NORTH AROLINA WILLS - Amazon S3s3.amazonaws.com/mythm-vids-prod/NC.Brophy.Wills.pdf · based on North arolina law. AL ULATING SHARES A. alculating Issue Shares: Per apita at Each

NORTH CAROLINA WILLS PROFESSOR ALFRED L. BROPHY

UNIVERSITY OF ALABAMA SCHOOL OF LAW

INTESTACY

A. Intestacy v. Testacy

1. Vocabulary

o When somebody dies without a will, the property is distributed through

______________________________.

o When somebody has a valid will, we call the person a ______________________________.

o Somebody who dies without a will is called the ______________________________ or the

decedent.

o The people who are entitled to receive property under intestacy are known as heirs. If there

is a valid will, the people who take are called devisees.

o Probate Estate: The property that passes either by intestacy or by will.

o Non-Probate Estate: The property that passes outside of the will.

2. Partial Intestacy

o If a will does not dispose of all the testator’s property.

o The property not distributed by will is distributed according to the rules of intestacy.

Exam Tip 1: North Carolina bar examiners have tested on this in the past.

B. Distribution of Intestate’s Real Property

1. Share When There is a Surviving Spouse

Exam Tip 2: First, look to see if there is a surviving spouse. That spouse will take one-third, one-half, or 100% of the real property depending on the scenario of other survivors.

Note 1: North Carolina has different rules for distributing an intestate’s real property and personal property.

a. Are there surviving issue (children or descendants of children)?

▪ Surviving spouse and no surviving issue: The surviving spouse takes

______________________________ of the real property.

▪ Surviving spouse and ONE surviving child (or surviving issue of that child): The surviving

spouse takes ______________________________ of the real property. The surviving

child or issue takes the other half.

2 | © 2017 Themis Bar Review, LLC | NC Wills

Note 2: A surviving child or issue cuts off the ability of parents and collateral relatives to inherit from the intestate decedent.

▪ Surviving spouse and TWO OR MORE surviving children (or issue): The surviving spouse

takes a one-third interest in the real property. The surviving children share the

remaining two-thirds interest.

b. Are there surviving parents?

▪ No surviving children (or issue of children), but one or more surviving parents of the

decedent: The surviving spouse takes a ______________________________ share of

the decedent’s real property. The other half goes to the decedent’s surviving parent or

parents.

▪ No children and no surviving parents: The surviving spouse takes

______________________________ of the real property.

Note 3: Property owned by the surviving spouse as a joint tenant or tenant by the entirety with the decedent: The property passes outside of the probate system and is not governed by the rules of intestacy. It goes immediately to the surviving spouse.

2. What if There is No Surviving Spouse?

o No surviving spouse but one or more surviving children: The surviving children or issue

takes ______________________________ of the real property.

o No surviving spouse and no issue: The surviving parents take the real property in equal

shares.

o No surviving spouse and no issue and no surviving parents: Look to the issue of the

decedent’s parents (i.e., siblings and issue of siblings).

o No surviving spouse and no issue and no surviving parents and no issue of parents: Look

up to the level of the grandparents. If there are no surviving grandparents, then look to

issue of the grandparents.

C. Distribution of Intestate’s Personal Property

1. Is there a surviving spouse?

o The surviving spouse takes the first $______________________________ of personal

property.

2. If there is more than $60,000 in personal property in the estate:

o Surviving spouse and ONE surviving child (or surviving issue of that child): The surviving

spouse takes the first $60,000 plus half of the remaining personal property.

o Surviving spouse and TWO OR MORE surviving children (or surviving issue): The surviving

spouse takes the first $60,000 and ______________________________ of the remaining

personal property. The surviving children or issue take the remaining two-thirds of the

personal property.

NC Wills | © 2017 Themis Bar Review, LLC | 3

o Surviving spouse and surviving parent but no surviving children: The surviving spouse takes

the first $______________________________, plus one-half of the remaining personal

property. The parent or parents take the remaining one-half of the personal property.

o Surviving spouse and no surviving issue and no surviving parents: The surviving spouse

gets all of the personal property.

D. Surviving Spouse

1. Marriage Requirement

o For a surviving spouse to take under the intestacy statute, the couple must have been

married.

Exam Tip 3: The exam may test your recognition of couples who are married but are on their way to divorce. If the divorce is finalized, then a spouse can no longer be a “surviving spouse” for intestacy purposes.

o A spouse who has willfully and without cause ______________________________ another

is not entitled to inherit through intestacy. The abandoning spouse is not considered a

surviving spouse for purposes of intestacy.

o Generally, separated spouses or spouses in the process of getting a divorce are considered

to be spouses until the final decree of ______________________________ for purposes of

intestate succession.

2. Survival Requirement

o North Carolina has adopted the Revised Simultaneous Death Act. It requires that an heir be

proven by ______________________________ evidence to have survived the decedent by

______________________________ hours to take by intestacy or by will. (This is the

default rule. It can be altered by a will.)

Example 1: The will of JFK, Jr. altered the default rule by requiring that a

beneficiary survive by six months.

ISSUE

A. Issue

1. Qualifications

o Lineal descendants: People descended in the immediate line from the decedent, i.e.,

children, grandchildren, great-grandchildren, etc.

o Does not include siblings, nieces and nephews, and other collateral relatives.

o A child born during a marriage is ______________________________ to be the marital child

of the parties to the marriage.

▪ In North Carolina, a child born within 10 months after the intestate’s death to that

man’s wife is ______________________________ to be the issue of that man.


