Flashcards in Wills & Trusts Deck (58):
Elements for Valid Will
A valid will must
1. meet the formalities
3. Complies with the law
Interested Witness presumption
an interested witness creates a rebuttable presumption that the witness procured the devise by duress, menace, fraud, or undue influence, unless there are two other uninterested witnesses or the devise is made solely in fiduciary capacity.
a will will be a valid holographic will if the signature and the material provisions are all in the testator's handwriting.
Formalities of a Will
Must be in writing, signed and witnessed
measured at the time of will execution. An individual must be of legal age and sound mind.
Mental Capacity Elements (Wills)
the individual must be able to:
1. understand the nature of the testamentary act, or
2. understand the nature and situation of his property or
3. remember and understand his relations with family members that are affected by the will.
3 types of Fraud (Wills)
1. Fraud in the execution
2. Fraud in the inducement
3. Fraud preventing revocation.
Fraud in the Execution
occurs when a testator is unaware he is signing a will or the will is forged by another
Fraud in the Inducement
occurs when a wrongdoer influences the testator through misrepresentations to include provisions int he will.
Fraud Preventing revocation
occurs when fraud is implemented to prevent a will revocation.
Fraud or Undue Influence Presumption
Fraud or Undue Influence is presumed in an instrument making a donative transfer to:
1. the person who drafted it,
2. a person with a fiduciary relationship with the transferor who transcribed the will
3. a care custodian who provided services within 90 days
4. co-habitant or employee of 1-3
Exceptions to the Undue Influence Presumption
1. the beneficiary is a blood relative or cohabitant
2. the property transferred is valued at $5,000 or less, or
3. independent attorney reviews the will and counsels the transferor
Valid Law for Wills
A written will is validly executed if its execution complies with:
1. the law of where the testator is domiciled at the time of execution, or
2. domiciled at the time of death or
3. the law and place where the will was executed.
A codicil is an amendment to an existing will made by the testator to change, explain, or republish the will. Must meet the same requirements as a will or holographic will.
Pour Over Will
a will that identifies a trust created by the testator that he can use to "pour over" his probate assets into and thus avoid going through probate if the assets are less than $100,000.
Elements of a valid pour over will
1. trust is identified in the will;
2. the terms are set forth in an instrument other than the will, and
3. the trust was executed concurrently or before the will execution.
Revocation of a Will
A will may be revoked:
1. by physical act
2. by subsequent will or
3. by operation of law.
Revocation by Operation of Law
A will is revoked by operation of law to accommodate an omitted spouse or child or subsequent domestic partner, or to remove all devises to a previous spouse after divorce or annulment.
Dependent Relative Revocation (DRR)
Courts will apply DRR where the testator revokes his first will or part of it with the mistaken belief that a substantially similar second will or codicil will be effective but is not actually effective at death. Court will disregard the revocation and allow the first one to take effect.
Revival of a will
When a will is revoked by physical act or a subsequent will, and then the subsequent will is revoked as well, the first will is a revived if the testator intend for it to be revived.
A specific gift is void when the item is not part of the testator's estate at death.
occurs when gifts are reduced to enable the estate to pay all debts and legacies that it otherwise would be unable to pay.
Order of Gift Abatement
1. Property not disposed of by the will
2. residuary gifts
3. General Gifts to non relatives
4. General Gifts to relatives
5. Specific Gifts to non relatives
6. Specific Gifts to relatives
A gift of specific, identifiable property.
A gift from general assets of the estate and does not include specific property.
A general gift that specifies the property or a particular fund from which the gift should be made.
What remains of the estate after all other gifts have been satisfied.
When a beneficiary predeceased the testator, the gift to the beneficiary lapsed and fell into the residue, or was distributed via intestate succession if there was no residue
When a beneficiary who is kindred to the testator predeceases the testator, the issue of the beneficiary take in his place, thus avoiding the lapse of the gift, unless a contrary intention appears in the will.
Applies when the decedent dies without leaving a surviving spouse or domestic partner, and/or for the portion of the estate remaining after the surviving spouse receives his share.
