Power of Appointment/Will Contests Flashcards
What is the power of appointment?
An authority created in (or reserved by) a donee enabling the donee to designate within limits prescribed by the donor, the persons who shall take the donor’s property and the manner in which they take it.
What are takers in default?
Persons who take the property if the donee fails to exercise the power properly.
What is the purpose of a power of appointment?
Allows someone to look at facts in existence at a later date, for the distribution of property.
What are the different classifications of powers of appointment?
General Power of Appointment: donee can appoint to herself, her creditors, or her estate, as if she owned the property herself.
Special Power of Appointment (“limited power of appointment”): donee cannot appoint to herself, and there is a limited group of people she can assign.
Presently Exercisable Power of Appointment: Donee can exercise it right now, in her lifetime, maybe in an intervivos trust.
Testementary Power of Appointment: Donee can appoint only by will.
In any power of appointment question, first classify the power.
How does RAP interact with powers of appointment and income interests?
When you are dealing with RAP and you have:
- An income interest built on a prior income interest, the second income interest is usually valid.
- An income interest built on a prior income interest conditioned upon reaching a certain age, the second income interest is void, but saved because the NY reform statute will force vesting within LIB plus 21 years.
What is the RAP and suspension rule checklist?
BOLDED are the most important!
1. Identify the interest.
- Determine whether you are measuring from the date of creation or date of exercise.
- Determine whether the “second look doctrine” applies.
4. Give the RAP rule.
5. Find a LIB and run with it.
6. Most likely, apply the NY Reform statute.
7. Give the suspension rule.
- Look to see if there is an income interest in an unborn beneficiary, and state that the income interest is void; OR
- Go further by giving the Statutory Spendthrift Rule, and state that the income interest is void. (Might be saved by the NY reform statute)
- Don’t forget to deal with the remainder interests.
How will a mistake be read in a will?
Absent suspicious circumstances, it is conclusively presumed that the testator read the will and intended its consequences. Thus, the plain meaning of the will by extrinsic evidence.
What is a latent ambiguity and how will it be handled?
A latent ambiguity is a misdescription, where the error is not evident by looking at the will.
Extrinsic evidence will be admissible to clarify or find the meaning of the testator’s words. This includes facts and circumstances evidence, evidence of the testator’s declarations of intent to third parties, and evidence of the testator’s statements to the attorney who prepared the will.
If extrinsic evidence does not cure the ambiguity then the gift will fail because there is no ascertainable beneficiary.
What is a patent ambiguity and how will it be handled?
A patent ambiguity is obvious error on the face of the will. Extrinsic evidence is admissible, but only facts and circumstances evidence and evidence of the testator’s statements to the attorney who prepared the will is admissible.
What is necessary for testamentary capacity?
A testator must have sufficient capacity to:
a. understand the nature of the act;
b. know the nature and the value of his property
c. know the natural object of his bounty;
d. know the dispositions (the gifts) he was making.
How does one show undue influence?
The testator has testamentary capacity, but is subject to, and controlled by, a dominant influence of power. The will contestant has the burden of proving:
- existence and exertion of an influence;
- effect of such influence as to overpower the mind and will of the testator AND
- product is a will or a gift in a will which would not have happened but for the influence.
The following is insufficient to constitute undue influence:
i. opportunity to exert influence;
ii. susceptibility to influence because of age or illness;
iii. unequal dispositions is not enough.
Can satisfy the burden by showing that the will makes a gift to one in a confidential relationship AND the person was active in preparing the will.
What about bequests to the drafting attorney?
The court will automatically inquire into whether a bequest to the drafting attorney was voluntarily made - known as Putnam Scrutiny.
