Trusts/Wills Flashcards
Trust?
fiduciary relationship where
a trustee holds a legal title to property
for benefit of trust’s beneficiary
- Creation: (1) someone (grantor/settlor/donor/testator) transfers legal title to property to trustee, who administers trust in accordance w/ settlor’s wishes for benefit of beneficiaries
- Not a bailment [deliver goods to a bailee, w/o transfer of ownership]
Types of Trusts:
Express vs. Implied?
Express trusts: from property owner’s intention; 2 types:
- Private express trusts
- Charitable trust
Implied trusts: created by operation of law (trusts are equitable remedies.); 2 types:
- Resulting trusts: places prop in hands of rightful owner when circumstances require it, even though there has not been any wrongdoing on anyone’s part
- Constructive trusts: deprives wrongdoer from retaining improperly obtained prop. (Result of fraud or unjust enrichment)
Parties to a Trust?
Settlor
Trustee (legal interest in trust property)
Beneficiary (equitable interest in trust property)
Settlor?
creates trust by transferring assets to a trustee AND
manifest intent to create a trust relationship
Self-settled trust?
Person who created the trust, Settlor, is also a beneficiary of the trust; aka “settlor’s ‘declaration of a trust’“
- A spendthrift or discretionary provision will not bar any of the settlor’s creditors; When there’s a self-settled trust, the settlor’s creditors can reach the maximum amount that can be distributed to or for the settlor’s benefit.
- Declaration can be oral, unless trusts assets include real prop [SoF requires writing], but need proof prop being held in capacity as trustee
Trustee?
legal owner of trust property, who holds it for benefit of beneficiaries
- Legal title to, responsibility for, and the management of the trust property resides in the trustee
- Must always be a beneficiary that can enforce the trust against the trustee
- Settlor can be the trustee, if there is a beneficiary in existence who can enforce the trust against the trustee.
- Settlor may also be the beneficiary of the trust.
- However, settlor cannot be the only trustee & beneficiary, because there is no one to enforce the trust against the trustee. [b/c can’t enforce obligation against yourself]
- If a sole trustee is the sole beneficiary, the trust will collapse because the interests will merge.
- Failure to designate a qualified trustee won’t necessarily destroy the trust.
Trustee Duties?
- fiduciary of trust
- must be given some active duties to direct him with respect to trust property in order for trust to be valid; w/o active duties: it is a “passive” or “dry” trust, and title to the trust assets will pass directly to the beneficiaries
- Duties do not have to be spelled out, but need a direction that a court could reasonably interpret his duties
No trustee designated/incompetent/dies: court will generally appoint a trustee …only time courts won’t step in is if settlor stated otherwise …”don’t replace”
Co-Trustees?
2+ persons have been named as trustees,
deemed joint tenant
- will may override this & name a successor trustee
- Co-trustees who are unable to reach a unanimous decision may act by majority decision
- Losing trustee may formally dissent, and avoid liability [filing notice of dissent]
Beneficiary?
the equitable owners of the trust property
General Rights of the Parties in a Trust?
- Rights of Settlor: no longer owns assets; therefore, no rights exist
- Rights of Trustee: adhere to the terms of the trust with respect to the trust assets for the benefit of the beneficiaries; legal title to trust property
- Rights of Beneficiaries: use and enjoyment of the property as distributed; equitable title to trust property
A valid trust requires:
- Present intent to create a trust
- Delivery of trust property to the trustee
- Ascertainable beneficiaries
- Active duties for the trustee
- Proper trust purpose [lawful]
- Trustee
Precatory Language regarding Trust Creation?
language insufficient to create a trust; precatory is defined as a request and trusts are demands/direction (e.g., these assets are given to Shayla in hopes[I would like] that she distributes them toward Asia’s college education)
- Exception: Even though the language is precatory, there is so much specificity, the courts will interpret it as mandatory. (Ex: $5000 to Asia. Joe would like Shayla to invest the money in an annuity that will pay $200/month to Asia.)
