PA Wills & Trusts Flashcards
Execution of Wills: Five Elements to Execute a Will + Remember Threshold for Signature + Remember Witnesses Nuance
1) Testator (T) must be over 18;
2) T must sign (Any mark-initials, i.e. “X” will serve);
3) Signed at the logical end of the Will;
4) Two attesting witnesses to T’s signing (ONLY when T signs by mark or if someone signs on behalf of the testator)
5) The will MUST have an operative effect (dispose of property, nominate personal representative or revoke or modify another will)
Execution of Wills: [HYPO] What happens if T signs the will above one of the clauses?
Everything below the signature is legally operative, everything below is void.
Execution of Wills: [HYPO] T writes a document in her own handwriting that reads: “This is my last will. I revoke all earlier wills. I leave everything to the YMCA.” T signs the instrument. Is it admissible to probate?
Yes, witnesses are not required in holographic wills, they are only required if T signs his will by mark or someone else signs for T.
Execution of Wills: [HYPO] “I give to my faithful nurse Nell the sum of $30,000.” Nell is one of two attesting witnesses to the will. Any problem for Nell?
In PA, no. While it raises questions of undue influence, it does not invalidate the witness requirement.
Revocation: Revocation by Physical Act Elements
(i) Intent to revoke, and
ii) Requisite physical act (burnt, torn, obliterated, or destroyed
Revocation: [HYPO] What if you revoke when there are duplicate copies? + Remember Revoking the Copied Will
The act of revocation on the original executed copy revokes all duplicate copies.
Remember: Revoking the copy WILL NOT invalidate the original, only the other way around.
Revocation: [HYPO] What effect does writing “VOID” on the back of the will have? + What about writing “VOID” on the back and signing it at the bottom?
Writing “VOID” on the back of the will is NOT VALID because the act must cross some of the language of the will (not all, but some)
However, writing “VOID” and signing underneath would technically count as a valid EXPRESS revocation.
Revocation: Physical Act Rebuttable Presumptions (when will found mutilated or missing will) + Remember How to Rebut
1) Will in T’s possession from time of execution until death and found mutilated PRESUMES T did the mutilating and intended to revoke
2) Will last seen in T’s possession and control not found after T’s death assumes T destroyed with intent to revoke
Remember: Rebut these presumptions by showing T was not last in possession.
Revocation: [HYPO] T calls his attorney, the place where the will is located, and orders his attorney to destroy T’s will. The order is never carried out. Will revoked?
No, missing second element of revocation by physical act: a requisite physical act (burnt, torn, obliterated, or destroyed)
Revocation: Revocation by Agent of T Elements
Revocation by another person must be (i) at T’s direction, (ii) in T’s presence, and (iii) T’s direction must be in front of two witnesses
Revocation: [HYPO} How can a will be probated if it was destroyed?
Proponents must meet the burden of proving the contents of the lost will by “clear and convincing proof”
Revocation: What is the rule if there is a codicil (or second will) inconsistent with an original will?
Where codicil makes NO REFERENCE to a will, but contains slightly inconsistent provisions, the will and codicil are read together to the extent possible, but the MOST RECENT document provisions control the older document’s inconsistent provisions
Revocation: Revocation of a Codicil’s Effect on a Will v. Revocation of a Will’s Effect on a Codicil
Revocation of a will revokes all codicils thereto, BUT revocation of a codicil to a will does not revoke the will.
Revocation: Effect of Divorce on a Will + Remember if a couple remarries + Remember Mere Separation of a Couple
Unless the will shows it was intended to survive divorce, a divorce revokes ALL PROVISIONS IN FAVOR of an ex-spouse in a decedent’s will, revocable trust or life insurance policy
Remember: If couple remarries, the spouse is read back into the will as if nothing had happened
Remember: Mere separation has no rights on a will, UNLESS grounds for a divorce has been established and divorce is pending
Revocation: How can a post-execution change to a will become effective (i.e. line through a number w/ new value)? + Remember Effect of Line Through Provisions
Post-execution changes are not effective unless the will is either re-executed
or republished by codicil after the changes are made.
