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MEET Topics > Trusts/Estates > Flashcards

Trusts/Estates Flashcards

1
Q

Intestate succession occurs when

A
  1. Decedent dies without will
  2. Decedent’s will does not dispose of all of their property
  3. Decedent’s will is denied probate
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2
Q

Intestate where survived by spouse and descendants

A

Surviving spouse inherits one-half or one-third of decedent’s estate with remainder to surviving descendants

UPC: if decendent’s descendants are also surviving spouse’s descendants, entire estate goes to surviving spouse

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3
Q

Not survived by spouse or descendants

A

Decedent’s surviving parents inherit entire estate and if no parents, descendants of decedent’s parents inherit

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4
Q

Intestate distributions

A

When decedent’s estate does not pass to surviving spouse, but instead to descendants then statutes control how distributions are made

Either (1) per capita with representation—modern per stirpes, or (2) per capita at each generation

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5
Q

Per capita with representation (modern per stirpes)

A

Estate divided into equal shares at first generation at which there are living takers; each living person takes share and each share of deceased person at that level passes to descendants

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6
Q

Per capita at each generation

A

UPC and growing number of states: divided at first generation with living takers, but shares of deceased are combined and divided equally among takers at next level

Avoids situations where takers are penalized for having bigger family

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7
Q

Adopted children’s inheritance rights

A

Treated the same as natural child for purposes of intestate succession but cuts off rights from adoptee’s inheritance rights from natural parents unless adoption by spouse of natural parent

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8
Q

Stepchildren and foster children inheritance rights

A

Generally have no inheritance rights unless adoption by estoppel or equitable adoption

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9
Q

Non-marital children

A

All states permit inheritance from mother and from father is allowed if paternity established

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10
Q

Posthumous children inheritance rights

A

Child in gestation at time of decedent’s death inherits as if born during lifetime

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11
Q

Simultaneous death

A

One cannot take as an heir or beneficiary unless she survives decedent

Two approaches (1) Uniform Simultaneous Death Act, (2) 120-hour rule

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12
Q

Uniform simultaneous death act

A

Property passes as though beneficiary or heir died before decedent unless sufficient evidence decedent died first

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13
Q

120-hour rule

A

Beneficiary/heir is only treated as having survived decedent if clear evidence that she survived by 120 hours or more

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14
Q

Slayer Rule

A

Decedent death’s caused by beneficiary; they then forfeit interest in decedent’s estate

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15
Q

Disclaimers

A

One may disclaim interest that otherwise would pass to them from decedent or decedent’s estate which has effect of interest passing as if disclaiming party predeceased decedent

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16
Q

Disclaimer requirements

A

For federal tax purposes, disclaimer must be in writing, irrevocable, and filed within 9 months of decedent’s death

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17
Q

Advancement

A

Gifts made during testator or decedent’s life with intent that gift be applied against any share the heir or beneficiary inherits from decedent/testator’s estate

Common law: gifts automatically deducted from interest

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18
Q

Modern requirement of advancements

A

Recognized as advancement only if
(1) decedent declared intent to make gift an advancement in contemporaneous writing, or
(2) beneficiary/heir acknowledged gift to be advancement in writing

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19
Q

Testamentary capacity and intent

A

For valid will, testator must have capacity and requisite intent

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20
Q

Testamentary capacity

A

For valid will, person executing must be 18 or older and have mental capacity which means they understand act, extent or property, people who are natural objects of bounty, and nature of disposition

Rebuttable presumption

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21
Q

Testamentary intent

A

Must intended that instrument operates as will and this must be present intent

Extrinsic evidence allowed to prove requisite intent or lack thereof

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22
Q

Wills

A

Instrument directing disposition of person’s property when they die

Has no legal effect before death and may be revoked or amended until death

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23
Q

Reqs of a will

A
  1. In writing
  2. Signed by testator, any mark intended is sufficient
  3. Signed by at least two witnesses
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24
Q

Attestation clause

A

Included immediately between testator and witness signatures setting forth above required elements and that they were met

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25
Q

Witness reqs

A

Must be competent (sufficient maturity and mental capacity to understand and appreciate nature of what they witnessed)

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26
Q

Interested witnesses common law

A

Entire will could not be probated, abolished in every state

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27
Q

Interested witnesses majority rule

A

Will is valid but gift to witness beneficiary is void unless (1) two other disinterested witnesses, or (2) interested witness would take if no will

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28
Q

Interested witness UPC

A

Presence does not invalidate anything

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29
Q

Codicil

A

Amendment, modification, or alteration to previously executed will

Same formalities are required and, when met, original is republished and executed on date of codicil

