Wills and Trusts Flashcards
What is Ademption?
Ademption is the failure of a gift because the property is no longer in the testator’s estate at the time of their death.
What are the common exceptions to the ademption doctrine?
- Replacement property. Beneficiary gets the replacement property if testator replaced gifted item with another similar item. (Beneficiary supposed to get the 65 inch Sony tv… but testator sold that and replaced it with a 65 inch LG).
- Some states allow for balance of purchase price if testator sold the gifted item and the purchaser still owes money to testator… remaining balance goes to beneficiary.
- Proceeds of condemnation award or insurance… if paid for after death.
- Proceeds from sale by guardian or conservator. IF testator is incompetent and the specific property was sold by guardian, beneficiary is entitled to pecuniary legacy equal to the amount of the proceeds.
Valid will requires what formalities?
- In writing
- signed by T (or at T’s discretion in his presence)
- 2+ witnesses
- Signed by the witnesses during T’s lifetime
- Witnesses understand instrument being witnessed is T’s will.
Requirements for a Holographic Will
Signed by T
Material provisions in T’s handwriting
No witnesses needed
Codicil
Alteration to existing will – valid if executed with required formalities as attested/holographic will
Incorporation by reference?
T may incorporate by reference a separate document into will when
the document is in existence at execution
will shows intent to incorporate
the writing describes the items and the recipients of the property with reasonable certainty
What is an inter vivos trust?
In lifetime trust “will substitute”
will must be valid
trust must clearly be identified in the will and executed before/concurrently with the will
trust may be amended or revoked after execution of the will
trust may be unfunded during T lifetime
Revival
Will 2 revoked, will 1 remains revoked unless evident from circumstances of will 2 revocation
if will 2 revoked by will 3, will 1 revived to extent of will 3 showing intent for will 1
revival by republication by codicil: ,making a codicil to the voided will.
Pretermitted child
Receives intestate share unless
will shows omission was intentional
t provided substitute transfer outside will
t had other children and left estate to parent of omitted child
Valid Trust
- intent
- settlor capacity
- Identifiable trust property
- Ascertainable and definite beneficiary
- valid trust purpose
Same person cannot be trustee and sole beneficiary
Explain the duties for a Trustee (4th and 5th are a bonus)
Duty of good faith – trustee must administer the trust in good faith in accordance with the trust purpose and terms in the interest of the trust beneficiary.
Duty of loyalty to beneficiaries – trustee must put interest of the beneficiaries first. Must avoid self dealing.
Duty of care – exercise care, still and caution that would be exercised by a reasonably prudent person.
Duty to perform personally
Duty to earmark assets
What is a spendthrift trust?
Restrains alienation, preventing beneficiary from transferring interest and creditors from access.
Some creditors can break through a spendthrift clause – preferred creditors.
What is a discretionary trust?
Grants absolute discretion to trustee to make distributions as he sees fit. Beneficiary, his assignee, nor creditors can compel payment.
Support trust?
directs the trustee to pay only as is necessary for the beneficiary’s support.
Class gift?
A gift to a group of persons described collectively typically by their relationship to a common ancestor.
Class does not close until the named person(parent) dies or the gift becomes posessory
Under common law, if a class member does not survive until time of distribution, his share passes to his estate, not his issue.
