Successions and Donations Flashcards
1
Q
Intestate succession
A
someone dying without a will
2
Q
Testate succession
A
someone dying with a will
3
Q
Descendent
A
The person who dies, and from whom property comes
4
Q
Estate
A
the property and liabilities belonging to the person (assets and liabilities) NOT a juridical person
5
Q
Heirs
A
person/people who inherit the estate
6
Q
Legatees
A
person/people who inherit testate
7
Q
Forced Heirs
A
children of the decedent who, at the time of death, are: 23 yrs. old or younger, or permanently incapable of taking care of themselves
can only be disinherited for just cause
8
Q
forced portion
A
the amount of property the forced heir(s) are entitled to
9
Q
disposal portion
A
the property the testor can freely disposeof
10
Q
legetime
A
the amount of property each individual person gets
11
Q
Lines
A
an heir’s position relative to the descendent
12
Q
Direct Line
A
People who are immediately above or below you.
(1) Ancestors: People who are immediately above the decedent.
(2) Descendants: People who are immediately below a decedent.
13
Q
Collateral line
A
not immediately above or below—but share a common ancestor (siblings, cousins)
14
Q
Classes
A
Groups of heirs who collectively exclude other groups
15
Q
Order of classes in successions
A
(1) decedents, (2) parents and siblings, (3) surviving spouse, (4) remote ascendents, (5) collaterals
16
Q
Degrees
A
Art 900 in the civil code—the nearness of blood is important in establishing degrees
17
Q
Direct (degrees)
A
Count the number of generations from the decedent to the person who is inheriting.
18
Q
Collateral (degrees)
A
Count up to the common ancestor, and then back down to the person of importance
19
Q
The class of descendants includes all of the following:
A
(1) the natural children of either parent;
(2) adopted children;
(3) children born out of wedlock whose parentage is established; and
(4) descendants of any of these.
20
Q
Who has the highest priority in succeeding to the property of their ascendants?
A
Descendants
21
Q
If the decedent is survived by: (1) at least one parent; and (2) at least one sibling or descendant of a predeceased sibling, the surviving sibling(s) or the descendants of predeceased siblings succeed to the
A
separate property of the decedent as naked owners subject to a usufruct in favor of the surviving parent(s).
If both parents survive the decedent, the usufruct is joint and successive, meaning that when one parent of the decedent dies, the other becomes the sole usufructuary.
22
Q
If the decedent is survived by at least one sibling, or descendant of a predeceased sibling, but leaves no surviving parents, the decedent’s sibling(s) or any descendants representing predeceased siblings succeed to the decedent’s separate property
A
full ownership.
Conversely, if the decedent is survived by at least one parent but leaves no sibling or descendant of a predeceased sibling, the decedent’s parents succeed to the decedent’s separate property in full ownership.
23
Q
When this class of heirs includes any half-siblings of the decedent, the estate is
A
first divided into two equal shares, representing the maternal and paternal lines. The decedent’s siblings of the whole blood inherit from both lines, and the decedent’s siblings of the half-blood inherit only from the line of the common parent.
24
Q
If the decedent leaves no surviving descendants, parents, siblings, or descendants of predeceased siblings, who succeeds to his separate property?
A
The surviving spouse.
Because the surviving spouse succeeds to the decedent’s share of the community property when the decedent has left no living descendants, the surviving spouse in this case would inherit the decedent’s entire estate.
25
If the decedent leaves no surviving descendants, parents, siblings, descendants of predeceased siblings, or spouse, then who succeeds to his separate property?
More Remote Ascendants
a. If the nearest living ascendants in relation to the decedent exist on only one side (i.e., the maternal or paternal side), they inherit the decedent’s separate property by heads.
b. If the nearest living ascendants in relation to the decedent occupy both the maternal and paternal sides and are in the same degree, the property is divided into two equal shares, with one share going to each side. The ascendants on each side take by heads.
26
In the absence of surviving descendants, parents, siblings, descendants of predeceased siblings, spouses, or other ascendants, who succeeds to his separate property?
More Remote Collaterals
Among collateral relatives, the nearest in degree excludes all others.
(1) If more than one collateral relative in the same degree survives the decedent, they take equally and by heads.
27
If there are no heirs eligible to inherit the decedent’s separate property, who succeeds to his separate property?
The state of Louisiana
28
(Devolution of Community Property) If a deceased spouse leaves no descendants
spouses take full ownership
29
(Devolution of Community Property) If a deceased spouse is survived by descendants
children get naked ownership, spouse gets 890 usufruct
30
The 890 usufruct terminates
upon the spouse's death OR the remarriage of the surviving spouse
31
Security is dispensed with when you’re dealing with an 890 usufruct, unless
the child is a forced heir (then must pay security), or the child is not a descendent of the surviving spouse (child from previous marriage, for example).
32
There are three ways in which an heir may succeed
in your own right
by representation
by transmission
33
A person succeeds in his own right when
by virtue of who you are and where you stand in relation to the decedent
34
A person succeeds by representation when
by virtue of representing someone else. You stand in the place, degree, and rights of another.
35
Representation only works going
down; it never works going up.
36
In the collateral line, representation can only take place in favor of
direct descendants of the decedent’s siblings (i.e., the decedent’s nieces, nephews, and their descendants).
