Higgins Notes - Luke (Terminology)

Question 1

Order to Examine

Answer 1

1. Validity of will - execution, intent, capacity
2. Revocation and/or Revival - Purposefully revoked; change in marital status; physical act (unless revived)
3. Distribution - Ademption,
   abatement, and lapse
4. Restrictions on testamentary freedom - Inadvertently omitted spouse or child / community property share

Question 2

CA Wills Differences

Answer 2

1. All children treated as children whether adopted, stepchildren, or sometimes Foster Children
2. Multiple families recognized, including former spouse or predeceased spouse law
3. Registered domestic partner equivalent to spouse
4. Wills executed outside CA, if valid where executed, are valid in CA even if rules are different.

Question 3

Interpretation Specific Devise v. General Devise

Answer 3

Specific Devise = gift of a particular item of property. [Issue is whether T intended donee to have that thing only, or something similar.]

General Devise = Gift of general economic benefit (such as cash), payable out of the general assets of the estate.

Note: Whether gift of stock is general or specific depends on language and circumstances. Usually general unless T says “my” shares of a particular stock or unless stock is small, closely held corporation not traded on a stock exchange.

Question 4

Valid Execution Requires: “ICE SAW”

Answer 4

1. Testamentary Intent — to make a will (holographic: can be proved by any admissible evidence)
2. Testamentary Capacity — (18 years old, no mental incompetence / insane delusion; confusion affects the disposition in the will, e.g. Leaving property to Batman, but not making the will on recycled paper because Batman told him to)
3. Due Execution — (e.g., a forman execution ceremony)
4. Signed by T — (a) any mark intended to identify T; (b) may be signed by proxy if done @ T’s direction and in their presence
5. Attestation — of 2 competent W’s [both of whom acknowledge T’s signature in the presence of each other] to signature [or acknowledgement of signature] by T; (a) don’t have to sign at moment of witnessing, but must sign before T dies; (b) a Will not properly attested to may still be admitted under C&C evidence of testamentary intent [e.g., having attorney notarize—instead of 2 Ws—because intend to come back soon and finalize with slight changes]
6. Writing — intentional reduction to tangible form [can even be scratching into paint with knife]

Holographic will/codicil — No requirement of Ws; Valid if signature and material provisions are in T’s writing (Executors and T’ees, bequests, declaration that instrument is will, date); Boilerplate is okay as long as material provisions.

Question 5

Term: Probate Property

Answer 5

Property that passes through probate under the decedent’s will or by intestacy (public transfer)

Question 6

Term: Nonprobate property

Answer 6

Property that passes outside of probate under an instrument other than a will (private transfer)

Question 7

Functions of Probate

Answer 7

1. Provides evidence of transfer of title to the new owners
2. It protects creditors by providing a procedure for payment of debts
3. It distributes the decedent’s property to those intended after the decedent’s creditors are paid

Question 8

Term: Personal Representative

Answer 8

Generic term for the person in charge of administering the estate of the decedent (court-appointed person who steps into the shoes of the decedent and “owns” the property in between decedent’s death and court order of new ownership)

Question 9

Term: Executor(trix)

Answer 9

The person in charge of administering the estate of a TESTATE decedent.

1. Letters Testamentary
2. Duty to Beneficiaries

Question 10

Term: Administrator(trix)

Answer 10

The person in charge of administering the estate of an INTESTATE decedent

1. Letters of Administration
2. Duty to Heirs

Question 11

Term: Beneficiary

Answer 11

Generic term for a person who receives property under a WILL

Question 12

Term: Heir

Answer 12

A person entitled to take under INTESTATE succession laws

Note: A live person CANNOT have heirs

Question 13

Term: Devise

Answer 13

A gift of REAL PROPERTY in a WILL

Question 14

Term: Bequest

Answer 14

A gift of PERSONAL PROPERTY in a WILL

Question 15

Term: Legacy

Answer 15

A gift of MONEY in a WILL

Question 16

Term: Primary Administration

Answer 16

Administration in the state in which the decedent died

Question 17

Term: Ancillary Administration

Answer 17

Administration in the state in which the decedent had real property, and it is not the state in which the decedent died.

Question 18

Term: Descent

Answer 18

Descent refers to the succession of real property. The law of the state where property is located is the law that governs (this is called ancillary probate)

Question 19

Term: Distribution

Answer 19

Distribution refers to the succession of personal property. The law in the state where the decedent lived is the law that governs (called domiciliary probate)

Question 20

Term: Collateral

Answer 20

A collateral is a relative who traces relationship to an intestate through a common ancestor by who is not in his lineal line of ascent or descent.

Collaterals of the half blood = A person related to an intestate through only one common ancestor

Question 21

Term: Ascendant or Ancestor

Answer 21

An ascendant or ancestor is a person related to an intestate or to a claimant to an intestate share in the ascending lineal line.

Question 22

Term: Affinity

Answer 22

Relationship by marriage

Question 23

Term: Consaguinity

Answer 23

Relationship by blood

Question 24

Term: Codicil

Answer 24

A testamentary instrument ancillary to a will

Question 25

Probate Process

Answer 25

1. Opening the estate by offering the will for probate.
2. Collecting the decedent’s assets
3. Paying any family allowance and setting aside homestead and exempt personal property
4. Paying creditor’s claims and tax bills
5. Distributing the assets of the estate upon the probate court entering a decree of distribution.

Question 26

Non-probate property: Joint Tenancy Property (both real and personal)

Answer 26

The decedent’s interest vanishes at death. The survivor owns the whole. (bank accounts, brokerage/mutual fund accounts)

Question 27

Non-probate property: Life insurance

Answer 27

Paid to named beneficiary upon death or receipt of death certificate

Question 28

Non-probate property: Contracts with “Payable on Dead” (POD) provisions

Answer 28

E.g., pension plans, tax-deferred investments, IRAs, 401k’s

Question 29

Non-Probate property: Interests in trust

Answer 29

When property is put in trust, the trustee holds the property for the benefit of one or more named beneficiary. The trust property is distributed in accordance with the terms of the trust.

