Post Midterm

Question 1

Revival

Answer 1

• Majority states hold that when second will is revoked, prior will is revived
• If subsequent will that revokes previous will is revoked by revocatory act, previous will remains revoked unless revived
• if a subsequent will that partly revoked the previous will is itself revoked, the presumption is the previous will is revived

Question 2

Marriage

Answer 2

• IF testator executes her will and subsequently marries, statutes in a large majority of states give the spouse his intestate share, unless it appears from the will that the omission was intentional or the spouse is provided for in the will provision
• Minority: premarital will is revoked entirely upon marriage

Question 3

Birth of children

Answer 3

Minority and TN rule: marriage followed by birth of children revokes a will executed before marriage
Majority: pretermitted child statute - gives child born after execution of will a share of parent’s estate

Question 4

2 doctrines that have effect on who takes what property

Answer 4

1) doctrine of incorporation by reference

2) doctrine of acts of independent significance

Question 5

Integration of wills

Answer 5

• allows for all papers present at the time of execution that are intended to be part of the will to be integrated into the will
• attorney can prevent problems by fastening documents and numbering pages wand testator initialing each page

Question 6

What papers constitute the will

Answer 6

• usually pages that are physically connected with staple and numbered or
• sufficient connection of language carrying over from page to page to show internal coherence

Question 7

Republication by codicil

Answer 7

• publication of will is testator’s statement to witnesses by words or action that a document is the testator’s will
• under doctrine of republication by codicil, a will is treated as re-executed as of the date of the codicil

Question 8

Republication by codicil vs. incorporation by reference

Answer 8

• republication: applies only to validly executed will
• incorporation by reference: can apply to incorporate into a will language or instruments that have never been validly executed

Question 9

Incorporation by reference requirements:

Answer 9

1) intent
2) document must be in existence
3) proper identification

Question 10

Contracts not to revoke a will

Answer 10

• mutual or reciprocal wills are quite common because spouses quite often want to favor each other followed by the same set of beneficiaries
• a joint and mutual will refers to a joint will in which the respective testators make similar or reciprocal provisions
• joint will is one instrument executed by both persons as the will of both, document is probated twice
• mutual wills are separate wills that contain similar or mirror-image provisions
• most courts do not presume contract
• many states have enacted statute of frauds provision
• some states have enacted statute of frauds provision

Question 11

Contracts concerning succession

Answer 11

• a contract to make a will or devise or to die intestate, if executed after the effective date of this article may be established only by
  1) provisions of a will stating mater provisions of the contract,
  2) an express reference in a will to contract and extrinsic evidence proving the terms of the contract, or
  3) a writing signed by the decedent evidencing the contract
  The execution of a joint will or mutual wills does not create a presumption of a contract not to revoke the will or wills

Question 12

Majority

Answer 12

• the execution of a joint will or mutual wills does not, by itself, give rise to a presumption of contract
• contract must be proved by clear and convincing evidence e
• many states subject contracts to SOF provision

Question 13

Mental capacity

Answer 13

To be capable of making a will, the testator must be 18 or older and capable of understanding in a general way:

1) the nature and extent of her property
2) the natural objects of her bounty
3) the disposition she is making of the property
4) relating these elements to one another and forming an orderly desire regarding the disposition of the property

Question 14

Comprehend action and its effect

Answer 14

• testator must understand what the testator is doing and its effect, must appreciate that the testator is making arrangements regarding who becomes the new owner of testator’s property

Question 15

Know nature and extent of property

Answer 15

Must know/ understand general nature and extent of the testator’s property.
- Does not need to be able to provide precise accounting of each asset the testator owns and its value

Question 16

Recognize natural objects of bounty

Answer 16

• must know / understand the individuals who would naturally benefit from her death
• needs to know identity of testators’ presumptive heirs
• unfairness does not equal incapacity

Question 17

Simultaneously hold elements in mind and make reasonable judgment

Answer 17

• hold the first three elements in testator’s mind simultaneously and for a long enough time to perceive their relationship to each other and to make a reasonable judgment.

Question 18

Mental capacity

Answer 18

• test is one of capability as opposed to actual knowledge
• need not be of average intelligence
• low level of capacity required to execute a will is because after death there is no concern about the economic consequences of an improvident devise
• greater capacity is required to execute a will than to marry

Question 19

Ante-mortem probate

Answer 19

• some states permit the probate of a will during testators life
• authorize a person to institute during during life an adversary proceeding to declare the validity of a will and the the testamentary capacity and freedom from undue influence of the person executing the will
• all beneficiaries and heirs must be parties to action

Question 20

Why require mental capacity?

Answer 20

• protects family from exploitation, intent to maintain family as economic unit
• assures sane person that disposition he requires will be carried out even if he becomes insane and makes another will
• protects senile or incompetent testator from exploitation
• engenders public acceptance of law

Question 21

Insane delusion

Answer 21

• false conception to reality
• testator may have sufficient capacity generally but suffering from insane delusion as to certain facts that my cause a will to fail for lack of capacity
• rule: delusion is insane even if there is some factual basis for it if a rational person in the testator’s situation could not have drawn the conclusion reached by testator

Question 22

Insane delusion standard

Answer 22

contestant must show:
1) testator labored under insane delusion and
2) the will or some part was a product of the insane delusion
Majority: view is that delusion is insane if rational person in the testator’s position could not have drawn the conclusion reached by the testator and this delusion must materially affect the will’s provisions

Question 23

Undue Influence

Answer 23

• coercion of testator
• if part of will is product of undue influence, that portion will be stricken
• donative transfer is invalid if procured by undue influence
• wrongdoer need not be present when donative intent was executed
• direct evidence rarely available

Question 24

Undue influence circumstantial evidence

Answer 24

Sufficient to raise inference of undue influence if contestant proves:

1) donor was susceptible to undue influence,
2) alleged wrongdoer had opportunity to exert undue influence,
3) disposition to exert undue influence, and
4) result that appeared to be result of undue influence

Question 25

Presumption of undue influence

Answer 25

• must establish existence of confidential relationship
• usually must establish one more additional suspicious circumstance
• then shifts back to proponent of will to rebut presumption

Question 26

No-contest clauses

Answer 26

Majority: enforces no-contest clauses unless there is probable cause for the contest

Question 27

Statement of reasons

Answer 27

• individualized use of expressive language stating reasons for what might appear to be an unnatural disposition is helpful in resisting a later claim of undue influence
• be mindful of testamentary libel, which can lead disappointed heirs to challenge will on principle

Question 28

No-contest clauses

Answer 28

• in terrorem clause
• provides that contestant to will shall take nothing
• discourages wil contests by putting the prospective contestant to the choice of taking a certain smaller provision in the will or perhaps nothing at all
• might inhibit a lawsuit that would prove lack of capacity or undue influence
• majority: courts should enforce no-contest clauses unless there is probable cause for the challenge

