Trusts & Estates

Question 1

Will Formation: Essay Intro

Answer 1

A testator creates a valid formal will when there is (1) a testator with formal capacity, (2) present testamentary intent (3) to sign (4) a writing (5) in the joint presences of two witnesses who understand the intsrument is a will.

Question 2

Will Formation: Capacity Paragraph

Answer 2

A testator has capacity when they are (1) 18 years old, (2) understand the extent of her property, (3) the testator knows the natural objects of their bounty (who will receive their property), and (4) knows the nature of their acts.

Here, testator [is/not] 18 yo because… They [do/do not] understand the extent of their property because ….They [do/do not] understand the nature of their bounty because… They [do/do not] know the nature of their act because…

Thus, the testator [does/not have] capacity.

Question 3

Will formation: present testamentary intent paragraph

Answer 3

A testator has testamentary intent when they sign an interest and understand they are executing a will.

Here, testator [did/did not] sign an interest because … and [does/does not] understand they are executing a will because…

Thus, there [is/is not] present testamentary intent.

Question 4

Will formation: signed paragraph

Answer 4

The testator or someone in their presence and direction must sign the will.

Here, testator [did/did not] sign the will because…

Thus, the will [is/is not] signed.

Question 5

Will formation: writing paragraph

Answer 5

The entire will must be in writing.

The entire will [is/is not] in writing because…

Question 6

Will formation: in the presence of two witnesses who understand the instrument is a will.

Answer 6

A formal will must be signed in the joint presence of and attested to by two witnesses at the same time. Two witnesses must be aware the instrument is a will and be of sufficient mental capacity to understand that they are witnessing a will being executed.

Here, the will [was/was not] signed in the joint presence of and attested to by two joint witnesses at the same time because… The two witnesses [were/were not] aware the instrument was a will and [did/did not] have the capacity to understand they were witnessing a will because…

Thus, this element [is/is not] satisfied.

Question 7

Will formation: presumption of fraud, duress, or undue influence paragraph

Answer 7

If a witness has an interest in the will property, a court will presume the witness procured the devise by fraud, duress, or undue influence.

Here [witness] has an interested in the will property because….

Thus, the court will presume there has been fraud, duress, or undue influence and [witness] will have to rebut that presumption.

Question 8

Will formation: substantial compliance doctrine

Answer 8

If a will was not properly witnessed, a court will treat the will as duly formed when the proponent of the will establishes, by clear and convincing evidence, that at the time the tester signed the will, they intended the document to constitute her will.

Here, there [is/is not] clear and convincing evidence that, at the time testator signed the will, they intended it to be their will because…

Thus, the substantial compliance doctrine [will/will not] save the will from the witness defect.

Question 9

Components of a will: integration

Answer 9

When a testator physically attaches documents to a will or the components of a will are internally consistent with the additional documents, it creates a presumption that the pages were present at time of execution and intended to be part of the will when it was executed.

Question 10

Components of a will: will alteration

Answer 10

Alterations made on the face of the will, including strikeouts, interlineation, or deletions, after a will is signed and attested are ineffective to change the will unless the will is re-executed with the proper formalities or the changes qualify as a holographic codicil.

Question 11

Components of a will: Codicil

Answer 11

A codicil modifies a previously executed will and must itself be executed with the same formalities. When a testator executes a codicil, the will is treated as having been executed on the same day as the codicil.

Question 12

Components of a will: incorporation by reference: BY WRITING

Answer 12

A document that is not integrated into a will is incorporated by reference and becomes part of the will when
(1) the document existed at the time the will was executed,
(2) the document is sufficiently described by the will,
(3) the document provides satisfactory proof that the proffered document is the document described in the will, and
(4) the testator intended to incorporate the document into the will.

Question 13

Contesting a will

Answer 13

A will contest challenges the validity of the will. Grounds for contesting are defective execution, lack of testamentary intent, revocation, incapacity, undue influence, fraud, or mistake.

Question 14

Intestate distribution: community property

Answer 14

A surviving spouse inherits all of the decedent’s community property. A surviving spouse receives decedent’s half of quasi-community property.

Question 15

Intestate distribution: per capita

Answer 15

In a per capita jurisdiction, whenever issue taken by intestacy, or if a will or trust provides for issue to take without specifying the manner, they take per capita, equally in their own right. Issue of the same degree take equally in their own right. Issue of more remote degree take per capita by representation.

