Tuesday, March 7, 2017

Intestate Distribution

When studying for Wills on the MEE, the Uniform Probate Code is the governing law.  Wills can get complicated, though, and it's sometimes best to contrast the uniform rules with state rules that might differ from the Uniform Code.  One such area deals with the means by which descendants (such as children) of a decedent take their shares of the estate.

In some states a decedent's descendants take their shares per capita with representation.  Essentially, this means that property is divided into equal shares at the first generational level at which there are living takers.  Each living person at that level takes a share, and the share of each deceased person at that level passes to his issue by right of representation.  I've always found that language to be difficult, and an example might help:

Let's say that A has three children: B, C, and D.  One of A's children, B, has 2 children: E and F.  Another of A's children, C, has 3 children: G, H, and I.  The last of A's children, D, has no children.   When A dies, 2 of his children, B and C, have already died.

Let's say that A dies with an estate worth $300,000 and all the property is going to pass to his children.   If applying per capita by representation, the $300,000 will first be split equally among A's children (B, C, and D) so that each gets $100,000.   B, however has already died so his $100,000 will pass to his 2 children (E and F) and C has already died so his $100,000 share will pass to his 3 children (G, H, and I).

How will this all result?  D who is alive will take $100,000.  E and F will share $100,000 equally ($50,000 each).   And G, H, and I will share $100,000 equally ($100,000/3 each).

Things change with the Uniform Probate Code, however.  The Uniform Code applies per capita at each generational level.  Here, the initial division of shares is again made at the first generational level in which there are living takers.  But the shares of deceased persons at that level are combined and then divided equally among the takers at the next generational level.  Let's look at the differences:

Applying the same situation as above, when A dies, two of his children, B and C, have already died.  This time, however, we will take the shares of B and C and combine them and then distribute that combination equally to all who are entitled to take from both B and C.

In other words, using this method (and this is the method to apply on the exam), D still takes his $100,000 as he is alive.  But we will combine the shares of B and C ($100,000+$100,000=$200,000) and divide them equally among all 5 children of B and C.

So, D takes $100,000.  And E, F, G, H, and I, each take $200,000/5=$40,000.

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