Question 29

Bequest to attorneys

Answer 29

• presumption of undue influence when attorney drafter receives legacy except when attorney is related
• those portions will be stricken

Question 30

Warning signs for will challenges

Answer 30

• radical departure from previous wills
• results in unnatural disposition (disinherits natural heirs)
• testator seems forgetful and has medical problems
• testator is accompanied to office by individual who is unnatural beneficiary of proposed will

Question 31

Strategies for lawyers

Answer 31

• ask client for detailed signed letter setting forth in detail the reasons as to disposition
• lawyer records video discussion during which testator discusses reasons
• family meeting where testator explains reasons for bequest and favoring one over another
• arrange for professional exam of client’s level of capacity
• extra precautions : disinterested witnesses, have witnesses sign affidavits as to their impression, use prominent witnesses who know testator
• consider no contest clause
• consider use of inter vivos trust instead, easier to establish capacity

Question 32

Duress

Answer 32

• when undue influence becomes overly coercive
• threatened to perform or did perform wrongful act that coerced donor into making donative transfer that donor would otherwise not have made
• transfers made by duress are invalid

Question 33

Fraud

Answer 33

• when testator is deceived by deliberate misrepresentation and does what she should not have done had the misrepresentation not been made
• misery must be made with both intent to deceive the testator and purpose of influencing testamentary disposition

Question 34

Fraud continued

Answer 34

• provisions procured by fraud are invalid and remaining potions stand unless fraud permeates entire will or provisions are inseparable
• when court cannot do justice by refusing probate, will may be probated and then court with equity powers can impose constructive trust on beneficiary to remedy unjust enrichment caused by fraud

Question 35

Fraud in the execution

Answer 35

• occurs when a person intentionally misrepresents the character or contents of the instrument signed by testator which does not in fact carry out testator’s intent

Question 36

Fraud in the inducement

Answer 36

• when misrepresentation causes testator to execute or revoke a will, to refrain from executing or revoking a will or to include a particular provision in wrongdoer’s favor
• complicated to prove

Question 37

Fraud and undue influence

Answer 37

• different from undue influence in that testator still has her free agency but makes a new estate plan based on the fraud while undue influence involves overcoming testator’s free will

Question 38

Tortious interference

Answer 38

• P must prove that interference involved conduct tortious in itself such as fraud duress, or undue influence to prevent to the proper disposition of an estate
• tort cannot be invoked if challenge is based on testator’s mental capacity
• recognized in half the states but not TN

Question 39

Tort law as alternative

Answer 39

• most courts require pursuit of probate remedies before commencing tort action for intentional interference, notwithstanding the different evidentiary burdens to satisfy

Question 40

Constructive trust

Answer 40

• equitable remedy designed to prevent unjust enrichment of a wrongdoer
• i.e. where holder of legal title may not in good conscience retain the beneficial interest, equity converts her into a trustee

Question 41

Mistaken or ambiguous language

Answer 41

• majority: follow traditional rules that bar admitting evidence to vary the written terms of a will
  1) plain meaning (or extrinsic evidence rule) allows for admission of extrinsic evidence to resolve some ambiguities but plain meaning of words cannot be disturbed by evidence that another meaning was intended
  2) No reformation rule: reformation is an equitable remedy that would correct a mistaken term to reflect testator’s intent

Question 42

Plain meaning, ambiguity, extrinsic evidence

Answer 42

• under plain meaning rule the will’s words cannot be disturbed by evidence that another meaning was intended but in some cases extrinsic evidence may be admitted if the words of the will are ambiguous or lack a plain meaning
• patent ambiguities: ambiguity on the will’s face cannot be resolved with extrinsic evidence, left to four corners of the document
• latent ambiguities: only appears when will’s terms are applied to testator’s property

Question 43

Latent ambiguities

Answer 43

1st type: when will clearly describes a person or thing and two or more persons or things fit that description (equivocation)
2nd type: when no person or thing exactly fits the will’s description, but two or more persons or things fit the description
- 2nd type more common
- Courts now allow extrinsic evidence for both patent and latent ambiguities to fulfill testamentary intent

Question 44

Openly reforming wills for mistake

Answer 44

• growing number of courts reform a mistaken term in a will
• minority but no longer uncommon
• must prove testator’s intentions by clear and convincing evidence

Question 45

Death of beneficiary before testator

Answer 45

• if devisee does not survive testator, devise lapses (fails)
• all gifts made by will are subject to a requirement that the devisee survive the testator, unless the testator specifies otherwise
• most states: antilapse statutes have been enacted that, under specified circumstances, substitute another beneficiary for the predeceased devisee

Question 46

Common law rules

Answer 46

CL rules regarding lapsed devises are default rules that apply if the will does not indicate what happens and the anti lapse statute is inapplicable. They are:

1) If specific or general devisee lapses, the divide falls into residue
2) If residuary devise lapses, the heirs of testator take by intestacy. If only a portion of residue lapses, the lapsed residue passes via intestacy rather than to the remaining residuary devisees ( no residue of a residue rule)

Question 47

Common law rules continued

Answer 47

3) If the devise is to a class of persons and one member of the class predeceases the testator, the surfing members of the class divide the gift
4) Void devises are dealt with like lapsed devises, devisee is dead or devise is to an animal

Question 48

Animals

Answer 48

Bequest can’t be made to an animal, but trust can be created for animal

Question 49

No residue of residue rule

Answer 49

• TN: maintains the rule
• Majority: reject the rule, determine that it is preferable that residuary legatee receive entire remainder rather than a portion go to intestate heirs

Question 50

Antilapse Statutes

Answer 50

• Substitute other beneficiaries (usually descendants) for the dead beneficiary if certain requirements are met
• typical anti lapse statue provides that if a devisee is of a specified relationship to the testator and is survived by descendants who survive the testator, the descendants are substituted for the predeceased devisee

Question 51

Antilapse Statutes continued

Answer 51

• theory behind them is one of presumed intent, assumed that testator would prefer for a substitute gift to the devisee’s descendants rather than for gift to lapse
• scope of anti lapse statute applies to a lapsed devise only if the devisee bears the particular relationship to the testator specified in the statute.
• some statues only apply to descendants of testator while others are broader and apply to descendants of testators’ parents and grandparents

Question 52

Antilapse statute: default

Answer 52

• designed to implement presumed intent, they state default rules that yield to a contrary expression of the testator’s actual intent
• words of survivorship alone are not sufficient of intent contrary to application of anti lapse statute

Question 53

Importance of sound drafting

Answer 53

• lawyer should not rely on presumption that anti lapse will apply
• must draft will to provide for what happens if the intended devisee does not survive testator