To create a trust, a settlor must have _________ intent.
present intent
- Ex: “I will put $5000 in trust for Terry next week” does not create a trust. It is a mere promise not supported by consideration.
If a trust states that it will name
the beneficiaries later, it is a _________.
resulting trust
- Resulting trusts: places prop in hands of rightful owner when circumstances require it, even though there has not been any wrongdoing on anyone’s part
- In Florida, if a trust fails for a lack of a beneficiary, then a resulting trust will be presumed in favor of the settlor or her successors.
If the settlor does not own the trust property and then subsequently buys the property, is a trust created?
No
cannot have a present intent for unknown property
What cannot be trust property?
- mere expectations
- unearned profits
- debt owed by the trustee [can’t sue yourself]
There must be some certainty over what is the trust property.
Must a trust must have ascertainable beneficiaries?
YES
- “To my friends” is too vague.
- “To my family” is also vague, but the courts will interpret it to mean heirs.
- If Settlor provides objective standard by which to identify beneficiaries, then those beneficiaries are ascertainable.
- a) Must provide a reasonable basis [Ex: Hold property in trust for “person who provided best health care for me before my death.”]
- b) Court will defer to trustee’s discretion unless: its arbitrary, capricious or acted in bad faith
- Trust may give trustee right to invade trust corpus for benefit of beneficiary subject to his discretion.
- Trust may give partial or total discretion.
Discuss Active Duties with respect to a trust?
- Must have active duties, if not it becomes “passive” or “dry” and that person must transfer legal title to beneficiary and end trust
- Duties do not have to be spelled out, but need a direction that a court could reasonably interpret his duties
Trust Purpose?
CAN’T BE: illegal, violate R.A.P. or against public policy
- Against public policy: ex. (1) encourage divorce [can end trust based on a subsequent divorce]; OR (b) prevent marriage [unless it’s a SS]
- When trust purpose violates public policy:
- delete obnoxious language
- what would Settlor have wanted had he known provision was in violation of public policy
Testamentary trust?
created by Testator’s valid will
- Even if a will is valid, there may be problems with trust.
- Wills frequently contain “pour over” provisions that direct the transfer of the decedent’s property into a trust established either by the testator during his lifetime or by another person.
Totten Trusts?
Arrangement with a bank that allows the depositor to open a bank account in his own name, as trustee for other parties.
- Only right beneficiary has: take what is left in the account when the trustee dies, if the beneficiary is alive [allows the property to bypass probate]
- The account holder can use the account as she wishes during her lifetime (adding to, withdrawing from, or even closing the account).
Limits on Trust Duration (Florida)?
- All trusts must comply w/ Rule Against Perpetuities–No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest; OR
- The interest either vests or terminates within 360 years after its creation.
Trustee owes a duty of _________________ to the beneficiaries in carrying out her obligations under the trust.
utmost loyalty and good faith
Trustee is prohibited from?
-
Self-dealing [NO borrowing or lending/buying or selling assets to trust]
- Any profits earned from self-dealing w/ trust belong to the trust.
-
Obtaining a personal benefit other than agreed upon or statutory fees as a consequence of his position
- Bonus, fee, or other benefit for trust business is strictly prohibited. All free gifts recieved, e.g. free TV, must be deposited into trust
- Conflict of interest with respect to trust & 3rd parties
-
Entering into transaction w/ beneficiaries of trust she is administering
- Only be allowed if:
- A) if all pertinent/mat’ facts known to trustee are disclosed
- B) all transactions must be fair when viewed objectively (Even when dealing w/ non-trust assets)
- Only be allowed if:
Affirmative Duties re: Trust Assets?
-
Trustee has affirmative duty to preserve and enhance trust property
- Prudent Business Person Rule: trustee must use a degree of skill and care & prudence that would be used by a business person in his own personal affairs (Trustee w/ superior business expertise/professional fiduciary: held to their profession’s standard)
- Trustee is obliged to attempt to utilize trust property in a productive manner; subject, at all times, to the obligation to be prudent.
