Trusts and Wills

Question 1

A holographic will is…

Answer 1

In the testator’s handwriting, signed by the testator, and does not need to be witnessed.

Question 2

What is the relationship between a life insurance beneficiary and a will?

Answer 2

A beneficiary of a life insurance policy takes by virtue of the insurance contract. The proceeds are not part of the decedent’s estate, unless they are payable to the estate as beneficiary. Life insurance policies typically provide that proceeds will only be paid to a beneficiary named on an appropriate form filed with the insurance company; other possible methods of changing a beneficiary are thus viewed as being excluded by the insurance contract.

Question 3

How does a will properly incorporate by reference another writing?

Answer 3

(i) it existed at the time the will was executed; (ii) the testator intended the writing to be incorporated; and (iii) the writing is described in the will with sufficient certainty so as to permit its identification.

Question 4

How does an antilapse statute operate?

Answer 4

Under the majority of the statutes, if the gift was made to a relation of the testator within a specific statutory degree, and the relation predeceased the testator but left issue, then the issue succeeds to the gift, unless the will expressly states the contrary.

Question 5

What is the order of abatement for gifts by will?

Answer 5

If not otherwise specified in the will, gifts are abated in the following order: (i) intestate property; (ii) residuary bequests; (iii) general bequests; and then (iv) specific bequests. Abatement within each category is pro rata.

Question 6

How much does an omitted spouse get under the UPC

Answer 6

Up to 50% of the augmented estate

Question 7

Under what method of calculating shares is the estate split at the first generational level, then split among the first surviving issue within each branch?

Answer 7

Per stirpes

Question 8

What’s the most common remedy for fraud in a will?

Answer 8

A constructive trust

Question 9

Can a trust provision restrain a first marriage

Answer 9

No. However, a restraint on marriage might be possible if the purpose of the trust is merely to provide support for a B while the B is single.

Question 10

What are the standards regarding a self-interested transaction by the T?

Answer 10

When self-
dealing is established, an irrebuttable presumption is created that the trustee breached the duty of
loyalty. No further inquiry into the trustee’s reasonableness or good faith will be required, because self-
dealing is a per se breach of the duty of loyalty. When the duty of loyalty is breached, any beneficiary
has standing against the trustee if his interests are violated, and he can choose either to set aside the
transaction or to ratify the transaction and recover any profits therefrom.

Question 11

How is the T’s duty of prudent investment evaluated?

Answer 11

In assessing whether a trustee has
breached this duty, the UPIA requires consideration of numerous factors, including (i) the distribution
requirements of the trust, (ii) the general economic conditions, (iii) the role that the investment plays in
relationship to the trust’s overall investment portfolio, and (iv) the trust’s need for liquidity, regularity of
income, and preservation or appreciation of capital.

Question 12

What is the UPAIA approach to distribution to income and principal beneficiaries?

Answer 12

A trustee is empowered to re-characterize items and reallocate investment returns as he deems necessary to fulfill the trust purposes, as long as his allocations are reasonable and are in keeping with the trust instrument. A distribution of stock is treated as a distribution of principal under the UPAIA.

Question 13

The surviving spouse takes the whole estate when

Answer 13

All of decedent’s descendants are also descendants of SS, and SS has no other
descendants, or
o Decedent (D) has SS, but no descendants or parents

Question 14

SS takes $300,000 and 75% of the remainder of the estate when

Answer 14

No descendant of D survives D, but D has a surviving parent

Question 15

SS takes $225,000 and 50% of the remainder of the estate

Answer 15

All of D’s issue are also issue of SS, and SS has other issue

Question 16

SS takes $150,000 and 50% of the remainder of the estate

Answer 16

D has issue not related to SS

Question 17

What is the stepparent exception

Answer 17

an adoption by a stepparent establishes a parent-child
relationship between the stepparent and the child (with full inheritance rights) but
does not curtail the parent-child relationship of the genetic parent who is married to
the stepparent nor the right of the adoptee (or a descendant of the adoptee) to
inherit from or through the other genetic parent

Question 18

Per capita with representation

Answer 18

Property is divided equally among the first generation with at least one living
member
The share of a non-living member of that generation passes to the living issue of
that member
Non-living member with no living issue—no property is allocated to the non-living
member

Question 19

When may a court modify a trust?

Answer 19

if events that were unanticipated by the settlor have occurred and the changes would further the purposes of the trust. To the extent possible, the modification must be made in accordance with the settlor’s probable intention, and the court need not seek beneficiary consent to make the modification

Question 20

A court may modify the terms of a trust that relate to the management of the trust property if…

Answer 20

continuing the trust on its existing terms would be impracticable, wasteful, or impair the trust’s administration

Question 21

What does the cy pres doctrine operate to do?

Answer 21

a court may modify a charitable trust to seek an alternative charitable purpose if the original charitable purpose becomes illegal, impracticable, or impossible to perform. The settlor’s intent controls. If it appears that the settlor would not have wished that an alternative charitable purpose be selected, the trust property may instead be subject to a resulting trust for the benefit of the settlor’s estate.