trusts and wills mnemonics and concepts

Question 1

Trusts are created “BIT BY BIT”

Answer 1

B – A BENEFICIARY must be clearly and unambiguously named
I – The INTENT to create a trust must be clear
T – TRANSFER of assets to the trust

Question 2

A trustee’s investments are prudent based on a TIN DAD:

Answer 2

T – TRUST TERMS restricting trustee investments
I – INFLATION
N – NEEDS of beneficiaries

D – DIVERSIFICATION of investments
A – The total AMOUNT of the trust
D – DURATION of the trust

Question 3

If you try to TIP a trust, that means litigation:

Answer 3

T – TERMINATE the trust
I – Invade accumulated INCOME
P – Invade trust PRINCIPAL

Question 4

Gifts give AID

Answer 4

Give AID…
A – ACCEPTANCE (usually implied)
I – Donative INTENT
D – Effective DELIVERY

Question 5

A valid will must be SWEPT:

Answer 5

S – SIGNED by an adult testator
W – In WRITING
E – Signed at the END by the testator
P – PUBLISHED
T – TWO witnesses (who don’t have to be adults) must sign within 30 days of each other,
in the testator’s presence

Question 6

A will contest can TIE the executor’s hands:

Answer 6

T – Lack of TESTAMENTARY capacity
I – Undue INFLUENCE
E – Improper EXECUTION (improperly SWEPT)

Question 7

DAMN CAR LAW can alter an existing will:

Answer 7

D – DIVORCE
A – AFTER-BORN children
M – MARRIAGE of the testator
N – NO CONTEST CLAUSE breach

C – CY PRES of charitable bequests
A – ADVANCEMENT of a bequest
R – RENUNCIATION by a beneficiary

L – LAPSED legacies (but always consider NY’s Anti-Lapse Statute)
A – ADEMPTION or abatement
W – WRONGFULLY killing the testator

Question 8

If you can BRA²G IT, J.P., you’ll increase your right of election:

Answer 8

B – Jointly-held U.S. savings BONDS
R – 50% of decedent’s RETIREMENT plan
A – Shareholder AGREEMENTS entered into after the marriage that restrict sale or
testamentary disposition of testator’s closely-held corporate stock
A – ANNUITY payments surviving decedent’s death
G – GIFTS causa mortis
I – INTER VIVOS gifts, even to charity, exceeding $14,000 if made within the one year prior
to the testator’s death (absent written waiver by other spouse)
T – Pre- or post-marriage TOTTEN trust bank accounts
J – Post-marriage JOINTLY-HELD bank accounts, stock brokerage accounts, or jointlyheld real or personal property, but only to the extent that consideration was furnished by
the decedent
P – PAY on death securities

Question 9

A beneficiary that uses I-DROPS is deemed to predecease the testator:

Answer 9

I – INTERROREM clause breach
D – DADS decree
R – RENOUNCES
O – Death within ONE hundred and 20 hours from testator’s death
P – PREDECEASES testator
S – SLAYS the testator

Question 10

A DADS judgment [Divorce, Annulment, Dissolution, or Separation Judgment] impliedly
revokes the survivorship interest of the former spouse named in TRIP JAW:

Answer 10

A TOTTEN trust

2. A REVOCABLE lifetime trust
3. A life INSURANCE policy
4. A PENSION plan (if not inconsistent with federal pension plan law)
5. A JOINTLY held realty or a joint bank account
6. A power of ATTORNEY
7. A WILL

Question 11

what is a trust?

Answer 11

a legal arrangement in which a settlor transfers property to a trustee to hold as a beneficiary for one or more beneficiaries.

Question 12

The trustee has _____ title whereas the beneficiaries have ______ title to enforce the trust

Answer 12

legal

equitable

Question 13

The key categories for trusts are RIPE

Answer 13

Revocable or irrevable
Intervivos
Private or Charitable
Express or Implied

Question 14

What is an implied trust? what are the three types of implied trusts?