- Trustee should diversify the trust’s portfolio.
- Acceptable items include: gov’t or highly rated bonds, mutual bonds
- Investments that will be questioned include: penny stocks, commodities, derivatives
-
Trustee generally may not delegate his duties
* Trustee MUST: be diligent in selecting his advisor for investment decisions & inform beneficiaries of the delegation.
Trustee’s Liability?
totally accountable for
any loss that arises from his breach,
AND any benefit gained is to be given to the trust.
He may also be subject to punitive damages
If trustee uses trust assets to buy property
and it increases in value, he must?
return both the trust property
and
the appreciation in value
When a trustee breaches his duty of care in investing,
he must?
replace trust for lost value,
but he cannot offset money lost by money earned.
A trustee will be ________ for any lost interest.
responsible
A trustee ordinarily has no liability for breaches of duty by the trustee whom he succeeds, except where the successor-trustee is?
aware of bad transaction & doesn’t take steps to defend it
3 ways a trustee can be relieved of liability for potentially wrongful acts?
- Exculpatory clause: provision in a trust instrument relieving trustee of liability
- Beneficiary had (1) full knowledge of material facts and (2) expressly approved of complained-of action by trustee, can ratify transaction, then trustee is NOT liable
- Beneficiaries knew and said nothing: may be estopped
Removal of Trustees?
Resignation?
- Trustee may be removed for cause, such as a breach of duty or if he has become incapacitated. [not mere dislike]
- Once Trustee has accepted appointment to his position, he can resign at any time, and a successor trustee: has all the rights of original trustee
Are beneficiaries’ interests alienable?
freely assignable/alienable
(in absence of a restrictive provision to the contrary)
Beneficiaries’ Interests:
Support?
directed to provide only
so much income and/or principal of the trust
as is necessary
for the latter’s support and for no other purpose
Beneficiaries’ Interests:
Spendthrift provision?
states beneficiary cannot voluntarily transfer his property and a creditor cannot attack it. Makes it INALIENABLE.
These are not absolute & cannot be used to defeat a claim of:
- alimony or child support
- furnished necessities to beneficiary
- gov’t to satisfy tax claims
Settlor’s Interests?
has no interest in trust unless he has reserved it or has made himself a beneficiary of the trust
- Settlor cannot make his own interest subject to a spendthrift provision
- Settlors often reserve right to revoke the trust
- creditor cannot force him to revoke, but a bankruptcy court could
MODIFICATION OR TERMINATION OF TRUSTS:
Termination by Settlor?
- Unless terms of a trust expressly provide that trust is irrevocable, settlor may revoke or amend trust.
- Settlor may terminate an irrevocable trust: all of beneficiaries are in existence & agree to termination
If the sole trustee becomes the only beneficiary?
The trust is terminated by merger
& beneficiary becomes owner of the trust assets
MODIFICATION OR TERMINATION OF TRUSTS:
Termination by Operation of Law?
Trust terminated by operation of law where:
- Accomplished by the mat’l purposes of the trust have become illegal, impossible, or impracticable;
- Trust res has been consumed, destroyed or lost; or
- Trust’s purpose have been fully accomplished
MODIFICATION OR TERMINATION OF TRUSTS:
Administrative Deviations?
if unforeseen circumstances, frustrate or substantially impair a mat’l purpose sought to be accomplished by the trust ► trustee may deviate from administrative provisions as necessary to accomplish settlor’s purposes
- Administrative deviance doctrine may not, however, be used to change the beneficial interests in the trust.
MODIFICATION OR TERMINATION OF TRUSTS:
Termination by Beneficiaries After Settlor’s Death?