Question 30

Marital Property Systems: Common Law

Answer 30

Each spouse owns his or her entire income as well as any property brought into the marriage by gift.

Question 31

Marital Property Systems: Community Property

Answer 31

Each spouse owns any property brought in during the marriage by gift, but only one-half of his or her income; the other half vests in the other spouse as soon as it is earned. Ownership of earnings is governed by the law of the spouse’s domicile state at the time the property was acquired.

Question 32

Surviving Spouses

Answer 32

Under most intestacy statutes, the surviving spouse is given at least half of the decedent’s estate after probate.

In community property states, the surviving spouse gets half of the community property with the added benefit of avoiding probate; however, all of the decedent’s individual property goes through probate.

Question 33

Same Sex Marriage

Answer 33

In CA, domestic partners can register with the Secretary of State, giving the surviving partner the rights of a spouse in case of intestacy.

Question 34

Share of the Descendants if all children are alive

Answer 34

Each child receives an equal share under the doctrine of per capita distribution.

Question 35

Share of the Descendants where at least one child predeceases decedent: Strict Per Stirpes

Answer 35

Under this doctrine, the estate to be distributed to the descendants is divided at the first generation into as many lines as have living descendants

Example: Difference between Strict and Modern:

• Assume D has 3 children: 1, 2, and 3
• Assume that 1 and 2 have one child each (A and B), and 3 has two children (C and D)
• Now assume that 1, 2, and 3 all predeceased D.

Under Strict per stirpes, A would receive 1’s 1/3, b would receive 2’s 1/3, and C & D would split 3’s 1/3 (giving each other 1/6)

Under MODERN per stirpes, A, B, C, and D would all receive 1/4.

Question 36

Share of the Descendants where at least one child predeceases decedent: Modern Per Stirpes

Answer 36

Under this doctrine, the estate to be distributed to the descendants is divided at the first generation that has any living descendants, and is divided into as many lines as having living descendants.

Example: Difference between Strict and Modern:

• Assume D has 3 children: 1, 2, and 3
• Assume that 1 and 2 have one child each (A and B), and 3 has two children (C and D)
• Now assume that 1, 2, and 3 all predeceased D.

Under Strict per stirpes, A would receive 1’s 1/3, b would receive 2’s 1/3, and C & D would split 3’s 1/3 (giving each other 1/6)

Under MODERN per stirpes, A, B, C, and D would all receive 1/4.

Question 37

Term: Adoption

Answer 37

An adopted child will be determined to be a descendant of the decedent if there has been either (a) a legal adoption, or (b) an equitable adoption.

Once a person is adopted, he is considered to be a natural child of the adoptive parent(s) and no longer a child of the natural/actual parents.

Question 38

Descendants — Adoption — Legal Adoption

Answer 38

A person can be adopted when there is consent of, or notice to, the natural parents and the court orders the adoption.

Question 39

Descendants — Adoption — Equitable Adoption

Answer 39

A court may allow for an equitable adoption in the absence of a legal adoption when there is clear and convincing evidence that the “parents” intended for there to be an adoption.

Question 40

Descendants — Adoption — Step Children

Answer 40

When a step parent adopts a step child, the child will inherit from the adoptive step parent and both of the child’s natural parents. However, the “replaced” natural parent cannot inherit from the child.

Question 41

Descendants — Adoption — Adult Adoption

Answer 41

As it concerns intestate succession, there is no difference between the adoption of an adult and an adoption of a child.

HOWEVER, not allowed where not intended by the decedent. Also not allowed if subterfuge.

Question 42

Descendants — Posthumous Children

Answer 42

A child conceived before the father’s death and born after the father’s death inherits SO LONG AS the child does NOT die within 120 hours of the father.

Question 43

Descendants — In Vitro Fertilization

Answer 43

A child of the decedent conceived after the death of the decedent shall be deemed to have been born in the lifetime of the decedent if:

(A) the decedent consented in a signed and dated writing

(B) within four months of the decedent’s death, and notice of the possibility of posthumous conception is served upon a person who has the power to control the distribution of the decedent’s property, and

(C) the child was in utero within two years of the decedent’s death so long as the child is not a clone of the decedent.

Question 44

Descendants — Surrogate Mothers & Sperm Donors

Answer 44

There is usually a contract for surrogacy, and the sperm donors that says who the legal mother and father will be.

The contract controls, and the child will take from the contractual mother and father in the case of intestacy.

Question 45

Descendants — Advancements

Answer 45

A gift made to an heir apparent during life (inter vivos) will be an advancement on the heir’s intestacy share (deducting the gift from the intestate share) if there is a declaration by the decedent in writing or an acknowledgment from the heir in writing that the gift is to be treated as an advancement.

Question 46

Simultaneous Death / Survival

Answer 46

In the situation where two people die very closely in time and location, it becomes very difficult to prove who died first.

In CA, two people are considered to have died simultaneously if it can’t be shown, by sufficient evidence, that one survived the other by 120 hours.

Question 47

3 Bars to Intestate Succession:

Answer 47

1. Slayer Statute
2. Elder Abuse / Child Abuse
3. Disclaimer

Question 48

Bars to Intestate Succession — Slayer Statute

Answer 48

Rule: An her who intentionally and feloniously kills the decedent is treated as predeceasing the decedent, and thus does not take.

Self defense and insanity are valid defenses and, if proved, will allow heir to take. However, an heir criminally convicted may not take if intentional and felonious killing is shown by preponderance of the evidence in probate court.

