple. His wife, W, joined with him in a warranty deed conveying the land to themselves with the expressed intention of creating a tenancy by entireties. H died and his heirs challenged W's right to take the fee by survivorship. The trial court held that a tenancy by entireties had been created and the wife properly took the fee. On appeal, held, affirmed, one judge dissenting. An Arkansas statute providing that a married man may convey "the interest specified in the deed" directly to his wife permits a husband, already owner …

Restraints On Alienation Of Legal Interests In Michigan Property: Ii, William F. Fratcher

Michigan Law Review

"Estate for life" is a generic term embracing interests in land of several types. The duration of such an estate may be measured by the life of the tenant himself, by the life of some other person, by the joint lives of a group of persons (i.e., the life of the member of the group who first dies), or by the life of the survivor of a group of persons. In the last two cases the tenant himself may or may not be a member of the group. When the duration of the estate is measured by the life of …

Wills-Execution And Revocation Of Duplicate Wills, Richard F. Hooker

Michigan Law Review

Testatrix executed three identical copies of her will. Counsel advised her that in the event she should desire to make a new will she must destroy "both copies of the will in her possession and he would 'definitely destroy the copy' which he retained.'' Thereafter, testatrix destroyed one of the two copies retained by her and struck out an objectionable devise in the other copy. Testatrix made no attempt to alter or destroy the third copy, although she was in temporary possession of it at a later date. The legatee (plaintiff) was successful in setting aside the decree of final …

Trusts And Estates - Relationship By Affinity-Meaning Of The Word "Stepchild" In A Tax Statute, Harold S. Lentz S. Ed.

Michigan Law Review

A widower with two children married Sarah Bordeaux and predeceased her. A child of the marriage died in infancy. The two children were raised by Sarah as if she had been their natural mother. A strong filial relationship developed, and at the death of Sarah in 1949, the bulk of her property passed to the two children by will. The inheritance tax division of the tax commission contended that the relationship by affinity had been terminated and that the children, no longer being "stepchildren," were not entitled to the lower tax rates under Class A of the inheritance tax statute …

Future Interests-Suspension Of Power Of Alienation-Effect Of Trustee's Power To Sell And Reinvest, Douglas L. Mann S. Ed.

Michigan Law Review

Testatrix' will provided that the residue of her estate was to be held in trust for the benefit of her great-nephews and great-nieces. The income from the trust estate was to be paid to them each year and, when the youngest attained the age of fifty, the corpus was to be divided equally among them. Testatrix left two nephews surviving her. Held, the disposition was valid. There was an implied power in the trustee to sell and reinvest the trust corpus, and therefore, the trust did not violate the statutory prohibition against suspension of the absolute power of alienation. …

Descent And Distribution--The 'Worthier Title" Doctrine In Iowa--A Limitation Established, Lewis R. Williams, Jr. S.Ed.

Michigan Law Review

Testator left his entire estate of less than $7,500 to his wife who had predeceased him. Defendants claimed the estate through operation of the anti-lapse statute, as heirs of the wife. As the distribution statute gave the widow of an intestate the first $7,500 of the estate, plaintiffs, heirs at law of the testator, claimed title on a basis of the "worthier title" doctrine, arguing that the widow, had she lived, would have taken by descent and not by purchase, and therefore the anti-lapse statute did not apply. On appeal from a denial of defendants' motion to transfer the proceeding …

Conflict Of Laws-Model Execution Of Wills Statute-Law Governing Revocation Of Will, Edward W. Rothe S.Ed.

Michigan Law Review

Decedent's will, devising Iowa realty, was denied probate in Illinois, the state of domicile, on grounds that the will had been revoked by cancellation. The devisees offered the will for probate in Iowa, under whose law no revocation was effected. The heirs contested probate on grounds that the Illinois denial of probate was conclusive and binding on Iowa courts in view of §633.49, Iowa code, 1946: "A last will and testament executed without this state, in the mode prescribed by the law, either of the place where executed or the testator's domicile, shall be deemed to be legally executed, and …

Adoption - Right Of Inheritance In Absence Of Legal Adoption-Specific Performance Of Contract To Adopt And Other Remedies, James C. Mordy

Michigan Law Review

Adoption was unknown at common law. Modern statutes permitting adoption are largely derived from Roman ideas, which were introduced into this country first through the civil law of Louisiana and later by statutes, beginning with Massachusetts in 1851.

Under the English common law, the only persons capable of inheriting property were blood relations of the deceased. On the other hand, most modern adoption statutes permit inheritance by adopted children equally with natural children. Adoption being purely statutory, the early cases denied the right of inheritance by supposedly adopted children when the statute was not strictly followed. Though still purporting to …

Future Interests-Rule As To Remoteness Of Vesting In California, Howard W. Haftel S. Ed.

Michigan Law Review

T devised the income of a trust to his unmarried daughter for life. If at her death there were living issue of the daughter, the income was to be distributed to such issue until 24 years after T's death. The trust was then to terminate, unless issue, who had been living at T's death, should survive the 24-year period, in which event the income was to continue to be distributed until the death of such issue. It was further provided, "if my said daughter survives me, but at the time of her death leaves no issue of hers …

Future Interests-Worthier Title Doctrine, David H. Armstrong S. Ed.

Michigan Law Review

Plaintiff created an irrevocable trust of $75,000, reserving the income to himself for life and directing distribution of the corpus upon his death to his heirs according to the California laws of succession in existence at his death. Later he sued to terminate the trust on the theory that since the worthier title doctrine prevented creation of a remainder in his heirs, he was sole beneficiary. The intermediate California appellate court held that the worthier title doctrine was inapplicable because of a California statute changing the word "heirs" from one of limitation to one of purchase. Therefore, the outstanding remainder …

Illegal Conditions And Limitations: Effect Of Illegality, Olin L. Browder, Jr

Michigan Law Review

IN earlier articles the writer undertook to explore that miscellaneous and somewhat neglected field of law in which public policy is held to nullify the efforts of persons to impose certain types of conditions and limitations on dispositions of their property.' Such provisions most commonly take the form either of conditions subsequent or executory limitations, but occasionally appear as conditions precedent or special limitations. Unlike provisions which run afoul of the rule against perpetuities or the rules against restraints on alienation, the provisions in question usually prescribe conduct on the part of beneficiaries which is not directly related to the …

Future Interests - Powers Of Appointment- Effect Of Bankruptcy Of Donee Of General Testamentary Power, Albert B. Perlin, Jr.

Michigan Law Review

By her will, X established a spendthrift trust, appointing Y and a trust company as co-trustees. In addition to receiving the income from the trust during his life, Y was given a general testamentary power to appoint the corpus; in default of appointment the corpus was to be divided equally among Y's issue. After X's death Y filed a voluntary petition in bankruptcy, listing the above interest as that of a beneficiary of a spendthrift trust, "value none." Before Y's death the trustee in bankruptcy purported to sell to plaintiff, who was not a creditor of Y …