37
A person succeeds by transmission when
deals with people who die after the decedent, but dies before s/he could exercise his/her acceptance of property.
38
If an ascendant gives an immovable to a descendant, and that immovable is found in the decedent’s succession, and the decedent dies without posterity:
the immovable goes back to the estate from which it came
EXAMPLE: If your grandparent gives you a tract of immovable property, that land is found in your succession when you die, and you die without posterity, then that immovable automatically goes back to the grandparent—irrespective of whatever other relations one might have.
39
If the decedent, while he was alive, mortgaged the property, when that property goes back to the ascendant it goes back with
the mortgage on it. The encumbrance remains.
40
A special statutory provision exists to cover circumstances where one spouse dies “rich in comparison with the surviving spouse,” in which case the surviving spouse is entitled to claim a
marital portion from the succession of the deceased spouse.
41
While there is no definitive test to determine whether a spouse is entitled to a marital portion, it will usually be awarded where:
5:1 or greater is "rich enough."
42
if the decedent died without children, then the marital portion is
1/4 claim against the estate
43
if the decedent is survived by three or fewer children, the marital portion is
1/4 interest in usufruct
44
if the decedent is survived by more than three children, the marital portion is
a "child's share" in usufruct
45
A marital portion may not exceed:
1,000,000 (bright-line limit by the Code).
46
A legacy left by the decedent to the surviving spouse and payments due to the surviving spouse as a result of the death
deduct the legacy from the marital portion
47
Succession occurs upon
the death of the decedent
48
Death means
irreversible stopping of circulatory and respiratory function
49
All rights vest in the heir at
the time of the decedent’s death; and from that moment, the heir may file formal succession proceedings.
50
Absent Persons
An absent person is one that has no representative in the State of Louisiana, and whose whereabouts cannot be ascertained by diligent effort. After 5 years, he can be declared dead.
There is a special statute that says if someone has disappeared after Hurricanes Katrina or Rita, then the relevant period of time is not 5 years, but 2 years.
51
Disappearance
If someone has disappeared under circumstances in which his death seems certain, then we can treat that person as dead, even without having them considered an absent person and running the 5 year clock.
52
Simultaneous Death
when two people die in the same accident, you presume they died at the exact same time
53
Capacity to Succeed
1. A successor need only be existence at the time of the decedent’s death in order to succeed.
2. A child who has been conceived but not yet born at the time of the decedent’s death is considered to be in existence for the purposes of succession.
3. If an individual has died and before his death he executed a written authorization for his spouse to use his frozen gametes after his death, even though that subsequently born child wasn’t even conceived at the time of the husband’s death, a special statute allows that child to inherit as if he did have capacity at the time of the husband’s death—as long as that child is born within 3 years of the date of death of the relevant party.
54
Declaration of Unworthiness
Capacity may be lost where a successor is declared unworthy.
2. A successor will be declared unworthy if:
a. he is convicted of a crime involving the intentional killing, or attempted killing, of the decedent; or
b. s/he is judicially determined (not necessarily in a criminal proceeding) to have participated in the unjustified killing or attempted killing of the decedent
55
reconciliation
A successor will not be declared unworthy if he can prove reconciliation with or forgiveness by the decedent
56
As a result of a successor being declared unworthy
a. the successor’s rights devolve as if the unworthy successor had predeceased the decedent; and
b. if the unworthy successor’s child takes in his place, neither parent can claim a legal usufruct upon the property.
57
An action to declare a successor unworthy may be brought only by
a person who would succeed in the place of or in concurrence with the successor to be declared unworthy, or by one who claims through such person
58
An action to declare a successor unworthy must be brought within
5 years from probate (testate); 5 years from the death of the decedent (intestate)
59
Judgment of Possession: Third parties who acquire immovables by onerous title from a successor who is recognized in a judgment of possession are protected after
2 years from unrecognized successors popping up and saying they have rights.
60
Is a successor obligated to accept his rights to succeed?
No. He may accept all rights, renounce all rights, or accept some rights and renounce others.
61
A successor who is a minor is deemed to
accept his succession rights.
| a. A minor’s legal representative may renounce on behalf of the minor when expressly authorized by the court.
62
Can acceptance take place before the decedent’s death?
no.
a. In addition, the successor must have knowledge of: his rights as a successor
b. A premature acceptance or renunciation is absolutely null.
63
Acceptance can be
formal or informal
64
Formal acceptance occurs where
stated in a writing or judicial proceeding
65
Informal acceptance occurs where
when a successor performs some act to indicate his or her acceptance (selling the property, for example)
66
Renunciation must be
express AND in writing
67
Collation involves
the process of figuratively (or actually) returning any gifts received by an heir or legatee within 3 years of the decedent’s death to the mass of succession in order to calculate the forced and disposable portions.
68
reduction is
the means by which an omitted forced heir collects his forced portion and defeats a decedent’s intention to unlawfully disinherit a forced heir
69
collation is
the means by which a forced heir gives effect to the decedent’s intent that he share equally in the estate.
70
The policy underlying collation is founded upon two presumptions
a. that the decedent meant to treat his children equally with regard to dividing their inheritance; and
b. any gifts the decedent gave to his children prior to death were given in advance of succession.