2. Adoption

o In North Carolina, an adopted child is treated as a biological child (blood issue) of the

adopting parents. That child can inherit from the adopting parents and the adopting

parents can inherit from the child.

o Adoption severs all inheritance rights between the ______________________________

parents and the adopted child and replaces the natural parents for all purposes.

▪ Stepparent exception: The majority of jurisdictions, including North Carolina, allows a

stepparent to adopt a child and that child can inherit from both the natural parent and

the stepparent and vice versa.

Example 2: A child is born to a married couple who divorce. The child’s

mother remarries. The stepfather adopts the child. The child is still the child of

the mother for purposes of inheritance; the child is also the child of the

adopting stepparent.

o Equitable adoption

▪ If there is no formal adoption procedure, generally, foster children and stepchildren

have no right to inherit from their foster parents or stepparents.

▪ Under the doctrine of equitable adoption, equity treats the children as though they

have been formally adopted, if certain requirements are met.

▪ Applies to ______________________________ only, not a will. A will can set out who

takes the property.

▪ Standards: Equitable adoption requires proof by clear and convincing evidence that

there has been:

• Express or implied ______________________________ to adopt the child;

• ______________________________ on the agreement;

• Natural parents gave up custody;

• Child lived in the home of and acted as the child of the foster parents;

• Foster parents took the child into their home and treated the child

______________________________; and

• A foster parent died intestate (i.e., without a will).

3. Half-bloods

o Siblings with one parent in common.

o North Carolina treats whole-blooded and half-blooded relatives

______________________________.

Example 3: A half-brother dies leaving no children and no parents and no

surviving spouse, but with a full-blooded sister and a half-blooded sister. The

half-sister and the decedent had the same mother but different fathers. Both

sisters split their brother’s intestate estate equally.


4. Non-marital children

In North Carolina, a non-marital child can inherit from and through a decedent if:

o Decedent was judged to be the father of the child by ______________________________

evidence;

o Decedent acknowledged himself to be the father in writing executed and acknowledged

before a certifying officer and during his lifetime and the child’s lifetime;

o Decedent died within ______________________________ of the child’s birth and can be

established through ______________________________ testing as the child’s father; OR

o Decedent acknowledged the child in his will.

5. Posthumously Conceived Children and Assisted Reproduction Technology

o A child born within ______________________________ months of a decedent’s death to

the decedent’s surviving spouse is presumed to be the decedent’s issue and inherits

intestate as if the child was born during the father’s life.

o In North Carolina, any child born as the result of reproductive technology is considered

legally the same as a naturally conceived marital child of a husband and wife requesting and

consenting in writing to the use of such technique.

Exam Tip 4: You may see these issues in the context of determining whether the child is entitled to Social Security benefits. That question is determined based on North Carolina law.

CALCULATING SHARES

A. Calculating Issue Shares: Per Capita at Each Generation

Exam Tip 5: This topic frequently appears on the exam.

Like the Uniform Probate Code, North Carolina uses the per capita at each generation approach to

distribution. This treats people who are equally distant from the decedent in an

______________________________fashion.

Example 4: Decedent has two surviving children and no surviving spouse. If

they are the only survivors, they are each entitled to a one-half share.

Example 5: A grandparent decedent passes away with no surviving spouse.

The decedent had three children. If all three children were still alive, each

would be entitled to a 1/3 share. If there were any grandchildren, the

grandchildren would not take because their share is represented by their parent.

• Procedure:

o First, divide the property into equal shares at the first generation where there is a surviving

descendant;


o Each survivor at that generation takes one share. That satisfies that descendant’s stock. If

they have issue who survive, it does not matter. For those who have passed away at that

level and leave issue who survive, the remaining shares are grouped and are distributed at

that next level to the issue who have survived.

Example 6:

B1, B2, C1, and D1 are each equally related to the grandparent decedent, A. So,

in North Carolina, each surviving grandchild would take an equal share, a one-

quarter share.

Example 7:

When one child survives and the issue of the other two also survive, the estate is

broken into three parts; D takes 1/3 and B1, B2, and C1 share the remaining 2/3

equally. They each take 1/3 of the 2/3, or 2/9.

Note 4: Under the per stirpes method of distribution, D takes a 1/3 share; C1 takes a 1/3 share; and B1 and B2 share B’s 1/3 share (1/6 each).

B. Ancestors and Collateral Relatives

• If there are surviving issue who are eligible to take, that cuts off claims of parents and collateral

relatives like siblings, nieces, and nephews.

• If there are no surviving issue and there is no surviving spouse, then the intestate’s parents

share the intestate’s estate in equal shares. If there is only one surviving parent, that parent

takes the entire intestate estate.

• If there are no surviving parents, then intestate’s ______________________________ and their

issue take.

• If no surviving siblings or issue of siblings then ______________________________ and issue of

grandparents take (one half to the maternal and paternal grandparents).

A

B

B1

B2

C

C1

D

D1

A

B

B1

B2

C

C1

D


• If there is no one surviving from any parent or grandparent and no surviving spouse or issue,

and no will, the property escheats to the state.

Note 5: The intestacy system is a default system. Wills are the way to opt out of the default system.

Note 6: In successful wrongful death actions, the people who receive the award are the decedent’s intestate heirs, even if the decedent left a will.

EXECUTION OF WILLS

Exam Tip 6: This is one of the most tested areas on the North Carolina bar exam.

A. Formalities

1. Attested (Witnessed) Wills

a. Testator’s Capacity

▪ The testator must be at least ______________________________ years old and must

have testamentary capacity.