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30
Q

Holographic will

A

Handwritten, unwitnessed will

Not recognized everywhere

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31
Q

Holographic will reqs

A
  1. Testator’s writing, at least material portions
  2. Signature
  3. Reflect intent to make will

Revokes any prior valid will

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32
Q

Separation of will documents (integration)

A

Issue can arise where part of will becomes separated

Test: integrated into will if (1) document was physically present at time of execution, and (2) testator intended to include

Reqs presumed if physical connection of pages

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33
Q

Acts of independent significance

A

Will can dispose of property by reference to acts or events occurring after testator executes will IF act or event has some independent significance during testator’s lifetime other than providing gift in will

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34
Q

Identifying beneficiaries and property

A

Future act or event can involve identifying beneficiaries like each person employed as gardener or all cars

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35
Q

Incorporation by reference

A

Docs intrinsic to will may be incorporated by reference into will

36
Q

Incorporation by reference reqs

A
  1. Intent to incorporate
  2. Authenticated document: sufficiently described to be authenticated
  3. In existence upon will execution unless it relates to tangible property if signed and items described to whom they are devised with reasonable certainty
37
Q

Revocation by testator

A

If testamentary capacity to make valid will then can revoke at any time before their death

38
Q

Revocation by written instrument

A

Will or any part of it can be revoked or changed if intent to revoke and formalities

39
Q

Revocation by physical act

A

Will may be revoked in most states by burning, tearing, or otherwise destroying the will

  1. Present intent required
  2. Act by another (revocation by proxy) is fine if done at testator’s direction and in their presence
40
Q

Partial revocation

A

May be accomplished by making marks of cancellation on will in most states

41
Q

Revocation by operation of law

A

Upon happening of certain events, usually involving marital status or children

42
Q

Marriage following execution of will

A

No effect on existing will in most states

UPC: omitted spouse takes share of decedent’s estate equivalent to what their intestate share would be unless it was clear intent to omit

43
Q

Divorce following execution of will

A

Revokes all bequests made in favor of former spouse, unless will expressly provides otherwise and treats former spouse as predeceased

44
Q

Pretermitted children

A

Will does not provide for children born or adopted after will

Most states give equal to what they would have received through intestate succession

45
Q

Revival of will

A

Where will revoked, and revoking instrument is revoked then original presumptively valid unless clear intent not to do so

46
Q

Dependent relative doctrine

A

Court disregards revocation done to create alternative disposition but based on mistake of fact or law if (a) premised on some mistake of fact or law, (b) revocation would not have happened absent this mistake, and (c) originally revoked is closer to what testator wanted

47
Q

Lapsed

A

Gift provided in will lapses where beneficiary predeceases testator and, absent anti-lapse, gift goes back into estate

48
Q

Anti-lapse statutes

A

Gift that would otherwise lapse vests in predeceased beneficiary’s descendants who become substitutes if predeceased was relative of testator and had descendants

49
Q

When anti-lapse elements not fulfilled

A

Common law: lapsed gift passes to testator’s heirs

Modern: residuary beneficiaries who survive testator and deceased beneficiary take

50
Q

Class gifts where there is predecease

A

If will makes gift to class and class member predeceases, surviving class members take absent an alternative provision in will unless anti-lapse applies

51
Q

Ademption

A

Gift fails if no longer in estate at time of death, applying to specific devises only

52
Q

Intent theory states exception to ademption

A

Adeemed bequest saved if evidence suggests ademption would be inconsistent with intent

53
Q

Abatement

A

Where estate’s value is insufficient to pay its obligations and provide for disposition of property, it must reduce gifts to pay obligations and satisfy

54
Q

Order of abatement

A

Property not disposed of by will
Residuary estate
General devises
Specific devises

55
Q

K involving will

A

Valid Ks to make, not make, or revoke wills generally enforceable, governed by K law so K requirements must be satisfied and generally needs to be in writing

56
Q

Common grounds for contesting will

A

Lack of capacity or testamentary intent, defective execution, undue influence, fraud, mistake, or revocation

57
Q

Standing to contest will

A

Only those who have pecuniary interest have standing

58
Q

No-contest clauses

A

Clause providing that beneficiary loses interest under will if they contest it but does not apply to suits challenging executor appointment, jurisdiction, or asking court to interpret

Majority: no forfeiture of interest if good faith and probable cause
Minority: given full effect

59
Q

Undue influence

A

Invalid if executed while testator subject to undue influence effectively overriding testator’s free will

Requirements: (a) influence exerted, (b) mind and free will overpowered, and (c) will would not have been executed absent influence

Presumed if special relationship like attorney-client, or significant participation in execution