Order of Intestate Succession
1. To Issue
2. To parents
3. Issue of parents
5. Issue of Grandparents
6. Issue of Predeceased spouse/partner
7. Next of Kin
8. Parents of predeceased spouse
9. Issue of parents of predeceased spouse
10. Escheat to the state
if a person dies intestate, property that the decedent gave to an heir during lifetime is only treated as an advancement against that heir's share of the intestate estate if the decedent declared and the heir acknowledge such in writing.
Modern Per stripes
makes an equal distribution at the first level of living heirs. if any of those heirs are deceased and leave issue still living, their share will be distributed equally between their issue.
Methods of Creating a trust
1. A declaration by a property owner that he holds the property as trustee,
2. a transfer of property during the owner's lifetime to another as a trustee,
3. a transfer of property by means of a will taking effect upon the owner's death,
4. an exercise of a power of appointment to another person as trustee or
5. an enforceable promise to create a trust.
Requirements for a Valid Trust
3. Purpose, and
Requirements for a Real Property Trust
A trust for real property must be in writing and signed by either the trustee or the settlor or their authorized agent.
where property is transferred from one owner to another, such that a trustee holds legal title for the benefit of a beneficiary, with the settlor having present manifestation of intent to create a trust for a legal purpose.
one created by a will, and the will contains the material provisions of the trust, and the trust arises upon the death of the testator.
Pour Over Trust
one that is structured to receive and dispose of assets at the settlor's death.
occurs when the settlor leaves a gift to the beneficiary on the face of his will without indicating an intent to create a trust in the will, but does so in reliance on a promise that the beneficiary will hold the property in trust for another.
occurs when the settlor leaves a gift in his will to a person in trust but does not identify the beneficiary of the trust.
occurs when the beneficiary cannot voluntarily alienate his interest, such that his interests are protected from creditors unless for necessaries, alimony or child support or govt. creditors.
direct the trustee to make limited distributions to pay for the beneficiary's support, health, maintenance or education and is not accessible by creditors to the extent int would interfere with the support.
gives the trustee discretion to distribute or withhold payments, principal, or income to the beneficiary.
one that is for charitable purposes and benefits society.
Cy Pres Doctrine
When a charitable objective become impossible or impracticable to fulfill, courts often apply cy pres doctrine and substitute another similar charitable object that is as near as possible to the settlor's intent.
One which in which there is neither a private beneficiary or charitable purpose. Generally invalid except to care for pets or maintain cemetery plots.
one where the settlor places money in a bank account with instructions that the named beneficiary takes any amount left at the death of the settlor.
Powers of the Trustee
Trustee have all enumerated powers expressed in the trust itself and pursuant to the law and implied powers necessary and appropriate to carry out the terms of the trust.
Duties of the Trustee
1. Duty to Account
2. Duty not to delegate his trustee duties
3. Duty to be impartial
4. Duty to use due care
5. Duty to segregate
6. Duty of loyalty
7. Duty to prudently invest
8. Duty to defend and enforce
Uniform Prudent Investor Act (UPIA)
provides that a prudent investor's performance is measured in the context of the entire trust portfolio as a whole.
Liabilities of Trustee
A trustee is personally liable for:
1. violating his trustee duties
2. torts made within the scope of his trust supervision.
3. Contracts made within the scope of his trust supervision.
Modification or Revocation Majority Rule
A settlor can modify or revoke the trust only if th power is expressly reserved in the trust.
Modification or Revocation Minority Rule (CA)
Trusts are revocable unless stated otherwise.
Termination of Trust
A trustee has no power to terminate a trust except s provided in the trust.
Papers are integrated into the will if they present at the time of the execution of the will and the testator intended them to be part of his will
Omitted Child or Spouse Rule
An omitted child or spouse will receive an intestate share if they were born or married after the will was made, unless they were
1. intentionally omitted
2. otherwise provided for or
3. there is more than one child and devised substantially all of the estate to the other parent for the care of the child.