Question 54

Class gifts

Answer 54

• if class member predeceases testator, surviving members of the class divide the total gift, including deceased members share

Question 55

Ademption (identity theory)

Answer 55

• when specific devises no longer exist at the time of the testators’ death, the devise fails
• doesn’t apply to general, demonstrative, or residuary devises

Question 56

General devise

Answer 56

• testator intends to confer a general benefit, not a particular asset

Question 57

Demonstrative devise

Answer 57

• hybrid

- general devise payable from specific source

Question 58

Intent theory of ademption

Answer 58

• newer intent theory of ademption: if specifically devised item is not in testator’s estate, the beneficiary may nonetheless be entitled to the replacement for, or cash value of original item depending on whether the beneficiary can show that this is hat the testator would have wanted

Question 59

Identity theory of ademption exceptions

Answer 59

• courts can get around identity theory by classifying a devise as general or demonstrative

Question 60

Stock split

Answer 60

• Today: courts disregard old approach and conclude that devisee is entitled to additional shares received by testator as result of stock split (absent contrary showing of intent)

Question 61

Exoneration of Liens

Answer 61

• when a will makes a specific devise of land on which there is a mortgage, UPC requires that devisee take the property subject to the mortgage lien
• traditionally devisee took land free of lien (mortgage paid by residuary assets) under doctrine of exoneration of liens

Question 62

Abatement

Answer 62

• arises when estate has insufficient assets to pay debts as well as all the devisees; in such a case, some devisees must be abated or reduced. By divvying up a limited pie among claimants of different priorities, abatement operates like bankruptcy
• will can direct how devises should abate

Question 63

Abatement continued

Answer 63

Absent any direction in the will, the devises should abate in the following order:

1) residuary devises are reduced first
2) general devises are reduced second
3) specific and demonstrative devises are the last to abate and are reduced pro rata.

Question 64

Abatement UPC

Answer 64

because traditional abatement theory can frustrate testamentary intent, UPC provides that if testamentary plan would be defeated by the usual order of abatement, the shares of the distributes abate as may be necessary to give effect to the intention of the testator

Question 65

Non probate transfers

Answer 65

• function as a private system of succession that runs in parallel to the probate system

Question 66

4 main will substitutes

Answer 66

1) life insurance - functionally indistinguishable from a will
2) pension accounts: contain will substitutes in the form of beneficiary designations
3) bank, brokerage, and mutual fund accounts - covenant on account is like beneficiary in a will
4) revocable inter vivos trusts - replicates incidents of a will

Question 67

Will substitutes

Answer 67

difference with wills in that

1) will substitutes are asset specific,
2) they avoid probate, and
3) formal requirements of will act are unnecessary

Question 68

Will substitutes and wills act

Answer 68

• revocable trusts: very flexible because donor can draft both the dispositive and the administrative provisions to her liking
• trust is an arrangement where the trustee manages property in a fiduciary capacity for one or more beneficiaries
• trustee holds legal title while beneficiaries hold equitable title

Question 69

Will substitutes and wills act continued

Answer 69

• person creating a trust is the settlor, grantor, or trustor
• trust created during settlor’s life in an inter vivid trust (generally revocable)
• a trust create by will is a testamentary trust (irrevocable)
• a revocable trust may be created by deed of trust, whereby a settlor transfers the property to be held in trust. On death, the property is either distributed or held in further trust

Question 70

Will substitutes and wills act continued

Answer 70

• initially case law held that revocable trusts created by deed of trust were ineffective to transfer property at settlor’s death unless executed with Wills Act formalities
• Today: all jurisdictions allow revocable trust created by deed of trust to effect a non probate transfer on death

Question 71

Will substitutes and wills act continued

Answer 71

A revocable trust may also be created by a declaration of trust where, as the name suggests, the settlor simply declares herself to be trustee of certain property for the benefit of herself during her life, with the remainder to pass to others at her death. The settlor retains the power to revoke the trust and the right to the trust income, and as trustee he also controls the management of the trust property.

Question 72

Discretionary Trust

Answer 72

• trustee has discretion to pay any amount of income or principal to beneficiary
• ensures fiduciary administration and provides protection from creditors
• lessens income tax burden on family by allowing trustee to distribute income to the beneficiaries who are in the lowest tax bracket

Question 73

Testamentary marital trust

Answer 73

• federal estate tac law permits a deduction for property given to a surviving spouse
• requires the trustee to pay income to wife for life and then on her death, pay the principal to the donor’s children
• useful for surviving spouse needing professional money management or if spouse is stepparent

Question 74

Trust for a minor

Answer 74

• current - federal gift tax allows for a tax-free gift of $15,000 per year donee.
• Outright gift to a donee creates special problems; however, as the minor cannot legally manage her property
• to facilitate annual tax free gifts of $15,000 to his minor daughter, donor creates a discretionary trust for the benefit of his daughter before she reaches 21, i.e. every year O can make a tax-free gift to his minor daughter

Question 75

Individual vs. corporate trustees

Answer 75

• individual trustees usually cost less than corporate trustees, but may be less effective in portfolio management
• corporate trustees have necessary expertise, institutional bureaucracy and deep pockets to recover damages from
• trustees are entitled to “reasonable compensation”. This is a default rule that may be displaced by contrary agreement

Question 76

Individual vs. corporate trustees continued

Answer 76

• trustees 1) invest, 2) administer, and 3) distribute
• generally corporate trustees are better at investment and administration but personal trustees are better at distribution
• this has led to the naming of co-trustees
• modern law encourages delegation by trustees on matter outside their expertise
• trust protector - given specific power to order distributions, replace the trustee, etc
• directed trust - trustee is responsible for administration but must follow directions of a third party

Question 77

Private trust company

Answer 77

• formed to serve as trustee for one or more trusts created by a single family
• wealthy individual or family can consolidate the various functions of trusteeship that might otherwise be parceled out through delegation, protection and directed trusts
• might be desirable if family wants to retain control over a family business or has other non financial objectives

Question 78

Bifurcation of ownership

Answer 78

• bifurcation: trustee holds legal title to trust property but the beneficiaries have equitable or beneficial ownership
• 2 issues: 1) the effect on the rights of third parties with respect to trust property of the trustee personally and
  2) the powers and duties of the trustee and the corresponding rights of the beneficiaries with respect to the trust property and against the trustee

Question 79

Asset partitioning and third party rights

Answer 79

• because a trust is not a separate legal entity, but a fiduciary relationship, asset partitioning can be complicated
• trustee cannot sue, be sued, hold property and transact with respect to trust property in her own name. Rather, she transacts business with respect to trust property in her fiduciary capacity as such

Question 80

Trustee liability

Answer 80

• Common law: trustee was personally liable for the debts and ownership arising from trust property ownership. the trustee, however, could seek indemnification from the trust fund
• This has been revised such that a creditor can seek recourse directly against the trust fund without recourse against the property of the trustee personally
• a personal creditor of the trustee cannot seek recourse against trust property