Remember: The effect of a line through a provision will automatically revoke that provisions, therefore if that provisions is not re-executed the beneficiary of that provision must apply DEPENDENT RELATIVE REVOCATION (see another card for this info)
Revocation: Define Dependent Relative Revocation (DRR) + Remember When Ineffective Gift is Smaller in Amount
DRR allows us to disregard a revocation which is based on, induced by, premised on a mistake of law or fact if the court is satisfied that, BUT FOR the mistake, T never would have made the revocation.
Remember: If ineffective gift was intended to be SMALLER than the testator original gave, DRR WILL NOT GO INTO EFFECT
Revocation: Revival of Wills That T Revoked + Remember DRR
In PA, you CANNOT REVIVE a will by revoking a will that took the place of the first.
Remember: If T’s intent was to revive, and if BUT FOR the legal mistake T never would have made the revocation, DRR can bring back THE MOST RECENT WILL (not the original)
Incorporation by Reference: Incorporating Extrinsic Documents by Reference Elements
To incorporate an extrinsic document by reference:
(i) Writing must be IN EXISTENCE at the time the will was executed;
(ii) Will must MANIFEST INTENT to incorporate the document;
(iii) Will must DESCRIBE THE WRITING sufficiently to permit its identification
Incorporation by Reference: Doctrine of Independent Significance
A person’s changes to their life that indirectly impact their will is allowed (i.e. I give X my car, and T upgrades car during lifetime)
***Lapse: Lapse Rule + Remember Anti-Lapse Statute
When a beneficiary named in a will dies before the T, the gift lapses UNLESS it is saved by the state’s ANTI-LAPSE statute
***Lapse: PA Anti-Lapse Statute
The PA statute applies when the predeceasing beneficiary is T’s decedent, sibling, or child of a sibling who LEAVES ISSUE (a.k.a decedents) who survived the T.
- **Lapse: [HYPO] T executes will in 2009; it provides (inter alia) “I give the sum of $5,000 to my sister, Paula. I leave the residue of my estate to brother, X.” Paula dies in 2010; she is survived by her husband H and two children. Paula has a will which leaves all of her estate to H. T dies in
2015. Who takes the $5,000?
Paula’s issues (her children) receive the gift. Even though Paula’s husband is the recipient in HER ESTATE, the ANTI-LAPSE statute refers to T’s estate, not a beneficiaries.
***Lapse: Anti-Lapse Exception
In the case of a gift to T’s sibling or to a child of a sibling, the gift will lapse to the extent it would pass as a result to T’s own spouse or issue (i.e., the spouse or issue are the residuary beneficiaries).
***Lapse: Class Gift Rule
When there is a gift by will to a group of persons generically described as a class (“children,” “nephews” and nieces,” etc.) and some class member predeceases the testator and the lapse statute does not apply, the surviving class members take
***Lapse: Class Gift Rule In Conjunction with Anti-Lapse
If the class gift is to a decedent, sibling, or child of sibling, and one of the class members die before the T, then the anti-lapse statute would kick-in for that class member and pass to his or her issue
***Lapse: What happens when a lapse occurs in the residuary estate? + Remember Anti-Lapse
If the residuary estate is devised to two or more persons, and the gift to one of them fails, the surviving residuary devisees take the entire residuary estate in proportion to their interest in the residue
Remember: If a decedent, sibling, or sibling’s child dies in the residuary estate, the anti-lapse statute would kick in and pass to his or her issue
***Lapse: Hierarchy of Gifts When Dealing with Abatement + Abatement Rule + Tip
Hierarchy from last used to first used:
1) specific devise (e.g. I give my car to),
2) demonstrative legacy (e.g. I give $5k to be paid out of my stocks)
3) General legacy (e.g. I give $5k to my daughter)
4) Residuary
5) Intestate property
Rule: Money needed to pay expenses and claims is raised by selling intestate
property, the residuary estate, general gifts and finally the subject matter of demonstrative and specific gifts, in that order
Tip: It goes in order from most general to most specific
Ademption: Common Law Ademption Rule + Exception
When the subject matter of a specific gift is not owned by T at death, the gift in the will is adeemed. That is, the beneficiary takes nothing.