▪ There are four elements to mental capacity:

• Testator must know the natural objects of her bounty (who the

______________________________ recipients of her property would be);

• Testator must know the kind, nature, and ______________________________ of

her property;

• Testator must know the manner in which she desires her act to take effect; and

• Testator must know the ______________________________ her act will have on

her estate.

b. Testator’s Signature

▪ Signed by the testator or someone else in the testator’s

______________________________ and at her ______________________________.

▪ The testator’s usual signature (or a mark, such as “X”) is sufficient.

c. Witnesses

▪ Witnesses do not need to see the testator sign as long as the testator

______________________________ her previous signature to the witnesses.

Example 8: Testator signs her will and then goes looking for witnesses.

Saying “This is my will and this is my signature” is sufficient acknowledgement.

▪ Two competent witnesses:

• North Carolina requires at least ______________________________ competent

witnesses to a will.


• Competency is determined at the time of ______________________________.

Subsequent incompetency is irrelevant.

▪ Interested witnesses:

• North Carolina allows witnesses to be “interested” and to take under the will.

However, if there are not at least two other ______________________________

witnesses, the interested witness takes nothing under the will.

• Only gifts to the interested witness, the interested witness’s spouse, and anyone

claiming under the interested witness would be void. The rest of the will is valid.

▪ Presence requirement:

• Though the testator does not need to sign in the presence of the witnesses (as long

as she acknowledges her signature), the witnesses need to sign in the presence of

the testator.

• “Presence” in North Carolina is usually judged by the “line of sight” test, i.e., the

testator must be able to see the witness signing.

d. Testamentary Intent

▪ The testator must understand that she is signing a will.

▪ The testator must ______________________________ the contents of the will.

▪ Which documents are considered part of the will? The doctrine of integration says that

all pages found with the will and intended to be part of the will are considered part of

the will. There is no need to sign each page of a will.

e. Date

▪ A will does not need to be dated.

f. Compliance

▪ In North Carolina, ______________________________ compliance with the formal

requirements of wills is required.

▪ The intent is to reduce the possibility of fraud.

2. Holographic Wills

o For a valid holographic (handwritten) will in North Carolina, the will must be:

▪ Written ______________________________ in the testator’s handwriting;

▪ ______________________________ by the testator either with the testator’s signature

or name written in the will in testator’s handwriting;

▪ Found after the testator’s death with the testator’s valuable papers or effects, or in a

safe-deposit box or other place where important papers are kept, or in the custody of

another where testator had deposited it for safe-keeping.


o A holographic will does not have to be ______________________________ for it to be

valid. The testator must write her ______________________________ in her handwriting,

but that can appear in the body of the will.

o A holographic will does not require witnesses.

o Clear testamentary intent: It must be clear that the document was intended by the testator

to be a will.

o At probate, a holographic will requires:

▪ The testimony of at least ______________________________ competent witnesses

that the will, along with the name of the testator, is written entirely in the testator’s

handwriting; and

▪ The testimony of ______________________________ witness that the will was found

after the testator’s death among her valuable papers or effects, or otherwise in a place

of safekeeping.

OTHER TYPES OF WILLS; CODICILS; WILL SUBSTITUTES

A. Self-Proved Will

• Includes notarized signatures of the testator and witnesses, acknowledging the will.

• A self-proved will facilitates probate: There is no need for further evidence of witnesses at a

formal probate hearing.

B. Nuncupative (Oral) Wills

Exam Tip 7: Bar examiners have tested on the topic several times.

• A nuncupative will is:

o Made ______________________________ by someone in their last sickness or imminent

peril of death, who in fact does not survive that sickness or peril; and

o Declared to be that person’s will before ______________________________ competent

witnesses who are simultaneously ______________________________ and asked to

witness the will.

• Only ______________________________ property can be disposed of by a nuncupative will.

• It must be probated within ______________________________ months from the time of

making unless it was reduced to writing within ______________________________ days of

when it was made.

C. Codicils

• A codicil is a ______________________________ to a will that alters, amends, or modifies it.

Editor's Note 1: The professor intended to say, “In North Carolina, a holographic codicil to an attested will and an attested codicil to a holographic will are valid.”


• A codicil republishes the will.

D. Foreign Wills

• Foreign will: A will executed outside of North Carolina (perhaps even outside the United States).

• A foreign will is valid in North Carolina if:

o It was validly executed in the place where the testator executed it;

o It was validly executed in the place where the testator was

______________________________ when it was executed; or

o The will is a military will and executed in compliance with the military code.

E. Will Substitutes (probate avoidance devices)

• Will substitutes are ways of transferring property at death or before death without a will.

• Types of will substitutes include:

o ______________________________ trusts;

o Pour-over wills;

o Bank accounts and securities with a ______________________________ form;

o Payable-on-death clauses;

o Life insurance; and

o Deeds.

1. Revocable trusts

o Revocable trusts are trusts into which the creator (settlor) puts property, retains the ability

to ______________________________ the trust, and includes instructions on what should

happen with the property if the settlor does not revoke the trust before death.

2. Pour-over wills

o These wills pour property from the will into a trust that is not part of the probate process or

the public record.

o The trust is executed either ______________________________ or simultaneously with the

will.

Example 9: Elizabeth Edwards used a pour-over will.

3. Bank accounts and securities with beneficiary form

o Property does not need to pass through probate.

o The person listed as beneficiary just needs to produce a

______________________________ of the account owner to the financial institution and

the property will be transferred to the beneficiary.

4. Payable-on-death clauses

o Similar to above; seen in contracts with financial institutions.


o At the decedent’s death, property held under the contract passes to the beneficiary upon

filing of the death certificate.