Question 49

Bars to Intestate Succession — Elder/Child Abuse

Answer 49

If there is clear and convincing evidence that an heir physically or financially abused an elder or dependent adult, the heir will be treated as predeceasing the elder and will not take.

Also: Refusal to support child (under 18) may result in parent being unable to inherit

Question 50

Bars to Intestate Succession — Disclaimer

Answer 50

A disclaimer i a voluntary act by an heir whereby the heir gives up his share of an inheritance. For a disclaimer to be valid, there MUST be:

1) A signed writing refusing all rights/benefits in the property that is irrevocable and unconditional, that is
2) delivered to the personal representative to the estate within 9 months of the decedent’s death, and
3) There must be no acceptance or benefits of, or dominion over, the property.

The heir’s share will pass to his heirs.

Question 51

Term: Partial Intestacy

Answer 51

When a will fails to mention some assets of the decedent, the non-identified property will pass under intestate succession.

Question 52

2 types of Wills:

Answer 52

1) Attested

2) Holographic

Question 53

The requirements for a valid attested will are:

Answer 53

(1) the testator is at least 18 years old,
(2) the testator has testamentary intent
(3) and testamentary capacity
(4) and the will is executed pursuant to the due formalities.

The requirements for a valid holographic will are the same, except the will does not have to be executed pursuant to the due formalities, but the material or dispositive provisions must be written in the testator’s own hand and then signed by the testator.

Question 54

What is Lack of Capacity and what is the consequence?

Answer 54

If one or more of the 4 elements of testamentary capacity is missing then there is a lack of testamentary capacity, which invalidates the will.

Lawyer should generally not make a will for a client who he reasonably and in good faith believes lacks the requisite capacity.

Question 55

What is Power of Attorney?

Answer 55

A power of attorney creates an agency relationship whereby the agent (“attorney in fact”) is given a written authorization to act on behalf of the principal, subject to traditional rule of agency law. On either’s incapacity, the agent’s authority terminates. However, a durable power of attorney continues throughout the incapacity of the principal until the principle’s death. The attorney in fact acts in the best interest of the principle, his powers are governed by the contract establishing the relationship, but an attorney in fact may never create a will (but can create a trust) and does not allow for health decisions (see “Health Care Directive”).

Question 56

What is a Health Care Directive?

Answer 56

A health care directive is an affirmative direction that expressly states what the person wants to have happen when they become incapacitated, including when to terminate medical treatment and appointing an agent to make such a decision. If an agent is appointed, he will be held to the substituted judgment standard, which requires that the agent do what the principle would have wanted.

Question 57

What is Testamentary Intent?

Answer 57

The testator must intend for the document to pass his property at death. But saying “I would like to make following changes to my will . . .” is NOT enough, this is only instruction. “Sham will” is not enough.

Question 58

What are Attested Wills?

Answer 58

An attested will is a will that has been signed by witnesses.

Question 59

What are the purposes of the formalities for attested wills?

Answer 59

There are four policy considerations underlying the due formalities requirement:

(1) the ritual or cautionary function, which makes sure that the testator intended to make a distribution of property;
(2) the evidentiary function, which makes sure there is reliable evidence of the testator’s intent;
(3) the protective function, which makes it harder for people to exert undue influence over the testator; and
(4) the channeling function, which increases the confidence of the testator that his desires will be carried out and makes it easier for the courts to cope with wills.

Question 60

What are the due formalities of attested wills?

Answer 60

To satisfy the due formalities requirement:

1) there must be a writing signed by the testator or by proxy
2) there must be two witnesses of the testator’s signature or acknowledgment
3) and the witnesses must sign the writing.

Question 61

What qualifies as a signature?

Answer 61

Any mark, cross, abbreviation, or nickname of the testator is sufficient. If a proxy signs for the testator, it must be done in the testator’s presence and at the testator’s direction.

Question 62

Witnesses

Answer 62

The witnesses must both see the testator sign. The witnesses must sign before the testator’s death; however the harmless error rule may be invoked if this requirement is not met (see below). If there is a bequest to a witness under the will, a rebuttable presumption of undue influence, duress, and menace arises (see below). Witness’s signatures need not be in testator’s presence. Only need to be affixed within reasonable time after, even if testator has died. Witnesses must still witness either the signing itself, an acknowledgement of signature, or acknowledgement of will.

Question 63

What is a “writing”?

Answer 63

A “writing” is anything that is an intentional reduction to a tangible form. The form must be a reasonably permanent record of the will. Questions arise if the medium is an audio or video recording and could depend on the applicable state statute.

Question 64

What are “attestation clauses”?

Answer 64

An attestation clause recites that the will was duly executed and then signed by witnesses. Such a clause gives rise to a presumption of due execution.

Question 65

What is a “self proving affidavit”?

Answer 65

A self-proving affidavit is added to the end of a will and signed by the testator and the witnesses before a notary public that swears that the will was duly executed. The notary public signs and attaches the required seal.

1. It does not make the will better, stronger, or more resistant to contest; the affidavit is merely an action to streamline the probation process.
2. Many states hold valid a will that was not made valid by signature that otherwise had a self-proving affidavit.

Question 66

Can mistakes in execution be overlooked by courts?

Answer 66

Yes, through CURING defects

Question 67

What is a “harmless error”?

Answer 67

Courts may excuse noncompliance with the formalities if there is clear and convincing evidence that the decedent intended the document to be his will. In CA, this rule is limited to attestation errors (such as witnesses signing after testator’s death).

Question 68

What is a “holographic will”?

Answer 68

A holographic will is a will written by the testator’s own hand and signed by the testator; attesting witnesses are not required (in half of the states). The dispositive portions of the will must be written by the testator’s hand in order for a holographic will to be valid. The amount of holographic material that a will may contain and still be valid without proper attestation. The prevailing view, the surplusage view, permits nonholographic material to be ignored if doing so does not alter the testator’s dispositive arrangements. The modern view, which is adopted by the UPC, is the material provision approach, which deems a will to be holographic merely if the most important words are in the testator’s handwriting.

