Trusts And Wills

Question 1

Requirements to create a trust

Answer 1

Intent
Trust property
Valid purpose
Ascertainable beneficiaries

Question 2

Pour over provision

Answer 2

Provision in a will that directs the distribution of property to a trust upon the happening of an event so the property passes in accordance with the terms of the trust
Applies even without a properly executed will

Question 3

Charitable trust

Answer 3

1) stated charitable purpose
2) exists at the benefit of the community at large

Question 4

Examples of charitable purposes

Answer 4

Poverty
Education
Religion

Question 5

Cy pres doctrine

Answer 5

A court may modify a charitable trust to seek an alternative charitable purpose if the original becomes illegal, impracticable, or impossible

Question 6

Support trust

Answer 6

Directs the trustee to pay income or principal as necessary to support the trust beneficiary

Question 7

Discretionary trust

Answer 7

Trustee is given complete discretion regarding whether or not the apply payments to the beneficiary

Question 8

Mandatory trust

Answer 8

Trustee has no discretion

Question 9

Spendthrift trust

Answer 9

Expressly restricts the beneficiary’s power to transfer his interest

Creditors cannot reach unless money is owed for child/ spousal support or to basic necessity providers or tax lien holders

Question 10

How can a beneficiary disclaim an interest?

Answer 10

Reduce the disclaimer to writing within 9 months of when the interest would become indefensibly vested

Question 11

Application of anti lapse statutes to a non probate gift

Answer 11

Generally anti lapse statutes do not apply to non probate gift

Question 12

Trustees duties

Answer 12

Duty of loyalty
Duty if prudence
Duty to disclose
Duty to account

Question 13

Duty of loyalty

Answer 13

No self dealing
No conflicts of interest

Question 14

Prohibited transactions as self dealing

Answer 14

Buying/ selling trust assets
Selling property between trusts
Borrowing from or making loans
Using trust assets to secure personal loans
Prohibited transactions with friends/ relatives

Question 15

Exception to self dealing

Answer 15

Authorized, fair and reasonable

Question 16

Conflict of interest

Answer 16

When trustee invests trust assets in a corporation in which the trustee has an interest that might affect the trustee’s judgement

Question 17

How can a conflict of interest be rebutted

Answer 17

Showing that the terms of the transaction were fair or that the transaction would have been made by an independent party

Question 18

Duty of prudence

Answer 18

General duty to act as a reasonably prudent person and treat the trust as if it was her own

Question 19

Requirements under the duty of prudence

Answer 19

Duty to diversify
Duty to make property productive
Prudent investor rule
Duty to be impartial

Question 20

Prudent investor rule

Answer 20

Requires trustee to act as a prudent investor would act investing his own property
Must exercise reasonable care, caution and skill

Question 21

Duty to diversify

Answer 21

Adequately diversify the trust investments in order to spread the risk of loss under a total performance portfolio approach

Question 22

Duty to make property productive

Answer 22

Pursue all possible claims, derive maximum amount of income, sell assets, secure insurance, pay expenses, and act within a reasonable period of time

Question 23

Duty to be impartial

Answer 23

Balance interests of the present beneficiaries and the interests of the present and future beneficiaries by investing property so that it produces a reasonable income while preserving the principal

Question 24

If no descendant is alive at the time of the defendants death but there is a surviving parent the spouse receives..

Answer 24

$300,000 and 75% of remainder

Question 25

If all of the decedents issue are also issue of the surviving spouse and surviving spouse has other issue, surviving spouse gets..

Answer 25

$225,000 and 50%

Question 26

If decedent has issue not related to the surviving spouse, then the surviving spouse takes...

Answer 26

$150,000 and 50% of remainder

Question 27

Community property

Answer 27

(Apply only when stated) At death, surviving spouse is entitled to 1/2 of the CP. Surviving spouse of an intestate decendent is also entitled to the decedents 1/2 CP. Therefore, surviving spouse takes 100%

Question 28

Putative spouses

Answer 28

Even if a marriage is not valid, as long as one party believes in good faith in its validity, the spouses qualify as spouses for inheritance purposes

Question 29

Adoptions effect on inheritance

Answer 29

Curtails all inheritance rights between the natural parents and the child Adopted children take the same as a natural child

Question 30

Per capita

Answer 30

If the surviving issue are all of equal degree of kinship, the property passes equally to each person

Question 31

Per capita with representation

Answer 31

If the surviving issue are not of equal kinship, the property is divided at the first generation in which at least one member survives the decedent. The shares of that decedent then go to their issue

Question 32

Capacity

Answer 32

At least 18 years old and possess sound mind Must know: the nature of the act, nature and character of his property, natural objects of his bounty, and plan of the attempted disposition

Question 33

Substantial compliance

Answer 33

(UPC) a will that is not validly executed but where there is clear and convincing evidence that the testator intended the document to be a will and substantially complied with the formalities will be treated as valid

Question 34

Holographic will requirements

Answer 34

Material provisions must be in Ts handwriting T signed T intended document as a will (No witness requirement)

Question 35

Codicil

Answer 35

Supplement to a will that alters, amends, or modified a will Must be executed by same formalities as the will

Question 36

Ways to revoke a will

Answer 36

Operation of law (divorce) Subsequent instrument Holographic will Physical destruction Alteration (Only Sorry Humans Alter Probate)

Question 37

Dependent relative revocation (DRR)

Answer 37

Allows a court to revive a revoked will when: 1) T revoked a will by subsequent instrument or physical act 2) under a mistaken belief of law or fact 3) T would not have revoked original will but for mistake

Question 38

Integration

Answer 38

A will consists of all pages that are present at the time of execution that are intended to form part of the will

Question 39

Incorporation by reference

Answer 39

Writing not included by testamentary formalities but may be incorporated by reference if (i) existed at the time the wills was executed (CL requirement) (ii) is intended to be incorporated (iii) is described in the wills or codicil with sufficient certainty

Question 40

Acts of independent significance

Answer 40

A will can provide for designation by reference to some unattested act or event occurring before or after execution of the will or Ts death if the act has some significance apart from the will

Question 41

Classifications of gifts

Answer 41

Specific General Demonstrative Residuary

Question 42

Abatement

Answer 42

If the assets are insufficient to pay all debts, a court will "abate" or reduce gifts to pay the debts

Question 43

Ademption

Answer 43

A specific gift is no longer in the estate at the time of Ts death

Question 44

UPC approach to ademption

Answer 44

Restore intent at the time he disposed of the subject matter is examined

Question 45

Traditional approach to ademption

Answer 45

If a SPECIFIC gift is not in the estate at death, the beneficiary takes nothing

Question 46

Lapse

Answer 46

If a beneficiary dies before T, the gift fails

Question 47

Anti lapse statute

Answer 47

If the beneficiary was blood related the surviving issue takes in her place

Question 48

Class gift rule

Answer 48

If the will beneficiaries are a class: Traditional- members who are alive at the time of the execution of the will take Modern- if anti lapse statue applies, issue of the pre deceased member also take

Question 49

An omitted spouse is entitled to an intestate succession share unless...

Answer 49

The omission was intentional The spouse was provided for outside of the will The spouse is party to a valid contract

Question 50

Will contests

Answer 50

1) lacked testamentary capacity 2) operating under insane delusion 3) subject to undue influence or fraud

Question 51

Undue influence requirements

Answer 51

Susceptibility Motive Opportunity Causation

Question 52

Insane delusion

Answer 52

A rational person in the Ts situation could not have reached the same conclusion

Question 53

Honorary trust

Answer 53

Legally enforceable trust that is not created for a charitable purpose but has no definite human beneficiaries