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2 MEE Practice Exam Rules > Wills and Trusts > Flashcards

Wills and Trusts Flashcards

1
Q

In order for a will to be validly executed:

A

Present intent, testamentary capacity, required formalities

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2
Q

Testamentary Capacity

A

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

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3
Q

Distribute or Withhold Based on Mistaken Fact

A

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

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4
Q

A codicil is valid if:

A

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

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5
Q

Incorporation by Reference

A

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

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6
Q

A codicil can validate a previously valid will or codicil if:

A

it appears that the T is attempting to re-establish her previous will or codicil.

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7
Q

The rule against perpetuities prohibits:

A

the disposition of property that uncertain to vest or fail within 21 years

Charitable trusts are immune from the rule against perpetuities

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8
Q

A trust of personal property is valid if:

A

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
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9
Q

Charitable trusts

A

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!

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10
Q

The Cy pres doctrine:

A

allows a court to conform a charitable trust to benefit a different purpose, or amend a trust to continue in duration

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11
Q

When a decedent is without a will:

A

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

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12
Q

What law governs the distribution of individual’s will?

A

The state where the T was domiciled when T died

*Domicile = presence + intent to remain

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13
Q

A valid holographic will requires:

A

The will to be written in the T’s handwriting (some states only require material portions) and signed by T

*NO WITS REQUIRED

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14
Q

Omitted Child

A

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

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15
Q

When interpreting a will, a court is only permitted to consider extrinsic evidence when:

A

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

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16
Q

When a beneficiary to a will predeceases the T (lapse):

A

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

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17
Q

A codicil can validate a previously valid will or codicil if:

A

It appears that the T is attempting to re-establish her previous will codicil.

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18
Q

Termination of Trust by beneficiaries after Settlor Dies

A

All beneficiaries and the trustee consent to the termination and there is no material purpose yet to be performed

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19
Q

Clafin Doctrine

A

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

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20
Q

Class Gifts (CL and UPC)

A

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
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21
Q

A class remains open and may admit new members until:

A

(i) at least one class member is entitled to obtain possession of the gift, (ii) the preceding interest terminates

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22
Q

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.

A

fiduciary

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23
Q

A trustee has a duty to:

A

administer the trust in good faith, in accordance with its terms and purposes, and in the interests of the beneficiaries

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24
Q

A private express trust:

A

Clearly states the intention of the settlor to transfer property to a trustee for the benefit of one or more ascertainable beneficiaries

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25
Q

Revocability

A

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
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26
Q

If a trust is revocable:

A

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

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27
Q

A power of appointment:

A

enables the holder to direct a trustee to distribute some or all of the trust property without regard to the provisions of the trust

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28
Q

A special power of appointment:

A

Allows the donor to specify certain individuals as the objects of the power, to the exclusion of others

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29
Q

When an appointment exceeds the grant of power:

A

The property or interest that was invalidly appointed passes to the taker in default (the party who would have received had there been no appointment)

30
Q

Elective share

A

An elective share gives the surviving spouse a fraction of the decedent’s estate if the surviving spouse decides to elect that share, rather than a gift in the will.

31
Q

The probate estate includes:

A

All assets that pass by will or intestacy upon a decedent’s death.
*A trust is generally considered a will substitute because the distribution of property placed in trust during a decedent’s lifetime pass outside of probate according to the terms of the trust

32
Q

In some jurisdictions, the surviving spouse can set aside inter vivos transfers made by decedent during marriage, without spousal consent if:

A

the decedent initiated the transfer within one year of her death, retained an interest in the property, or received less than adequate consideration

33
Q

Specific Gift

A

A specific legacy, devise, or bequest is a gift of property that can be distinguished with reasonable accuracy from other property that is apart of the T’s estate

34
Q

General Gift

A

Gift of personal property that T intends to be satisfied from the general assets of his estate

*“my automobile,” or “$10,000”

35
Q

Bequest of Stock (CL)

A

Bequest of stock owned by T when the T’s will was signed excluded subsequently acquired shares of the same stock.

*A stock dividend is a property interest distinct from stock given by the specific bequest

36
Q

Bequest of Stock (UPC)

A

A stock dividend is treated like a stock split instead of cash dividend

37
Q

Ademption (CL)

A

If the subject matter of a specific bequest is missing or destroyed, the beneficiary takes nothing, not even the equivalent in cash

*Ademption only applies to specific bequests

38
Q

Ademption (UPC)

A

Permits a beneficiary of a specific extinct gift to inherit the property acquired by T as replacement property or the outstanding balance

*Ademption only applies to specific bequests

39
Q

Rule of Construction - Generically Described Property

A

Bequest of generically described property applies to property that meets the generic description at T’s death

40
Q

Disclaimer

A

A disclaiming party is treated as if she predeceased the decedent and the bequest passes either to disclaimant’s issue or residuary

41
Q

Typical Anti-lapse statute:

A

Provides for alternate disposition of lapsed bequests

*If the gift was made to a relative of T within certain statutory degree, and the relation predeceased the T but left issue, the issue succeed to the gift, unless the will expressly states to the contrary

42
Q

If decedent’s spouse and parents do not survive, what are the schemes available to divide property?