5. Life insurance

o Life insurance is paid to the named beneficiary without having to go through probate.

o If the insured designates someone as a beneficiary, the beneficiary cannot be altered by

______________________________.

6. Deeds

o In order for a deed to be valid, it must be validly delivered.

Example 10: A probate avoidance device—the grantor may give a deed to an

escrow agent with instructions to deliver the deed at the grantor’s death.

o Creditors typically cannot reach property that passes by joint tenancy or tenancy by the

entirety.

REVOCATION OF WILLS

A. How to Revoke

• A will may be revoked by:

o Subsequent instrument that meets the will formalities;

o Physical destruction or cancellation; or

o Operation of ______________________________.

1. Subsequent instruments

Example 11: A new will that explicitly revokes a previous will.

2. Physical Destruction or Cancellation

o A will may be revoked by burning, canceling, tearing, obliterating, or destroying a

______________________________ portion of the will with the

______________________________ to revoke it.

o If a will was once known to exist but cannot be found at testator’s death—or is found

mutilated—there is a rebuttable ______________________________ of revocation.

o A third party can physically destroy and thus revoke a will on a testator’s behalf so long as it

is done (i) at the testator’s ______________________________ and (ii) in the testator’s

______________________________.

Example 12: The testator calls the lawyer who drafted her will and asks the

lawyer to destroy it. The lawyer does so. Though it is done at the direction of

the testator, the will is not revoked because it was not physically destroyed in

the presence of the testator.


3. Operation of Law

o Dissolution of marriage revokes all will provisions in favor of the former spouse, including

appointments as executor, trustee, etc., and grants of a power of appointment, unless the

______________________________ specifically provides otherwise.

o Separation without divorce does not affect the rights of the spouse or domestic partner

until a complete property settlement is in place.

o Caveat: In North Carolina, a subsequent marriage does not

______________________________ a will.

Example 13: A testator executes a will years before marriage. Years later, the

testator marries. Upon marriage, the will is not revoked. The new spouse is

limited to the spousal elective share.

Note 7: Partial revocation of a will is allowed in North Carolina.

Note 8: A holographic will can be altered or revoked in whole or part by holographic changes and ______________________________ a new signature.

B. Lost Wills

• There is a rebuttable presumption of revocation when a will known to exist and in the

possession of the testator is not found upon the testator’s death.

• If the presumption is rebutted, you want a ______________________________ copy of the will.

• The burden is on the ______________________________ of the lost will to show existence of a

will.

• Revocation of a will revokes its codicils since they are considered part of the will.

C. Revival

• A revocation of a subsequent will does not automatically revive a former will.

• To revive a former will, you have to:

o Properly ______________________________ it; or

o Incorporate it by ______________________________ in a subsequent will or codicil that is

properly executed.

D. Dependent Relative Revocation (DRR)

• If a will is revoked based on a mistake of ______________________________ or

______________________________—such as the mistaken belief that revoking a subsequent

will revives a previous will—then a court may apply DRR and say that the most recently revoked

will is revived.

Example 14: An early will leaves property to a friend who later is not

considered a friend. Testator drafts a new will and then revokes it, mistakenly

believing that the first will will be revived. If we do not apply DRR, Testator will

die intestate because both the first and second wills have been revoked. DRR


allows us to probate the second will BUT, it must be shown that reviving the

second will would be more in keeping with the testator’s desires than would

being intestate.

Exam Tip 8: If you see an otherwise valid revocation based upon a mistake (whether of law or fact), begin your analysis by stating the DRR rule.

E. Will Contracts

1. Examples

o Contracts to ______________________________ a will: (e.g., “If you take care of me for

the rest of my life, I will leave you property.”)

o Contracts not to revoke a will: (e.g., a married couple makes a mutual contract that

whoever survives will not revoke their will and they will leave property to their children

together.)

o Contracts to die ______________________________: (e.g., “I promise I won’t leave

property to someone else. I will allow my property to pass by intestacy.”)

Exam Tip 9: North Carolina bar examiners have asked several questions on this topic in the recent past. Apply principles of contract law when faced with a question involving a will contract.

2. Writing requirement

o The writing may be a will that states the material provisions of the contract; or

o A separate writing with the material terms of the contract; or

o Reference in a will to such a contract and extrinsic evidence proves the terms.

• Look for ______________________________ for the promise.

Exam Tip 10: You may see will contracts in the following contexts: • Joint wills (e.g., a married couple signs the same document); • Reciprocal wills (wills with identical or reciprocal provisions). If you see this fact pattern, analyze if there is a contract between the parties to continue to have that will provision. Look for clear evidence of intent not to revoke.

CONSTRUCTION AND INTERPRETATION OF WILLS

A. Definitions

• A gift of real or personal property is a called a ______________________________.

o Specific devise:

Example 15: “I leave my car to my next-door neighbor.”

o General devise:

Example 16: “I leave $100,000 to my niece.”


o Demonstrative devise: Gifts paid from a particular source.

Example 17: “I leave $10,000 from my BB&T bank account to my cousin.”

o Residuary devise: Whatever remains after we’ve made all the specific, general, and

demonstrative devises.

• The person who receives property is the ______________________________.

B. Incorporation by Reference

• A will may incorporate another writing that was not executed with all the formalities of a will, if

the other writing:

o Existed at the time the will was ______________________________;

o Is ______________________________ to be incorporated into the will; and

o Is described in the will with sufficient certainty to permit its identification.

C. Acts of Independent Significance

• A will may designate a beneficiary or make a disposition by reference to an act unrelated to the

execution of the will, and maybe occurring after execution, as long as that act has significance

independent of its testamentary significance.

