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CHAPTER 2 PROBLEMS Assume the Decedents in All of the Problems Are Illinois Residents. Some Problems Refer to the Illinois Proba

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CHAPTER 2 PROBLEMS Assume the Decedents in All of the Problems Are Illinois Residents. Some Problems Refer to the Illinois Proba CHAPTER 2 PROBLEMS Assume the decedents in all of the problems are Illinois residents. Some problems refer to the Illinois Probate Act of 1975 (“Probate Act”), Chapter 755, Act 5 of the Illinois Compiled Statutes: http://www.obre.state.il.us/LAWS/Laws.htm. To find a section in the Act, § 4-3 for example, clink the link, scroll down to Chapter 755, Estates, then click Act 5, Probate Act of 1975. The first number of a citation is the Article number; § 4-3 is in Article IV; click it and scroll down to § 4-3. Problem 1 What are the functions of probate and the major responsibilities of the personal representative? What are the disadvantages with probate? When is probate required? Problem 2 Do the attesting witnesses have to appear in court in Illinois to admit the will to probate? Problem 3 Johnston is an 87-year-old physician with a wife and two adult children who are lawyers. He retains you to write a new will leaving one-half of his substantial estate to his 37-year-old personal assistant. He has the mental capacity to make this decision. (a) What steps might you take to make sure this gift survives a potential will contest by his family? (b) Johnston wants you to draft a provision making a substantial bequest to you to show his appreciation for the outstanding legal advice you have given him. Is there a problem with this? How would you suggest this be handled? See Rule 1.8 of the Illinois Rules of Professional Conduct at http://www.iardc.org/rulesdecisions.html. Problem 4 Yvonne died intestate survived by her husband, one minor child and one brother. At her death, Yvonne owned a $1,500 bank account, miscellaneous personal effects, household items worth about $1,000, and $90,000 of securities. She also owned a $200,000 insurance policy on her life; her surviving spouse is the beneficiary. At her death, she owed various undisputed small debts totaling $500. Is it necessary or desirable to open an estate administration? If not, how will the surviving spouse obtain title to the bank account and the securities? See Probate Act §§ 25-1(a) and (b)(6). C:\! FWM 2007\! chapter 2 handouts.wpd 1/28/07 8:45 pm 38 Problem 5 Martin died intestate; determine how his estate should be distributed if the following relatives survive him. See Probate Act § 2-1 (a) - (d), which follows the “strict” per stirpes rule. (a) his wife, Walda, and son Stuart (b) Walda, Stuart and daughter Diane (c) Walda and his mother Margaret (d) Margaret and his sister Sarah (e) Walda, Stuart, and Diane’s children, Gary and Gabi (f) son Stuart, and grandchildren Gary and Gabi (g) Granddaughter Gail, Stuart’s daughter, Gary and Gabi Problem 6 Randall signs his will in a hospital in the presence of Lucy and Marvin and asks them to witness the will. As Lucy steps forward, Marvin suddenly has to sneeze. Not wanting to contaminate Randall, Marvin steps briefly around the curtain and sneezes twice while Lucy signs the will as a witness. Marvin then signs the will as a witness. Is the will admissible to probate in Illinois? See Probate Act § 4-3(a). Problem 7 Sharon, a widow, bequeathed one-half of her estate to her daughter Emily and one-fourth to each of her sons. Emily was one of two of the will’s witnesses and the estate was worth $120,000 when Sharon died. See Probate Act § 4-6(a). (a) Is the will valid? (b) How much will each child inherit? Problem 8 Jessica’s attorney recommends that she execute a pourover will. (a) What are the advantages of a pourover will? (b) Are they permitted in Illinois? If so, what must Jessica do before she executes the will? See the first two sentences of § 4-4. Problem 9 Bob and Karen have been married for 20 years and are about to purchase a retirement condominium. Would you recommend they take title as joint tenants or as tenants by the entirety? What are the advantages and disadvantages of each? C:\! FWM 2007\! chapter 2 handouts.wpd 1/28/07 8:45 pm 39 Problem 10 (1) Richard is married, has one adult daughter, and dies intestate. How will his estate be distributed? See