Wills and Trusts Flashcards
1
Q
Will validity/creation
A
- Execution
- writing
- signed by T, or in his presence and at his direction
- signed by 2 witnesses
- witnesses know T’s will
- witness see T sign or acknowledge T signature at same time - Holographic will
- T’s signature
- material provisions in T’s handwriting
- invalid if no date and unclear which will is new - Capacity
- 18 yrs old
- sound mind/competent, understand:
- - nature of testamentary act;
- - situtation of his property; and
- - relations with family members
- no duress, fraud, undue influence
- fraud in the execution (forgery)
- fraud in the inducement (misrep)
- undue influence
- - unnatural disposition
- - opportunity to influence
- - T susceptible to influence
- - beneficiary active in procuring disposition - Rebuttable presumption fraud/undue influence if devise is:
- drafter
- one in fiduciary relationship with T
- care custodian w/in 90 days
- employee of any of the above
- exceptions:
- - blood relative
- - less than $5k
- - ind attorney reviewed w/out beneficiary present - Conflicts of laws
- valid if complies w/ laws of state of:
- - execution
- - place of death
- - domicile
2
Q
Will components
A
- Integration (usually papers attached to will)
- present at the time of will
- T’s intent (internal coherence) - Incorporation by reference
- existed at time of will
- will shows T’s intent
- sufficiently identifies papers - Acts of independent legal significance
- separate from effect in will - Codicil
- amendment to will
- republishes will as of date of codicil
- same formalities of will or holographic will - Pour-over will
- identifies trust in will
- terms set forth in document other than will
- trust executed before or at same time as will
3
Q
Will revocation
A
- By physical act
- intent to revoke must be concurrent
- presumed destroyed if will last with T and now gone
- burning: slightest, part burned need not be material
- tearing, obliteration: tearing must touch material part
- cancellation: drawing lines through words of will
- increases not permitted, only decrease - By subsequent will
- express
- implied by inconsistencies b/w wills - By operation of law
- previous spouse after divorce
- omitted child/spouse, unless:
- - intentionally omitted on face of will;
- - otherwise provided for outside will; or
- - child(ren) at time of will and substantially all estate to other parent of omitted child
- - spouse valid agreement waiving right
- omitted spouse gets intestate share up to 1/2 SP - Dependent Relative Revocation (DRR)
- T revokes 1st will
- mistakenly believes 2nd will valid when it isn’t
- if T knew 2nd will not valid, would not have revoked 1st will
- 1st will probated anyway
4
Q
Will revival
A
- 1st will revoked
- 2nd will revoked
- 1st will revived if T intended to revive it
- extrinsic evidence ok
5
Q
Will distribution
A
- Classification of gifts
- specific gift
- - identifiable property
- - stock splits follow original stock
- - stock dividens look to T’s intent
- general gift
- demonstrative gift
- - general, but specifies property or fund to take from
- residuary: remainder - Ademption
- by extinction
- - gift no longer there
- - look at T’s intent
- by satisfaction
- - given to beneficiary during T’s life - Abatement
- gifts reduced to pay all debts
- reduced in order:
- - property not in will
- - residuary gifts
- - general - nonrelative
- - general - relative
- - specific - nonrelative
- - specific - relative - Exoneration
- property doesn’t abate to exonerate mortgage, lien, deed of trust, etc. unless specific intent
- specific gift of other property cannot be abated to exonerate - Lapse/antilapse
- predeceased beneficiary gift lapses to residue
- if beneficiary kindred, antilapse, so gift to issue
- simultaneous death: apply lapse or antilapse - Survivor’s rights
- widow elects under will or statutory share of her 1/2 of CP or QCP
- omitted heirs take intestate share, except:
- - T’s intent in will
- - otherwise provided for
- - all of estate to other parent - Bars to succession
- no contest: ok to bring if probable cause
- killers treated as predeceased
6
Q
Intestate distribution
A
- Intestate succession
- all CP and QCP to surviving spouse
- all SP to spouse if no child; 1/2 if 1 child/parents, 1/3 if 2+ children
- if no spouse/partner, then to
- - issue
- - parents
- - grandparents
- - issue of predeceased spouse
- - next of kin
- - parents of predeceased spouse