Exception: Ademption DOES NOT APPLY to general gifts (e.g. demonstrative, general, residuary, or intestate) those gifts will be funded by other means
Ademption: PA Ademption Rules - Will Executed Before T Declared Incompetent
When an event that would otherwise cause ademption occurs during the testator’s incapacity this statute gives the beneficiary a cash legacy EQUAL to the fruits of the transaction involved
Ademption: PA Ademption Rules - A specific devisee has the following rights to the remaining specifically devised property if not in T’s possession at his death
1) Any balance of PURCHASE PRICE owing from purchaser on land sale contract at T’s death
2) Any amount of CONDEMNATION AWARD for taking the property, to the extent unpaid at T’s death
3) Any amount of UNPAID INSURANCE at death
Ademption: [HYPO] - “I give and bequeath my Rembrandt painting to my daughter Dora.” The Rembrandt painting was incinerated in 2017. The painting was insured, and the insurance company
duly paid its full value of $150,000 to T. Subsequently, T dies. Is Dora entitled to the
insurance proceeds?
No, Dora was adeemed, T was not incompetent so not first exception, and no unpaid insurance so no second exception
Ademption: Increase in Value Rule for Securities Owned By T + Example
Specific devisee takes “any additional or other securities of the same entity owned by the testator because of action initiated by the entity, excluding any acquired by exercise of purchase options.”
Example: “I bequeath my 100 shares of stock in Tax Shelters, Inc. to my son, Simon.” At his death, T
owned 200 shares of stock in Tax Shelters, Inc., consisting of the 100 shares he owned when he executed the will, plus 100 shares distributed to T by the corporation six months
after the will was executed. Simon would own all 200 stocks.
Ademption: Change in Value Rule for Securities Owned By T + Example
A specific devisee is entitled to securities of another entity owned by the testator as a result of merger, consolidation, reorganization, or other similar action initiated by the entity.
Example: TS was acquired by LTV, and as a part of the merger each shareholder was given one share of LTV for every two shares of TS. At T’s death he owned 50 shares of LTV stock. The conversion would all be given to beneficiary.
Exoneration of Liens on Specific Devises Rule
A specific devisee of encumbered property is NOT ENTITLED to have the encumbrance paid out of the residuary estate UNLESS the will shows such intent. “A general direction in the will to pay debts does not show such an intent.”
Latent Ambiguities Rule + How do courts resolve this issue?
Extrinsic evidence is admissible to clear up a latent (i.e. does not appear on the face of the will ambiguity), the same is generally true for patent ambiguities as well (i.e. face of the will)
Courts will correct ambiguities by STRIKING OUT WORDS
Ambiguities: Plain Meaning Rule + Example
You cannot disturb the plain meaning of an unambiguous will with extrinsic evidence.