71
Collation is presumed unless
it is expressly waived in the appropriate form
72
Children, or grandchildren coming to the succession of their parents or other ascendants, must collate
what they have received from the decedent by donation inter vivos, directly or indirectly.
a. Failure to collate results in these successors being barred from claiming the legacies made to them by such ascendants, unless the donations and legacies have been made to them expressly as an advantage over their coheirs and besides their portion.
b. The declaration that a gift or legacy is made as an advantage or extra portion must be unequivocal, and may be made (1) in the instrument of donation, (2) in the act of donation, (3) in an authentic act after the donation is made, or (4) in the will
73
A grandchild, to whom a gift was made or a legacy left by his grandparent after the death of his father or mother, must collate when
he is called to the inheritance of the grandparent, jointly with the other grandchildren, or by representation.
74
Gifts made from a grandparent to a grandchild during the parent’s life
are exempt from collation
75
Collation is due upon donations inter vivos made within
3 years of the donor's death
a. in order to provide for their descendant who would eventually take in their succession; or
b. for the payment of that descendant’s debts.
76
The following expenditures are exempt from collation
a. expenses for the heir’s board, support, education, and apprenticeship;
b. manual gifts (DOESN'T mean corporal movables generally, they mean christmas gifts that are normally given "customary gifts")
77
Who may demand collation?
Only forced heirs may demand collation.
a. Forced heirs of the first degree can demand collation.
b. Representatives of forced heirs (grandchildren whose parents have predeceased them -- this point is debatable)
78
There are two methods of making collations
in kind and by taking less
79
Collation takes place in kind when
you physically give the property back
80
Collation is made by taking less when
your advance is factored in to whatever else you get
81
(Collation) A donee in possession of an immovable can choose to either
make the collation in kind or by taking less
82
A donee who collates in kind is entitled to reimbursement by his coheirs for certain expenses, including
(a) those necessary for the preservation of the property; and
(b) those which have improved the property, in proportion to its increase in value caused by such improvements.
83
No reimbursement is due for works made for
the mere pleasure of the donee, but the donee has the right to remove such works so long as he can do so without damaging the property.
EXAMPLE: An in-ground pool would probably be classified as an improvement to the estate, but an above-ground pool, depending on its construction, might be classified as a removable work made for the mere pleasure of the donee.
84
Donees of movables may only make collation by
taking less
85
Forced heirs of the first degree can demand collation of gifts given by a decedent to his children or grandchildren within 3 years of the date of death. The gift is valued at:
the date of donation (not death)
86
The right to demand collation is personal, as such it is subject to
prescription -- forced heirs must demand collation within ten years, but if an action for collation is barred if the heir unconditionally accepts a succession and obtains a judgment putting him in possession of the property.
87
two types of donations
donation inter vivos and donation mortis causa
88
A donation inter vivos
made between living persons—donor gratuitously divests himself of ownership for another person
89
What is required for an effective donation inter vivos
act of donation
act of acceptance
the donation must be irrevocable and effective at the present time (doesn't have to transfer immediately)
90
A donation mortis causa is
upon death. another word for a will. It is not a contract; it is a juridical act.
91
Can you revoke a donation mortis causa?
Yes. You can revoke up until the event of the donor's death
92
Unenforceable gratuitous transfers
certain designations on bank accounts—joint accounts; pay on death accounts. this is not an effective gratuitous transfer
93
requirements for making a donation
must have: capacity to donate, capacity to accept, requisite formalities are followed, and no substantive limitations are allowed.
94
The only real requirement for a donee is
that s/he exists
95
An unborn child’s capacity to receive a donation inter vivos requires
that (1) the child is in utero, and (2) born alive.
96
Capacity to donate inter vivos must exist at:
the time of donation
97
Capacity to donate mortis causa must exist at
the time of execution of the testimate
98
Capacity to donate requires that the donor be able to comprehend generally, and
s/he must understand the nature and consequences of the transaction
99
A minor under 16 years of age does not have capacity to make a donation, except
in favor of his spouse or children
NOTE: After becoming age 16 but prior to reaching age 18 (i.e., the age of majority), a minor has capacity to make a donation mortis causa to anyone, but he may make a donation inter vivos only in favor of his spouse or children.
100
A donation which is the product of fraud, duress, or undue influence will be
declared null
101
Fraud defined
the donor has capacity (as does the donee) but the donee has lied to the donor and it is that lie that causes the donor to make the donation
102
Duress defined
(same as contract) force used to cause a reasonable fear of force, injury to self or reputation or property. (objective and subjective determination)
103
Undue Influence defined
(doesn't apply in the general contract context). Only in a donation context. Can negate the donation upon proof that it was the product of influence by the donee or another person that so impaired the volition of the donor as to substitute the volition of the donee for that of the donor. Basically, you've done something to influence the donor so much that it was your decision, not that of the donor.
104
How to determine undue influence
(1) susceptibility (low capacity), (2) opportunity for influence, (3) person who is exerting influence the type to do this kind of things, (4) result is achieved.
105
Proof of fraud, duress, or undue influence requires a showing of
clear and convincing evidence
106
However, a showing based on a preponderance of the evidence is sufficient if, at the time the donation was made
(1) a confidential relationship (e.g., attorney-client, physician-patient) existed between the donor and the alleged wrongdoer; and
(2) the alleged wrongdoer was not then related to the donor by affinity, consanguinity, or adoption.