After settlor’s death, trust can only be terminated before period specified by settlor has expired if approved by court based on whether
- purposes of trust has been accomplished &
- all beneficiaries approve such termination
spendthrift clause, then cannot terminate
MODIFICATION OR TERMINATION OF TRUSTS:
Natural Expiration?
when trust was to be in operation for a specified number of years or until the occurrence of a prescribed event, and that period of time has elapsed of the incident has occurred, the trust will terminate
TRUSTS ARISING BY OPERATION OF LAW:
IMPLIED TRUSTS:
Any time a resulting or constructive trust arises, it means?
the trust will end, because it has no duties or named beneficiaries [remedies given by courts of equity]
TRUSTS ARISING BY OPERATION OF LAW:
IMPLIED TRUSTS:
Resulting trusts?
arise when: express trust
makes incomplete disposition of an equitable interest or
equitable interest fails after property is given to trustee
- Trust reverts back to settlor/his estate
- Florida: trust may be enforced by an individual named in trust instrument, or by court, to oversee the trust.
- A resulting trust creates a reversionary interest in the settlor
TRUSTS ARISING BY OPERATION OF LAW:
IMPLIED TRUSTS:
Constructive Trusts?
an equitable remedy, whereby a trust is erected on holder of specific property to redress wrongdoing OR prevent unjust enrichment
- a) Typically imposed when property has been wrongfully obtained.
- b) Purpose is to oblige holder of property to divest himself of it & transfer it to the person entitled to that asset.
- c) In a possible answer: Say that a court will “raise,” “erect,” or “impose” a constructive trust.
- Ex: Widowed father tells Son that he will hold Son’s property for Son so that Son will not mismanage it while in college. Son transfers property to Father based on this promise. Father, however, needs the money for his new girlfriend. He later refuses to return the money to his son. Son can sue to have a constructive trust imposed over the son’s property that the father is holding. If the court imposes a constructive trust, the person holding the property, the constructive trustee (Father), has a duty to return the property to the person entitled to it, either the transferor or an intended beneficiary, in this case, Son.
CHARITABLE TRUSTS:
Distinguishing Characteristics?
- Charitable purpose
- Indefinite beneficiaries
- Exemption from RAP
- Use of cy pres doctrine [trust doesn’t end]: court could allow trust to continue with a similar charitable purpose.
CHARITABLE TRUSTS:
Charitable purpose?
- relief of poverty
- advancement of religion
- advancement of education
- promotion of health
- other purpose that benefits the community
- Charitable purpose can be broad if trustee is constrained to use trust exclusively for that objective. [use money for charity]
- Distinguish b/w a charitable purpose & benevolent[kindly] purpose.
merely helping others is insufficient
CHARITABLE TRUSTS:
Cy Pres?
If settlor’s exact charitable purpose cannot be carried out, court MAY direct application of trust property to another charitable purpose that approximates settlor’s intention.
- Cy pres FACTORS: (1) accomplished or impossible; & (2) settlor has shown a genuine charitable intent
- If settlor provided for “gift over” in event charitable purpose cannot be accomplished, this is ordinarily viewed as an indication settlor lacked a general charitable intent.
- A non-charitable gift-over will likely fail as violating the R.A.P.
- If it comes back to settlor as a resulting trust, it is vested at its inception & will not violate Rule Against Perpetuities.
- A non-charitable gift-over will likely fail as violating the R.A.P.
Decedent?
Estate?
Probate?
Non-probate assets?
Consanguinity?
- Decedent: deceased person
- Estate: real & personal property decedent leaves at death
- Decedent’s probate [administration]: process distributing assets of the decedent’s estate
- Probate: process of legally establishing the validity of a will before a judicial authority
-
Non-probate assets: do not require a will or intestacy to pay to others upon death [joint tenancy, life insurance, pension plans, trusts]
- Exception: life insurance policy beneficiary is decedent’s estate
- Consanguinity: blood relationship b/w persons
TIP: On Bar exam, distinguish b/w probate assets & non-probate assets.
Testate?
Intestate?