Example: T had a nephew named John Paul Jones, whom he hadn’t seen for ten years. After T’s death, Paul Frederick Jones says, “There’s been a terrible mistake! T told me on numerous occasions that he intended to, and that he had, left a legacy for me in the will.” The stenographer who typed the will says “I goofed. I have the notes T gave me, from which I typed the will, and they show clearly that the legacy was supposed to have been given to Paul Frederick Jones.” This evidence is STILL NOT ADMISSIBLE
Inheritance: Decedent of Surviving Spouse - If survived by spouse but no issue or parent
Surviving spouse gets entire estate
Inheritance: Decedent of Surviving Spouse - If survived by spouse and parent but no issue
Spouse - 1st $30k + 1/2 of estate
Inheritance: Decedent of Surviving Spouse - If survived by spouse and issue, and all issues are also issues of surviving spouse
Spouse - 1st $30k + 1/2 of estate
Inheritance: Decedent of Surviving Spouse - If survived by spouse and issue, and one or more issues are not issue of the surviving spouse
1/2 of the estate
Inheritance: Hierarchy of Shares of an Estate if Not Going to Spouse or No Spouse Survives
1) All to issue, if any
2) If no issue, to parents or survivor,
3) If no issue or parents, to parents issue or heirs
Inheritance: How do issues take? - Majority (PA) Rule
Issue, whether of decedent, decedent’s parents or others, take per capita (equally) if all are of same degree of relationship; otherwise they take by
representation
Inheritance: Children born out of wedlock - Inheritance from biological father (not married to mother) + Exceptions + Remember inheritance from biological mother
A son born out of wedlock generally CANNOT inherit from his paternal father not married to his mother, UNLESS (1) father marries mother, (2) father holds illegitimate son as his and either receives him into his home or provides him with support, or (3) clear and convincing evidence of paternity
Remember: If a mother dies intestate, a son CAN ALWAYS inherit
Inheritance: Adopted Children’s Rights from Adoptive Parents + Remember Biological Parents
An effect of an adoption completely transplants a son or daughter into his adoptive parent’s family with full inheritance rights
Remember: After adoption, a child’s inheritance from his biological parents is SEVERED
Inheritance: Adopted Children’s Rights from Maternal Family Inheritance (Mother’s Kin)
A son may inherit from the maternal family ONLY IF they have continued to maintain a FAMILIAL RELATIONSHIP with him
Simultaneous Death Act - Wills + Insurance
In the event of a death from a T and the beneficiary under a will, the situation will be construed as if the T survived and the beneficiary PREDECEASED, generating a lapse with potential triggering of PA’s anti-lapse statute
Insurance: Same as wills; as though insured survived; as though beneficiary predeceased.
Simultaneous Death Act - Intestacy (120 Hour Rule)
To inherit from a decedent, you MUST SURVIVE the decedent by 120 HOURS (5 days), otherwise you are considered pre-deceased
Inheritance: Would a gift before T’s death to an issue be considered an advanced payment to be taken out of issue’s share of the estate?
No, UNLESS the gift is declared to be an advancement in a contemporaneous writing by the decedent or it is acknowledged as such in writing by the heir.
Doctrine of Satisfaction
Applies to TESTATE ESTATE. In PA, a lifetime gift will be treated as having been made in prepayment of a beneficiary’s interest under a will ONLY IF the donor’s acts and declarations show that that was the donor’s intent
Doctrine of Satisfaction + Difference from Advanced Payment Rule of Intestate Estates
Applies to TESTATE ESTATE. In PA, a lifetime gift will be treated as having been made in prepayment of a beneficiary’s interest under a will ONLY IF the donor’s
acts and declarations show that that was the donor’s intent
Difference: Here, we do not need express writing and we can use extrinsic evidence to show intent
Rights of Surviving Spouse: When a will is written before marriage? + Exceptions
A spouse may claim an intestate share, as if T died without a will UNLESS (1) the will gives the spouse a greater share, or (2) it appears from the will that it was executed in contemplation of marriage
Rights of Surviving Spouse: Define Elective Estate
Elective estate is equal to net testamentary estate PLUS 3 types of lifetime donative transfers to the spouse or to others: (1) TRANSFERS WITH RETAINED POWER to revoke, consume, invade, or dispose (e.g. revocable trust), (2) decedent’s undivided interest in property acquired through RIGHT OF SURVIVORSHIP FORM, and (3) transfers in EXCESS OF $3K within a year of death
Rights of Surviving Spouse: What is a spouse’s elective share? + Alternative + Waiver
Elective share is 1/3 of elective estate but it is in lieu of all other interests the spouse has in D’s property whether passing under the will, by nontestamentary transfer, or to the extent the spouse has the property or its proceeds, property which the decedent gave the spouse during life
Alternative: The spouse may elect to keep what is left to her under the decedent’s estate plan, but if she does, she has to reduce the elective share by the value of what she decides to keep.