Question 81

Beneficiaries

Answer 81

• hold equitable as opposed to legal title
• have claim against trustee for breach of trust and additional remedies relating to trust property itself
• beneficiaries can reclaim wrongfully disposed of property
• trusts usually involve both a present interest and equitable future interests in the income

Question 82

Fiduciary Administration and beneficiary rights

Answer 82

• trustee has responsibility to manage trust property, i.e. all the responsibilities of typical ownership
• trustee must act according to fiduciary duties owed to the beneficiaries, namely the duties of loyalty, prudence and the subsidiary duties of impartiality, not to commingle and the duty to inform and account

Question 83

Beneficiary remedies

Answer 83

• beneficiary is entitled to an election among remedies that include compensatory damages to restore the trust estate and trust distributions to what they would have been but for the breach and the disgorgement by the trustee of any profit earned by the trustee owing to the breach

Question 84

4 functions of trusteeship

Answer 84

1) custodial function
2) administrative function
3) investment function
4) distribution function

Question 85

Trust vs. legal life estate

Answer 85

1) legal life tenant has possession and control of property while trustee has legal title
2) legal life estate tenant has no right to sell but has duty to pay taxes and expenses
3) equitable life estate (Trust) allows trustees to allocate costs fairly between beneficiaries and to transact in relation to the trust property
4) equitable estate can be places outside creditor’s reach

Question 86

Commercial uses of trust

Answer 86

• today: many trusts remain preferred organization for mutual funds and asset securitization
• fed. law imposes mandatory trust form on employee pension funds
• pension funds and mutual funds hold nearly $20 trillion in assets and the asset securitization industry is worth more than $1 trillion
• most structured finance transactions and mutual funds that make use of a business trust employ a statutory as opposed to a common law trust

Question 87

Common Trust Uses

Answer 87

1) Mutual fund: pooling of shares to achieve economies of scale allows for feasible portfolio management and simplifies diversification
2) Asset securitization: bank loans to individuals to purchase homes are secured by mortgages on individual homes. Bank then sells its payment rights to an asset securitization trust. The trust in turn sells equitable ownership in the trust to investors and manages the portfolio on their behalf
3) Pension funds: manage income subject to a fiduciary obligation to the employees of the company making contributions

Question 88

Creation of a trust

Answer 88

1) Intent
2) Ascertainable beneficiaries and
3) Specific property to be held in trust
- Sole issue is whether grantor manifested an intention to create a trust, i.e. transfer of property for the use and benefit of another person manifests an intention to create a trust

Question 89

TN Trust creation

Answer 89

1) transfer of property to another person as trustee during the settlor’s lifetime or by will or other disposition taking effect upon settlor’s death
2) declaration by owner of property that owner holds identifiable property as trustee
3) Exercise of a power of appointment in favor of a trustee or
4) a court pursuant to its statutory or equitable powers

Question 90

TN requirements for creation

Answer 90

1) Settlor has capacity to create trust
2) Settlor indicated intention to create trust
3) trust has definite beneficiary or is
a) charitable trust
b) trust for care of an animal
c) trust for non charitable purpose
4) trustee has duties to perform and
5) same person is not the sole trustee and beneficiary

Question 91

Testamentary trust

Answer 91

• created by will and must be inferred from language and structure of the will in light of all circumstances

Question 92

Trust will not fail for want of trustee

Answer 92

• may have 1 or several trustees
• trustee may be settler if it is an inter vivos trust, a beneficiary or a third party
• courts will appoint a trustee if the testator creates a trust but fails to name a trustee, i.e. trust will not fail for want of trustee

Question 93

Active duties

Answer 93

• trustee must have some active duties to perform, i.e. if it has not duties, it is deemed stale and fails

Question 94

Precatory Language

Answer 94

• Supreme court has found precatory language (wish, hope) legally binding
• To ensure it remains non-binding, use language like “I wish, but do not legally impose”

Question 95

Deed of trust

Answer 95

• unlike testamentary trust, which is created by will and must satisfy Wills Act, and an inter vivid trust in land, which must satisfy SOF, no particular formalities are required to create an inter vivid trust of personal property

Question 96

Equitable charge vs. trust

Answer 96

• equitable charge is a devise of property of a certain sum of money to a third person
• creates a security interest in the transferred property with no fiduciary relationship, ie., more than a debtor secured creditor relationship

Question 97

Problems related to delivery

Answer 97

• delivery needed to satisfy gift
• physical, constructive, and symbolic delivery with respect to gifts
• issue: can a gift that fails based on a delivery infirmity be re-characterized as a trust?
• the case law manifests that for purposes of forming a trust, all that is necessary is that the donor manifest an intention to hold the property in trust

Question 98

Restatement of Trusts

Answer 98

• if property owner intends to make an outright gift inter vivid but fails to make the transfer that is required in order to do so, the gift intention will not be given effect by treating it as a declaration of trust
• a gift of personal property can be perfected on the basis of donative intent to make a gift is established by clear and convincing evidence

Question 99

Necessity of trust property

Answer 99

Trust includes: 1) trustee, 2) beneficiary. and 3) trust property (res)

• Res can be any interest in property that can be transferred
• critical question: whether the trust corpus can be called property

Question 100

Trusts vs. debts

Answer 100

• requirement of a trust res distinguishes a trust from a debt
• a trustee is a fiduciary who holds specifically identified property for the benefit of another
• a debt involves a personal obligation to pay sum of money to another
• crucial factor is whether the recipient of the assets is entitled to use them as his own and commingle them with her own assets

Question 101

Resulting trusts

Answer 101

• an equitable reversionary interest that arises by operation of law in two situations, namely
  1) where an express trust fails or makes an incomplete disposition or
  2) where one person pays the purchase price for property and causes title to the property to be taken in the name of another person who is not the natural object of the purchaser’s bounty

Question 102

Expectation

Answer 102

• an expectation or hope of receiving property in the future, or an interest that has not come into existence or has ceased to exist does not qualify as res sufficient to create a trust.
• However, a person may assign future earning from an existing contract

Question 103

Taxation of grantor trusts

Answer 103

• Treasury dept. has issued regulations spelling out circumstances where trust settlor would be liable for taxes based on dominion and control
• Spousal attribution rule: a settlor is treated as holding any power or interest that is held by the settlor’s spouse if the spouse is living with the settlor at the time the property is transferred into trust

Question 104

Taxation of grantor trusts

Answer 104

2 major exceptions:

1) Discretionary power to distribute, apportion or accumulate income or to pay out principal can be given to an independent trustee
2) When power to distribute principal is under a reasonably defined standard set forth in the trust instrument; or power is given any trustee other than settlor to distribute income according to a reasonably definite external standard set forth in the trust instrument