Partial intestacy?
Heirs?
Issue/descendent?
Devise/legacy/bequest (to a devisee)?
- Testate: person dies with a will
- Intestate: person who dies w/o a will
- Partial intestacy: portion of Decedent’s estate is not testate
- Heirs: persons, including surviving spouse & state, entitled under statutes of intestate succession to property of Decedent
- Issue/descendent: all lineal descendants from an ancestor in any degree
- Devise/legacy/bequest (to a devisee): testamentary disposition of real or personal property [gift]
Testacy proceeding?
proceeding to establish a will OR determine intestacy
- FL: Heir must survive Decedent by a single second to take as an heir or devisee [if not, treated as having predeceased decedent for purposes of succession]
Order of Intestate Dstribution?
- Surviving Spouse
- Descendants
- Parents
- Siblings ► nieces & nephews
- Grandparents ► Uncles & Aunties (1/2 goes to decedent’s paternal kindred; 1/2 goes to decedent’s maternal kindred)
- In-Laws (widowed decedent’s stepchild may inherit through intestacy if Decedent had no relatives of his own to inherit)
- Escheats to State
INTESTATE DISTRIBUTION:
Surviving Spouse but NO Descedents?
SS takes entire intestate estate
INTESTATE DISTRIBUTION:
Escheat
no party entitled to inherit under statute,
property escheats to the state
INTESTATE DISTRIBUTION:
No SS or SS Not Entitled to Take,
then estate property passes in following order:
Pass in following order:
-
Survived by descendants: Intestate estate passes by representation [per capita] to decedent’s descendants, estate divided into as many equal shares as there are descendants
- a) If descendants[multiple] predecease w/ their own descendants: descendants’ descendants in same generation nearest to decedent, will combine total shares of descendants’ into one share and split it evenly.
- b) If descendant predeceases decedent and does not have descendants to take their share: its as though descendant was never born
- Survived by only parents: intestate estate to parents to split equally
- If the decedent is survived by neither spouse, descendant, nor parents: goes to ascendant’s descendant’s [by representation to brothers & sisters]
- grandparents
Special Problems of Intestate Distribution:
Adopted Children?
- Transplantation theory w/ regard to adopted children. Adopted child loses any relationship w/ natural parents & is treated as natural born child of adoptive parents. [adoptive parent become natural parents]
- Generally adopted person loses all rights to inherit from or through natural parents (birth parents)
- If a natural parent dies & child later adopted by surviving parent’s new spouse: child is still an heir of decedent & adoptive parent
- If natural parent remarries & consents to adoption of his child by his new spouse: adopted child has right to inherit from both of his natural parents and adoptive parent.
-
Adoption by estoppel/Equitable/virtual adoption:
- Person promised to adopt the child, allowed the child to live with her, treated the child as adopted, but died before adoption – child can inherit.
- Must provide clear and convincing evidence
- Does NOT block child’s right to inherit through birth parents
Special Problems of Intestate Distribution:
Stepchildren?
have no inheritance rights unless they’re adopted,
Unless, can prove adoption by estoppel
- Adoption by estoppel: attempt to adopt thwarted by technical defect, or stepparent Ks w/ natural parents to adopt but for some reason does not
Special Problems of Intestate Distribution:
Half-blood Relatives?
siblings of decedent by only one of his parents;
they take by representation in half [as child of one parent]
- Relative with only one common parent or grandparent
- Only collateral relatives can be half‐bloods
- When intestate decedent dies with both whole‐blood and half‐blood heirs:
- Half‐blood heirs take 1/2 as much as whole‐blood heirs.
Special Problems of Intestate Distribution:
Non-marital Children?
born out of wedlock, considered child of his mother & her kindred for purposes of the intestate inheritance
Father if:
- Natural parents participate in marriage ceremony (even if marriage was void);
- Paternity established in court; or
- Father ackowledges paternity in writing.