107
If it is possible to sever a provision that is declared null due to fraud, duress, or undue influence, the remaining provisions in the donation or testament will be
given effect. Otherwise, the entire act of donation or testament will be nullified.
108
Forced heirs are
descendants of the first degree, who at the time of death of the decedent are 23 years of age or younger, or those permanently incapable of taking care of their person or administering their estate, either because of a mental or physical incapacity.
109
If, at the time of death of the decedent, according to medical documentation (forced heirs)
an inherited and incurable disease that may render him or her medically incapable anytime in the future, even if they are capable of caring for their person or estate at present.
110
Grandchildren as forced heirs
in limited instances. Predeceased parents: forced heir by representation, but only if the pre-deceased parent would have been 23 or younger at the time of the grandparent's death (fictitiously age the deceased parent)
Permenant incapability: regardless of the parent's would-be age, if the grandchild has a condition that renders him/her incapable of caring for him/herself or her/his estate.
111
Amount of Forced Portion if the decedent leaves at his death no forced heir
that person can freely dispose of his estate
112
Amount of Forced Portion if the decedent leaves at his death one forced heir
the forced portion is 1/4; 3/4 disposible
113
Amount of Forced Portion if If the decedent leaves at his death two or more forced heirs
1/2 forced portion (just count heads)
EXAMPLE: A dies, and he has two kids, B (19) and C (16). The disposable portion is 1/2, and the forced portion is 1/2. B and C split the disposable portion by head, and each has a legitime of 1/4.
114
Amount of Forced Portion if If the decedent leaves at his death five or more forced heirs
each forced heir can receive no more than he would receive if the decedent died intestate.
EXAMPLE: Joy leaves 5 living children at her death, only one of which (Kate) is less than 24 years old. Kate’s legitime is not 25% but rather 20%, since that is the amount to which she would be entitled under intestate succession.
115
Generally, a legitime may consist of
a. full ownership;
b. naked ownership subject to a usufruct in favor of the decedent’s surviving spouse (effective until the surviving spouse dies or remarries); or
c. property placed in a trust, but only when the forced heir is the principal beneficiary.
2. No charges, conditions, or burdens may be imposed on the legitime except those expressly authorized by law.
116
Active Mass Calculation
For the purpose of calculating the forced and disposable portions, and reductions to which donations are subject, start with the value of the entire estate (excluding insurance policies and retirement benefits), add any donations inter vivos made within 3 years of the decedent’s death, and then subtract the estate’s debts.
117
Donations mortis causa are reduced before donations inter vivos, unless
the testator has expressly declared otherwise in his testament.
118
When the property of the estate is not sufficient to satisfy the forced portion, a forced heir may recover
the amount needed to satisfy his legitime from the donees of donations inter vivos made within 3 years of the date of the decedent’s death, beginning with the most recent donation and proceeding successively to the most remote.
119
If a donee from whom recovery is due is insolvent
skip the recipient and move on
120
reduction is subject to what rule
the two-thirds rule
121
The two-thirds rule is
The value of a remunerative donation is only included in the calculation of the forced portion if the value of the remunerated services is less than two-thirds the value of the property donated at the time of the donation, in which case the gratuitous portion is included in the calculation and is subject to reduction.
Likewise, the value of an onerous donation is only included if the value of the charges is less than two-thirds the value of the property donated at the time of the donation, in which case the gratuitous portion is included and subject to reduction.
122
An action brought by a forced heir to reduce an excessive donation must be brought within
5 years
123
A forced heir may only be deprived of his legitime if
he is disinherited by the testator, for just cause
124
Just cause for a parent to disinherit a child is only satisfied if the child
a. has raised his hand to strike one of his parents, or has actually struck the parent;
b. has been adjudged guilty of cruel treatment, a crime, or a grievous injury against one of his parents;
c. has attempted to murder one of his parents;
d. without any reasonable basis, has accused one of his parents of committing a crime carrying a punishment of life imprisonment or death;
e. has used any act of violence or coercion to hinder one of his parents from making a testament;
f. being a minor, has married without the consent of his parents;
g. has been convicted of a crime carrying a punishment of life imprisonment or death; or
h. after attaining the age of majority and knowing how to contact his parents he has not done so for 2 years, without just cause
125
A grandparent may disinherit a grandchild for any of the same reasons as a parent, whether the child’s act was against a parent or the grandparent, except
marrying without a grandparent's consent
126
A disinherison must be made
expressly, clearly identifying the person disinherited in a testament.
127
The testator must express in the instrument the reason, facts, or circumstances that constitute the cause for the disinherison; otherwise
the disinherison is null.
128
a. These reasons, facts, or circumstances are presumed to be true.
b. A disinherited heir’s defenses include
(1) rebutting by a preponderance of the evidence; (2) reconciliation (Unlike the other defenses, this defense is subject to the heightened clear and convincing evidence standard), (3) inability of the disinherited heir to understand the impropriety of his behavior due to age or mental capacity.
129
Donation Omnium Bonorum
donation of all of your goods (inter vivos)
Such an attempted donation is void.
a. Some courts have ruled that only the donor is able to raise the idea of a donation omnium bonorum to presumably get the property back, while others have ruled that forced heirs are allowed to do so
It is inperscriptable
130
A person may not make a donation inter vivos consisting of all of his property; the donor must retain at least
enough for his subsistence.
