Trusts & Estates

Question 1

INTESTATE SUCCESSION: DECEDENT IS SURVIVED BY ONLY A SPOUSE

Answer 1

In most states, if the decedent is survived by ONLY a spouse (no descendants), the surviving spouse will inherit the entire estate.

However, some states provide that a certain portion of the estate will be given to the decedent’s parents and the parents’ issues.

Question 2

INTESTATE SUCCESSION: DECEDENT IS SURVIVED BY A SPOUSE AND DESCENDANTS

Answer 2

In most states, if the decedent is survived by a spouse AND descendants, the surviving spouse will inherit one-half or one-third of the decedent’s estate with the surviving descendants inheriting the rest. Under the

Uniform Probate Code (UPC), the surviving spouse will inherit the entire estate IF ALL of the descendants are descendants of the surviving spouse.

Question 3

INTESTATE SUCCESSION: DECEDENT IS NOT SURVIVED BY A SPOUSE OR DESCENDANTS

Answer 3

In most states, if the decedent is NOT survived by a spouse OR descendants, the decedent’s surviving parents will inherit the entire estate equally. If there are NO surviving parents, the descendants of the decedent’s parents will inherit the estate (i.e., the decedent’s brothers/sisters, nieces/nephews, and their descendants down the line).

Question 4

Strict Per Stirpes

Answer 4

When a child predeceases a parent who later dies intestate:

Under the common law strict per stirpes approach, the estate is divided by the number of members in the first generation of children who are either alive or survived by descendants. Each member who is alive takes their share, and the shares of the deceased members drop to the next generation. This process is repeated for the next generations until every share is taken.

Question 5

Modern Per Stirpes

Answer 5

When a child predeceases a parent who later dies intestate:

Under the modern per stirpes approach, the estate is divided equally among the living and deceased at the first generation that has a living taker. Each member who is alive takes their share, and the shares of the deceased members drop to the next generation. This process is repeated for the next generations until every share is taken.

Question 6

Per Capita

Answer 6

When a child predeceases a parent who later dies intestate:

Under the UPC per capita at each generation approach, the estate is divided at the closest generation to the decedent in which one or more of the descendants are alive. However, shares of the deceased descendants on each level are added together and divided equally among all representatives of the deceased descendants in the next generation level (shares are dropped by “pooling” method).

Question 7

Incorporation by Reference

Answer 7

Incorporation by reference deals with the incorporation of extrinsic documents into the will (rather than pages or portions of the original will). In most states, a document or writing may be incorporated into a will by reference if:

1. The testator intended to incorporate the document into the will;
2. The document was in existence at the time the will was executed; AND
3. The document is sufficiently described in the will

Question 8

Devises to Classes

Answer 8

A testator may devise property to a class of individuals (e.g., “I leave $20,000 to be divided equally among all my children.”). A class may increase or decrease in number until the testator’s death. If a member of the class predeceases the testator, her share is split evenly among the remaining members of the class (i.e., it does NOT lapse into the residue).

Question 9

Lapsed Legacies & Anti-Lapse Statutes

Answer 9

If a beneficiary named in a will predeceases the testator, absent an alternate disposition of the devise specified by the testator, the devise lapses into the estate’s residue UNLESS the jurisdiction’s anti-lapse statute preserves the devise for the beneficiary’s descendants
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Under an anti-lapse statute, devises will vest in the descendants of the predeceased beneficiary if the predeceased beneficiary:

1. Is a blood relative of the testator; AND
2. Has descendant(s) who survive the testator.

Question 10

Will Execution (Witnesses and Interested Witnesses)

Answer 10

A will is valid if the specific formalities provided by state law are met. Generally, these formalities require a valid will to be:

In writing;
Signed by the testator; AND
Signed by at least two witnesses

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The witnesses must sign the will in the testator’s presence within a reasonable amount of time after witnessing the signing of the will. Under the UPC, a valid notary can satisfy the dual-witness requirement.

Under the traditional view, a witness signs the will in the testator’s presence if she signs the will within the testator’s line of sight [e.g., cannot be in another room down the hall from the testator].

Under the modern view, a witness signs the will in the testator’s presence if she signs the will within the testator’s range of senses (e.g., may be in another room down the hall if the testator can still hear the witness).

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Under the common law, the signing of the will MUST be witnessed by two disinterested witnesses (individuals who do NOT receive any benefits under the will).

However, virtually every state has abolished this common law rule and allow interested witnesses to validly witness the signing of a will. In a minority of states, the interested witness forfeits his inheritance UNLESS two additional disinterested witnesses serve as valid witnesses to the will. Still, some states only allow interested witnesses to inherit their intestate share of the estate.)

Question 11

Revocation by Will by Physical Act

Answer 11

A will is revoked if the testator, or another person in his presence and at his direction burns, tears, obliterates, or destroys the will WITH the intent to revoke the will.

Under the common law, words of cancellation are valid ONLY IF they come in physical contact with the words of the will [e.g., words of cancellation are written over the original terms of the will]. Under the UPC, words of cancellation need NOT touch any of the words of the will, but they must be somewhere on the will to validly revoke.

Question 14

Trust Creation

Answer 14

A trust is a fiduciary relationship between the trustee(s) and the trust beneficiaries. When a trust is created, title to property is divided between legal and equitable title:

The trustee holds legal title to the property and becomes the owner of record for the property.
The beneficiary holds equitable title to the property and is entitled to the financial benefits of the property.

Question 15

Express Trust vs. Implied Trust

Answer 15

An express trust is created when a person has the intent to create a trust and complies with the requisite formalities to create that trust.

An implied trust is created by conduct, regardless of whether there was intent to create a trust (e.g., constructive trusts imposed by courts).

Question 16

Elements of Express Trusts

Answer 16

A valid express trust is created if the following five elements are met:

1. The settlor has intent to create the trust;
2. There is trust property (i.e., the res);
3. An ascertainable beneficiary exists;
4. The trust has a trustee; AND
5. All parties comply with the requisite formalities.

Question 17

Modification of Trusts by the Parties

Answer 17

Generally, a trust is irrevocable and CANNOT be modified unless the settlor retained the right to do so in the terms of the trust instrument. However, in a minority of jurisdictions, the settlor is free to modify or revoke the trust instrument WITHOUT express authorization to do so.

Question 18

Termination of Trusts

Answer 18

Generally, a trust may be terminated if:

1. The trust is revoked or expires pursuant to its terms;
2. The material purpose of the trust has been satisfied or becomes unlawful, contrary to public policy, or impossible to carry out;
3. The settlor and all of the beneficiaries unanimously agree to terminate;
4. All of the beneficiaries agree and no material purposes for the trust remain;
5. Termination will further the purpose of the trust due to circumstances that were not foreseen by the settlor; OR
6. The court or trustee determines that the value of the trust property is too low to justify the cost of administration.