60
Q

Mistake

A

Nature of instrument: what it is person is signing, extrinsic evidence allowed

In inducement: relates to reason made will or gift, no relief

Omission: no relief or extrinsic

61
Q

Reformation for Mistake

A

UPC allows court to reform terms of will to conform to testator’s intent

Must show by clear and convincing evidence that mistake of law/fact affected will and testator’s intent

62
Q

Inter vivos gift

A

Non-probate; gift given by living person to another living person

Requirements include intent, delivery, and acceptance

63
Q

Totten trust or POD account

A

Deposit in one’s own bank account held in trust for another, creates valid revocable trust either by withdrawing all funds of revoking trust by will

64
Q

Life insurance

A

K between insurance and policyholder

Unless K provides otherwise, policyholder cannot change beneficiary through will provision

65
Q

Power of appointment

A

Authority granted to person enabling them to designate new owner of property and how they take

General: donee can exercise in favor of anyone
Special: power exercisable in favor of limited class of appointees

66
Q

Executor

A

Named in will as personal representative to carry out administration of decedent’s estate and, if no one, court appoints

67
Q

Living will

A

Specifies life-sustaining and pain-alleviating measures

Created, generally, in writing, signed by testator, and witnessed by two adults

Revocable

68
Q

Durable healthcare power of attorney

A

Document that appoints individual as an agent to make decisions on behalf of principal if become incapacitated

69
Q

Trust

A

Fiduciary relationship where trustee holds legal title to property for benefit of designated beneficiaries

Created by settlor; generally, revocable

70
Q

Express trust

A

Created with express intent either private, for benefit of certain defined or ascertain able persons, or charity, for benefit of indefinite class or public generally

71
Q

Resulting trust

A

Implied or imposed by law when express trust fails for some reason; settlor becomes beneficiary and if dead, then to settlor’s estate

72
Q

Constructive trust

A

Not trust; equitable remedy used in cases to rectify unjust enrichment or wrongful conduct

73
Q

Valid express trust requires

A
  1. Settlor has capacity to convey
  2. Settlor has clear present intent to create trust
  3. Competent trustee with duties
  4. Definite beneficiary (specifically identify, or how beneficiaries will be ascertained)
  5. Present and clear disposition of settlor’s specific property in trust
  6. Valid trust purpose
74
Q

Inter vivos trust

A

Creation requires transfer of property or declaration of trust and then property must be delivered

If land is property, then must be in writing for SoF

75
Q

Testamentary trusts reqs

A

Created by will and must include intent, essential terms, and identification of beneficiaries by either

  1. Terms of will itself
  2. Incorporation by reference
  3. Power of appointment
76
Q

Pour-over provisions

A

Provision that devises property to previously existing trust

77
Q

Powers of trustee

A

Exercise powers expressly or impliedly conferred; has powers necessary and appropriate to properly invest, manage, and distribute trust property

78
Q

Duties of trustee

A
  1. Duty to administer trust in good faith and prudent manner
  2. Duty of loyalty, no self-dealing
  3. Duty to report to beneficiaries
  4. Duty to separate trust property and keep records
  5. Duty to enforce claims and defend trust
  6. Duty to preserve property and make it productive
79
Q

Discretionary trust

A

Trustee has absolute power and discretion to make decisions regarding distribution

Beneficiaries have no right to income until trustee exercises discretion to distribute; creditors of beneficiary cannot reach unless served with process

80
Q

Support trust

A

Directs trustee to pay beneficiaries from trust as much as is necessary for beneficiary’s support

Creditors of beneficiary cannot touch

81
Q

Spendthrift trust

A

Prohibits beneficiaries from transferring their interests in the trust

Beneficiary’s creditors cannot reach but once distributed, they can

82
Q

Charitable trust

A
  1. Indefinite beneficiaries required: reasonably large class, unnamed and changing over time
  2. Charitable purpose: benefit public, effect of gift not motive controls
  3. Can be perpetual: RAP does not apply

Modification: trust property can be applied to different charitable purposes

83
Q

Termination of trusts (automatic)

A

At expiration of specified term, or when purposes have become accomplished, unlawful, impossible, or contrary to public policy

84
Q

Revocation and/or modification of private trusts

A

By settlor: modify or revoke unless terms expressly prohibit

By beneficiaries: modify or revoke upon consent of settlor and all beneficiaries, or without settlor consent if would not frustrate material purpose of trust

Remember, all beneficiaries include unascertainable ones

85
Q

Cy Pres

A

For charitable trusts, allows court to modify terms to as near as possible as settlor’s original intent

MEET Topics (7 decks)

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