Question 69

What are “conditional wills”?

Answer 69

Conditional Wills. A conditional will is a will that takes effect upon the happening of some condition. In most cases, courts allow such a will to be probated upon death from any cause, not just the cause stated in the condition.

Question 70

Where does a signature need to be on a holographical

Answer 70

The signature may be anywhere on the document, but if it is not at the end there may be doubt about whether the decedent intended his name to be a signature.

Question 71

What doctrines are used to determine what documents and terms make up a will (components of a will)?

Answer 71

1) Integration of Wills
2) Republication by Codicil
3) Incorporation by Reference
4) Acts of Independent Significance
5) Ambiguity

Question 72

Components of a Will: Integration of Wills

Answer 72

External: under this doctrine, extrinsic evidence will be allowed to show that all papers present at the time of execution that are intended to be part of the will are integrated into the will. Internal: the process of making sure that the testator’s will contains no fewer and no more pages that it did when the testator executed it.

Question 73

Components of a Will: Republication by Codicil

Answer 73

A codicil is a testamentary instrument that supplements an earlier valid will. A will is treated as re-executed as of the date of the codicil. If a will has been revoked, it may be republished by codicil and make the revoked will valid.

Question 74

Components of a Will: Incorporation by Reference + Requirements

Answer 74

A writing in existence when a will is executed may be incorporated by reference if the language of the will manifests an intent to incorporate and the writing is sufficiently identified by the will. In CA, no single item passed by separate writing can have a value in excess of $5000 and the total passed in this way cannot exceed $25,000.

Requirements:
(1) intent,
(2) the writing incorporated must have been in existence when the testator executed the will, and (3) the testator must have
identified the writing to be incorporated with specificity. The terms of any incorporated document are frozen at the time of execution of the will.

Question 75

Components of a Will: Acts of Independent Significance

Answer 75

If the beneficiary or property designations are identified by acts or events that have a lifetime motive and significance apart from their effect on the will (like a testator’s purchases of a new car not only to be more valuable to the beneficiary but also to serve as a means of transportation), the gift will be upheld under this doctrine.

Extrinsic evidence is permitted to identify the beneficiaries or property passing under the will in this way.

Example: if there is a class of people that can change over time, like employees, then hiring or firing them is an act of independent significance, and the entire class will share equally or as specified.

Example: shuffling the contents of two safety deposit boxes is an act of independent significance. Example: “contents of home” include the obvious furniture, but all other property like stock certs are not counted because they are do not have tangible value.

Question 76

Components of a Will: Ambiguity

Answer 76

The way in which will ambiguities are solved is dependent upon whether the ambiguity is patent, latent, or not readily apparent. A patent ambiguity is unclear on its face, a latent ambiguity contains sensible meaning on its face, but cannot be carried out without further clarification, and a not readily apparent ambiguity is one that is neither patent or latent but there is a presentation of extrinsic evidence to show that what the will said was not intended.

Question 77

What is the goal in construing wills?

Answer 77

The goal in construing wills is to give effect to the T’s intent. Extrinsic evidence may be considered by the court in ascertaining what the T meant by the words used in the will.

Question 78

What will the court do if there is CLEAR AND CONVINCING evidence of a scrivener’s error?

Answer 78

The court may REFORM (correct) the error.

Example: Address of real property

Question 79

What will the court do if there is an ambiguity in the will?

Answer 79

The court may construe the will consistent with the T’s probable intent.

Precatory language, “wish, recommend,” etc. are not mandatory and NOT legally enforceable. However, courts are more likely to follow precatory language in the administrative aspects of the will — such as waiving bond for the executor.

Question 80

What is “precatory language”

Answer 80

“Wish,” “Recommend,” etc.

Question 81

What will the court do if a devisee does not survive the T (the devise lapses/fails)?

Answer 81

All states have anti-lapse statutes in case of the death of a beneficiary before the testator.

In CA, if a transferee predeceases the testator/settlor, the transferee’s issue take the transferee’s share. Under the CA statute, “transferee” means blood relative, so only the heirs predeceasing blood relatives may take from decedent.

Question 82

What is “ademption”?

Answer 82

Ademption refers to a situation wherein property gifted to a beneficiary no longer exists at the death of the decedent. Identity theory: If the exact item the testator attempted to give away in the will is not in the testator’s estate, the gift adeems. Intent view (minority): May allow tracing and may even permit the beneficiary to receive the value of the missing property.

Ademption Example: Also note specific words “leave 100 shares” versus “my 100 shares,” or “stock certificate 125564” when determining identity of the property.

Question 83

What is “ademption by extinction”?

Answer 83

Ademption by extinction applies to specific devises of property. Thus, if a specific and identified item is gifted to a beneficiary, but then that item no longer exists at decedent’s death, the devise fails.

Question 84

What is “ademption by satisfaction”?

Answer 84

Ademption by satisfaction is similar to advancement (above), and it applies when the testator makes a transfer to a devisee after executing the will bur before death. – Does apply to general and specific bequests. If general, then must be by writing.

Question 85

What is “abatement”?

Answer 85

Abatement occurs when the estate has insufficient assets to pay debts as well as all the devises. In such a case, some devises must be abated or reduced. Reduction occurs in the following order: first from residuary devises, then from general devises, and finally specific and demonstrative devises (reduced pro rata).

Question 86

What is pretermission protection?

Answer 86

If a decedent fails to provide for his surviving spouse, who married decedent after execution of all of the decedent’s testamentary instruments, she shall receive her intestate share. The same holds true for children born after the execution of all of the decedent’s testamentary instruments.

