W&T post midterm Flashcards
exoneration
delivered with encumbrance
credit card debts
are general debts of decedent paid by the residuary
Set off
F’s share off set by money he borrowed.
more bills than we have assets
abate the entire estate
Will I want my entire 25 first cousins to inherit my estate (to my heirs)
25 first cousins didn’t get anything the aunt who was first in line to get the estate.
to 25 cousins
create class gift - distribute my estate equally to those her are my first cousins alive at my death - go to table of consanguinity and those alive who fit description get the money.
General designation
fall back to rules of intestacy
per capita
c1 c2 c3(x)-(1) c4(x)-(4)
create groups at each generation
1/2 alive kids 1/2 dead kids
Instead of flow through 4 kids would share the other 1/2 of estate (1/8)
per stirpes
only involves lineal decendents (kids and issue)
per stirpes - parent predeceases c1 c2 c3(x)-(1) c4(x)-(4)
c1 (1/4) c2 (1/4) c3 (1/4) c4 (1/12 3 ways)
if says per capita or per stripes =
distribute per stirpes if confusion in document
per capita/per stirpes
not fall back mechanisms only if will says
Lapse
sister doesn’t survive that 100k falls out of the will and lapses to intestacy
anti-lapse statute
if designated beneficiary is kindred of decedent. She is kindred because she is sibling kindred of testator or kindred of testator’s spouse. relationship by blood or marriage, if kindred then if s1’s issue would take her 100k. who her issue are? create parent child relationship
create lineal decdency map for s1
class gift
if kindred - then your issue can take 1/19 th share. won't add people to the class just have issue take.
Is it a class gift
group of people big amount
(aggregate amount)
do we apply rules of anti-lapse?
share between abcd - share and share alike = argue it is a class gift opposed to =
- 20 to ABCDE (5 individual general pecuniary gifts)
apply anti lapse does not apply to class gift when
SHARE AND SHARE ALIKE or to the SURVIVORS THEREOF = alternate beneficiaries (anti lapse does not apply) = abcde - argue class gift that language = class gift anti lapse statutes do not apply kindred - apply to issue wasn't kindred - 20k into redsiduary for distribution.
class gift
class gift to those who are alive at the death of the testator (clear as to what their client wants)
- want kids to get = any class members die their issue takes their class gift instead
anti lapse
if boilerplate doesn’t override anti lapse
- disinherit don’t apply anti lapse statutes = override
- anti lapse is out
trust
not subject to probate - non probate transfer mechanism
beneficiary under life insurance policy
life insurance contract beneficiary designation
divorce
automatically terminated on divorce
ERISA protected account
divorcing - retirement accounts
protected under ERISA
QUADROS
qualified domestic orders - not to
retirement accounts are a community property interest
ERISA problem
ITF
in trust for
open bank account ITF
gma creates account distributes 10k to nice when turns 21. Granny ITF niece when turns 21.
TOD
transfer on death (stocks, bond, vehicle, etc. ) DMV recognizes TOD - title to transfer to a person.
bank accounts
pay on death
POD cancel right now!
because some things won’t happen automatically.
merger
ma and pa appoint as trustees and beneficiaries problem with doctrine of merger - no trust because no diving up of the assets
valid trust
trust property - something for trustee to manage and beneficiary to receive
valid trust
- trustor’s intent
2. look at trust itself for statement of intent
deed signed
valid transfer of ownership
- CA no one on notice that transfer occurred because no one knows about it.
acquire intellectual property right
present transfer of a future interest
acertainable beneficiaries
no way to ascertain who trustees are.
authority under probate code to designate someone to distribute assets based on a standard set by trustor or dicrestion of trustee. Court now a days can give trustees the discretion.
absolute discretion who friend are and which assets go to which friends
makes it hard for trustee. not so much room for litigation.
determine beneficiaries
power of appointment
trust says 100k a yr. to son on his death distribute equally to grandsons
reasonable purpose inferred = life estate for son and remainder distribution for grandchildren
purposes in violation of public policy
strings attached to distributions. challenges: viable language attaching strings to trust distributions based on substance abuse issues by potential beneifciary
dead hand of the trust
control behavior of future generations. TJ was opposed to trusts. no strings attached to money let future generations decide what to do with it.