Waiver: Right to take an elective share CAN be waived IN WRITING after fair disclosure
Pretermitted Children Definition + Rights + Exception + Remember Property Left to Spouse
A pretermitted child is a child born or adopted AFTER a will is created
Rights: A pretermitted child is entitled to take an INTESTATE SHARE, UNLESS it appears the omission of the child was intentional
Remember: A pretermitted child must not take from any property left to a spouse
Doctrine of Re-Publication by Codicil + Remember Conjunction with Pretermitted Children
A codicil amending a previous will REDATE the original will as if it were published the date the codicil was published
Remember: Therefore, a codicil will trump the pretermitted child effect given to wills created before the birth or adoption of a child
Intentional Killing Effect on Decedent’s Estate + Remember Jointly Held Property Rule + Remember Standard for Rule to Take Effect
A person who feloniously and intentionally kills the decedent is NOT ENTITLED to ANY BENEFIT of from the D’s estate by will, intestacy, elective share, life insurance contract or otherwise and passes as if killer PREDECEASES decedent
Remember: JTWROS passes 1/2 to victim’s estate and 1/2 to killer FOR LIFE, remainder to victim’s estate
Remember: The standard is PREPONDERANCE OF THE EVIDENCE, therefore acquittal at a criminal trial does not relieve this rule
Desertion Rule
Inheritance and elective share rights of a husband or wife are forfeited if the husband or wife WILLFULLY OR MALICIOUSLY DESERTS or otherwise fails to support his or her spouse for a year or more
PA Will Contract Elements + Remember Reciprocal Wills
A K to make a will, not to revoke will or die intestate, can ONLY be shown if: (1) the terms are IN THE WILL itself, (2) the terms are set out in a SEPARATE WRITING, or (3) the will REFERS TO THE K and EXTRINSIC EVIDENCE proves its terms
Remember: There is NO K for mutual wills, these also must follow the rules of PA will contract elements
Estate Administration: When does a will become effective?
A will is not effective UNTIL it is admitted to PROBATE after D’s death
Estate Administration: Eligibility of a Personal Representative + Remember Non-PA Residents
Pennsylvania banks and trust companies as well as persons 18 or older who have not been charged with voluntary manslaughter or homicide in connection with the decedent’s death.
Remember: Nonresidents may serve only if they are nominated in the decedent’s will
Will Contests Discussions: Standing + Remember If Personal Representative Wants to Join Contest
Any person whose share of the estate would increase if the will (or a gift in the will) were invalid.
Remember: However, it is the personal representative’s duty to defend the will. The PR must resign the position if she chooses to join in the contest.
Will Contests Discussions: Lack of Testamentary Capacity - Who has burden? + What are the elements of the test?
Contestants of the will have the burden to prove T lacked testamentary capacity.
Test:
(i) Did T UNDERSTAND the NATURE OF THE ACT he was doing?
(ii) Did T know the NATURE and CHARACTER of his PROPERTY?
(iii) Did T know the natural objects of his bounty?
(iv) Did T UNDERSTAND THE DISPOSITION he wished to make?
If any of these answers are no, T lacked capacity
Will Contests Discussions: If T had been adjudicated as incompetent and a guardian appointed, is this enough to prove lack of capacity?
PA says NO b/c (1) the test for whether a guardian should be appointed is different from the four-point lacking capacity test, and (2) even if T had a mental problem, the jury could find T wrote the will during a “lucid” interval
Will Contests Discussions: Insane Delusion
A distinctive form of testamentary incapacity: Where T is otherwise sane, but the will (or a gift in the will) is a product of an insane delusion, having no basis in fact or reason, which T adheres to against all reason and evidence, and where the will (or gift in the will) is the product of the insane delusion.