131
If a donation is conditional, and that condition is impossible, illegal, or immoral, the condition is treated
as if the condition was not written. You can enforce the donation, but just read out the inpermissible condition
132
If the condition is so intertwined with the donor's purpose of making the donation
you can't just read out the condition, the entire donation is null.
133
Three types of offending conditions
nonalienation clause, prohibition on marriage, no contest clause
134
nonalienation clause
"Blackacre so long as you never sell it." Not allowed. A court said 10 years was too long of a prohibition even.
135
Prohibition on marriage
"you can have this property so long as you never marry" not ok; "you can have this so long as your not married at the time of my death." "you can have this so long as you don't remarry," also ok.
136
no contest clause
"if you challenge the will, you get nothing" ok; "if anyone challenges the will, then no one gets anything."
137
Prohibited Substitution
A disposition is null (unless in a trust) in which the donor attempts to give full ownership to a first donee (the institute), with a charge to preserve the thing and deliver it to a second donee (the substitute) at the institute’s death.
Thus, a charge for the institute to preserve the thing and deliver it to the substitute before the institute’s death would be permissible.
The effect of a prohibited substitution is to invalidate the entire disposition.
138
Residual Substitution
you can do this: you can have full ownership of the thing, but if there is any left over when you die, it goes to ___. Apparently that's fine.
139
Vulgar Substitution
A disposition by which a third person is called to take a gift or legacy in case the donee or legatee does not take it is a permissible substitution.
140
Short-Term Survivorship Clause
A testator may impose a suspensive condition upon a legatee or a trust beneficiary stating that he must survive the testator for a stipulated period (of no more than 6 months), in default of which a third person is called to take the legacy.
141
A valid donation inter vivos is subject to the following requirements
a. the act must be at least partly gratuitous;
b. the donor must not expect payment in return;
c. the transfer must be made at the present time;
d. the act must be irrevocable; and
e. the donee must convey acceptance during the lifetime of both the donor and the donee.
142
A gratuitous donation is
grandma sends you $20 in a birthday card. Donation made out of kindness
143
Mixed motive transaction
trying to get something, but giving a payment above and beyond that
144
Two-thirds rule
If an obligation imposed on the donee results in a material advantage to the donor, and at the time of the donation, the cost of performing the obligation is at least two-thirds of the value of the thing donated, then the contract is considered a bargained-for exchange and not a donation inter vivos.
145
An onerous donation is one that is
burdened with charges imposed on the donee
146
A remunerative donation is
instead of imposing charges in the future, this is payment for something done in the past.
147
Formalities for a donation of a corporal immovable
authentic act, identification
148
Formalities for a donation of a corporal movable
The donation of a corporeal movable (or manual gift) may be made by delivering the thing to the donee without any other formality.
149
Formalities for a donation of an incorporal movable
The donation of an incorporeal movable of the kind that is evidenced by a certificate, document, or other writing may be made by authentic act or by other applicable rule or law.
150
Authentic Act
Unless otherwise expressly permitted by law, a donation inter vivos must be made by authentic act, else it will be declared null.
151
Identification
The donor, donee, and thing donated must be clearly described, either in the act of donation itself or from information contained in it, as clarified by extrinsic evidence if necessary.
152
A donation inter vivos has no effect until
it is accepted by the donee
153
Acceptance can be made
a. in the act of donation;
b. subsequently in writing; or
c. by possessing a donated corporeal movable.
154
Acceptance must be made effective during
the lifetime of the donee or donor
If the donee dies without having accepted the donation, his successors may not accept for him
155
The rule that donations inter vivos must be irrevocable is subject to certain exceptions such as
ingratitude
| nonfulfillment of conditions
156
Ingratitude sufficient to render a donation revocable occurs where
(1) the donee has attempted to take the life of the donor; or
(2) the donee has been guilty towards the donor of cruel treatment, crimes, or grievous injuries.
157
Revocation based on ingratitude is subject to a prescriptive period of
one year from the date the donor knew or should have known of the act of ingratitude.
158
Dissolution of a donation inter vivos can also occur by consent of the parties or by judicial decree when
a condition that the donee has the power to perform or prevent goes unfulfilled, or when a condition depends on the performance of a charge by the donee and the donee fails to perform.
159
An action to dissolve a donation for nonperformance must be brought within
5 years of non-performance
160
disposition mortis causa may be made only in the form of a testament authorized by law
olographic (drawn on a napkin, for example)
| notorial will
161
testament must be executed by
the testator, and not by his mandatary
162
A testator may delegate to his executor the authority to
allocate specific assets to satisfy a legacy expressed in terms of a value or a quantum, including a fractional share.