Question 16

Intestate distribution: per stripes

Answer 16

In a per stripes jurisdiction, distributions are made at the first level, even if everyone is dead, so long as they left issue. The the issue take as the predeceased ancestor would.

Question 17

Intestate distribution: adopted children

Answer 17

Adopted children are treated as a natural child of the adopting parent and severs the relationship between the child and his or her natural parents. However, the relationship is not severed between the child and his or her natural parents when the child is adopted by the spouse of the natural parent.

Question 18

Intestate distribution: step-children & foster children

Answer 18

Stepchildren and foster children are treated as an adopted child if (1) the relationship began during the child’s minority, (2) continued through the parties’ lifetimes, and (3) it is established by clear and convincing evidence that the stepparent or foster parent would have adopted but for some legal barrier.

Question 19

Intestate distribution: Non-marital children

Answer 19

Martial status of parents is irrelevant; rather, a court will focus on whether a parent-child relationship existed, irrespective of marital status.

Question 20

Trust Formation Paragraph

Answer 20

A valid trust requires intent, res, a valid purpose, a trustee, and a beneficiary. There is intent when the truster manifests unequivocal intent to create a trust. There is res when there is identifiable property. A trust purpose is valid when it is legal and not against public policy. A trust must have a trustee. A trustee is a person designated to administer the trust. If one is not named, the court may appoint a trustee. A beneficiary is someone who has an interest in the trust. A trust must have a beneficiary to enforce the trust.

Here, there [is/is not] intent because… There [is/is not] res because… there [is/is not] a valid purpose because… there [is/is not] a trustee because… there [is/is not] a valid beneficiary because…

Thus, a vlid trust [was/was not] formed.

Question 21

Types of trust: Charitable trust

Answer 21

A charitable trust confers a substantial benefit upon society. A charitable trust must have a stated charitable purpose.

Here, there is a state charitable trust purpose because…

Question 22

Types of trust: charitable trust: modification/CY PRES

Answer 22

A court may modify a charitable trust through the cy pres power or when the settlor does not foresee circumstances and a deviation from the original trust terms is needed to preserve the trust. The Cy Pres doctrine applies when the settlor creates a trust that is impossible carry out, and the court can either (a) create a resulting trust or (b) apply cy pres. Under the doctrine of cy press, a court finds the settler had a general charitable intent and modifies the mechanism to carry out the settlor’s intent.

Here, the trust [is/is not] impossible to carry out because…

Question 23

Types of trust: Honorary trust

Answer 23

An honorary trust exists when there is no ascertainable beneficiary and confers no substantial benefit upon society. A trust need not carry out the settlor’s goal but may.

Question 24

Types of trust: Spendthrift trust

Answer 24

A spendthrift trust restricts a beneficiary from transferring their right to future payments or income or principal and bars creditors from attaching the beneficiary’s right to future payments.

Question 25

Types of trust: Discretionary trust

Answer 25

A discretionary trust permits a trustee, in their discretion, to provide to a beneficiary or for the beneficiary’s benefit, all or party of the principal or annual rent income of the trust estate as the trustee sees fit during the beneficiary’s lifetime. A beneficiary’s creditors have the same rights as the beneficiary to take only if the trust exercises the discretion to pay.

Question 26

Types of trust: Support trust

Answer 26

A support trust exists when a trustee is required to use only so much of the income or principal as necessary for the beneficiary’s HEMS.

Question 27

Types of trust: Resulting trust

Answer 27

A resulting trust is implied in fact based on the presumed intent of the parties. If a court finds a restyling trust, the res goes back to the settlor or settlor’s estate.

Question 28

Types of trust: Constructive trust

Answer 28

A constructive trust is an equitable remedy which a court will create as a remedy to prevent fraud or unjust enrichment. When the court creates a constructive trust, the wrongdoer is the trustee and her sole duty is to transfer the property to the intended beneficiary as determined by the court.

Under the duty of loyalty, a trustee must administer the trust for the sole benefit of the beneficiary, and not favor one beneficiary over another.

A court will create a constructive trust when the person has engaged in (1) self dealing, (2) fraud in the inducement or undue influence in the creation of a will, (3) secret trust, or (4) an oral real estate trust.

Question 29

Types of trust: Testamentary trust

Answer 29

A testamentary trust is a trust contained in a will that provides for the distribution of all or party of an estate.

