MEE Wills and Trusts Flashcards
I dont have a will. What will happen?
No will = property passes by intestate succession.
When can another paper be apart of the will?
If its incorporated by reference. Meaning:
- will manifests intent to incorporate
- will sufficiently identifies other document
- other doc exists when will is executed
I died with no will + spouse + no issue
Most v UPC
Most: spouse gets everything
UPC: spouse gets everything but sometimes grandparents and parents get a portion
I died with no will + living spouse + issue (child, grandchild, etc.)
Most v UPC
Most: Surviving spouse recieves portion and issue recieves a portion.
UPC: Survivng spouse gets everything if all kids and grandkids are issue of the surviving spouse
I died with no will + no spouse + issue
Everything goes to kids/grandchildren
I died with no will and was antisocial with no spouse or kids
Parents > Sister and Brothers > Nieces and Nephew > Remote Ancestors
Once we know who is entitled to a portion of the estate, how do we divide?
- per capita at each generation (majority/UPC)
- per stirpes (common law)
How do I explain per capita distribution
each descendant takes an equal share of the assets.
how do i explain per stirpes distribution
each descendant takes a share of the assets by right of representation
How do I make an attested will
- testamentary capacity (nature and extent of property; natural objects of your bounty; understanding that you are disposing of property; the ability to connect all the above elements)
- testamentary intent (intended the document be a will)
- capacity at least 18
- writing signed testator and two witnesses
How can i make a will other than attested
a holographic will in some states; writing mostly in T’s handwriting, signed, and stated intent to be a will
How much of stock do I get?
CL v. UPC
Common law =
- specific bequest of stocks includes
- any additional shares produced by a split stock
- but not dividends
UPC =
- a specific bequest of stock includes stock dividends.**
Decedent gave me gift during lifetime. What do i do?
CL: lifetime transfers presumed to be advancements
UPC: lifetime transfers are presumed to be gifts unless evidence suggests decedent intended it as an advancement
What happens if the stuff I was supposed to get in the will is gone?
- doctrine of ademption applies
- when specifically bequeathed property is not in the testator’s estate at death, the bequest fails.
- Most court use and objective test and the testator’s intent is irrelevant.
What happens if I killed the decedent/testator?
One who intentionally brings about death of decedent forfeits any interest in the decedent’s estate; distributed as if killer was dead
What if i want to change my will? or I have changed it?
- A codicil is an amendment to a validly executed will
- A will is treated as executed on the date of the most recent validly executed codicil
In a discretionary trust,
the trustee is given discretion whether to apply or withold payments of income or principal (or both) to beneficiary
“secret” trust distinguished from “semi-secret” trusts examples
secret (no mentioned of bene or trust) :
- A person wills their house to their friend “Bob” with the understanding, communicated outside the will, that Bob will then give the house to their niece “Alice”.
- enforceable by clear and convincing extrinsic evidence
semi-secret (reveals existence of trust but not bene):
- “I leave $50,000 to Mary to be used according to our prior discussions”
- the will acknowledges a trust exists, but the specific details of who the beneficiaries are and how the money should be used are not written in the will.
- property reverts to estate / unenforceable
Spendthrift trusts or provisions
function? validity? not protected from creditors if/when?
- function is to prevent creditors from accessing beneficiaries interest
- valid only if restrains both voluntary and involuntary transfers
- clause cannot be used to shield the beneficiary from:
- court order child/alimony payments, support and maintance for bene, child, former spouse, spouse, etc.
- if settlor is beneficiary (this would arise if they did this solely to avoid creditors; unjust and dumb)
What are the generally duties of a trustee?
- duty of care
- duty of loyalty
- delegation
- investments/prudent investmentrule
- duty to inform
- duty to account
What is trustee’s duty of care?
- T must administer the trust in good faith
- T’s discretionary decisions may be challenged if T failed to exercise good judgment
- T held to a heightened standard and must use his special skills
- exculpatory provisions in trust ok but does not excuse bad faith acts
highly tested
what is trustee’s duty of loyalty?
if T engages in self-dealing, the court will not inquire further into T’s motives because it is a per se breach of duty
(unless terms of trust allow or it, still must be fair and reasonable)
self-dealing:
- buy or sell trust assets for himself
- transfer props between trusts
- borrow funds or make loans
- use trust assets to secure personal loans
- engage in prohibited activities
- otherwise act for personal gain through trustee position
no fraud or bad faith required for breach
can trustee delegate duties?
modern law allows T to delegate duties if it is unreasonable to expect trustee to perform the task (e.g., investment strategies) and T must oversee the decision making
what is the trustee’s duty in re to trust investments?