163
Failure to adhere to the requisite formalities for the execution of a testament render the testament
absolutely null
164
Capacity must exist at the time
the testiment is made/executed
165
Testamentary intent requires
that the person needs to want that particular document will serve as the will
166
Testamentary intent must exist
at the time the instrument is executed
Lack of testamentary intent renders a testament completely invalid
167
Testaments may only take on two forms
olographic and notarial
168
olographic testament is
the lay person's will
169
the will must be entirely written
the court will excise the preprinted text
170
The signature must appear
at the very end of the document
171
requirements of an olographic testiment
entirely written
signature at the end
the date is sufficiently indicated if the day, month, and year are reasonably ascertainable from information in the testament, as clarified by extrinsic evidence, if necessary
172
Additions and deletions on the testament may be given effect only if
they are made in the testor's handwriting
173
notorial testiment's validity
are presumed
174
the testator knows how to sign his name and to read, and is physically able to do both, then, in the presence of a notary and two competent witnesses, the testator must
(1) declare or signify to them that the instrument is his testament; and
(2) sign his name at the end of the testament and on each other separate page
The testament must be dated. The date appearing on the testament should indicate the day on which the document was singed by the testator and witnesses.
c. In the presence of the testator and each other, the notary and the witnesses must sign and date an attestation clause certifying the proper execution of the testament.
175
Substantial Compliance
If we can, we will give force of the will so long as they substantially complied with the rules. This works only for very minor deviations, e.g. forgetting to date the attestation clause, but you did date the rest of the will
176
person is generally competent to act as a witness to a testament unless
he is insane, blind, unable to sign his name, or under 16 years of age.
177
If a subscribing witness or the notary is a legatee:
it doesn't affect the will's legitimacy, but rather the legatee's ability to inherit. his or her inheritance is excised.
If the witness would be an heir in intestacy, the Code dictates that that person allows that person to inherit the lesser of his intestate share
If a legacy is in favor of the spouse of a subscribing witness, the legacy is invalid, but the spouse is likewise entitled to the lesser of his intestate share or the legacy in the instrument if he would have been an heir in intestacy.
178
Rule of interpretation
The cardinal rule when interpreting a testament is that the intent of the testator controls.
2. If the language of the testament is clear and unambiguous, it must be followed according to its written terms, without reference to any extrinsic evidence.
3. If a testament contains contradictory provisions, the one written last prevails.
a. Nevertheless, if a testament contains a legacy of a collection or a group of objects and also a legacy of some or all of the same objects, the legacy of some or all of the objects prevails
179
A testator can revoke his entire testament by doing any of the following
a. physically destroying the testament, or having it destroyed at his direction;
(1) The physical destruction of one copy of the testament, where multiple copies exist, raises a presumption in favor of revocation
b. declare it in a subsequent testament or authentic act
c. executing a document entirely written and signed by the testator in his own handwriting that identifies and clearly revokes the testament.
d. you can also just write revoked on the instrument
180
A testator can revoke a single legacy or other testamentary provision by doing any of the following
a. so declaring in a subsequent testment;
b. making an incompatible disposition or provision in a subsequent testament;
c. making a subsequent inter vivos disposition of the thing that is the object of the legacy, and not reacquiring it; or
d. clearly revoking the legacy or provision by a signed writing on the testament itself
181
When a married testator gets divorced, and is not married to that spouse at the time of his death, what happens to legacies in favor of the former spouse
any legacies in favor of the former spouse are revoked by operation of law, unless the testator provides a clear intent to the contrary.
182
Any other modification of a testament, not involving revocation or revival, must be
in one of the forms prescribed for testaments.
183
A legacy is universal if
all or a balance of the estate (after particular legacies are deducted) goes to a particular person. IF there is a general legacy, there can be no universal legacy
184
A legacy is particular if:
generally being legacies of individual items
185
A legacy is general if
a fraction, portion, or percentage of the estate, or the remainder thereof
186
A disposition of property expressly described by the testator as all, a fraction of, or a certain proportion of separate or community property, movable or immovable property, or corporeal or incorporeal property, is also a
general legacy
187
When a legacy is given in favor of more than one person, it is classified as
separate
188
separate when the testator assigns shares; when the testator does not assign shares, it is classified as
joint
189
A legacy will lapse when
a. the legatee predeceases the testator;
b. the legatee is incapable of receiving at the death of the testator;
c. the legacy is subject to a suspensive condition which can no longer be fulfilled, or the legatee dies before fulfillment of the condition;
d. the legatee is declared unworthy;
e. the legacy is renounced;
f. the legacy is declared invalid; or
g. the legacy is declared null (e.g., for fraud, duress, or undue influence).
190
Anti-lapse rule
Overrides all other anti-lapse rules, but only applies when the original legate is either a child or sibling of the testor, or the child of the descendant of the testor's child or sibling. If that occurs, accretion takes place by roots in favor of the legatee's decedents in existence at the time of the decedent's death.
191
If a joint legatee predeceases the testator, the surviving legatees take
the legacy in full ownership and in equal proportions.
192
Under the statutory scheme, the general rule is that the lapse of a particular or general legacy accretes to the successor who
have received the thing had the legacy not been made.
193
If the statutory rules do not cause a lapsed particular or general legacy to be disposed of, they pass
proportionally to the universal legatees
Otherwise, they devolve by intestacy
194
When extinction occurs, the legatee to whom the legacy was intended to favor is entitled to:
a. any part of the property that remains;
b. uncollected insurance proceeds attributable to the loss; and
c. the testator’s right of action against any person liable for the loss.
Extinction does not occur where the property constituting the legacy has been transformed into a similar object without an act of the testator.
195
Priority of Disbursements
1. Payment of estate debts and satisfaction of the legitime occur before the disbursement of legacies.
2. Absent a contrary testamentary provision, particular legacies must be discharged in preference to general and universal dispositions.