Question 30

Trustee’s duties: Intro paragraph (8)

Answer 30

A trustee has a duty to (1) administer the trust, (2) segregate funds, (3) not to delegate, (4) account, (5) invest, (6) loyalty, (7) earmark, and (8) due care.

Question 31

Trustee’s duties: Duty to adminster

Answer 31

A trustee must administer the trust in good faith and in a prudent manner in compliance with trust terms.

Here, trustee {did/did not] administer the trust in good faith and prudent manner in compliance with trust terms because….

Thus, trustee {did/did not breach the duty to administer.

Question 32

Trustee’s duties: Duty to segregate

Answer 32

A trustee may not co-mingle personal funds or funds from another trust.

Here, trustee commingled [personal funds/funds from another trust] because…

Thus, trustee [did/did not] breath the duty to segregate.

Question 33

Trustee’s duties: duty to not delegate

Answer 33

A trustee may not delegate their duties to a third party or another trustee.

Here, trustee delegated their duties to [third person/another trustee] because ….

Thus, trustee [did/did not] breach the duty not to delegate.

Question 34

Trustee’s duties: Duty to account

Answer 34

A trustee must provide beneficiaries, on a regular basis, a statement of income and expenses of the trust.

Here, trustee [did/did not] provide beneficiaries, on a regular basis, a statement of income and expenses of the trust because…

Thus, trustee [did/did not] breach the duty to account.

Question 35

Trustee’s duties: Duty to invest

Answer 35

A trustee must invest trust assets. There are three acceptable methods to invest: (via state lists, (b) common law prudent person test, and (c) the Uniform Prudent Investor Act.

Here, trustee [did/did not] properly invest trust assets because…

Thus, trustee [did/did not] breach the duty to invest.

Question 36

Trustee’s duties: Duty of loyalty

Answer 36

A trustee must administer the trust for the benefit of the beneficiary, and not favor on beneficiary over another.

Here, trustee [did/did not] administer the trust for the benefit of the beneficiary because…. trustee [did/did not] favor one beneficiary over another because…

Thus, trustee, [did /did not] breach the duty of loyalty.

Question 37

Trustee’s duties: duty to earmark

Answer 37

A trustee must label trust property as trust property.

Here, the trustee [did/did not] label trust property as trust property because..

Thus, trustee [did/did not] breach the duty to earmark.

Question 38

Trustee’s duties: duty of due care

Answer 38

A trustee must act as a reasonably prudent person in dealing with her own affairs.

Here, trustee [did/did not] act as a reasonably prudent person dealing with her own affairs because…

Thus, trustee [didi/did not] breach her duty of due care.

Question 39

Co-Trustee Liability

Answer 39

A co-trustee is liable for the wrongful acts of a co-trustee to which they consent, improperly delegate authority, or fail to take steps to redress a breach.

Here co-trustee [is/is not] liable because…

Question 40

Remedies for breach of trustee duties

Answer 40

A court may grant the following remedies when a trustee violates a duty: (1) award damages, (2) create a constructive trust, (3) trace funds and place an equitable lien on property, (4) ratify the transaction if its good for the beneficiary, and (5) remove the trustee.

Given that trustee has violated the duty to [duty violated], any of the above remedies are available.

Question 41

Trust termination: Revocable trust

Answer 41

Under the majority rule, the settlor must expressly reserve power to revoke a trust for a trust to be revocable. Under the minority view, a settlor has the power to revoke unless the trust is expressly made irrevocable.

Here, the trust is revocable because…

Question 42

Trust termination: irrevocable trust

Answer 42

A trust becomes irrevocable once a settlor dies. An irrevocable trust can terminate when (1) the settlor and all beneficiaries agree to terminate, (2) when all beneficiaries agree to terminate and the material purpose of the trust has been accomplished, (3) by operation of law, or (4) at the time designated in the trust.

Here, the trust [is/is not] irrevocable because…. The settlor and all beneficiaries [have/have not] all agreed to terminate because… All beneficiaries [have/have not] all agreed to terminate and the trust purpose has been accomplished because… The trust [is/is not] terminated by operation of law because… it {is/is not] the time designated in the trust for it to terminate because…

Thus, the trust [has/has not] been revoked.

Question 43

Trust: Income & Principal

Answer 43

A life tenant gets cash dividends, interest income, and net business income. A life tenant must pay for interest on loan indebtedness, taxes, and minor repairs.