Question 105

Practice point

Answer 105

When creating an inter vivid trust on a client’s behalf, pay close attention to IRC 671 77 and the relevant regulations if the settlor wants to shift taxation on the income to the trust or its beneficiaries

Question 106

Necessity of trust beneficiaries

Answer 106

• a trust must have one or more beneficiaries because there must be someone that the trustee owes fiduciary duties to
  Exceptions:
  1) Charitable trusts
  2) Private trusts in favor of unborn children

Question 107

Test of validity

Answer 107

• If the class of beneficiaries is described such that some person might reasonably be said to answer the description, the trust is valid. An appointment is invalid, however, if it cannot be determined whether the appointee answers the description
• Be aware of distinction between power of appointment and power coupled with a trust

Question 108

Trust v. power of appointment

Answer 108

• be aware that beneficiaries are often given powers of appointment that are valid because they are non fiduciary and discretionary, i.e. to my wife for life and then to such of my descendants as she chooses

Question 109

Trusts for pets and other non charitable purposes

Answer 109

• rule requiring defined beneficiary does not apply to charitable trusts because beneficiary interests are monitored by the state attorney general
• lack of an ascertainable beneficiary invalidates trusts for both animals and non-charitable purposes
• two solutions: 1) common law honorary trust and 2) statutory purpose trust

Question 110

Honorary Trust

Answer 110

• transferee is not under a legal obligation to carry out the settlor’s stated purpose but if the transferee declines, she is said to hold the property upon a resulting trust and the property reverts to the settlor or the settlor’s successors
• must not violate RAP, i.e. void if it can last beyond all relevant lives in being plus 21 years

Question 111

Statutory purpose trust

Answer 111

• states have statutes that permit a trust for a pet animal or other non charitable purpose such as maintaining a gravesite
• to avoid problem of lack of beneficiary, statutes provide for enforcement by either the settlor or the court

Question 112

Necessity of written instrument

Answer 112

• Law does not require a writing to create a valid trust, i.e. an inter vivid oral declaration over personal property is enforceable
• Wills Act requires that testamentary trust be in writing and the SOF required an inter vivid trust of land to be in writing
• Problems arise with oral trust for disco

Question 113

Trusts for pets and other non charitable purposes

Answer 113

• rule requiring defined beneficiary does not apply to charitable trusts because beneficiary interests are monitored by the state attorney general
• lack of an ascertainable beneficiary invalidates trusts for both animals and non-charitable purposes
• two solutions: 1) common law honorary trust and 2) statutory purpose trust

Question 114

Honorary Trust

Answer 114

• transferee is not under a legal obligation to carry out the settlor’s stated purpose but if the transferee declines, she is said to hold the property upon a resulting trust and the property reverts to the settlor or the settlor’s successors
• must not violate RAP, i.e. void if it can last beyond all relevant lives in being plus 21 years

Question 115

Statutory purpose trust

Answer 115

• states have statutes that permit a trust for a pet animal or other non charitable purpose such as maintaining a gravesite
• to avoid problem of lack of beneficiary, statutes provide for enforcement by either the settlor or the court

Question 116

Necessity of written instrument

Answer 116

• Law does not require a writing to create a valid trust, i.e. an inter vivid oral declaration over personal property is enforceable
• Wills Act requires that testamentary trust be in writing and the SOF required an inter vivid trust of land to be in writing
• Problems arise with oral trust for disposition at death

Question 117

Oral trusts of personal property

Answer 117

• valid in all but a handful of states

- must be established by clear and convincing evidence

Question 118

Secret vs. semisecret trust

Answer 118

• where the will indicates no trust, the trust is “secret” and courts admit evidence of the promise to prevent the trustee from unjust enrichment and impose a constructive trust for the benefit of the ostensible beneficiary
• where the will indicates that the trustee holds the property in trust but does not identify a beneficiary, a “semisecret” trust is created. Because the will on its face shows that the trustee is not meant to benefit personally, it is not necessary to admit evidence of any promise and the legacy fails, (goes to heirs)

Question 119

Rise of non probate transfers

Answer 119

• will substitutes constitute a non probate system of private succession that competes with the public probate system

Question 120

Non probate revolution

Answer 120

• will substitutes fall on the will side of the gift/will distinction
• however case law has treated will substitutes as lifetime transfers
• courts have done this by straining logic
• of all will substitutes, only the transparently labelled “POD account” has persistently failed the present-interest test and has had to depend for the most part on statutory validation

Question 121

Modern law will substitutes

Answer 121

• modern law no longer denies the will- like nature of will substitutes and expressly validates them
• UPC and restatement both authorize POD designations in contracts
• today most banks, brokerage houses, mutual funds and other financial intermediaries allow POD and TOD designation on customer accounts

Question 122

Revoking or amending a revocable trust

Answer 122

• under traditional law, an inter vivos trust created by a written instrument was presumed irrevocable unless there was an express or implied reservation by the settlor or a power to revoke the trust .
• the opposite is true now, as an inter vivos trust is deemed revocable unless declared otherwise

Question 123

Revocable trusts

Answer 123

• most flexible of will substitutes and like a will, it is not inherently asset specific
• a settlor of a revocable trust remains free to revoke the trust at any time for any reasons
• created by:
  1) deed of trust whereby the settlor transfers to trustee the property to be held in trust, which is then distributed or held in further trust on settlor’s death. All states allow a revocable trust to be created by deed of trust without Wills Act formalities
  2) Declaration of Trust, whereby the settlor simply declares herself to be trustee for her own benefit during her lifetime, with remainder to pass per the declaration

Question 124

UTC 603

Answer 124

• while a trust is revocable [and settlor has capacity to revoke trust], rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to the settlor
• during the period the power may be exercised, the holder of a power of withdrawal has the right of a settlor of a revocable trust under this section to the extent of the property subject to the extent of the property subject to the power

Question 125

Revocation by physical act

Answer 125

Although case law has concluded that trusts requiring a written revocation cannot be revoked by physical acts such as tearing, this has been reversed by the UTC’s liberal rules for revocation and amendment, provided the trust did not provide for an exclusive means of revocation

Question 126

Revoking or amending a revocable trust

Answer 126

• under traditional

Question 127

UTC 602

Answer 127

• Unless a trust is expressly irrevocable, the settlor may revoke or amend the trust
• settlor has broad authority to revoke or amend the trust
• revocation or amendment must be shown by clear and convincing

Question 128

Revocation by writing

Answer 128

Under UTC 602, a trust may be revoked by a subsequent writing including a will, without need for delivery to the trustee

Question 129

Revocation by physical act

Answer 129

Although case law has concluded that trusts requiring a written revocation cannot be revoked by physical acts such as tearing, this has been reversed by the UTC’s liberal rules for revocation