Probate Act § 2-1. (2) Richard dies with a will that leaves his entire $300,000 probate estate to his daughter and expressly disinherits his wife. His wife renounces his will. (a) How will the estate be distributed? See Probate Act § 2-8(a). (b) What result if he did not have a daughter and the will left his entire estate to his brother? (c) What result if he did not have a daughter and he left $100,000 to his sister and the residue to his brother? See Probate Act § 2-8(d). Problem 11 Walter and Beverly Smith live have two small children. Walter has $250,000 of assets in his name and Beverly has $50,000 in her name. They do not think they need wills because of the modest size of their estate. (a) What are some problems the survivor might have to contend with if one spouse dies intestate? (b) What would happen to their property and their children if they die intestate simultaneously in an accident? (c) What provisions would you include in their wills to alleviate some of these problems? C:\! FWM 2007\! chapter 2 handouts.wpd 1/28/07 8:45 pm 40 Pritzker Heirs Settle Family Feud Over Inheritance for $560 Million Bloomberg.com January 7, 2005 Jan. 7 (Bloomberg) -- Actress Liesel Pritzker and her brother Matthew agreed to accept $560 million to settle $2 billion in claims that family members cheated them out of their inheritance, a person familiar with the matter said. Liesel Pritzker, 20, and her brother Matthew, 22, will get $280 million each in cash, paid in equal shares by 11 relatives, including Thomas Pritzker, chairman of Hyatt Corp. The two also will get to keep $170 million they received previously to resolve their claims, the person said. The two Pritzker heirs had threatened in their April lawsuit to interfere with plans to split up the holdings of one of the world's richest families. The Pritzker fortune includes the 209- hotel Hyatt chain, commercial real estate, industrial businesses and a 25 percent stake in Royal Caribbean Cruises. “The settlement lifts a big question mark on the family’s ownership structure and clears the way for a possible public offering,” said Roger Cline, head of consulting firm Roundhill Hospitality in Roslyn Heights, New York. “Wall Street has become very bullish on hotel stocks generally. I can't think of a better time than this year to take Hyatt public.” The largest part of the settlement will be paid by Liesel and Matthew's father, Robert Pritzker, 78, who also sued. He agreed use a $200 million trust to reimburse charitable foundations of the other 11 Pritzker defendants for their $560 million in settlement payments upon his death. “We have definitely achieved what we set out to do,” Dan K. Webb, an attorney for Matthew Pritzker, said in a statement. Liesel and Matthew Pritzker claimed in their lawsuit that their trust fund assets were transferred to accounts benefitting other family members and the Pritzker Foundation, a Chicago charity. Trusts “We filed Liesel’s lawsuit to find out exactly what happened to her trusts when she was a young girl,” said Lazar P. Raynal, a lawyer for Liesel Pritzker, in a statement. “Once we accomplished that goal, we were in a position to resolve all financial issues relating to the trusts. That has been done to Liesel’s full and complete satisfaction.” Robert Pritzker denied in an e-mailed statement that he had done anything improper. He said he had “acted appropriately and with integrity as their trustee.” He said he is “proud of Liesel’s acting” and “very close” to Matthew. Liesel Pritzker appeared in the movies “A Little Princess” and “Air Force One,” under the stage name Liesel Matthews. Liesel and Matthew Pritzker claimed in the suit that their father emptied their trust funds in 1994 “with malicious and vindictive intent” because of animosity over his divorce with their mother. In addition to the return of about $2 billion in assets that the two siblings claimed were taken from their trusts, Matthew and Liesel also wanted punitive damages and to oust Robert and Thomas Pritzker and Pritzker family tax lawyer Marshall Eisenberg, who was also named in the suit, as trustees of all remaining trusts for Matthew and Liesel. Yesterday’s settlement was paid into trusts under new trustees of the siblings’ choosing, the person said. C:\! FWM 2007\! chapter 2 handouts.wpd 1/28/07 8:45 pm 41.
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