Question 87

What are two exceptions to “pretermission protections”?

Answer 87

The surviving spouse or after-born child will not take their intestate share if:

(1) the decedent’s failure to provide for the spouse or child was intentional and that intention appears on the face of the instrument; or
(2) the decedent provided for the spouse or child outside of the testamentary instruments and that intent is shown by any extrinsic evidence.

Question 88

What is required to revoke a will?

Answer 88

To revoke a will:

1) the testator must be 18,
2) have testamentary capacity and
3) an intent to revoke.

Question 89

In what ways can a will be revoked?

Answer 89

A will can be revoked in any of the following ways: 1) an express written revocation by testator or proxy

2) revocation by physical act by testator revoked by law by testator or proxy
3) revoked by inconsistency
4) or revoked by operation of law.

Revocation of a will also revokes all underlying codicils and all copies of the will.

Question 90

Express Written Revocation.

Answer 90

A will can be revoked by a subsequent attested or holographic will that expressly revokes the prior will. This must be done by the testator or by proxy.

(1) New will,
(2) an amendment to the existing will, or
(3) a document that revokes the prior will but does not contain replacement dispositive provisions.

Question 91

Revocation by Physical Act.

Answer 91

A will can be revoked by a physical act such as destroying, obliterating, or burning the will. A revocation by physical act only revokes the part of the will that is actually destroyed; the remaining portion may still be a valid will.

In CA, striking out portions of the will (called cancellation) is a valid partial revocation by physical act. This must be done by the testator or by proxy.

Requires:

(1) capacity to revoke,
(2) intent to revoke,
(3) a satisfactory physical act performed on the will, and
(4) the simultaneous existence of the first three prerequisites.

By proxy OK in some circumstances, but not in others depending on the law of the state. Partial revocation by physical act is possible in jurisdictions that permit it, but consider testator’s intent and any likelihood of fraud.

Question 92

What is the presumption of a “lost will” re: revocation?

Answer 92

There is a presumption that a will was revoked by physical act if there is evidence that the will was in physical possession of testator and the will cannot be found at testator’s death. However, a will that is lost, destroyed without the consent of the testator, or not destroyed in accordance with the revocation statute, the will can be probated if its contents are proven.

Question 93

Revocation by Inconsistency.

Answer 93

A subsequent will that does not expressly revoke the prior will, but makes a complete disposition of the testator’s estate, presumptively replaces the prior will and revokes it by inconsistency. If the subsequent will does not make a complete disposition of the testator’s estate, it does not revoke the prior will and the property not disposed of under the codicil is disposed of in accordance with the prior will.

Question 94

Revocation by Operation of Law.

Answer 94

In most states, divorce revokes any provision in the decedent’s will for the divorced spouse. In other states, revocation occurs only if the divorce is accompanied by a property settlement.

Question 95

Dependent Relative Revocation.

Answer 95

This is also called implied conditional revocation. If the testator purports to revoke his will upon a mistaken assumption of law or fact, the revocation is ineffective if the testator would not have revoked his will had he known the truth. Usually, a testator implicitly conditions revocation on the happening of some event (e.g., subsequently executed will as being valid), and if the implied condition does not occur, then neither does the revocation.

Question 96

Revival.

Answer 96

A testator can reinstate (revive) a will that has been revoked by re-executing the revoked will or by including an express statement of revival in a subsequent will or codicil. See Example on page 168; 171- 173 (for examples that includes DRR and Revival)

Question 97

Requirements for Challenging the Validity of a Will.

Answer 97

A person must have a pecuniary interest to maintain a will contest action; mere expectancies or moral interests are insufficient. A constructive trust maybe implemented by the court if undue influence, duress, or fraud otherwise prevented testator from making a will altogether.

Question 98

What is an Insane Delusion?

Answer 98

An insane delusions means that the testator was laboring under a false belief that was maintained despite all evidence to the contrary and that the false belief directly affected a particular provision of the will. A mistake is not an insane delusion. There can be no rational disposition of testator under an insane delusion. (1) false belief and (2) that belief is irrational.

Question 99

What is the result of an insane delusion?

Answer 99

If an insane delusion is shown, but the delusion did not affect the dispositions, then the will stands. If it did affect the dispositions, then the will fails for lack of testamentary capacity.

Question 100

When does Undue Influence exist?

Answer 100

Undue influence exists if the testator was coerced into making a bequest that he would not have made absent the undue influence and that the testator did not desire to make.

If there isn’t direct evidence of undue influence, then proving the following three elements will raise a rebuttable presumption of undue influence:

(1) there was a confidential relationship between the testator and the alleged influencer (usually a dominant-subservient relationship);
(2) the influencer was active in the procurement of the will; and
(3) there was an unnatural disposition (esp. a non-blood bequest). Most likely only circumstantial evidence where there is/was undue influence.

Question 101

What is the result of undue influence?

Answer 101

If part of a will is the product of undue influence, those portions of the will that are the product of such influence may be stricken and the remainder of the will allowed to stand, if the invalid portions of the will can be separated without defeating the testator’s intent or destroying the testamentary scheme.

Question 102

What is required to rebut the presumption of undue influence for attorneys and non-blood caretakers when they take under the will?

Answer 102

A certificate of independent review attached to the will

Question 103

What is duress?

Answer 103

When undue influence becomes overtly coercive it is called duress. A donative transfer procured by duress if the wrongdoer threatened to perform of did perform a wrongful act that coerced the donor into making a donative transfer that the donor would not otherwise have made. Physical harm.

Question 104

What is Fraud?

Answer 104

Fraud occurs where the testator is deceived by a deliberate misrepresentation and does that which he would not have done had the misrepresentation not been made. The misrepresentation must be made with both the intent to deceive the testator and the purpose of influencing the testamentary disposition.