Example 18: A testator leaves “whatever motorcycle I own at the time of my

death to my beloved nephew.” Since executing the will, the testator has

purchased and sold a few motorcycles. Whatever motorcycle the testator owns

at the time he passes away will be given to the nephew.

The significance of the act of purchasing or selling a motorcycle is independent

of the testamentary function.

D. Doctrine of Lapse

Exam Tip 11: This topic is asked about very frequently on the exam.

1. “Lapse”

o If a beneficiary does not survive the testator, the gift to them lapses.

o The beneficiary generally needs to be alive at the time of the gift to take it.

Example 19: A testator leaves something to his beloved sister. The sister

passes on before the testator dies. That gift, without a curative doctrine,

lapses.

Example 20: A testator leaves “my motorcycle to my best friend and law

partner.” He passes away before the testator. That gift lapses, and either

becomes part of the residuary or passes according to an alternate disposition.

2. Anti-Lapse Statute

o Anti-lapse statute: Preserves gifts from lapsing, in certain circumstances.


o Provides an exception if a beneficiary who predeceases the testator is related to the testator

at the level of ______________________________ or descendant of grandparent.

o If the deceased beneficiary is closely enough related, the surviving

______________________________ of the deceased beneficiary take in her place.

Example 21: A testator devises property to his sister. She’s passed away but

she leaves issue who survive her (the sister) and who take in her place.

Editor's Note 2: Under the anti-lapse statute, the issue of the deceased sister will take the property in place of the sister.

o Keys to look for:

▪ Is the beneficiary who has passed away sufficiently closely related?

▪ Has the beneficiary who has passed away left issue who survive?

3. Class Gifts

o Typically, when there is a gift to a class, only the ______________________________

members take.

Example 22: A gift of “$100,000 to the class of the siblings of my best friend”

may be to a class that contracts as members die or expands as members are

born.

o Class gifts work in conjunction with the anti-lapse statute: The anti-lapse statute only

applies if the testator is related to the beneficiary at the level of grandparent or below.

Example 23: I leave property to my siblings. If some of the siblings pass away

during my life but leave issue who survive, the issue who survive will stand in

the shoes of the deceased sibling and take by representation.

4. Residuary

o The anti-lapse rule applies to residuary beneficiaries: If a residuary beneficiary dies before

the testator and either is not related at the level of grandparent or leaves no issue, then the

other residuary beneficiaries take the deceased beneficiary’s share.

Example 24: I devise my residuary to my best friend, Fred. Fred predeceases

me and leaves issue who survive. His issue do not take.

E. Abatement

• Occurs when the testator gives away more than he owned.

• Order of abatement:

o First, ______________________________ property;

o Then, residuary devises;

o General devises;

o ______________________________ devises.


Example 25: A beneficiary receives a specific devise of a car and a residuary

devise of a one-half interest in a farm. There were some debts and the farm

was to be sold. The beneficiary would lose some of her interest in the farm, but

would receive the specific devise of the car.

F. Ademption

• When a testator does not own specifically devised property at the time of her death, the gift is

generally ______________________________, unless the testator was incompetent or the

property is ______________________________.

o Ademption by ______________________________, i.e., the property no longer exists.

o Ademption by ______________________________, i.e., the property has already been

given to the beneficiary during the testator’s life.

G. Exoneration of Liens

• Specifically devised real property is given to a beneficiary with liens still on the property.

• This is a default rule.

Example 26: Testator devises his house to his daughter. There is a $50,000

mortgage on the house. Unless the will specifies otherwise, the daughter takes

the property subject to the $50,000 mortgage.

Note 9: You can, by will, explicitly exonerate the lien (mortgage).

H. Ambiguities and Mistakes

• Generally, North Carolina adheres to the ______________________________ of the will and

generally does not allow extrinsic evidence to interpret the will.

• Latent ambiguity (i.e., the ambiguity is not apparent from reading the will): North Carolina

______________________________ the introduction of extrinsic evidence in the case of a

latent ambiguity.

Example 27: “I give $1,000 my cousin, Chuck” is a latent ambiguity when there

are two cousins named Chuck.

• Patent ambiguity (i.e., the ambiguity is apparent from reading the will): North Carolina generally

does not allow extrinsic evidence BUT allows extrinsic evidence if the patent ambiguity relates

to the testator’s intent.

Example 28: “I give my brother one-quarter of a million dollars ($25,000) to

my favorite nephew, Sam.”


RESTRICTIONS ON THE POWER TO TRANSFER

A. Rights of the Surviving Spouse

1. Spousal Support: The surviving spouse is entitled to the following means of support:

o North Carolina Homestead exemption;

o Family allowance (free from any creditors’ claims):

▪ $30,000 for one year of support and maintenance; and

▪ $5000 for each minor child for one year of support. The following children are eligible

for the child’s benefit:

• Each minor child;

• Each child under ______________________________ who is a full-time student;

• Each child under age ______________________________ who is incompetent or

disabled.

o Social Security survivor benefits;

o Pension plan with survivor benefits.

2. The Elective Share

o The surviving spouse can elect against the will and receive the elective share in place of the

will.

o Goal: Take a picture of the property that the decedent had control over at the time the

decedent died, including the probate estate and other property that passes through will

substitutes. That adds up to the total assets of the decedent.

o Total assets include:

▪ Decedent’s property that would pass via ______________________________ if he died

without a will;

▪ Property over which the decedent held a presently exercisable general power of

appointment;

▪ Property held as tenants by the entirety or joint tenancy, measured as one-half of the

value of the property held with the surviving spouse;

▪ Payments made as a result of the decedent’s death under any policy (e.g., life insurance)

that the decedent owned or could exercise a right of appointment over;

▪ Property transferred during life over which the decedent retained the right to possess or

the right of income or power over (e.g., revocable trust);

▪ Property transferred to someone other than the surviving spouse within one year of

______________________________ and during marriage to the spouse, except for

property for which there was full and adequate consideration or that the spouse

consented to in writing.


o Add all those together; then give the surviving spouse a percentage of that total based on

the ______________________________.

