Reasons for DWT… At when in heirs is converted into in O (inheritance common law, FPI FPI O’s by heirs), then it becomes taxable (feudal incidence)… O’s BUT, today, 2 purposes … served… Clear title (since NOT ascertained until death of heirs transferor) (thus, can be avoided through drafting) Probable intent Doctor v. Hughes… O reserves to O has 2 daughters (O still life estate, EI O’s heirs… alive)… daughter1 in debt to creditor… BUT, as per O has thus, creditor out of luck DWT, … FSA… If daughter1 had then creditor been able to seize remainder, would’ve interest… BUT, if O wanted to create a in heirs, then O remainder … O’s would’ve drafted differently express intent to avoid (DWT a DWT rule of construction) To trigger must use (OR functional equivalent) DWT, “heirs” In when ends, then to Levy for life, then exists in Levy, mother’s life estate FPI OR surviving surviving Levy’s“lawful issue” mother’s “lawful issue”… AND, mother dies w/ Levy as ONLY thus, Levy is … child… mother’s surviving “lawful issue”… BUT, is NOT the same as thus, Levy surviving … “lawful issue” “heirs”… cannot trigger to give self (rather, stuck w/ w/ in his DWT FSA life estate FPI surviving “lawful issue”) A is automatically revocable, unless it is expressly trust unrevocable… AND, even if expressly unrevocable, MAY still be revoked if is trustor … also sole beneficiary… BUT, in Levy became upon death, but NOT … Levy, trustor mother’s sole (b/c, again, is NOT the same as beneficiary surviving “lawful issue” “heirs”) Rebuttal of must come in original, NOT susequent, document DWT If O reserves w/ in heirs (O has 2 life estate, EI O’s children)… then, O wills estate to A, including clause stating provided … “Having amply for my 2 children…”… If applies, then in heirs converted to in O, which was then DWT EI O’s FSA transferred to A in will
Reasons for DWT… At common law, when FPI in O’s heirs is converted into FPI in O (inheritance by O’s heirs), then it becomes taxable (feudal incidence)… … BUT, today, 2 purposes served… Clear title (since heirs NOT ascertained until death of transferor) Probable intent (thus, can be avoided through drafting) Doctor v. Hughes… O reserves life estate, EI to O’s heirs… O has 2 daughters (O still alive)… daughter1 in debt to creditor… … BUT, as per DWT, O has FSA… thus, creditor out of luck If daughter1 had remainder, then creditor would’ve been able to seize interest… … BUT, if O wanted to create a remainder in O’s heirs, then O would’ve drafted differently express intent to avoid DWT (DWT a rule of construction) To trigger DWT, must use “heirs” (OR functional equivalent) In Levy, when mother’s life estate ends, then to Levy for life, then FPI exists in Levy’s“lawful surviving issue” OR mother’s “lawful surviving issue”… … AND, mother dies w/ Levy as ONLY child… thus, Levy is mother’s “lawful surviving issue”… … BUT, “lawful surviving issue” is NOT the same as “heirs”… thus, Levy cannot trigger DWT to give self FSA (rather, stuck w/ life estate w/ FPI in his “lawful surviving issue”) A trust is automatically revocable, unless it is expressly unrevocable… … AND, even if expressly unrevocable, MAY still be revoked if trustor is also sole beneficiary… … BUT, in Levy, Levy became trustor upon mother’s death, but NOT sole beneficiary (b/c, again, “lawful surviving issue” is NOT the same as “heirs”) Rebuttal of DWT must come in original, NOT susequent, document If O reserves life estate, w/ EI in O’s heirs (O has 2 children)… … then, O wills estate to A, including clause stating “Having amply provided for my 2 children…”… If DWT applies, then EI in O’s heirs converted to FSA in O, which was then transferred to A in will
Property-2_Coskran-Spring-2009.docx