Wills and Trusts Flashcards
In order for a will to be validly executed:
Present intent, testamentary capacity, required formalities
Testamentary Capacity
T must have capacity to execute a will and the burden is on the contestant
T has capacity if T knows:
(1) the nature and extent of his property,
(2) the persons who are the natural objects of T’s bounty,
(3) the nature of the instrument T is signing and
(4) the disposition that is being made in the will
Distribute or Withhold Based on Mistaken Fact
If T decides to distribute or withhold property from beneficiary based on mistaken fact a court may invalidate the provision if interested party can show: but-for the mistake, the change or provision would not have occurred
A codicil is valid if:
it meets the same elements as a will
(1) It must be written, executed with testamentary intent, and it must be signed by the T in the presence of two witnesses
Holographic codicils are valid if they are handwritten and signed by T
Incorporation by Reference
A writing that is not valid as a will may be incorporated by reference into a will if the will manifests an intent to corporate the writing, the writing is identified with reasonable certainty, and the writing existed at the time the will was executed
A codicil can validate a previously valid will or codicil if:
it appears that the T is attempting to re-establish her previous will or codicil.
The rule against perpetuities prohibits:
the disposition of property that uncertain to vest or fail within 21 years
Charitable trusts are immune from the rule against perpetuities
A trust of personal property is valid if:
it has a trustee, a beneficiary, and trust property
- Trustee: manages trust property and holds it for benefit of beneficiaries
- Beneficiaries: in private express trust, must be definite and ascertainable
- Trust Property: must be identifiable
Charitable trusts
are created when the settlor intends to create a trust for a charitable purpose, often to benefit the public at large, and has no ascertainable beneficiaries
RAP does not apply!
The Cy pres doctrine:
allows a court to conform a charitable trust to benefit a different purpose, or amend a trust to continue in duration
When a decedent is without a will:
their inheritance passes through intestate succession
*Typically, this would be through their spouse, descendants or parents
Most intestacy statutes assign property as follows: (1) decedent’s linear descendants, (2) decedent’s parents, (3) decedent’s grandparents linear descendant’s or parents linear descendants
What law governs the distribution of individual’s will?
The state where the T was domiciled when T died
*Domicile = presence + intent to remain
A valid holographic will requires:
The will to be written in the T’s handwriting (some states only require material portions) and signed by T
*NO WITS REQUIRED
Omitted Child
AFTER: Most courts allow child born after the will was executed to take in equal share to the other children included in the will
BEFORE: Court should follow the will on its face and omit the child unless it is clear the omission was accidental
When interpreting a will, a court is only permitted to consider extrinsic evidence when:
The terms of a will are ambiguous
Upon a finding of ambiguity, a court may consider both direct and circumstantial evidence in an effort to best determine the intent of the T
When a beneficiary to a will predeceases the T (lapse):
the beneficiary’s devise will lapse into the residuary of the will, or in absence of a residuary, it will pass by intestacy.
***Most states have enacted anti-lapse statutes that apply to devises to FAMILY
A codicil can validate a previously valid will or codicil if:
It appears that the T is attempting to re-establish her previous will codicil.
Termination of Trust by beneficiaries after Settlor Dies
All beneficiaries and the trustee consent to the termination and there is no material purpose yet to be performed
Clafin Doctrine
A trustee can block a premature trust termination, even one to which all beneficiaries have consented, if the trust is shown to have an unfulfilled material purpose
*Consider the settlor’s intent
Class Gifts (CL and UPC)
CL: Unless the governing instrument provides otherwise, the gift is expressly limited to the transferor’s surviving children, so that the surviving issue of a deceased child does not take
UPC: If a class gift is limited in favor of a class of children, only those children at the time of distribution are entitled to possession of property - Child who predeceases time of distribution: issue can take
A class remains open and may admit new members until:
(i) at least one class member is entitled to obtain possession of the gift, (ii) the preceding interest terminates
A trust is a ______ relationship wherein the trustee is called upon to manage, protect, and invest certain property and any income generated therefrom for the benefit of one or more named beneficiaries.
fiduciary
A trustee has a duty to:
administer the trust in good faith, in accordance with its terms and purposes, and in the interests of the beneficiaries
A private express trust:
Clearly states the intention of the settlor to transfer property to a trustee for the benefit of one or more ascertainable beneficiaries
Revocability
Under the UTC, an inter vivos trust is revocable unless the instrument expressly states otherwise
- Settlor may terminate if all beneficiaries are in existence and all agree on termination
If a trust is revocable:
The settlor’s power to revoke naturally includes the power to amend or modify the trust
*May do so by substantial compliance with a method provided in the terms of the trust
A power of appointment:
enables the holder to direct a trustee to distribute some or all of the trust property without regard to the provisions of the trust
A special power of appointment:
Allows the donor to specify certain individuals as the objects of the power, to the exclusion of others