Trusts & Estates Flashcards
duty of loyalty
a trustee owes a duty of utmost loyalty and good faith to the beneficiaries in carrying out his obligations under the trust. a trustee is prohibited from self-dealing in any manner, even if done in good faith, with trust assets, and is ordinarily precluded from obtaining any personal benefit other than the agreed-upon or statutory fees as a consequence of his position.
duty of care
a trustee must exercise care in the administration of the trust. he must exercise that degree of care, skill, and prudence with respect to trust assets as would a reasonably prudent businessperson with respect to his own affairs and property. the duty of care incumbent upon a trustee includes the obligation to take reasonable steps to protect and preserve the trust estate, including obtaining necessary insurance.
duty to administer trust according to applicable law
a trustee has a duty to administer the trust according to applicable law. the uniform principal and income act specifies the distribution of receipts between trust principal and income. all ordinary expenses, including ordinary repairs are allocaed to trust income. however, extraordinary repairs are allocated to principal. an extraordinary repair is one necessitated by an unusual or unforeseen occurrence and which is beyond the usual or regular kind.
testamentary intent
to validate a will, the testator needs testamentary intent when making the will, meaning the document was intended to dictate the distribution of their property post-death. The court determines this intent by examining the document, the testator’s words and actions, and the circumstances of the will’s execution.
testamentary capacity
needed when creating a will. being at least 18 years old at the time of execution, having awareness of expected heirs (natural objects of their bounty), understanding their property’s full extent, and comprehending the legal implications of creating a will.
attested will
a formal attested will needs testamentary intent and capacity from the testator, and must adhere to statutory formalities: be in writing, signed by the testator, acknowledged by the testator in the presence of at least two witnesses who sign the document during the testator’s lifetime, and recognized by the witnesses as the testator’s will.
holographic will
under the UPC, a holographic will or codicil, a handwritten and unattested will, may be considered valid, even if not traditioinally witnessed, as long as the signature and the material provisions are in the testator’s handwriting. the testator’s testamentary intent and capacity are also required.
revocation by subsequent instrument
a will can be partially or fully revoked by a subsequent will, a codicil, or by implication. revoking instruments, such as a codicil or holographic will, must follow the original will’s formalities during execution.
revocation by physical act
a testator can revoke a will through a physical act, like burning, tearing, or otherwise destroying the document, assuming the simultaneous intent to revoke. for revocation by tearing, a material part of the will must be torn.