A

Per capita with representation, per stirpes, and per capita at each generation

43
Q

Per capita with representation

A

Property is divided equally among the first generation with at least one living member

44
Q

Per stirpes

A

First divided into the total number of children of the ancestor who survive or leave issue

Issue equally share the portion that the deceased ancestor would have taken if living

45
Q

Per capita at each generation

A

Property is divided into as many equal shares as there are living members of the nearest generation of issue and deceased members of that generation with living issue

46
Q

If there is no spouse and no children, what are the two methods of determining heirship?

A

Parentelic, degree of relationship approach, combined approach, UPC approach

47
Q

Parentelic

A

Descendants of the decedent’s parents take to the exclusion of descendants of the decedent’s grandparents (niece would be an heir but not an uncle)

48
Q

Degree of Relationship

A

Calculated by counting the number of relatives between the living taker and D using the closest common ancestor

49
Q

UPC

A

(1) D’s parents equally if both survive or all to surviving parent if only one survives, (2) then to descendants of D’s parents, (3) then to D’s living maternal/paternal grandparents, (4) then to descendants of D’s deceased grandparents, (5) then to D’s nearest maternal/paternal relative, (6) then escheats

50
Q

Child (for purposes of intestate succession)

A

Includes adopted children, children born out of wedlock, and half bloods (but not step children)

51
Q

Advancements

A

Issue: should the gift be deducted from what the child would inherit under the laws of intestate succession?

CL: Lifetime transfer was presumptively treated as down payment on heir’s intestate share and taken into account when computing heir’s intestate share

Majority: Presumed to be gift and is ignored in computing intestate share

52
Q

Ademption by Satisfaction (UPC)

A

A lifetime gift is not prepayment unless: (1) the will says so, (2) T declares in a contemporaneous writing that the gift is to be deducted from the will, or (3) the devisee acknowledges in writing that the gift is in satisfaction of the bequest

53
Q

Will Requirements

A

In writing, signed by T (who intends doc to be will), and witnessed by two witnesses

54
Q

Revoking a Will by Physical Act

A

Must be done with the intent to revoke the will

55
Q

Dependent Relative Revocation

A

A first will is not revoked if a later will is found invalid, if it appears that the T would not have revoked the first had the T had accurate information

56
Q

Divorce (revocation)

A

Actual divorce revokes gifts in favor of a spouse

57
Q

Slayer Statute

A

An individual who feloniously and intentionally kills the decedent cannot take under decedent’s will

*On test, this doctrine usually does not preclude taking because the killing was not felonious or intentional

58
Q

Abatement

A

When assets of an estate are insufficient to satisfy all gifts made by someone’s will, gifts to the beneficiaries will be reduced in the following order: intestate property, residuary gifts, general gifts, specific gifts

59
Q

Undue Influence

A

Wrongdoer exerts such influence over T that it overcomes T’s free will and causes T to make a gift he would not otherwise have made

(1) T was susceptible to undue influence,
(2) influencer had opportunity to exert undue influence,
(3) influencer had a disposition to exert undue influence, and
(4) will appears to be an object of undue influence

60
Q

Pourover Will

A

Will that makes a gift to a trust is valid so long as the trust is identified in the will and the terms are incorporated in a writing executed before or concurrently with the execution of the will

61
Q

Discretionary Trust

A

Trustee has discretion to decide when to make a distribution to a beneficiary

62
Q

Support Trust

A

Trustee must pay what is necessary for the beneficiary’s support

63
Q

Spendthrift Trust

A

Restrains both the voluntary and involuntary transfer of a beneficiaries rights

  • Creditor may not reach prior to beneficiary reaching it unless creditor is:
    (1) child or spousal support creditor,
    (2) judgment creditor,
    (3) State or United States,or
    (4) creditor with claim for necessities
64
Q

Modifying Charitable Trust

A

May terminate if charitable purpose becomes unlawful, impracticable, or impossible

*Cy pres may save the trust

65
Q

Honorary Trust

A

Does not have a charitable purpose or a definite beneficiary

*Often a trust to take care of a thing

66
Q

Duty of Loyalty

A

A trustee has a duty of loyalty to act in the best interests of the beneficiaries

67
Q

Duty of Care - Prudent Administrator

A

UPIA: trustee must administer the trust as a prudent person would, using reasonable care, skill, and caution

  • Investment and management strategies should be evaluated in context of portfolio as a whole
  • Duty to Diversify: Liable for failure to diversify absent directions to the contrary
68
Q

Breach of Trust Remedies

A

Suspending or removing trustee, decreasing compensation, compelling a trustee to perform trust duties, compelling payment of damages

  • Self dealing: beneficiaries may rescind the transaction and ask for the self-dealing purchase to be set aside OR recover any profits the trustee made
69
Q

Class Gifts - Rule of Convenience

A

When a gift is made to a group, such as “my children,” the class closes when at least one member is entitled to distribution

70
Q

Class Gifts - UPC Approach

A

Each beneficiary will take their share and the deceased beneficiary’s share will pass to their surviving descendants

71
Q

Class Gifts - CL Approach

A

If gift or remainder to a deceased beneficiary has already vested and there is no applicable statute, then it will go to whomever the instrument says it should go to or whomever the deceased person has specified in their will or through intestacy

2 MEE Practice Exam Rules (13 decks)

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