Exam Tip 12: This has been recently revised in North Carolina. Bar examiners might test on this change.

o Surviving spouse’s share:

▪ If the marriage is less than five years: 15% of the decedent’s total assets;

▪ At least five years but less than 10 years: ______________________________%;

▪ At least 10 years but less than 15 years: 33%;

▪ 15 years or more: ______________________________% of the decedent’s total assets.

o Net property passing to the surviving spouse includes:

▪ Property devised to spouse or passing through ______________________________ or

beneficiary designation;

▪ Surviving spouse’s interest in ______________________________;

▪ Property transferred during life to the surviving spouse for which there is a signed

acknowledgement;

▪ Property awarded posthumously pursuant to an equitable distribution claim;

▪ Property held in a spousal trust.

Example 29: A husband dies with the following assets: (i) $100,000 in life

insurance proceeds, payable to his surviving spouse, (ii) non-marital real

property worth $500,000, devised to his adult children in his will, and

(iii) $50,000 in stocks, devised to his children. The husband’s Total Net Assets

equal $650,000. The couple have been married 30 years; the surviving spouse’s

applicable share of the Total Net Assets is 50%, or $325,000. The property

passing to the surviving spouse is $100,000 (the insurance policy). Therefore,

the surviving spouse is entitled to an elective share of $225,000.

o The spouse may waive her right to the elective share:

▪ Fair and reasonable disclosure of the decedent’s property; unless

▪ The spouse has waived her right to the disclosure.

Note 10: A will executed before marriage is not revoked upon marriage; the spouse is entitled to an elective share. That is the extent of her protection.

Note 11: How North Carolina treats a spouse who gets married after the execution of a will is different from how it treats children born after the execution of a will.

B. Gifts to Children

1. Advancements

o Advancements apply only to ______________________________, not wills.


o In North Carolina, there is a presumption that gifts to children during the decedent’s life are

not advancements.

▪ The estate could show that a gift during the decedent’s lifetime is an advancement.

▪ Must look to the ______________________________ of the decedent.

o If the gift is shown to be an advancement, its value is brought into the “hotchpot” with the

intestate estate:

▪ Start with the intestate estate;

▪ Add the value of the advancements to calculate the total estate;

▪ Divide the total estate so that each child receives an equal share.

Example 30: A decedent died leaving two children and no surviving spouse.

The decedent’s intestate estate was $75,000. If one child received an

advancement of $25,000, that $25,000 would be added back into the estate for

a total estate of $100,000. Each child would be entitled to half (or $50,000).

Because the first child had already received an advancement of $25,000, that

child would receive $25,000 from the decedent’s estate and the other child

would receive $50,000 from the estate. They end up with equal amounts.

2. Satisfaction of Devises: The Wills analogue to advancements.

Example 31: If a gift of money is devised in a will, but the amount is provided

during the decedent’s lifetime, the devise is said to have been

______________________________.

3. Transfers to Minors: Property transferred to minors may be held by a guardian, a

conservatorship, a custodian, or a ______________________________.

C. Omitted Children: If a will omits a child born (or adopted) after its execution, that child may claim an intestate share of the estate, unless:

• The testator made a provision for the child in the will;

Example 32: A class gift “to all of my children.”

• It appears from the will that omission was ______________________________;

Example 33: Anna Nicole Smith’s will expressly excluded after-born children.

• The testator had other children at the time of the execution of the will and none of those

children took under the will;

• The spouse takes ______________________________ the estate under the will;

• The testator provided for the child outside of the will, whether adequate or not.


BARS TO SUCCESSION; WILL CONTESTS

Exam Tip 13: This is a popular topic for the bar exam.

A. Bars to Succession

1. Homicide (Slayer’s Statute)

o A slayer may not inherit from the decedent’s estate.

o A slayer is a person who:

▪ Is guilty as principal or accessory in the ______________________________ and

______________________________ killing of the decedent;

▪ Found liable in a ______________________________ action within two years of

decedent’s death for the

willful and unlawful killing of decedent; or

▪ Is a juvenile who is adjudicated ______________________________ for an act that

would be a willful and unlawful killing.

Note 12: A person found not guilty by reason of insanity is not considered a slayer for purposes of the North Carolina slayer’s statute.

o Slayers are treated as if they had ______________________________ the decedent.

▪ If the slayer and decedent hold property as tenants by the entirety, then one-half passes

to the decedent’s estate immediately and one-half passes on the

______________________________ of the slayer.

▪ If the slayer has issue who would be entitled to take if the slayer had predeceased the

decedent, then the living issue take. This applies to all property, both probate and

nonprobate (e.g., life insurance policies).

Exam Tip 14: Past exams have stressed “willful and unlawful killing.”

2. Surviving Spouse: The following acts disqualify the spouse from taking:

▪ An absolute ______________________________, annulment, or divorce from bed and

board;

▪ Separation and cohabitation that has not been condoned;

▪ Willful ______________________________ without cause;

▪ Knowingly entering into a ______________________________ marriage.