Life tenant is entitled to cash dividends, interest income, and net business income. However, life tenant must pay for interest on loan indebtedness, taxes, and minor repairs.

Question 45

Will construction: holographic will

Answer 45

A testator creates a holographic will when they (1) intend the document to be a will, (2) have capacity, (3) handwrite the material provisions, and (4) sign the document. A holographic will need not be witnessed.

A testator has testamentary intent when they sign an interest and understand they are executing a will.

Here…

A testator has capacity when they are at least 18 years old, understand the nature and extent of their property, the testator knows the natural objects of their bounty, and know the nature of their act.

Here…

Material provisions include the gifts and beneficiaries.

Here…

The testator must sign the will.

Here…

Question 46

Will construction: Harmless error

Answer 46

A court may still find a valid will if there is a harmless error made in the execution of a will.

Here, although there is an error in the will because … the error [was/was not] harmless because…

thus, the harmless error doctrine [will/will not] save the will from being invalidated.

Question 47

Capacity: Lack of testamentary intent

Answer 47

A court may find a testator lacked the requisite intent when the testator lacked capacity, suffered from and insane delusion, was defrauded, was subject to undue influence, or there was mistake.

Question 48

Capacity: Insane delusions

Answer 48

A testator suffers from an insane delusion when (1) testator had a false belief, (2) false belief was the product of a sick mind, (3) no evidence supports the belief, and (4) the delusion affected the testator’s will. When the court finds an insane delusion existed, only that part of the will which is affected is invalidated. The affected portion will go to the residuary devisee or, if none, by intestate succession.

Here, the testator [did/did not] have a false belief because… The false belief [was/was not] the product of a sick mind because… not evidence supports this belief because… The delusion affected the testator’s will because…

Thus, testator [did/did not] suffer from an insane delusion.

Question 49

Capacity: fraud

Answer 49

Fraud occurs when there is a (1) representation of material fact, (2) known to be false by the wrongdoer, (3) for the purposes of inducing action or inaction which (4) induces the desired action or inaction. There are three ways to show a testator was the subject to fraud: fraud in the inducement, fraud in the execution, and fraud in preventing a testator from revoking the will.

Question 50

Capacity: Undue influence

Answer 50

There is undue influence when a testator’s free agency is subjugated. There are three ways to establish undue influence: (1) prima facie case, (2) the case law presumption, and (3) statutory presumption. The consequence of undue influence is the affected part of the will is invalidated and the affected part foes to residuary devices, heirs at intestacy, or to a constructive trust, whichever gets the best result.

Question 51

Capacity: Undue influence: prima facie case

Answer 51

A prima facie case of undue influence is met when there is (1) susceptibility, (2) opportunity, (3) active participation, and (4) unnatural result.

Question 52

Capacity: Undue influence: case law presumption

Answer 52

Undue influence under the case law presumption is established when there is (1) a confidential relationship between the testator and the wrongdoer, (2) active participation, and (3) an unnatural result.

Question 53

Capacity: Mistake

Answer 53

A mistake occurs when the testator makes a mistake in (1) content, (2) execution, (3) inducement, (4) description, (5) validity of subsequent testamentary instrument, or (6) regards to living children.

A mistake in content occurs when the wrong beneficiary or gift is named. When the testator committed someone, there is no remedy.

A mistake in execution occurs when the testator signs the wrong document. If the testator mistakenly signs his will believing its a non-testamentary instrument, the will is invalid.

A mistake in inducement occurs when a particular gift is made or omitted based o testators erroneous belief. Generally, there is no relief unless both the mistake and what the testator would have done but for the mistake appear on the face of the will.

Question 54

Changes in property: Abatement

Answer 54

Abatement occurs when a testamentary gift is reduced because the estates assets are not sufficient to satisfy all of the estate’s debts and satisfy all bequests and devises.

Here, the estate assets [are/are not] sufficient to satisfy all of the estate’s debts and satisfy all bequests and devises because…

Thus, the court [is/is not] likely to abate gift.

Question 55

Changes in property: ademption by satisfaction

Answer 55

A gift can be deemed by satisfaction if the will provides for deductions of gifts made while the testator was alive, if both the testator and beneficiary declare in writing that the gift has been satisfied, or the property is given to the beneficiary during their lifetime.

Here, both the testator and beneficiary in writing [ the gift was satisfied/ property was given to the beneficiary in their lifetime] because…

Thus, gift [will/will not] be deemed by satisfaction