* Clear & convincing evidence man was father of child
* Rebuttable presumption – child born in wedlock is child of mother’s husband.
Special Problems of Intestate Distribution:
Posthumous Children?
person conceived before the decedent’s death but born alive thereafter, deemed alive at decedent’s death
- Must survive a second after Decedent’s death
INTESTATE DISTRIBUTION:
Advancements?
[Inter vivos gifts to an heir by the decedent & dies intestate]
-
If a person dies intestate as to all or any part of his estate, property that he gave to an heir in his lifetime is treated as an advancement against the estate only if:
- Acknowledged in a writing as an advancement by Decedent or heir.
- If property an advancement: will reduce intestate share
- If property recipient dies before decedent: property not taken into account in division & distribution of intestate estate
Will?
Requirements?
doc. executed by Testator/Testatrix that takes effect on death of Testator/Testatrix
Requirements: [must be intended by testator to be a will &]
- Capacity
- Written
- Signed by Testator
- Attestation must occur via 2 witnesses or bring will before notary & have notary acknowledge signature
- usually disposes of a person’s property, but not necessary; may also be a codicil or testamentary instrument that: Appoints executor; Nominates guardian; Revokes/revises another will; Expressly excludes/limits rights of an individual to succeed via intestate succession
A valid will must be:
- WRITTEN; reasonably permanent record
-
Signed by testator OR in testator’s name by some other individual in testator’s conscious[earshot] presence & by testator’s direction [testator must request]; and
- Sign end of the will & any name (w/ intent to adopt as Testator’s own doc)
- Assisted signatures: do not require testator request/direction,
- Publication: not required to tell anyone, not even witnesses
-
Harmless error rule: alteration will be validated if proponent proves by clear & convincing evidence that Testator intended alteration to constitute part of his will
- Integration rule: all pages present at execution of will become part of will
-
Signed in presence of 2 witnesses (witness actual signing of will or acknowledgment of previous signature by testator or proxy)
- Must sign will in presence of Testator AND in presence of each other.
- Witnesses may sign anywhere on the will.
- Any competent person may witness a testator’s signature on a will – even named beneficiary
- Testamentary Intent: Testator must have a present intent to make the document his will.
Probate the Will?
“validating” a will; probated will then becomes a legal instrument that may be enforced by executor/personal representative of the estate
- Probate is the process of transferring legal title to property from a person who has died to that person’s heirs or beneficiaries.
Self-Proving Will?
will simultaneously/after execution & attested by acknowledgement of testator & affidavits of attesting witnesses, each made before an officer authorized to administer oaths & evidences by officer’s certificate, under official seal
- Self-proved will satisfies requirements for execution w/o testimony of any attesting witness, upon filing of will, acknowledgment & affidavits. Thus, it avoids problems w/ hostile or unavailable witnesses.
Qualifications of Witnesses?
Interested Witnesses?
- Ability to observe Testator affix his signature,
- Coupled w/ ability to comprehend the nature of the act
Interested Witnesses: has a pecuniary interest in the will
- Under UPC: interested witness has no bearing on witness’s signature, but may give rise to implications of fraud, undue influence or duress
Holographic Wills?
written by the testator, entirely in his own handwriting
- NOT VALID IN FLORIDA, even if validly executed in another state.
Conditional Wills?
Testator may choose to make a particular gift, or a will, conditional on the (non-)occurrence of a specific event
- Condition must be clear on the face of the will
- Extrinsic evidence not allowed to make a facially valid will conditional
Codicils?
an instrument executed subsequent to a will
that alters/explains/adds to/subtracts from/conforms the will
by way of republication.
[therefore, can be either holographic or attested, but must match original will]
- A codicil, by its nature: refers to another document
- As to the original will: republishes the will to which it refers [makes will as though written for the first time on the date of the codicil]
- A validly executed codicil cures any defects in execution of original will
Classification of Testamentary Distributions:
Specific bequest or specific devise?
gift that’s identified & distinguished from all other things of the same kind, and is satisfied only by the delivery of the particular thing
- use of possessive words (e.g., “my”) indicates that a specific legacy was intended.