3. Parents: Any parent who has willfully abandoned a child loses all rights to

______________________________ succession, including the right to administer the child’s

estate, except when a parent:

▪ Resumed care and maintenance at least one year before the child’s death, and

continued care and maintenance; or

▪ Had been deprived of custody under a court order, and has substantially complied with

all court orders regarding ______________________________.


Exam Tip 15: There has been a recent bar exam question on the effect of a parent’s abandonment of a child.

4. Renunciation

o A devisee (or intestate heir) must ______________________________ renounce if they

choose not to accept property.

o The renunciation must:

▪ Identify the transferor of the property interest or creator or holder of the power;

▪ ______________________________ the property or interest renounced;

▪ ______________________________ the renunciation; and

▪ Be ______________________________ and acknowledged by the person renouncing.

o The renunciation must be filed within ______________________________ months of death

to be a qualified disclaimer for federal estate and gift tax purposes (failure to do so results in

the beneficiary being considered to have accepted the property and then making a gift of

the property).

o The ______________________________ of the renouncing party has no elective share or

other marital interest in the renounced property.

B. Will Contests

Note 13: A will contest in North Carolina is called a “______________________________”.

1. Period of Limitations

o The general period for filing a caveat is ______________________________ years from the

filing of a will.

o But, if a will is probated in solemn form then the challenge must take place during the

probate and anyone properly served cannot caveat the will.

2. Standing to Contest: Any ______________________________ party can contest a will.

Example 34: Judgment creditor of a beneficiary under a will; a beneficiary

under a prior will.

3. Testamentary Capacity: A testator lacks capacity if she does not know:

o Natural objects of her bounty;

o The kind, nature, and ______________________________ of her property;

o The manner in which she desires her act to take effect; and

o The effect her acts will have on her estate.

4. Insane Delusion

o A belief for which no ______________________________ support, but to which the

testator adheres despite all reason and evidence to the contrary.

o In North Carolina the caveator must show:


▪ That the testator suffered insane delusion;

▪ That it was the ______________________________ of the disposition; and

▪ That the delusion was actually operative in the production of the will.

5. Undue Influence

Exam Tip 16: This was asked about on the bar exam fairly recently.

o The mental or physical ______________________________ exerted by a third party on a

testator with the ______________________________ to substitute the judgment of the

third party for the testator.

o The caveator must show that the will would not have been made

______________________________ the undue influence.

o Factors that are signs of undue influence (not all need to be present):

▪ Old age and physical or mental weakness;

▪ Testator was in the ______________________________ of the beneficiary and subject

to her constant association and supervision;

▪ Others had little or no opportunity to see the testator;

▪ The will is different from and ______________________________ a prior will;

▪ The will was made in favor of one with whom there are no

______________________________;

▪ The will disinherits the natural objects of the testator’s bounty;

▪ The beneficiary has procured its execution.

6. Fraud

o Fraud must be present at the time of the ______________________________ of the will.

o Elements of fraud:

▪ ______________________________ made by the beneficiary;

▪ With ______________________________ to deceive the testator and for the purpose

of influencing the testamentary disposition;

▪ Reasonable ______________________________ by the testator on the

misrepresentation; and

▪ Damages.

o Fraud in the inducement: Making a knowingly false statement to induce the testator to

make a different will from the one she otherwise would have made.

o Fraud in the execution: Fraud as to the very nature of the instrument or its execution.

Example 35: The testator did not know she was signing a will.

o Constructive fraud:

▪ Using a confidential or fiduciary relationship to harm the testator


▪ There does not need to be actual fraud—only abuse of a

______________________________ relationship to gain an advantage.

o Remedy: Constructive trust

7. Forfeiture Clauses

o A no-contest clause is an express clause in a will that disinherits a beneficiary who

challenges a will.

o They are generally enforceable, but are not enforced against people who in good faith and

with probable cause challenge a will.

8. Provisions in Restraint of Marriage

o A broad restraint against marriage (e.g., forfeiture of a gift if a beneficiary ever marries) is

generally void.

o A reasonable restriction on marriage (e.g., a restriction against an ill-advised marriage to a

specific individual) is valid.

PROBATE AND ADMINISTRATION

Exam Tip 17: Bar examiners have occasionally tested on the workings of probate and administration because it is an important part of the practice of lawyers whose practice is wills and trusts.

A. Vocabulary

• Probate: The judicial process that establishes the validity of a will, determines who the

devisees/heirs are, issues letters to the executor (or, if intestate, the administrator) of the

estate, allowing the person to (i) give notice to ______________________________, (ii) collect

money owed to the estate, (iii) pay creditors, (iv) distribute property to the heirs or

beneficiaries.

• “Probate” deals only with property subject to a will; “administration” deals with intestate

property.

• “Probate” also deals only with probate property; it does not deal with nonprobate property.

• Nonprobate property: Includes property passing by joint tenancy or tenancy by the entirety;

property paid pursuant to a ______________________________ policy; pension plan proceeds;

property subject to a revocable trust.

B. Procedure

Exam Tip 18: The North Carolina examiners are very likely to ask a question in this area.


