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CA BAR SLAP DOWNS > WILLS/TRUSTS > Flashcards

WILLS/TRUSTS Flashcards

(70 cards)

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1
Q

Valid Trust

FIVA

A
  1. Intent to create - oral, writing, conduct prior or with transfer
  2. Funding property - identifiable and described with reasonable certainty
  3. Valid purpose - legal and against PP
  4. Ascertainable beneficiaries
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2
Q

Types of Trusts

A

Inter Vivos: grantor still living
Testamentary: created and incorp in a will (will must be valid)
Charitable: benefits society and has a stated purpose (CT analysis)

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3
Q

Revocable Trust

A

settlor reserves the right to modify/terminate

presumed in CA

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4
Q

Trustee Power to Terminate

A

No power to terminate unless expressly stated

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5
Q

Removal of a Trustee

A

The court can remove if purpose is frustrated by a violation of a duty

Trustee can withdraw

Trust will not terminate, court will appoint new trustee

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6
Q

Unfulfilled Material Purpose

Trustee Duties

A

A trustee can block trust termination by the beneficiaries if the purpose of the trust is unfulfilled

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7
Q

Irrevocable Trust

A

Modification and termination while the settlor is still alive requires beneficiaries to consent and keep with primary purpose

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8
Q

Trustee Duties

A

A trustee has a duty to diversify, a duty not to engage in self-dealing, and a duty of care to conduct the business of the trust as a RPP conducting his own business affairs

All trust assets must be earmarked and stored separately from the trustee’s personal assets.

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9
Q

Charitable Trust

A

A charitable trust is a trust created for the purpose of benefitting society. There must be a stated purpose and indefinite beneficiaries (society at large).

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10
Q

Remainder Beneficiary

A

Entitled to the principal upon termination of the trust

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11
Q

Income Beneficiary

A

Recieves income from the trust

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12
Q

Beneficiary Violation of CT

A

If a charity violates an express condition of the trust, the charity may be liable for the benefit recieved. The attorney general of the state can challenge and has standing to challenge.

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13
Q

Cy Pres

A

Under the doctrine of cy pres, if the purpose of the charitable trust has terminated or other circumstances have frustrated the settlor’s purpose of the trust, if the court determines that the purpose of the trust was general, rather than a specific cause, the court will imply a new purpose as close as possible to the settlor’s intended purpose.

Specific: NO –> must terminate
General: YES –> substitute similar charity

*Court generally does not want to interfere but will try their best to match intentions

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14
Q

Resulting Trust

A

A resulting trust is an equitable remedy implied in fact based on the settlor’s intent. If the court decrees a resulting trust, the trustee or beneficiary must transfer the trust property back to the settlor’s estate.

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15
Q

Valid Will

Wills

A

ATTESTED WILL
Capacity - 18, nature, property, bounty
Testamentary intent
In writing signed by T
2 witnesses - capacity, maturity, present acknowledge
CA substantial compliance

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16
Q

Pour Over Will

A

When property is brought into a trust for distribution at the death of the testator

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17
Q

Interested Beneficiary/Undue Influence

A

Interested beneficiaries are parties that benefit from a will but were also involved in creating and executing the will

Presumed by the court to have caused undue influence if opportunity to influence and testator was susceptible to undue influence or coercion

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18
Q

Dependent Relative Revival

A

If there is a mistake of law or fact, the court can revive a revoked will if it can be shown that the T would not have revoked the original if not for mistake of law or fact

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19
Q

Trustee refuses to serve

A

Where a trustee refuses to serve as the trustee, the court will appoint a new one. A trust will not fail for lack of a trustee

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20
Q

Trust Termination by…

A
  1. Automatically when primary purpose has been accomplished
  2. Consent of all beneficiaries if S is dead or no remaining interest
  3. By Court id the purpose becomes illegal, impractical, impossible
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21
Q

Termination of a trust prematurely

A

If the court finds that termination would not frustrate the settlor’s intent, the court may find that a trust may be terminated

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22
Q

Trustee DOC

A

A trustee has a duty of care to conduct the business of the trust as a RPP conducting his own business affairs

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23
Q

Duty to Diversify

Trustee Duties

A

A trustee has a duty to diversify the investments of the assets of the trust, just as a reasonably prudent investor would. 3 rules: majority, minority, statutory