General devise?
one payable out of general assets of the decedent’s estate and not in any way separated or distinguished from other things of like kind
Demonstrative bequest/devise?
bequest/devise of fixed sum to
be paid out of a particular fund
- Payable from a particular fund or from the sale proceeds of a particular item
- If fund or item are no longer part of the estate or insufficient to pay the devise: Devise will be satisfied out of the general estate.
- Ex: Tina’s will devises $5,000.00 to her cousin, Charles, to be paid out of the proceeds of the sale of her Acme Corporation stock. Even if Tina dies without owning any Acme stock from which to satisfy the gift to Charles, Charles will still be entitled to the $5,000 to be paid from the general assets of Tina’s estate because the gift is a demonstrative devise.
LIMITATIONS ON TESTAMENTARY DISPOSITIONS:
Elective Share
- Share surviving spouse is entitled to demand if unhappy with what she is receiving from the decedent’s estate (either through intestacy or will).
- May take elective share in addition to the right to homestead, exempt property, and family allowance
- 30% of the elected estate in Florida
LIMITATIONS ON TESTAMENTARY DISPOSITIONS:
Procedure for Election
- SS must make her election w/in: 6 months after notice of administration or 2 years after Decedent’s death
- Spouse can withdraw petition anytime before final judgement
- May be filed by spouse or her attorney-in-fact
- IF attorney‐in‐fact or guardian files petition, court must determine whether election is in spouse’s best interests.
- must give notice of time & place set for hearing to interested parties
- if notice given to all interested persons SS may petition court for an extension of time for making an election 9 mths after decedent’s death
- court in the county of decedent’s domicile
LIMITATIONS ON TESTAMENTARY DISPOSITIONS:
Property Subject to Election?
Elective estate includes?
SS of a decedent who dies domiciled in this state has a right to an elective share amt equal to: 30% of the elected estate
Including:
- Decedent’s probate estate;
- Other property held in right of survivorship;
- Property in a revocable trust;
- Cash surrender value of insurance policies on the decedent’s life;
- Death benefits payable under retirement plans;
- Certain transfers within one year of the decedent’s death;
- Property transferred in satisfaction of the elective share;
- Property held in a discretionary trust for the settlor, or a trust where the decedent had the right to income or principal; AND
- Accounts or securities in “Pay on Death” accounts and decedent’s interest in accounts held in right of survivorship.
LIMITATIONS ON TESTAMENTARY DISPOSITIONS:
Satisfaction of Elective Share:
In absence of any provision in will,
elective share is satisfied as follows:
- Property passing to the surviving spouse
- Includes:
- Any devise to the spouse in decedent’s will;
- Any share the spouse takes by intestacy;
- Life insurance policies payable to the spouse;
- Retirement benefits plans payable to the spouse; and
- The value of property spouse is getting by right of survivorship or otherwise.
- Includes:
- Any balance is satisfied from the decedent’s estate or revocable trusts.
Children Not Mentioned in the Will:
If Testator fails to provide for his child born/adopted after making his will–unless failure was intentional–receives?
- After-born/adopted child: receives an intestate share [same amount would have received had estate been intestacy]
- Exception: will devised all or substantially all of estate to other parent of omitted child and that other parent survives Testator
- Testator had children living when will was executed & devised portions of estate to them, omitted after-born/adopted child entitled: share in portion of Testator’s estate devised to Testator’s then living children as if child had been given an equal share of that portion of the estate. [prior kids got gifts, then after born kid gets gifts too]
- If Testator had living children at time of will’s execution but children received nothing: gets nothing [be weary that codicil republish the will …so if its republished w/o new kid then he gets nothing]
INTERPRETATION OF WILLS?
Wills are always to be construed in accordance with the discernible will of the testator.
[intention of the testator governs]