There must be:

(1) an intentional misrepresentation,
(2) made for the purpose of inducing reliance thereon,
(3) with actual reliance, and
(4) damages.

Question 105

What is “Fraud in the Execution”?

Answer 105

Testator is deceived as to either

(a) the identity of the instrument signed or
(b) the contents of the will.

Question 106

What is “Fraud in the Inducement”?

Answer 106

The individual perpetrating fraud deceived testator as to extrinsic fact that caused testator to make the will in the first place.

Question 107

What is the result of fraud?

Answer 107

A provision in a will procured by fraud is invalid, and the remaining portion stands unless the fraud permeates the entire will or the portions invalidated by the fraud are inseparable from the rest of the will.

Question 108

Tortious Interference with Expectancy.

Answer 108

A tort action in which plaintiff seeks to recover from a third party – it is NOT a will contest – There may be punitive damages. This cause of action does not exist in CA.

Question 109

What is a Mistake?

Answer 109

Mistake of law or fact. Mistake arises when the testator believes something to be true when it is not and that belief is either:

(1) not induced by another person or
(2) induced by another’s innocent misrepresentation.

Mistake negates intent. Examples: inadvertently included provision or missing provision. But missing provisions or mistake resulting from inducement, such as supposed death of beneficiary and resulting will change, will likely not be fixed by court, because although mistaken, change was intentional.

Question 110

What is a “no contest clause”?

Answer 110

A no contest clause provides that a beneficiary who contests the will shall take nothing, or a token amount, in lieu of the provisions made for the beneficiary in the will.

Question 111

Contracts Relating to Wills.

Answer 111

A person may enter into a contract to make a will or a contract not to revoke a will. Contract law applies. Upon breach, the contract beneficiary is entitled to a contract remedy. Generally, these contracts must be in writing, but equitable estoppel has been used in CA to get around the statute of frauds.

Question 112

Pour-over Wills.

Answer 112

A pour over will is a will that has an express clause to distribute some or all of decedent’s probated property to an inter vivos trust. The property will then be distributed under the terms of the trust. The trust can be funded or unfunded, and it can be created and/or amended after the will is executed. The trust is incorporated by reference.

Question 113

What are “Trusts”?

Answer 113

A trust is an arrangement whereby a trustee manages property as a fiduciary for one or more beneficiaries. The legal and equitable title is split so that the burdens of ownership (legal title) go to the trustee and the benefits of ownership (equitable title) go to the beneficiaries.

Question 114

What are the requirements to create a trust?

Answer 114

The requirements for the creation of a trust are:

(1) intent to create a trust, that is, to hold property for the benefit of another;
(2) mental capacity;
(3) split of legal and equitable title;
(4) res, that is the thing or property over which title is split; and
(5) a signed writing by the settlor of the property held and split is real estate.

Question 115

Creation of a trust: Intent

Answer 115

The settlor must have the present intent to create a trust. In so doing, the focus in on function rather than form. That is, no particular form of words or conduct is necessary for the manifestation of intention to create a trust; all that is required is a command from the settlor that a trust shall be created.

To decide the settlor’s intent, the court will look to the language of the governing document in light of all the circumstances. Precatory language is not good enough.

Example: A transfers legal title to Thomas and equitable title to both Thomas and Brenda – Valid.

Question 116

Creation of a trust: Res

Answer 116

A trust cannot be created if there isn’t any property. Similarly, a trust terminates when no property remains. The trust res has to be in existence at the time the trust is created.

Question 117

Creation of a trust: Inter-vivos ore Testamentary Trust

Answer 117

A trust can be created during the lifetime of the settlor (inter-vivos) or by will upon the settlor’s death (testamentary). A testamentary trust must be writing, but an inter-vivos trust does not (unless the res is real property).

Question 118

Creation of a trust: Declaration or Deed of Trust

Answer 118

A declaration of trust is a situation where the settlor declares himself to be the trustee and thus retains the legal interest over the trust res; the settlor only needs to manifest the intention to the hold the property in trust the benefit of another. A deed of trust is a situation where the settlor transfers legal title of the res to a third party to act as trustee. Here, a deed of trust or actual delivery of the trust property is necessary.

Question 119

Who are the parties to a trust?

Answer 119

Ordinarily, a trust involves three parties: the settlor, the trustee, and one or more beneficiaries. However, one person can be more than party to the trust, and sometimes can even be all three.

Question 120

Parties to a Trust: Settlor

Answer 120

The settlor is the person who creates a trust by splitting his title in property. The settlor can also be a trustee and a beneficiary so long as there is more than one trustee or beneficiary.

The settlor must have the requisite capacity to convey property to create a trust. Where the settlor creates an irrevocable trust naming himself as beneficiary and includes a spendthrift clause, creditors may be able to set aside the conveyance as fraudulent under state laws.

Question 121

Parties to a Trust: Trustee

Answer 121

The trustee holds legal title to the res and owes a fiduciary duty to beneficiaries (see below). A trustee can also be the settlor or a beneficiary. There can be multiple trustees to a single trust. A trust will not fail for want of a trustee: the court will appoint a trustee if the settlor fails to appoint one, the trustee refuses the appointment, or the trustee dies.

Must have capacity and must affirmatively accept the duty. Can be corporation if that corporation provides for it being a trustee in its charter.

Question 122

Parties to a Trust: Beneficiary

Answer 122

The beneficiary holds equitable title to the res and is owed a fiduciary duty by the trustee. A beneficiary can be a human or legal entity so long as they are ascertainable during the life of the trust (exception: charitable or honorary trusts see below). Beneficiaries may disclaim. Incidental beneficiaries (neighbor to un-kept house) has no standing to sue. Beneficiaries must be specific, “those friends,” is not enough. Beneficiaries may also transfer or assign, but only if the trust instrument does not forbid.