- invest and manage as a prudent investor would in investing his own property
- utilizing any special skills or expertise he possess
- evaluated by evaluating entire portfolio
- duty to diversify/make property productive
What are the two ways that a judicial modification of a trust appropriate?
highly tested
- cy pres doctrine: if a charitable trust’s purpose becomes unlawful, impossible, or impractiable the court may modify as close as possible with settlor’s intent
- deviation of trust: trustees and benes can request the court permit a deivation from administrative provisions
cy pres doctrine only applicable if:
highly tested
- property is placed in a trust for a charitable purpose that has become unlawful, impossible or impractiable to carry out, and
- settlor manifests a general charitable intent to devote property to charitable purposes (most courts presume)
- absence of a reverter clause is evidence of the settlor’s general charitable intent
- if reverter clause present, court will revert trust property to parties specified in clause (when it becomes unlawful, impossible, imprac, etc.)
What is the rule against perpetuities under common law
- a future interest
- must vest within 21 years
- of a death of a life in being
- if there is any possibility that future interest will not best, interest = invalidated
What is the rule against perpetuities under “wait and see” jdxs
- some courts will “wait and see” if future interest actually does fail to vest
- distinguishable from common law because it doesnt invalidate the possibility that it will fail to vest
what is the modern trend for rule against perpetuities
- under modern trend
- some courts will reduce age contingencies exceeding 21 years
- to validate a conveyance that would otherwise violate common law RAP
O conveys Greenacre to A for life, then to A’s children who reach
the age of 30.
This conveyance would be invalidated under the common law, because there is a possibility that the interest would not vest within 21 years after A’s death.
However, the modern trend allows courts to rewrite the conveyance to: O conveys Greenacre “to A for life, then to A’s children who reach the age of 21.”
trustees and benes can request court permit a deviation from administrative provisions if:
- purpose of trust has been satisfied;
- purpose of trust has become unlawful
- purpose of trust are impossible to carry out
examples of charitable purpose
- relief of poverty
- advancement of education, science, art
- advancement of religion
- promotion of health
- governemnt purposes such as parks or museums
court decides what is a charitable purpose
How do you create an express trust?
[ insert elements from E&T outline]
what is it and how do u create a testamentary trust
A testamentary trust is created through provisions of settlor’s will; it does not come into existence until settlor’s death (so long as valid)
Creation requires:
(1) the will to state the essential terms (bene, purpose, trust prop) and (2) intent to create a trust either
- by express terms or
- by incorporation by reference
what does common law v UTC say about revocability?
under majority (CL):
- a trust is irrevocable unless the settlor expressly retains the right to revoke or amend the trust
under minority (UTC):
- a trust is revocable unless trust expressly provides otherwise
definition of trust
- a trust is a fiduciary reltaionship b/w trustee and benes
- trustee holds legal title to the property and becomes owner of record for property
- beneficiary holds equitable title to property and is entitled to financial benefits
1) what is a discretionary trust and 2) how do we know when trustee abused their discretion
- occurs when trustee has absolute power and discretion to distribute property to benes
- exercise must be in good faith
- court will ony interefere if abuse of discretion
- abuse depends on:
1. terms of trust instrument
2. other duty of trustee (care, loyalty, etc.)
high tested
spendthrift trusts and rights of creditors
[ put course companion stuff]
spendtrhift trusts and rights of creditors tested together
support trusts or hems trusts
[ put stuff from E&T outline]
three parties involved in creation of trust
- settlor: person who creates the trust
- trustee: person who holds the assets of the trust for benefit of beneficiary, and manages its assets
- bene: person who is entitled to the assets or profits of trust
a constructive trust….
- is not a trust but rather a remedy to prevent unjust enrichment from wrongful conduct
- must show particular property was involved in improper conduct
The creation of a trust involving [….1] must comply with the Statute of Frauds, while the creation of a trust involving […2…] need not comply with the Statute of
Frauds.
1) real property
2) personal
property (without real property)
An ascertainable beneficiary exists;
1) At the time of trust creation, the settlor must either:
A. Specifically identify the beneficiary by name; OR
B. Sufficiently describe how the beneficiary is to be identified (e.g., “my children” is sufficient –– “my friends” is not sufficient).
2) The beneficiary must be able to possess title to property (e.g., an animal cannot be a trust beneficiary). However, the beneficiary need not have capacity to manage the property.
3) Settlors and trustees can also be beneficiaries; however, a sole trustee cannot be the sole beneficiary of the trust.