196
If the estate is insufficient to discharge all bequests, absent a contrary preference in the testament, the order of disbursements is as follows:
a. first, legacies of specific things;
b. second, legacies of groups and collections of things; then
c. any remaining property is applied toward the discharge of legacies of money, divided among the legatees in proportion to the amounts of their legacies.
197
All legacies, whether universal, general, or particular, include the
fruits and products attributable to them from the date of the testator’s death, subject to administration of the succession.
198
Legacies of a specified amount of money begin to accrue interest at a reasonable rate beginning
one year after the date of the testate's death
If, however, the legacy is subject to a lifetime usufruct of a surviving spouse, or is held in trust subject to an income interest for life to a surviving spouse, interest accrues from the date of death.
199
A trust without a trustee
A trustee technically does not need to accept the trust property for which he has title for the creation of the trust.
b. The trustee thereafter needs to accept at some point, but he can do so either in the trust instrument or subsequently in writing after a reasonable period of time.
c. The trustee’s acceptance is retroactive to the moment of creation of the trust.
d. A trust will not fail for want of a trustee.
(1) Generally, the court will appoint a trustee if no trustee is designated, or if the designated trustee is incompetent, fails to survive the settlor, or otherwise fails to qualify.
200
What can be trust property?
Any identifiable property right that is transferable and capable of ownership may generally constitute trust property.
201
A Forced Heir’s Legitime can be placed in a trust, subject to certain requirements
b. The forced heir must have access not only to the principal, but also to the income of the property.
c. If a forced heir’s legitime is put in trust, the trustee must pay out income to the forced heir after considering other means of support and maintenance the forced heir may have over the year as is necessary for his health maintenance, support, and education.
d. The forced heir must receive the principal free of trust at the termination of the trust, or at least the portion of the trust that affects his legitime.
e. A forced heir’s legitime can be burdened with a usufruct in favor of a surviving spouse.
(1) It can also be burdened with an income interest in favor of the surviving spouse of the decedent.
f. The term of the trust cannot exceed the life of the forced heir beneficiary, except that it can be subject to a lifetime interest in favor of the surviving spouse.
202
The settlor is
the person who creates the trust (can have more tha on in an inter vivos trust)
203
The trustee acquires title to the trust property and holds it for
the benefit of the beneficiary.
204
Only the following may serve as trustees
a. an individual who is a United States citizen with capacity to contract;
b. a bank, financial institution, or trust company organized under the laws of any U.S. state, or under federal laws; or
c. a nonprofit corporation, if the trust is for mixed or charitable purposes.
205
A trust will not fail for lack of a trustee unless
the settlor specifies that the existence of the trust is dependent on acceptance by the named trustee.
206
A trustee can be involuntarily removed for
sufficient cause that he is breaching his fiduciary obligations.
207
A corporate trustee may be removed upon
petition of the beneficiaries that it is in the best interests of the beneficiaries as a whole, and that another corporate trustee is willing to take over.
208
A trustee is entitled to compensation as set forth in the trust instrument. If no amount is specified, he is entitled to
compensation that is reasonable under the circumstances.
209
Trustees are also entitled to indemnification from the trust estate for
expenses properly incurred in administering the trust.
210
Beneficiaries are
the person for whose benefit the trust is created
211
Persons designated as beneficiaries may be:
a. natural persons;
b. corporate entities;
c. partnerships; or
d. other legal entities having the power to receive property.
212
Beneficiaries of a trust must be in being and objectively ascertainable from the trust instrument, starting
at the time of the trust's creation
213
Renunciation - inter vivos trust requires
an authentic act -- creditors cannot accept on his or her behalf
214
Renunciation - testamentary trust requires
renounce the same way you do any other inheritance -- creditors can accept on his behalf, if the renunciation operates to their detriment
215
Income beneficiaries get the benefit of
the fruits of the principle
216
concurrent vs successive beneficiaries
concurrent - people who receive income presently
successive - when x dies, income beneficiary becomes Y
NOTE: You cannot have successive principle beneficiaries
217
The timing of the distribution is set by the settlor, or the settlor can leave it to the trustee’s discretion. If no provision is made in the trust document
the default rule is that income is paid every six months
218
If there are multiple income beneficiaries and one of them dies, the income goes to the other income beneficiaries, unless
the descendants of the income beneficiaries are also principal beneficiaries, in which case the income goes to the principal beneficiaries.
219
Principle beneficiaries
they are the owners of the underlying property
220
The general rule for the death of a principal beneficiary is
his interest vests in his heirs or legatees
221
Substitute principal beneficiaries may take the principal if
the original principal beneficiary dies during the term of the trust without descendants.
222
When a forced heir is involved, for a substitute principal beneficiary to take
the original principal beneficiary must die during the term intestate and without descendants.
223
Under a spendthrift trust, the beneficiary is not able to voluntarily or involuntarily alienate his interest, except as to:
(1) creditors of the beneficiary who may have rights based upon alimony or maintenance;
(2) creditors who have supplied necessary services or necessary supplies for a beneficiary;
(3) creditors of damages arising as a result of a felony criminal offense that the beneficiary has been convicted of or pled guilty to.
224
If there is a term to the trust, generally that will govern unless
it goes above the cap or ceiling.