Will Contests Discussions: Undue Influence Elements + But For Test
Contestants must show: (i) existence and exertion of the influence, (ii) effect is to overpower the mind and will of the testator, and (iii) the result is a will that would not have been executed but for the influence.
But for the undue influence, the will or provision in the will would not have been written
***Will Contests Discussions: Undue Influence - When is there a presumption of undue influence?
A presumption of undue influence arises upon a showing that a principal
beneficiary under the will who stands in a confidential relationship to the testator (attorney-client, priest-parishioner, doctor-patient) draws or procures the execution of the will.
Will Contests Discussions: Undue Influence - What is the effect of a “no contest” clause (a.k.a. “in terrorem” clause)?
If someone contests a will, and a provisions in a will states that anyone who contests will “forfeit their legacy,” that person will not forfeit if he or she has probable cause to do so
Trust Requisites: When does a trust exist?
When a written agreement gives legal title to property for the benefit of others
*Trust Requisites: What is precatory language of suggested use? + Example
This language does not create a trust because it is merely suggestions to a beneficiary on what to do with the money.
Ex: “To A, it is my wish and my desire that he look after X and Y.”
*Trust Requisites: In PA, is a trust set up with no assets but does name the trustee as beneficiary of a life insurance policy, pension plan, or direct beneficiary of the settlor’s will?
Yes, statutes provide that an otherwise empty trust is valid if it named the direct beneficiary of a life insurance policy, pension plan, or direct beneficiary of the settlor’s will.
Trust Requisites: Ascertainable Beneficiaries (Private v. Public Trusts)
Private: A private trust MUST have ascertainable beneficiaries
Public: The opposite is true for public trusts (i.e. charitable trusts), and may be unascertainable for a large and unidentifiable segment of the public
Trust Requisites: In PA, what happens to a private trust that fails due to unascertainable beneficiaries? + What happens if the person with the power of appointment does not exercise his power?
A trust that is invalid for want of definite beneficiaries CAN be given effect as a power of appointment
If the person with the power of appointment does not exercise their power WITHIN A REASONABLE TIME, the power will be returned to the settlor if living, otherwise the settlor’s estate
Trust Requisites: Could a trust fail for not having a trustee?
No trust can fail for want of a trustee. If the intention to create a trust is clearly manifested but no trustee is named, or the named trustee dies or resigns with no provision for a successor trustee, the court will appoint a suitable trustee to execute the trust
Pour Over Wills Definition + Requirements + Remember Timing Trust Can Be Created
A pour over will leaves a residuary estate to a trust rather than a person.
Elements: The only requirements are that (i) the trust must be identified in T’s will and (ii) its terms must be set out in a written instrument.
Remember: The instrument may be executed BEFORE,
CONCURRENTLY with, or AFTER the will. The devised property is added to the trust as it exists at T’s
death
Totten Trust Definition + PA Rule to Revoke
Totten trust is the name given to a bank account in the depositor’s name as trustee for a named beneficiary. Under such a bank account the depositor retains the passbook and continues to make deposits and withdrawals during her lifetime. The beneficiary has no beneficial interest in the account during the depositor’s lifetime, but succeeds to whatever is on deposit at the depositor’s death.
In PA, T’s intent to revoke a totten trust must be CLEAR AND CONVINCING, therefore a simple residuary clause in a will canceling a totten trust would not work for revocation
*Charitable Trusts in Relation to RAP or Rule Against Accumulations
Charitable trusts ARE NOT subject to RAP or Rule Against Accumulations, it can last and accumulate income perpetually
Doctrine of Cy Pres + What are the two questions a court will ask when deciding to use this doctrine? + Remember Courts Lean
If a trust can no longer serve its purpose, a court may invoke the doctrine of cy pres to either change its purpose with what the settlor intended or destroy it
Questions: (1) What was the PRIMARY INTENT of the settlor? (2) What was the SPECIFIC DIRECTION of the trust?
Remember: Courts will lean towards keeping the trust for its charitable purpose
Creditor’s Rights in a Trust: What is a creditor’s rights to satisfy their claim from a beneficiary of a trust?