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24
Q

Duty to Diversify - Majority

Trustee Duties

A

The trustee may only invest funds in a particular list of secure investments and new businesses are not on that list

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25
Duty to Diversify - Minority | Trustee Duties
Under the minority rule, a trustee may invest in a new business
26
Duty against self-dealing | Trustee Duties
A trustee has a duty to not engage in self-dealing transactions, where they use the trust assets for their own purposes
27
Avoid violation of trustee duties by
Getting permission from beneficiaries in advance or if the beneficiaries had ratified the trustee's decision after the fact
28
Standing to file suit against the trustee
The beneficiaries have standing to file suit if the courts find that the trustee was in violation of his duties. Where a trustee has violated one or more duties, the beneficiaries are entitled to 1) require disgorgment of profits or 2) return the sold item
29
Will Capacity | Wills
Testator must be at least 18 years old, understand the objects of her bounty, understands the nature and extent of her property, and know she is making a will
30
Holographic Will
A holographic will is a valid testamentary instrument that is in the testator's handwriting. It must contain all material terms and be signed. Does NOT need to be dated
31
Revocation by Subsequent Instrument
A will can be revoked by subsequent instrument either expressly or impliedly by disposing of substantially all of the testator's property or property stated in the first will Subsequent instrument must also comply with will formalities
32
Revocation by Physical Act
A will can be revoked by physical act if there was intent at the same time as the act.
33
Multiple Copies of a Will
When a testator duplicates a will, it is presumed that when she revokes one copy, the other copy is also revoked
34
Wills: Mistake in Content - Ambiguity
When a testator disposing of property but it is uncertain who or what is to be given, the court may look to extrinsic evidence to determine property distribution Cannot be determined = gift fails
35
Will: Specific Gift
A specific gift is one a distinct asset in the testator's estate, typically given when stated "my"
36
Ademption by Extinction
When a testator devises a specific gift but the testator no longer owns the gift at their death, the gift it to adeem and the beneficiary is to take nothing CA: the courts look to the intent of the testator to determine whether they meant the gift to fail or adeem. Such factors include whether tracing is available or who changed the form and relationship of the parties
37
Intestate Property
If there is no will or the will is invalid, the assets will pass through intestacy. CP - split between spouses SP - parents, siblings, kids take all or split Issue: 1. Per capita - equal degree of kinship, passes equally to each 2. Per capita with representation - not equal kinship, divided at first generation
38
Wills Attack Outline
Valid will (formal/holographic, capacity/UI/fraud) Components (integration, codicil, incorp by reference, ind significance) Revocation (instrument, physical act, codicil, duplicate, operations of law, presumption if will not found, DRR, revival) Changes to property (specific gift, gen gift, demonstrative gift, residuary, ademption, satisfaction, abatement) Reasons to bar (slayer, elder abuse, lapse, anti-lapse, omitted child/spouse) Distribution (intestate succession, terms of will)
39
CA Clear and Convincing Evidence Presumption/Harmless Error
In CA, if the testator dies after January 1, 2009, and there is a problem as to 1) only one witness signing the will 2) a witness failed to sign in T's lifetime or 3) the witness didn't know that they were signing a will Clear and convincing evidence that T intending document to be will at time of execution, still the will
40
Will incorporation by reference - independent significance
When a will makes a gift by reference to something that does not exist at the time the will was executed, the reference is valid if it has independent significance
41
CL Lapse and Modern CA Anti-Lapse | Wills and Trusts
CL Lapse: When beneficiary dies before settlor, the gift fails Modern CA Anti-Lapse: When beneficiary dies before settlor and they are blood related, bene's surviving issue will take the gift
42
Words of survivorship
When a testator uses words of survivorship, it manifests an intent that the gift should not fo to the taker's issue and will go to the residuary, and the gift is distributed according to CA intestate succession (link to anti-lapse)
43
Omitted child/spouse
Spouse: If a will was executed before marriage or domestic partnership or the spouse was not mentioned, they are entitled to an intestate share unless it was intentional, they were provided property outside the will, or there was a valid contract waiver Child: A child omitted becuase they were born after the will was executed, was thought to have died, or the T did not know they existed and were left out unintentionally can take an intestate share unless provided for outside the will or a significant part of the estate was provided to the child's parent