225
If both the income beneficiaries and the settlors are humans, the maximum duration of a trust is:
the death of the last income beneficiaries or 20 years after the death of the last settlor, which ever occurs last
226
If none of the settlors are humans but the income beneficiaries are humans, the maximum duration of a trust is:
the death of the last surviving income beneficiary or 20 years after the creation of the trust, whichever is longer
227
If there are no human income beneficiaries but there are human settlors, the maximum duration a trust is:
20 years from the date of the death of the last surviving settlor
228
If neither the income beneficiaries nor the settlors are human, the maximum duration of a trust is:
50 years from the creation of the trust
229
If no term of the trust is stipulated, then
1. The trust terminates at the death of the last surviving income beneficiary who is a natural person.
2. If there are no human income beneficiaries but there are human settlors, the maximum duration a trust is 20 years from the date of the death of the last surviving settlor.
3. If neither the income beneficiaries nor the settlors are human, the maximum duration of a trust is 50 years from the creation of the trust.
230
The powers of a trustee to perform his duties may be
a. derived from the trust instrument (either expressly or by implication);
b. granted by statute;
c. implied in law as necessary or appropriate to accomplish the trust’s purposes; or
d. granted by the court upon petition.
231
A trustee’s actions pertaining to matters within his discretion are generally not subject to attack or court control unless
he abuses his discretion
232
Unless expressly precluded by the trust instrument, a trustee has the power, among other things, to
a. incur reasonable expenses that are necessary to maintain the trust property;
b. sell or lease trust assets;
c. mortgage or pledge trust property;
d. settle or abandon trust claims; and
e. exercise all stock powers.
233
A trustee has no implied authority to invade trust principal for a beneficiary who has merely the right to
receive income from the trust.
234
The court may authorize a trustee to pay principal from the trust property as is necessary for support, maintenance, education, medical expenses, or the welfare of beneficiaries, provided in doing so he’s not
impairing the interests of other beneficiaries.
235
The trust instrument may specifically grant an invasion power if:
(1) the income is necessary for the health, education, maintenance, and support of an income beneficiary; or
(2) the same party is both principal and income beneficiary.
236
If a forced heir's legitime is subject to a trust, then the principle is not able to be invaded and paid out to someone else as payment because
the forced heir must eventually be given his/her legitime in full ownership (all of it)
237
Duties of a Trustee
Duty of Care and the duty of loyalty
238
Duty of care
the trustee must be a prudent administrator of the trust, and he must be loyal (no self dealing)
239
Duty of loyalty
cannot make an investment or enter contracts on behalf of the trust purely that favor the trustee (no self-dealing)
240
a. As a general rule, a trustee may not delegate to another the performance of his duties.
b. A trustee may delegate
investment and management decisions
241
In connection with a permitted delegation, the trustee must exercise reasonable care, skill, and caution in:
(1) selecting the agent;
(2) establishing the scope and terms of the delegation, consistent with the purposes of the trust instrument;
(3) reviewing periodically the actions of the agent; and
(4) remedying any breaches of the agent’s duties discovered by the trustee.
242
Upon request, the trustee must provide to the beneficiary complete and accurate information as to
the nature and amount of the trust property, and permit him to inspect the subject matter of the trust, and documents relating to it.
243
Modern Portfolio Theory
A trustee’s investment and management decisions with respect to individual assets are evaluated not in isolation, but in the context of the trust portfolio as a whole and as part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
244
Prudent Investor Rule
A trustee must invest and manage trust property as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust, all the while exercising reasonable care, skill, and caution.
245
Co-trustees must use reasonable care to prevent other co-trustees from
committing a breach of trust, and must compel one another to redress any breaches.
246
A co-trustee may be liable for the breach of the duty of care or loyalty by another trustee if he:
participates;
improperly delegated his obligations to a co-trustee; concealed, approved, or somehow acquiesced in the malfeasance;
failed to exercise reasonable care;
realized there had been a breach, but did not take steps to remedy it.
247
A trust instrument may not relieve a trustee for
(1) breach of the duty of loyalty
| (2) acts committed in bad faith
248
May a beneficiary prospectively and generally limit the liability for a breach of the duty of loyalty or for bad faith actions?
No
249
Beneficiary’s Remedies
a. Compel the trustee to act more prudently.
b. Enjoin the trustee from committing further breaches of trust.
c. Compel the trustee to appropriately fix the situation that he’s caused.
d. Petition the court to remove the trustee.
250
Where the trust was to be in operation for a specified number of years,
or until the occurrence of a prescribed event, and that period of time has elapsed or the incident has occurred, the trust ordinarily terminates
in accordance with the instrument’s terms.
251
Trusts in Louisiana are indestructible, meaning that
Once they are set up, the consent of all the settlors, trustees, and beneficiaries still cannot effectively terminate a trust unless the trust instrument so provides.
252
A trust may be revoked, in whole or in part, by the settlor only if
he has reserved a right to revoke or an unrestricted right to modify its terms.
253
Once a valid trust has been created, the settlor may modify the trust only
to the extent allowed by the terms of the trust.
254
If the trust instrument itself allows a party, not a beneficiary, to add or remove beneficiaries of the trust, that is allowable as long as
all of the affected beneficiaries are descendants of the person giving the power to modify.