Answer 14

implied trust created by operation of law,

Constructive Trust
Resulting Trust
secret and semi secret trusts

Question 15

Define a constructive trust

Answer 15

A constructive trust is just a flexible remedy designed to (1) disgorge unjust enrichment that results from (2) wrongful conduct. The “trustee’s” only duty is to convey the properyt to the person who, in equity, should have the property.

Question 16

explain a pour over will

Answer 16

“Pour over” gift is a gift made in a will. Testamentary gifts are valid. These gifts can be changed during lifetime. To make a valid “pour over” gift, the trust must be in existence or executed concurrently with the will. “Pour over” can be in existing trust or those executed by other persons. POs are valid even if trust unfunded or only partially funded during settlor’s lifetime.

Question 17

Under the common law the two witnesses who witness the will must be disinterested or not receiving a bequest from the will or the will would not be valid. However, today, the common law no longer applies. If the will is witnessed by an interested witness, what may happen to the bequest?

Answer 17

in some states, the bequest may or may not be affected allowing the bequest. In other states, that particular gift to the interested witness would not be valid.

Question 18

T or F, in states that do not acknowledge holographic (handwritten) wills, a handwritten will could still be valid as long as it complies with the statute of wills for the creation of a valid will.

Answer 18

True

Question 19

T or F Some states provide by statute that a bequest to an interested witness is void unless the will is witnessed by two disinterested witnesses.

what can be done to remedy this?

Answer 19

True

if the testator is able to republish his will with a codicil and two disinterested witnesses, the bequest can be saved.

Question 20

What are the requirements to incorporate a document into a will by reference?

Answer 20

Under the incorporation by reference doctrine for a writing, only documents in existence when the will was signed can be incorporated by reference into the will.

However, many states have enacted statutes allowing a testator to dispose of tangible personal property by a memorandum signed after the execution of the will if the will evidences an intent to dispose of the tangibles in that manner.

Question 21

Durable healthcare POA statutes provide that agents acting in _____ _______ are immune from civil liability relating to their decisions made on behalf of the principal.

Answer 21

good faith

Question 22

explain the powers of a durable health power of attorney

Answer 22

An agent acting under a durable health-care power of attorney (POA) is authorized to make health-care decisions on behalf of the principal whenever the principal lacks the capacity to make a decision herself.

• agent may make decisions on behalf of the principal without the concurrence of the principal’s relatives.
• A durable power is not dependent upon a particular diagnosis and
• remains in effect until and unless rescinded by the principal.

Question 23

T or F [d]eath resulting from the withholding . . . of health care in accordance with a typical statute that governs health durable POAs does not for any purpose constitute suicide or homicide for purposes of the slayer statute

Answer 23

True

Question 24

Define Heirs as a legal technical term

Answer 24

“Heirs” is a technical legal term. It means those individuals who take (or who would take) a share of a decedent’s probate estate if that decedent dies intestate.

Question 25

When construing a state anti-lapse statute, with an express survivorship requirement like this is typically construed to mean?

how is this different than under the UPC?

Answer 25

that there is no protection from lapse. In other words, the phrase evidences a testator’s intent that only if the named beneficiary survives the testator will the bequest be given effect

The Uniform Probate Code (UPC), however, takes a contrary approach with respect to the effect of the phrase “if he [or she] survives me.” It provides in Section 2-603(b) that an express survivorship contingency does not evidence intent for the anti-lapse statute to be inapplicable.

Question 26

what generally happens if a general or specific bequest lapses?

What happens if a residuary bequest lapses?

Answer 26

If a general or specific bequest lapses, it falls into the residuary and passes to the residuary beneficiaries.

If, on the other hand, a residuary bequest lapses, its disposition depends on whether the jurisdiction (1) follows the traditional common law “no residue of a residue” rule (see McGovern Et Al. at 399–400) or (2) has adopted, by case law or statute, a “residue of a residue” approach. See, e.g., Unif. Probate Code § 2-604(b). The latter (residue of a residue rule) has become increasingly accepted on the theory that a testator, by writing a will, expresses a preference for those beneficiaries named in the will and not for his or her heirs.