Question 130

No present interest

Answer 130

• beneficiary of revocable trust has no legally enforceable interest while trust is revocable, only settlor may enforce trustee’s fiduciary obligations
• consistent with treating a revocable trust as will substitute

Question 131

Third party trustee and settlor incompetence

Answer 131

• if third party trustee misused funds while settlor was alive, the beneficiaries are entitled to enforce the usual rights of trust beneficiaries
• in the case of incompetent settlor, the UTC bars action by a beneficiary while the settlor retains power to revoke the trust, but this has been placed within parentheses, i.e. jurisdictions are free to change this rule

Question 132

Revocation by writing

Answer 132

• Under UTC a trust may be revoked by a subsequent writing including a will, without need for delivery to the trustee

Question 133

Irrevocable trusts and creditors

Answer 133

Trusts irrevocable on death can be reached by creditors in satisfaction of settlor’s debts to them, to the extent not satisfied by settlors estate

Question 134

Creditors and revocable trusts

Answer 134

• traditionally: a creditor had no recourse against property in a revocable trust unless the debtor was also a trust beneficiary, i.e. the debtor’s ability to revoke and take back the trust was not considered sufficient ownership of the property
• Modern law: rejects this view, concluding that the power to revoke the trust is regarded as sufficient ownership to subject the trust to creditor claims during life and after death

Question 135

Creditors and other non probate transfers

Answer 135

• not all non probate assets are equal and creditors cannot reach certain non probate assets. These are:
  1) Creditors of a joint tenant cannot reach jointly held property after the joint tenant’s death
  2) Life insurance proceeds are usually exempt from the insured’s creditors if payable to a spouse or child
  3) Retirement benefits are usually exempt
  4) US savings bonds with a POD beneficiary may be exempt as well

Question 136

Capacity and limitation periods for revocable trusts

Answer 136

• modern rule is to require no higher capacity to add property to a revocable trust than a will
• UPC and UTC provide for a three year limitations period to challenge wills and revocable trusts respectively
• UTC provides that the limitations period can be shortened to 120 days if the trustee sends the prospective contestant a copy of the trust instrument and a notice informing the person of the trust’s existence, of the trustee’s name and address, and of the time allowed for commencing a proceeding

Question 137

UPC 2-804

Answer 137

• revokes a disposition in favor of a former spouse in a “governing instrument” which is defined to mean a deed, will, trust, insurance or annuity policy, account with POD or TOD designation, pension plan or other such non probate transfer
• advise clients to update their estate plans upon divorce or separation

Question 138

Ademption and abatement

Answer 138

• courts have applied state ademption doctrine for wills to a revocable trust that called for a transfer of specific property to a particular beneficiary on settlor’s death

Question 139

Antilapse controversy

Answer 139

• UPC applies anti lapse concepts to testamentary trusts

- controversial

Question 140

Capacity and limitation periods for revocable trusts

Answer 140

• modern rule is to require no higher capacity to add property to a revocable trust than a will
• UPC and UTC provide for a three year limitations period to challenge wills and revocable trusts respectively
• UTC provides that the limitations period can be shortened to 120 days if the trustee sends the

Question 141

Life insurance

Answer 141

• Life insurance shifts the economic risk of premature death to an insurance company.
• In 2011, benefit payments totaled $109.4 billion and the total value of policies is $20 trillion.
• Term life insurance is the cheapest and most common.
• Whole life insurance combines life insurance with savings and is the most expensive form of life insurance.
• Life insurance policies have long been valid to transfer property on death without Wills Act formalities.

Question 142

Lifetime consequences

Answer 142

• a revocable trust can facilitate property management by a fiduciary, although it can be cumbersome
• it can also be used in planning for incapacity and ensuring for continuity in property management
• trustee administration is less cumbersome and more flexible than establishing a conservatorship
• it may be used to keep title clear and avoid commingling marital property with property acquired before marriage, i.e. create a revocable trust of marital community property in community property states

Question 143

Probate avoidance

Answer 143

• because a revocable trust can be used to avoid probate and ensure continuity in property management upon death, i.e. it avoids the cumbersome process of requiring a personal representative to be appointed by a probate court to distribute property after probate is closed.
• Revocable trusts also provide privacy because a will is a public record.

Question 144

Probate avoidance continued

Answer 144

Revocable trusts, unlike testamentary trusts, are not subject to ongoing court supervision after the settler’s death unless an interested party brings suit to settle some trust matter.
Settlor’s of revocable trusts funded with personal property, but not land, may choose the state law to govern the trust, whereas a testamentary trust will be governed by decedent’s domicile at death.
Probate, however, has the advantage of providing for non-claim statutes to bar creditor claims after a short period of time.

Question 145

Life insurance

Answer 145

Life insurance shifts the economic risk of premature death to an insurance company.
In 2011, benefit payments totaled $109.4 billion and the total value of policies is $20 trillion.
Term life insurance is the cheapest and most common.
Whole life insurance combines life insurance with savings and is the most expensive form of life insurance.
Life insurance policies have long been valid to transfer property on death without Wills Act formalities.

Question 146

Divorce and insurance policies

Answer 146

• Changing an insurance beneficiary in a will but not on the insurance is ineffectual

Question 147

Types of pension plans and retirement plans

Answer 147

1) Defined Benefit Plan – beneficiary receives a regular pension check on a monthly basis for the rest of her and her spouse’s life. This benefit is based on the length of work and the employee’s compensation at retirement. These plans are expensive to administer and are quite rare in today’s private sector, i.e. only 15% of private pension plans’ total wealth.
2) Defined Contribution Plan – employees and some employers contribute to a specific account for the employee. These plans are less expensive for employers and allow an employee to control the size and timing of distributions. These plans can be conveyed at death outside of probate.

Question 148

Pension and retirement plans

Answer 148

• Nearly 4 out of 10 families include someone who participates in a pension or retirement plan provided by an employer and these plans held $25 trillion in value, i.e. a substantial portion of the $90 trillion in total wealth.
• Pension plans are increasingly a means of estate planning.

Question 149

Growth in pension and retirement plans

Answer 149

• Brought about by the massive increase in life expectancy in the developed world.
• Most family assets are in the form of housing and financial wealth and family support is dropping.
• The federal government has created irresistible incentives to save for retirement via tax-qualified pension plans.

Question 150

Pension plans continued

Answer 150

The federal government incentivizes retirement savings by allowing:

1) Savings with pre-tax dollars;
2) Earnings and appreciation accrue and compound on a tax-free basis; and
3) Distributions from pension accounts are usually taxed at lower marginal rates because retirement income is lower than peak-earning income.
4) Income to accumulate after retirement so that retirement plans can be used as a tax shelter for savings and investment.