1. Primary jurisdiction

o Primary jurisdiction: The county where the decedent was

______________________________ at the time of the

______________________________. Probate must be filed there.

o Other counties where the decedent owned real property have

______________________________ jurisdiction, but that jurisdiction is dependent on

proceedings where there is primary jurisdiction (where the decedent is

______________________________).

2. Personal representative

o A will usually names an executor; if it does not or the named executor(s) are unavailable,

the priority of naming a personal representative is as follows:

▪ Surviving spouse;

▪ Any devisee;

▪ Any ______________________________;

▪ Any next of kin, with closer next of kin having priority;

▪ Any ______________________________;

▪ Anyone of good character residing in the county;

▪ Anyone of good character.

o The court then issues letters testamentary (for wills) or letters of administration (intestacy)

to the personal representative. They authorize the personal representative to make

______________________________ in the property.

3. Proceedings

o In North Carolina, a will can be probated ______________________________, even decades

after the testator’s death.

o Solemn form probate:

▪ Requires the clerk to give ______________________________ to all interested parties

and to schedule a hearing;

▪ Caveats (objections to the will) must be filed within a fairly short time of receiving

notice;

▪ If no interested party with notice contests the will, the probate is binding.

Note 14: Probate in solemn form is seen when a will contest is anticipated, so as to restrict the time period for contesting.

o Common form probate:

▪ Most common (and standard) form of probate in North Carolina.

▪ Caveats (objections to the will) can be filed within ______________________________

years after filing common form probate (even after probate has closed).


4. Creditors’ Claims

o Period of limitations: In North Carolina, claims that arose before the decedents’ death must

be filed with the personal representative either:

▪ Within the time specified in the notice to creditors (must be at least three months); or

▪ Within ______________________________ days after the delivery or mailing of notice

to known creditors.

o Notice

▪ The personal representative must ______________________________ notice to

creditors who can reasonably be ascertained; and

▪ ______________________________ a notice to creditors, which gives at least three

months from the first publication of notice for a claim.

5. Personal representative

o Duties:

▪ Provide ______________________________ to devisees, heirs, and claimants;

▪ Inventory and ______________________________ assets of the decedent;

▪ Manage the assets during administration;

▪ Receive and ______________________________ of creditors and tax collectors;

▪ Distribute the remaining assets to those entitled to them.

o Fiduciary: The personal representative owes fiduciary duties to the estate and may be

______________________________ liable for breach of those duties.

o Closing the estate: After paying creditors and distributing assets, the estate is closed.

POWERS OF APPOINTMENT; POWERS OF ATTORNEY

A. Powers of Appointment

1. Definition: A power that can be given to somebody by the creator o f a trust (“donor”) to an

individual (“donee” or “power holder”) to dispose of trust property.

o Exercisable by will: “______________________________” power of appointment.

o Exercisable during life: “Presently exercisable” power of appointment.

2. Purpose: The power to determine who the next beneficiaries of a trust are.

3. Types:

o General power of appointment: The donee can appoint herself, her estate, her

______________________________, or the creditors of her estate as a new owner.

o Special (“nongeneral”) power of appointment: More limited.


▪ Exclusive: Power to appoint to anyone except a group, e.g., the donee herself, her

creditors, or her estate;

▪ Nonexclusive: Allows the donee to appoint among a class of people, e.g., grandchildren;

If the donee fails to exercise the power, the court will imply a gift to the objects of the

special power.

Example 36: A trust creating the power to give issue or children the power to

redirect property at a later date. It extends control over the trust:

Testamentary trust: A trust established by a will, giving lifetime income to each

of the testator’s children and then giving the children the power to redirect or

appoint, within a class, who will be the next generation of takers.

4. Exercise of the power of appointment

o Testamentary powers may be exercised only by ______________________________.

o In North Carolina, any general devise includes property subject to a power of appointment.

▪ Residuary clause: Exercises a general power of appointment if:

• The power is a general power of appointment;

• There is no taker in ______________________________;

• There is no contrary intent in the document creating the power; and

• The power has not been previously released by the donee.

▪ Blanket exercise clause (e.g., “…including any property over which I have power of

appointment”): Exercises the power of appointment unless the donor required a

______________________________ of the power.

Exam Tip 19: With questions on power of appointment, be prepared to answer whether the power has been exercised, and if so, whether it was properly exercised. Be on the lookout for a residuary clause and also for a “blanket exercise clause.”

Note 15: If a decedent has a presently exercisable power of appointment, that gets added to the total net assets of the decedent for purposes of the elective share.

B. Powers of Attorney

Exam Tip 20: This topic frequently shows up on the exam.

1. Definition: An ______________________________ for someone else (an “attorney in fact” or

“agent”) to act on behalf of the principal who executed the power.

2. Power of Attorney for Financial Matters

o General: Authorizes broad powers, such as those related to financial transactions, tax filings,

gifts. The power of attorney may even authorize agents to make gifts themselves.

o Special: E.g., to execute a deed to a particular piece of property.


3. Health Care Power of Attorney

o Allows an agent to make healthcare decisions for the principal when the principal becomes

______________________________;

o A health care power of attorney must be:

▪ In ______________________________;

▪ ______________________________ by the individual who is to receive care;

▪ In the presence of two qualified witnesses; and

▪ Notarized.

Note 16: General, special, and health care powers of attorney can be made durable powers of attorney (i.e., continue even if the grantor is incapacitated).

4. Scope of Authority: Fiduciary Duties

o Exercise of the powers for the ______________________________ of the principal;

o Hold separate the assets of the principal from the assets of the agent;

o Exercise ______________________________ care;

o Account for all transactions on behalf of the principal; and

o ______________________________ an accounting of administration when directed by a

court.

Example 37: The North Carolina general statutes provide a model form for a

durable power of attorney for financial matters. That form allows the principal

to give the agent the power to give herself a gift.

[END OF HANDOUT]


Documents

NORTH AROLINA WILLS - Amazon S3s3.amazonaws.com/mythm-vids-prod/NC.Brophy.Wills.pdf · based on North arolina law. AL ULATING SHARES A. alculating Issue Shares: Per apita at Each