Question 123

Settlor vs. Creditor

Answer 123

A revocable trust is subject to the claims of the settlor’s creditors while the settlor is living and upon the settlor’s death. An irrevocable trust is subject to the claims of the settlor’s creditors while the settlor is living only if the settlor is also a beneficiary.

Question 124

Settlor vs. Trustee

Answer 124

A personal creditor of the trustee has no recourse against the trust property, and a creditor of the trustee as a trustee has no recourse against the personal property of the trustee.

Question 125

Settlor vs. Beneficiary

Answer 125

A creditor cannot attach trust assets if the trust is a discretionary trust, but can if the trust is a mandatory trust, unless the creditor is a preferred creditor (i.e., debt for alimony and child support, tort victims, or IRS). A discretionary trust is one in which the trustee has discretion in the distribution, whereas a mandatory trust is one in which the trustee must make specified distributions to an identified beneficiary. A non-preferred creditor may not attach trust assets of a mandatory trust if there is a spendthrift clause (the beneficiary is prohibited from transferring his interest in the trust). Spendthrift restrictions include spousal and child support, federal tax claims, few tort claims.

Question 126

Modification and Termination of a Trust.

Answer 126

A trust may be modified or terminated if the settlor and all beneficiaries consent (if inter-vivos irrevocable), after the settlor’s death if all beneficiaries agree and the court orders the modification or termination, or on court order in changed circumstances not anticipated by the settlor that will defeat or substantially impair a material purpose of the trust absent modification or termination.

Modifications and terminations are usually ordered in order to carry out the intent of the settlor. This must always be taken into account in a modification or termination analysis.

Question 127

What effect does a merger have on a trust?

Answer 127

Mergers destroy trusts.

Question 128

Modification/Termination in California

Answer 128

In CA, a court may modify the administrative or dispositive provisions of a trust if, owing to circumstances not known to the settlor and not anticipated by the settlor, the continuation of the trust under its terms would defeat or substantially impair the accomplishment of the purposes of the trust. In other words, modification or termination is appropriate if the reason for the modification or termination outweighs any conflicting material purpose of the settlor.

Question 129

Who owes a fiduciary duty, and to whom?

Answer 129

All trustees are fiduciaries, and all fiduciaries owe a duty of loyalty and a duty of prudence to beneficiaries. A trustee may be liable to the beneficiaries when there is a breach a fiduciary duty that causes damages.

Question 130

What are the two major duties?

Answer 130

1. Duty of Loyalty

2. Duty of Prudence

Question 131

What is the Duty of Loyalty?

Answer 131

The duty of loyalty means that the trustee will administer the estate solely in the interest of the beneficiaries. The duty of loyalty is referred to as the duty against misappropriation. Under this duty, the trustee is prohibited from self dealing.

Question 132

What is the “No Further Inquiry Rule”?

Answer 132

If the trustee engages in a transaction that involves self-dealing or a conflict between the trustee’s fiduciary capacity and personal interests, good faith and fairness to the beneficiaries are not enough to save the trustee from liability. In such a case, no further inquiry is made; the trustee’s good faith and the reasonableness of the transaction are irrelevant.

Question 133

What are the exceptions to the “No Further Inquiry Rule”?

Answer 133

Self-dealing is allowed, and the no further inquiry rule abrogated, if:

(1) the trust authorizes self dealing;
(2) all beneficiaries consent to the transaction;
(3) the trustee gets a court order authorizing the transaction; or
(4) the trustee is a corporation or bank and the trust assets were deposited with its own banking department in order to invest the trust assets in a common trust fund or in a mutual fund that it operates.

Question 134

What is the liability of a bona fide purchaser who assists trustees?

Answer 134

A person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee’s powers is protected from liability as if the trustee properly exercised the power.

Question 135

What is the Duty of Prudence?

Answer 135

The duty of prudence is the duty to administer the trust as a reasonably prudent person would. The duty of prudence is the duty to avoid mismanagement. The trustee has the affirmative duty to actively advance the interest of the beneficiaries.

There are 8 duties (CADDIIES)

(1) duty to collect and protect assets;
(2) duty to administer the trust;
(3) duty to diversity;
(4) duty of proper delegation;
(5) duty of impartiality;
(6) duty to inform and account.
(7) duty to earmark; and
(8) duty to make proper investment selection

Question 136

Duty of Prudence: Prudent Investor Rule

Answer 136

A trustee shall invest and manage trust assets as a prudent investor would. The trustee shall exercise reasonable care, skill, and caution in so doing. A trustee’s investment and management decisions must be evaluated not in isolation, but in the context of the trust portfolio as a whole and as part of an overall investment strategy having risk and return objectives reasonably suited to the trust.

Question 137

Duty of Prudence: Duty to Diversify

Answer 137

A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying. Diversification reduces the risk of the overall portfolio. Failing to diversify is an uncompensated risk, meaning that there is a higher risk without the higher possibility of reward.

Question 138

Duty of Prudence: Duty of Proper Delegation

Answer 138

Prudent people seek help when dealing with matters beyond their ken. Delegation is permitted subject to a duty of care, skill, and caution in selecting, instructing, and monitoring the agent. In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

Question 139

Duty of Prudence: Duty of Impartiality

Answer 139

This duty is implicated when a trust has two or more beneficiaries. The duty of impartiality mandates that the trustee strike a balance between the beneficiaries when investing, managing, and distributing the trust property. Generally, the interests of income beneficiaries are at odds with the interests of remainder beneficiaries. The trustee may not favor one class of beneficiaries over the other.