A creditor CANNOT acquire the trusts assets because the B does not own the property, BUT may get the income directed to beneficiaries
Creditor’s Rights in a Trust: Define Spendthrift Clause + What is a creditor’s rights if there is a spendthrift clause in the trust? + Exception of 4 Creditors
A spendthrift clause withdraws the beneficiary’s interest in assigning his or her interest to creditors.
If a spendthrift clause is in a trust, a creditor HAS NO RIGHTS to garnish B’s income from it (but can be acquired after it is in Sam’s bank account)
Exception: 1) Claims for alimony, 2) child support, 3) creditors who provide necessities for life (food, shelter, clothing, medical care), and 4) gov’t entity
Creditor’s Rights in a Trust: What happens when the beneficiary is the settlor and a Spendthrift Clause is involved?
If the beneficiary is also the settlor, the spendthrift clause is UNENFORCEABLE, and the creditor can garnish S’s income stream AND reach actual trust assets IF the trust is revocable or if the T has discretion to distribute funds to S
Trust Administration: Duty of Loyalty - Self Dealing Prohibition
A trustee cannot buy or sell, borrow, or exchange trust assets to itself or another trust
Trust Administration: Prudent Investor Rule + Broken up into 6 duties
A trustee must adhere to a standard of reasonable care, skill, and caution in making investment decisions.
Elements: (i) Duty NOT TO COMMINGLE, (ii) duty to BALANCE RETURN WITH POTENTIAL RISK, (iii) duty to DIVERSIFY investments, (iv) duty to keep trust PRODUCTIVE, (v) duty to DELEGATE INVESTMENT decisions as permitted by statute (PA statute allows trustee to delegate to an agent provided they have experience), and (vi) duty to PARTICIPATE in administration of trust
What is the liability for a Trustee’s breach of trust? (Beneficiary has 3 choices) + Remember Calculation of Damages
1) B can RATIFY the transaction and waive the breach (e.g. T invests in volatile stock that pays off for B)
2) SURCHARGE - B can sue for the resulting loss (calculation is difference between what T paid for the stock and its worth at the TIME OF SUIT)
3) In self-dealing transactions, B can TRACE and recover property for the trust
Modification by Settlor
A settlor, acting alone, can revoke, terminate or modify a trust if (i) the instrument does not explicitly state that the trust is irrevocable, and (ii) the settlor substantially complies with all provisions in the trust instrument pertaining to the form that the proposed action must take (e.g., in writing, delivered to trustee, etc.)
Termination by Beneficiaries: Claflin Doctrine + Elements + Remember Spendthrift Clauses Application
Beneficiaries, all of whom are sui juris (all of age and competent) can terminate their trust, ONLY IF: (i) all beneficiaries consent, and (ii) there is no other trust purpose to be served
Remember: If a spendthrift clause is in the trust it CANNOT be terminated UNLESS the consent of all of its beneficiaries and the settlor agree
Reformation of Trust: Can a court terminate a trust?
Yes, if it becomes UNECONOMICAL to continue
Powers of Appointment: Define Donor of the Power of Appointment + Donee of Testamentary Power + Broad v. Limited + Takers in Default
Donor: A will that creates the power of appointment
Donee: One who is restricted to appointments by her own will and cannot exercise during life
Broad: No limit to the class of beneficiaries to whom she can appoint
Limited: A limit to the class of beneficiaries to whom she can appoint
Takers in Default: Person’s who get the property if donee defaults
Powers of Appointment: Does anti-lapse statute apply in powers of appointment?
Yes, anti-lapse statutes apply to power of appointments
Power of Attorney Elements + Is this power durable?
To be valid, a power of attorney must be: (i) in writing, (ii) dated, (iii) signed by the principal before a notary public, and (iv) witnessed by two individuals who are neither the agent nor the notary.
In PA, a power of attorney is presumed to be durable, unless the instrument states otherwise