the kid is druggy
difficult to establish standards = interim texting, lapse in drug treatment disabilities
- not annually test quarterly. clean test = good distribution. Careful if try to change perosnal habit or conduct to punitive or invasive of manner may violate public policy
invasive prohibitive drugs
no public policy to support drug abuse
policies encourage divorce, discourage marriage
against public policy
powers of appointment
h & w joint plan in mind for assets. all assets for benefit of h & w lifetime beneficiaries. no merger problems. death of h, w continues to be life beneficiary. agreed how assets distributed. trust give power of appointment (donors) creators/trustor ability to agree that someone else can not change trust but redirect trust assets other than those listed in the trust itself. midcourse correction. built in so parents can go with the flow. after h dies w can’t make changes to will. w makes change when h is gone by power of appointment
donor
created the trust
donee
power to exercise the change
appointee
the person to whom the assets can be redirected
appointed property
which assets in the trust being subject to redirected.
Capacity
18 years of age, of sound mind
broader standard in CA
discretion to pick beneficiaries
power of appointment
do not know who beneficiaries are til w dies, wait to see if she exercieses
exercise it
power of appointment
power of appointment to children
children, grandchildren = successive powers of appointment.
problem = how distribute truest if don’t know if power of appointment ever expires.
corporations own land for centuries
bd. of directors - have power to sell corporate assets. freely alienable. bd. chose not to do so. as long as people to make decision to sell all not a problem.
s gets 10k a year until exhausted or she dies. if not exhausted her issue divide for their lifetime or until funds exhausted or until her issue die. her children children.
5 generations. s pay indefinitely 10k year. 50k a yr. pay 10k to s, see trust going on forever. S gets life estate and issue until get to 90 yr. mark. then distribute assets pro rata to those in line to share in annual distribution
transfer rights in trust if
named in trust and vested and is there a spend thrift clause
vested
dad dies
creditors can get what he is entitled to in the trust
distribution
spend thrift provisions
beneficiaries interest is not freely alienable.
even if cali assignment then can’t recognize the assignment because of the spendthrift clause.
obligation under the trust is to mail the check directly to freddy.
creditors
can’t go after the trust
have to do
what the trust says
victims of felons
if trust has trust benefits accruing to him. Go to DA and have deal put together as a felony restitution order.
bundle into felony proceeding with restitution order
h
public governmental benefits
j
personal property
ambulatory, moves wherever client goes
Is a accelerated when there is a disclaimer of life estate?
yes
contrary trust provisions prohibiting? or other trust purposes equal to the income distribution to the beneficiary
intent of the trustor not only to provide LE to child but to defer distribution to grandchildren until they were older.
secondary purpose - LE and delayed distribution .
then remainder of trust won’t accelerate because there’s other things the trust has to do.
whether should or shouldn’t trigger the acceleration of the remainder =
the spendthrift clause to protect beneficiaries from themselves or lenders.
seized by gc creditors - spendthrift clause says don’t let creditors get it
don’t receive
until acceleration of LE or at least 21 yrs. old
valid trust
trust property
evidence trust property = change trust title
ma and pa of ma and pa trust
revoke trust and retitle the assets, take out of trust.
revoke as it relates to all properties
multiple settlers
adding property to trust, can take the property out
wife adds her sep. property and her half of cp
free to alter as far as what they added to it
pa dies
his portion becomes irrevocable
trust start out revocable by presumption or stated terms
become revocable when person can no longer exercise it
- death
- incapacitated
trust start out revocable by presumption or stated terms
become revocable when person can no longer exercise it
- death
- incapacitated - no longer competent to exercise a right
family home
shouldn’t put in irrevocable trust. significant asset in terms of stand alone value - room to maneuver.
dog bit ear off and put house in irrevocable trust so they wouldn’t lose it
asset protection = insurance not trust.
exceptions
small trust $ value 40k or less in terms of the value of the assets in the trust, then trust is uneconomical to operate = trust fees, an account fees (stuff to manage the money costs more than income generated by the 40k)