Question 140

Duty of Prudence: Duty to Inform and Account

Answer 140

The trustee has a duty to inform the beneficiaries of the existence of the trust and significant developments pertaining to the administration of the trust, and to respond promptly to a request by a beneficiary for information reasonably related to the beneficiary’s interests in the trust. The beneficiaries must be given enough information for them to be able to decide to enforce, modify, or terminate the trust. The trustee must account once per year, and the law protects a trustee from liability to the beneficiary for breach of trust if the facts underlying the beneficiary’s claim are fairly disclosed in an accounting filed with the court, notice of the accounting is properly served on the beneficiary, and the beneficiary does not timely object to the accounting.

Question 141

Duty of Prudence: Duty to Inform and Account (in California)

Answer 141

A CA statute provides that when a revocable trust becomes irrevocable because of the death of the settlor, the trustee shall provide a complete copy of the terms of the trust to any beneficiary or heir of the settlor who requests it.

Question 142

Duty of Prudence: Duty to Earmark

Answer 142

To earmark property is to designate it as trust property rather than the trustee’s own. Commingled trust funds become difficult to trace and hence subject to the risk that personal creditors of the trustee can reach them. Thus, there is a prohibition against commingling, and all trust property must be earmarked.

Question 143

Duty to Collect and Protect the Trust property:

Answer 143

A trustee has the duty to collect and protect trust property without unnecessary delay. “Unnecessary delay” depends on the circumstances.

Question 144

Calculating Damages for breach of fiduciary duty:

Answer 144

The core principle in trust remedy law is to put the beneficiary in at least the position that she would have been in had the breach not occurred. This make- whole standard is implemented by holding the trustee liable for any losses incurred and gains forgone as a result of the breach. In addition, the trustee is liable for any profit made by the trustee through the breach of trust.

Question 145

What is a Charitable Trust?

Answer 145

A charitable trust need not have a specifically ascertainable beneficiary. A charitable trust is any trust that is for a charitable purpose. The state attorney general has the power and standing to enforce and bring suit against the trustee of a charitable trust.

Question 146

Are Charitable Trusts subject to RAP?

Answer 146

No

Question 147

What is a “Charitable Purpose”?

Answer 147

A trust is for a charitable purpose, and is thus a charitable trust, if it is for:

(1) relief of poverty;
(2) advancement of education;
(3) advancement of religion;
(4) promotion of health; or
(5) government or municipal services such as parks or museums (or any other purpose that is sufficiently beneficial to the community to justify the preferential treatment afforded to a charitable trust

Question 148

What is the Cy Pres Doctrine?

Answer 148

Under this doctrine, if the settlor’s exact charitable purpose becomes illegal, impossible, or impracticable, the court may direct the application of the trust property to another charitable purpose that approximates the settlor’s intention. The doctrine, which means “as nearly as possible,” addresses the risk that because a charitable trust may have a perpetual existence, changed circumstances will render the trust’s original purpose obsolete. A court is required to award the funds to a charity that most resembles the one that was to be the recipient of the trust.

Question 149

What are Honorary Trusts?

Answer 149

Honorary trusts have been accepted in CA even though there is no human being with equitable title. An honorary trust is where the trustee has the power, but not a duty, to apply the trust property to the settlor’s stated purpose. If the trustee does not do so, then the property reverts on resulting trust to the settlor or the settlor’s heirs or devisees.

Question 150

How do Honorary Trusts work in CA?

Answer 150

In CA, a trust for the benefit of a pet or an animal is valid for the lifetime of the animal. Similarly, a trust can be for the keeping property in good condition, erection of monuments, saying of mass for the decedent, etc.

Question 151

What is the rule re: Discriminatory Trusts?

Answer 151

If the trustee of a racially restrictive trust is a governmental body, courts have held that the administration of the trust in a racially discriminatory manner is discriminatory state action forbidden by the Constitution, making the racial restriction unenforceable. In such cases, most courts have held that the settlor would prefer the charitable trust to continue without the racial restriction. Such restrictions on a private trustee do not violate the Constitution, but may be violative of federal laws. Other types of discriminatory trusts include gender based discrimination and religious based discrimination. In each case, distribution in accordance with the terms of the trust may violate federal law.

Question 152

What is a Discretionary Trust?

Answer 152

An arrangement whereby the trustee is given the discretion to determine which beneficiaries to pay and how much to pay to each. This would be the case where there are uncertainties as to the beneficiaries and their needs. Extent of the discretion is provided for in the instrument. Discretionary support trusts: determination of level of support could be based on what settlor had intended or in consideration in the differences of other available assets of the beneficiaries – court take equity view.

Question 153

What is the Rule Against Perpetuity?

Answer 153

No interest in property is good unless it must vest or fail within any life in being plus 21 years. If a conveyance fails under that test, it may still be valid if it actually either vests or fails within 90 years of the conveyance. If the conveyance still fails, then the court will reform the document.

Question 154

How do you analyze a RAP problem?

Answer 154

(1) Ask if the interest is contingent (not vested),
(2) what will it take to resolve the contingency (identify exactly what is needed), and
(3) is there someone or some group you can identify and say, “within your lifetime(s) or 21 years thereafter, this contingency will be resolved, one way or the other.”

Question 155

Application of RAP:

Answer 155

RAP only applies to contingent interests. An interest is contingent if there is a condition precedent to the beneficiary being able to take, or if the beneficiary is not yet born.

Question 156

Tolling of RAP:

Answer 156

The tolling of the two time periods begins when the conveyance becomes irrevocable.

Question 157

Life in being under RAP:

Answer 157

A life in being can be any beneficiary alive when the tolling period begins. The object is to find a life in being that will show that the interest will vest or fail within the 21 year period. If such a life in being can be found, that person is called the validating life.

Question 158

What is a “savings clause” under RAP?

Answer 158

A savings clause stipulates that the trust must terminate and all interests distributed within 21 y ears of the death of the measuring life individual. The sole purpose of such a clause is to ensure that RAP is not violated.