Question 151

Types of pension plans and retirement plans continued

Answer 151

3) Individual Retirement Account – similar to a defined contribution plan, it is governed by a contract between the account holder and the custodial institution. Most IRA accounts involve funds that have been “rolled over” from an employee defined contribution plan after that employee has changed employer.

Question 152

Succession issues for pension and retirement accounts

Answer 152

• With two-thirds of American wealth now held in pension and retirement accounts, these plans are now prominent in estate planning.
• The problem is people don’t understand the significance of the death beneficiary designation in their retirement plans and state laws with regard to these plans are often inconsistent and conflict with federal law.

Question 153

Changing beneficiary designation

Answer 153

• Courts are split on requiring strict compliance with contract terms to change a beneficiary designation for an IRA
• Majority: will does not change either a life insurance or an IRA beneficiary designation

Question 154

ERISA and subsidiary law of wills

Answer 154

ERISA also preempts state law on spousal share rights, replacing state law with a mandatory federal rule.

Question 155

UPC Nonprobate transfers on death

Answer 155

Allows for use of nonprobate transfers to transmit property at death without satisfying Wills Act or other testamentary formalities provided the money is paid to the individual set forth in the contract or in a separate writing or if the money ceases to become payable in the event the promisee dies before the promisor.

Question 156

TOD security accounts

Answer 156

TOD registrations are now allowed in nearly all states.
Most banks, brokerage houses, mutual funds and other financial intermediaries allow POD and TOD designations on their customers’ accounts.

Question 157

Savings account - Totten trust

Answer 157

In the landmark case of In re Totten, 71 N.E.748 (N.Y. 1904), O deposits money in a savings account in the name of “O, as trustee for A.” O retained the right to withdraw the funds and A was entitled to what remained in the account at A’s death.
The court upheld this arrangement as not testamentary, declaring that a “tentative” revocable trust had been created.
These savings account trusts have come to be known as Totten trusts.
Per the UPC, the Totten trust is abolished as a formal category and instead treated as a POD account.

Question 158

Multiple party bank and brokerage accounts

Answer 158

If a bank or brokerage account is joint and survivor, owned by “A and B, as joint tenants with right of survivorship,” both A and B have the power to draw on the account, but the survivor alone owns the balance, which does not pass via probate.
Sometimes something other than a true joint tenancy is intended, i.e. an agency or convenience account is intended.

Question 159

UPC Joint tenancy

Answer 159

The UPC authorizes a joint tenancy account with right of survivorship, an agency account and a POD account.
Under the UPC, joint bank accounts belong to the named parties during their lifetimes in proportion to the net contributions of each to the sums on deposit, unless there is clear and convincing evidence of a different intent.

Question 160

Antilapse statutes

Answer 160

The UPC imposes a requirement of survivorship on beneficiaries of a POD bank account and TOD security account.
The UPC also includes an antilapse provision for nonprobate transfers, which substitutes the surviving descendants of a predeceased named beneficiary.

Question 161

Non probate transfer of real property

Answer 161

Real property is less suited to nonprobate transfer, as the deed must be changed by probate administration or otherwise.
This can be resolved via revocable trust, the joint tenancy by the entirety and TOD deed for real property.

Question 162

Joint tenancy and tenancy by the entirety

Answer 162

Upon the death of one tenant, the surviving tenant owns the property absolutely. This obviates the need for probate administration.
If a joint tenant wants someone other than the joint tenant to take her share of the property at death, she must sever the joint tenancy during her life, converting it into a tenancy in common.
A creditor must seize the joint tenant’s interest during the joint tenant’s life, because the interest vanishes at death.

Question 163

TOD deed for real property

Answer 163

A substantial minority of states have enacted statutes such as the Uniform Real Property Transfer on Death Act (2009), absorbed into the UPC as §§ 6-401 through 407, which allow the transfer of property via TOD deed.
Under these statutes T can identify the beneficiary who will succeed to the property on T’s death by recording a TOD deed.
Neither TN nor KY allows for TOD deeds to transfer real property.

Question 164

Planning for incapacity

Answer 164

Based on the aging population, an estate lawyer’s practice will increasingly focus on planning for an incapacitated client.
One method of dealing with an incapacitated client’s property is via a conservatorship.
Others are revocable trusts and durable powers of attorney.

Question 165

Conservatorship UPC

Answer 165

Expensive, time-consuming and problematic.
A court may appoint a conservator to manage an incapacitated person’s property.
A court must find, by CCE, that the person is unable to manage property and business affairs because that person is unable to manage property and business affairs because of an impairment.
A court must also find, by preponderance of the evidence, the person’s property will be wasted unless management is provided.

Question 166

Revocable trusts

Answer 166

A trust instrument can provide for a successor trustee in case of the settlor’s incapacity or the settlor may be a co-trustee, with provision for the co-trustee to act alone in the case of the settlor’s incapacity.
Trust instrument should include a means of determining whether the settlor is incapacitated.
Trustee can only act with respect to property placed in the trust by the settlor prior to incapacity.

Question 167

Durable power of attorney

Answer 167

Ordinary power of attorney creates an agency relationship whereby the agent, called an attorney-in-fact (usually not a lawyer) is given a written authorization to act on the principal’s behalf.
The traditional power of attorney, however, terminates on the principal’s incapacity.
This has led to the durable power of attorney (remember Estate of Anton).

Question 168

Durable power of attorney continued

Answer 168

Durable power of attorney continues throughout the incapacity of the principal until she dies, authorized by UPC §§ 5-501 to 5-505 (1990) and the laws of all 50 states.
Controlled by the common law of agency as modified by state power of attorney statutes.
Principal, if competent, can terminate the durable power of attorney at any time.

Question 169

Durable power of attorney continued

Answer 169

Attorney-in-fact owes the fiduciary duties of loyalty and obedience to the principal. Durable powers must be created by written instruments that often must be witnessed and notarized.
Unlike trusts, powers of attorney end at death and attorneys-in-fact do not own property and have limited powers under traditional agency laws.
If agent dies, the power terminates unless a successor is appointed by a court.
Third parties prefer to deal with trustees than with agents.

Question 170

TN durable power of attorney

Answer 170

T.C.A. § 34-6-101 et seq. is the “Uniform Durable Power of Attorney Act.”

T.C.A. § 34-6-102 defines a durable power of attorney as:

a power of attorney by which the principal designates another as the principal’s attorney in fact in writing and the writing contains the words ‘This power of attorney shall not be affected by subsequent disability or incapacity of the principal,’ or ‘This power of attorney shall become effective upon the disability or incapacity of the principal,’ or similar words showing the intent of the principal that the authority conferred shall be exercisable, notwithstanding the principal’s subsequent disability or incapacity.