- - escheat to state
- heir must survive decedent by 120 hours - Per capita - generation
- 1st generation with living
- each living gets one share
- shares of all deceased split equally between next generation living - Per capita - representation
- 1st generation with living
- each living gets one share
- share of deceased goes to his issue equally
- if deceased has no issue goes back to all at that level - Strict per stirpes
- 1st generation with living or deceased with issue
- each living or deceased issue gets one share - Children
- adopted treated as natural
- step or foster take only if
- - relationship during child’s minority
- - continued through life
- - legal barrier prevented adoption
7
Q
Will contract issues
A
- K to make a will, not make a will, revoke a will established by:
- material provisions of K in will
- reference in will to K and extrinsic evidence
- writing signed by decedent - Joint or mutual will do not create presumption of K
8
Q
Trust creation/validity
A
- Trust created by (1 of the following)
- declaration by owner holding property as trustee
- transfer of property during owner’s life to trustee
- transfer by owner in will (testamentary)
- exercise of power of appointment to another as trustee
- enforceable promise to create trust - Validity requires
- settlor’s intention
- indentifiable trust property
- legal purpose
- ascertainable beneficiary
- court can appoint trustee
9
Q
Trust limitations
A
- Real property needs writing
- Oral trust for personal property is by clear and convincing evidence
- Performed by trustee only
- Invalidation - see Wills (fraud, undue influence, capacity)
10
Q
Types of trusts
A
- Express: all above validity requirements met
- Testamentary: in will
- Pour over: see pour-over will
- Secret: no beneficiary/intent on face of trust
- Semi-secret: no beneficiary named, but intent there
- Spendthrift: beneficiary cannot alienate his interest
- Support: for beneficiary’s health, education, maintenance
- Discretionary: trustee can distribute/withhold from beneficiary
- Charitable: benefits society
- cy pres: if can’t be done court tries substitute - Honorary: no charitable or private beneficiary
- Totten: beneficiary take money leftover in bank account
- Resulting: implied in fact; goes back to settlor’s estate. Arises from:
- purpose of trust ends
- trust fails
- illegal trust
- excess corpus
- semi-secret
- purchase money resulting trust: buyer (beneficiary) pays consideration for property but allows title to be taken in the name of another (trustee) - Constructive: applied to prevent unjust enrichment for fraud, self-dealing, undue influence, secret trusts, etc.
11
Q
Trust administration
A
- Powers of trustee
- enumerated and implied - Duties of trustee
- account and inform
- not to delegate unless uses skill and due care
- impartiality (treat all beneficiaries fairly)
- due care: reasonable prudent person dealing with own affairs
- - investigate
- - diversify
- segregate and earmark: no commingle
- loyalty: no self-dealings or conflicts of interest
- prudently invest
- - statutory lists
- - UPIA: look at portfolio as a whole; reasonable
- defend actions and enforce claims - Liabilities of trustee
- personally liable for violating trustee duties
- liable for torts and contracts if within scope - Duties of 3rd parties
- transfer to BFP cuts off beneficiary’s interest
- transfer to non-BFP can be set aside by beneficiary
- 3P can hold property as constructive trustee - Allocation
- income to beneficiary
- principal to remainderman (inherits property on termination)
- trustee uses best judgment in allocating
12
Q
Trust modification/revocation
A
- Majority: settlor can modify or revoke only if right reserved
- Minority: settlor can modify or revoke even if right not reserved unless stated otherwise
- Court can modify to meet settlor’s intent or for cy pres
13
Q
Trust termination
A
- Trustee cannot terminate unless trust says so
- Beneficiaries can terminate if all competent, all consent and doesn’t frustrate trust purpose
- Settlor can terminate if he reserved power to do so
- Court can terminate if trust purpose frustrated/impossible/illegal
- Lapse and antilapse apply
14
Q
Trustee breach of duty remedies
A
- Trustee cannot offset losses
- Damages, constructive trust, tracing, equitable lien, remove trustee, surcharge for resulting loss
- Laches if beneficiary waited unreasonably long to bring claim and prejudice trustee/other beneficiaries
