Non Probate Transfers & Planning for Incapacity

Question 1

Types of Wills Substitutes

Answer 1

o Pension plan
o Life Insurance
o POD Accounts
o TOD Accounts

Question 2

Do Will Substitutes Satisfy the Wills Formalities Act?

Answer 2

o No

o They do not have to satisfy the Wills Act formalities

Question 3

Will Substitutes are essentially

Answer 3

Contracts

Question 4

Whether a contingent beneficiary can complain of a transaction by the settlor of a revocable trust, prior to the vesting of her interest upon the death of the settlor?

Answer 4

As a contingent beneficiary, she does not have standing to sue for breach or enforcement of any of the fiduciary’s duties

Question 5

Standing

Answer 5

▪ A trustee has a fiduciary duty to the settlor
• If he is both the trustee and the settlor, he really only owes a duty to himself
▪ If someone has a present interest, they have standing
• Here, no one has a present interest, because the trust is revocable

Question 6

Power to amend or revoke a trust:

Answer 6

If the terms of a revocable trust do not provide a method for revocation or amendment that is expressly made exclusive, the settlor may amend or revoke the trust by any method manifesting clear and convincing evidence of the settlor’s intent

Question 7

Whether the bank can reach the assets of the trust for the purposes of satisfying the unpaid debts

Answer 7

▪ The creditors can reach the assets in the same way that creditors can reach the assets in a will
▪ Policy
Violates public policy for an individual to have an estate to live on, but not an estate to pay his debts with

Question 8

When a joint tenant dies…

Answer 8

their interest is extinguished

Question 9

Creditors of a joint tenant…

Answer 9

cannot reach the jointly held property after the joint tenant’s death

Question 10

Exceptions from Reach of Creditors

Answer 10

o Life insurance proceeds are usually exempt if payable to a spouse or child
o Retirement benefits are usually exempt

Question 11

Does the divorce revoke the former spouse’s interest in the will substitute?

Answer 11

Yes

Question 12

Do Ademption and Abatement apply to Will Substitutes?

Answer 12

Yes

Question 13

Antilapse Statutes and Will Substitutes?

Answer 13

o Antilapse statutes do not apply unless there is a sufficiently close relationship
o 1/3 of states and the UPC apply the antilapse statute to will substitutes

Question 14

Capacity

Answer 14

Must have capacity to make a trust

Question 15

Pour-Over Will

Answer 15

o A trust must have trust property

o However, the assets that fund a trust can come at a later time

Question 16

Can you change beneficiary of life insurance by Will?

Answer 16

-majority rule finding an attempt to change the beneficiary of a life insurance policy by will, without more, to be ineffectual
o they must have made some showing that the insured had done all within his powers or all that reasonably could have been expected of him to comply with the policy provisions respecting a change of beneficiary, but that through no fault of his own he was unable to achieve his goal

Question 17

Pay on Death (Non-probate Transfer on Death)

Answer 17

For non-real property is ok