Question 171

Powers of Attorney

Answer 171

Majority view is that an agent acting under a power of attorney cannot make, amend, or revoke the principal’s will, but the agent may create, modify or revoke a trust if the power to do so is expressly granted in the power of attorney instrument.
In some states and the UPC, a guardian or conservator appointed by the court also has the power to make, amend, or revoke the ward’s will.

Question 172

Potential for abuse

Answer 172

A power of attorney can authorize an agent to perform virtually any act with respect to the principal’s property. The breadth of this power creates a fear of abuse of power by agents.

Question 173

Uniform power of attorney act

Answer 173

The Uniform Law Commission has proposed a Uniform Power of Attorney Act that has been drafted to reconcile the divergent state laws on powers of attorney and to address the recurring problem areas in their use. Under the new act (so far enacted in ID and NM) the term attorney-in-fact is replaced with the term agent and, in contrast to current law, presumes that powers of attorney are durable unless the instrument states otherwise.
The act specifies the agent’s fiduciary duties, sets forth mandatory duties, powers in respect of trusts, gifts, and beneficiary designations.
Tennessee relies on the “Uniform Durable Power of Attorney Act,” i.e. T.C.A. § 34-6-101 et seq. and has not yet incorporated the Uniform Power of Attorney Act.

Question 174

Gifts and enhanced formalities

Answer 174

Whether an agent may make gifts from the principal’s property raises difficulties.
In most states, an agent cannot make a gift without specific authorization because of the potential for abuse.

Question 175

Healthcare

Answer 175

• The U.S. Supreme Court has concluded that each person has a right to make health care decisions for herself and to refuse medical treatment.
• A person may exercise this right by way of an advance directive because in the absence of such a directive, health care decisions fall to the spouse or next of kin.

Question 176

Directive regarding health care and disposition of the body

Answer 176

• Advance Directives: Living Wills, Health Care Proxies and Hybrids.
• U.S. Supreme Court has held that each person has a constitutional right to make health care decisions for herself, including the right to refuse medical treatment. Cruzan v. Director of Mo. Dept. of Health, 497 U.S. 261 (1990).
• If state law requirements are met, a person may state her wishes about terminating medical treatment or appoint an agent to make decisions for her. Where a person’s wishes are not clearly expressed, the state may assert an interest in favor of preserving life and prevent the withdrawal of treatment.
• In resolving a conflict over the wishes of an incompetent individual, the law relies on advance directives and default rules in the absence of an advance directive.

Question 177

Advance directives

Answer 177

3 basic types

1) instructional directives such as a living will or a Medical Directive, specifying how one wants to be treated in end-of-life situations or in the event of incompetence.
2) Proxy directives, such as a health care proxy or durable power of attorney for health care, designating an agent to make health care decisions for the patient.
3) Hybrid or combined directives that incorporate elements of the first 2 directives.
- oral revocation is valid

Question 178

Problems with advance directives

Answer 178

Rarely completed.
Fail to convey meaningful information.
People making directives have poor understanding of what they are deciding.
People cannot predict the medical conditions they will face.
Preferences regarding future treatment may change over time.

Question 179

Tennessee Law Durable power of attorney for health care

Answer 179

Set forth in T.C.A. §§ 34-6-201 through 34-6-218.
Provides broad powers to attorney in fact to make decisions as to health care of principal, before or after death of principal, “to the same extent as the principal could make health care decisions for the principal if the principal had the capacity to do so…” T.C.A. § 34-6-204.

Question 180

TN Law revocation of power of attorney for heath care

Answer 180

T.C.A. § 34-6-207 deals with revocation of health care powers of attorneys. Allows principal to revoke power of attorney by notifying either agent or health care provider of revocation either orally or in writing.

Question 181

Uniform health care decisions act

Answer 181

Promulgated in 1993, it takes a hybrid approach, including forms that create a durable power of attorney and offer the person a chance to indicate how aggressively she would like to be treated. The agent must make decisions in accordance with the patient’s wishes. The health care provider must follow the instructions except where contrary to the provider’s conscience or contrary to generally accepted medical practice.

Question 182

Health care decisions for an incompetent person

Answer 182

When making health care decisions for an incompetent patient, an agent for health care decisions is held to a “substituted judgment” standard of what the patient has chosen or would have chosen in that situation. Some commentators say the standard should be the “best interests of the patient.”

Question 183

Health care decisions for an incompetent

Answer 183

In the absence of an advance directive designating an agent, responsibility for an incompetent patient’s decisions regarding health care usually falls to the patient’s spouse or next of kin, subject to the state’s interest in preserving life.
Per the Uniform Health Care Decisions Act, decisions are to be made by surrogates in the following order: 1) the spouse, unless legally separated; 2) adult child; 3) a parent; or 4) adult sibling. If more than one person in the class, majority rule.
Tennessee has adopted the Health Care Decisions Act under T.C.A. § 68-11-1801 et seq.

Question 184

Physician assistance: euthanasia and assisted suicide

Answer 184

Oregon became the first and only state to authorize physician-assisted suicide.
Under the Oregon law, a physician is relieved of criminal and civil liability for prescribing a lethal dose of medicine to an adult if certain conditions are met.
In Gonzalez v. Oregon, 546 U.S. 243 (2006) the US Supreme Court upheld the Oregon law from a challenge by the U.S. Justice Department.
The adult patient must suffer from an incurable disease that is likely to produce death within 6 months, must make several requests.
WA and MT now also authorize physician aid in dying.

Question 185

Rise of elder law

Answer 185

The field of elder law, dealing with the legal problems of the elderly, began to develop in the 1990s.
Issues range from health care, asset preservation, Medicaid eligibility, retirement, competency and guardianship, discrimination, elder abuse and housing and institutionalization.
Lawyers can also help with pension plans and Social Security, durable powers of attorney, conservatorships and trusts to preserve assets if the elderly person is admitted to a state institution.

Question 186

Disposition of the body - postmortem remains

Answer 186

Historically people had little say over their remains at death. Courts have since carried out the wishes of the deceased person provided these wishes do not conflict unreasonably with the desires of the living.
Some states have passed mortal remains legislation.
If a person dies by violence or in suspicious circumstances, however, all states require an autopsy regardless of the deceased person’s wishes.

Question 187

TN elective share statute

Answer 187

§ 31-4-101. Right of election; net estate

(a)(1) The surviving spouse of an intestate decedent who elects against taking an intestate share, or a surviving spouse who elects against a decedent’s will, has a right of election, unless limited by subsection (c), to take an elective-share amount equal to the value of the decedent’s net estate as defined in subsection (b), determined by the length of time the surviving spouse and the decedent were married to each other, in accordance with the following schedule:

The elective-share married to each other:
percentage is:
less than 3 years 10% of the net estate
3 years but less than 6 years 20% of the net estate
6 years but less than 9 years 30% of the net estate
9 years or more 40% of the net estate