44
Pretermitted Spouse
Not mentioned in will Considered pretermitted spouse if - the will shows intent to ommit/disinherit spouse - spouse did not waive rights to estate - testator did not provide for spouse ok to take intestacy share
45
Pretermitted Child
If child is not included in will, and will was created before child born, then presumed mistake and allowed to take intestacy share Child will not take if - evidence of intentionally not being provided for - decedent provided for child outside the will
46
Discretionary Trust
Trustee given complete discretion
47
Mandatory Trust
No trustee discretion, the trust governs
48
Alienation in Trust
The bene's interest is freely alienable unless limited by the trust
49
Support Trust
Income and principal used to support the beneficiary and creditors cannot reach unless necessity
50
Spendthrift Clause in Trusts
A spendthrift clause expressly restricts the bene's power to transfer their equitable interest No creditors can reach unless if child/spousal support, basic necessities, tax lien holders, but if the beneficiary gets a surplus (more than necessary to maintain lifestyle), creditors can reach the extra amount.
51
Trustee Powers
A trustee has powers that are expressly granted in the trust, necessary power to act as a reasonably prutent person handling their own affairs, and the implied powers to k, lease, sign, rent, invest, etc. If there are co-trustees, votes must be unanimous unless stated otherwise
52
Trustee Duties of Care | FIDM-P
**Follow** instructions in trust **Impartial** - best interest of all present and future beneficiaries **Diversify** - adequately diversify investment as to spread risk of loss **Make property productive** - pursue all claims for the max amount of income **Prudent Investor Rule** - like acting with own property (startups vs. large companies)
53
Trustee Duties of Loyalty
Good faith (subj) and reasonable (obj) in B's best interest Self-Dealing = per se breach, irrebuttable presumption
54
Trustee Duty to Disclose
Complete and accurate information to the beneficiaries
55
Trustee Duty to Account
So that trustee's performance can be evaluated and assessed
56
Remedies for Trustee Violations
1. losses resulting from breach 2. beneficiaries can sue and seek damages 3. court or beneficiaries can discharge the trustee (will not end trust)
57
Undue Influence in Trust and Wills
If a beneficiary is part of a will or trust but was part of the making of the will or trust, the court may find that there was undue influence. Traditionally, the court will look at susceptibility, motive, opportunity, and causation CA will look at the tactics used, the influencer's authority, the victim's vulnerability, and the equity of the result Confidential Relationship Presumption 1. beneficiary and settlor/testator had a confidential relationship 2. beneficiary participated in executing the will 3. gift to the the beneficiary was unnatural 4. Does not take or takes under intestate succession
58
Fraud in Wills and Trusts
Fraud is the intentional misrepresentation by the beneficiary, with the intent to deceive, with the purpose of being included in the trust or will. Inducement: If testator/settlor made the will he wouldn't have made but for the fraud Execution: If testator/settlor didn't know that beneficiary was creating a will or of its contents
59
Wills - interested witnesses
Rebuttable presumption of undue influence
60
Codicil
A codicil is a testamentary instrument modifying an earlier will. If valid, it republishes the will date. 1. How is it changing og will? 2. Is it valid? Holographic/attested
61
Will Substitute - Deed
Must be valid attested or holographic and merges
62
Will Choice of Law - CA
If created and valid in another state, valid in CA
63
Will Revocation by Operation of Law
A will can be revoked at divorce or dissolution of domestic partnership unless there is intent that the will is to survive divorce or dissolution
64
Will Revival by Republication
Shown by extrinsic evidence
65
Will Integration
Court will allow integrations if present at the execution of the will and there was intent by physical or nature of language
66
Will Incorporation by Reference
References existed at the time of execution, with the intent to be incorporated, described in the will Can make invalid will valid
67
Classification
Specific - identified easily General - not specific ($) Demonstrative - gifts from particular source Residual - remaining
68
Abatement
If assets in the estate are insufficient to satisfy outside creditors, the court will reduct the gifts in the following order: 1. intestate 2. residuary 3. general 4. specific Take from non-relatives first, then relatives
69
Ademption by Extinction
Traditionally, if a specific gift is no longer in existence at the time of death, beneficiary gets nothing. Modernly, the court will try to find ways to give the gift.
70
Distribution CP/QCP
Surviving spouse owns 1/2 CP at death, dead spouse can dispose through will

CA BAR SLAP DOWNS (16 decks)

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