Wills and Trusts Flashcards
Valid attested will
a valid attested will requires 1) testamentary intent, 2) testamentary capacity, and 3) that wills formalities be met. Wills formalities require a signed writing by the testator, in the joint presence of two witnesses, and for both witnesses to understand that what they signed was the testator’s will.
What are some ways to prevent testamentary intent?
- Undue influence over T: Physical or mental coercion that controls T’s dispossession of property
- Fraud in the execution: Misrepresentation of document, deception, switching papers
- Fraud in the inducement: Misrepresentation of law or facts induces T in reliance
- Mistake in the execution: Carelessness, accidentally signing wrong document
- Mistake in the inducement: Innocent misrepresentation, mistaking true facts (extrinsic evidence is admissible). Rest of will is valid unless enforcement would grossly distort T’s intent
- Sham will: clear and convincing evidence showing the document was not intended to be a will invalidates it
- Conditional will: If explicit condition precedent to will taking effect does not occur, will is invalid
What are the ways in which someone can exert undue Influence over a testator?
Traditional factors: opportunity to influence T (confidential relationship), susceptibility of T, active participation by influencer, unnatural result (successful influence of dispossession).
CA: Vulnerability of T, apparent authority of influencer, actions of influencer, equity of result.
Holographic Will
a will that is 1) signed by testator 2) with material provisions in T’s handwriting.
No witnesses needed
Codicil
Alteration to existing will – valid if executed with required formalities as attested/holographic will
- Can have holographic codicil to attested will and vice versa
Incorporation by Reference
T may incorporate by reference a separate document into a will when 1) the document is in existence at execution 2) will shows intent to incorporate, and 3) the writing is described
- A will can also refer to a document not yet in existence at the time of execution if 1) an unrevoked will refers to the writing 2) the writing is dated and in T’s handwriting or signed by T, and 3) the writing describes the items and the recipients of the property with reasonable certainty
Facts of independent significance
A will may dispose of property by reference to acts and events that take place after the execution and without formalities that attend to the will itself, i.e., things can happen (variables) after execution that can affect disposition without formalities (e.g., a will to pass a gift in equal shares to T’s employees. This provision is valid even if the employees change after execution)
Pour-over provision
T may dispose of property by will to an existing inter vivos (established during lifetime) trust. Hence, an inter vivos trust may be a “will substitute,” provided the will is valid
This trust must be clearly identified in the will and executed before/concurrently with the will
This trust may be amended or revoked after execution of the will
This trust may be unfunded during T’s lifetime
Anti-lapse
In California, under the anti-lapse statute, a gift does not lapse if the devisee who predeceased the testator was kindred (i.e., blood relation) of the testator or kindred of a surviving, deceased, or former spouse or domestic partner of the testator, and leaves issue. The issue of a deceased devisee covered by the anti-lapse statute takes in her place.
Valid Trust (private express trust)
A valid private express trust requires:
- 1) intent (settlor manifests present intent to create a trust by words or conduct)
- 2) settlor capacity (presumed unless contrary evidence such as UI, fraud, mistake)
- 3) identifiable trust property (res) in existence
- 4) ascertainable and definite beneficiary, and
- 5) valid trust purpose
What are a trustees express and implied powers?
Express powers: A trustee has powers expressly conferred by the trust instrument, state law, and court decree
Implied powers: A trustee has broad powers as necessary to carry out trust terms and promote beneficiary interests
How can a trustee resign?
Once trustee position is accepted, can resign only where permitted by trust, court, or all beneficiaries
Trustee duty of good faith
A trustee must administer the trust in good faith in accordance with the trust purpose and terms, in the interests of the trust beneficiaries. If a trustee acts in bad faith or dishonestly, court may interfere with actions
Trustee’s duty of loyalty
Trustee has a duty of loyalty to beneficiaries in all matters relating to the trust. Trustee must put interest of the beneficiaries first.
- Must avoid self-dealing (trustee may not use trust to advance own interests) and conflict of interest
- Examples of prohibited transactions: buying trust assets, selling to another trust managed by trustee, borrowing from or loaning to trust, personal gain (other than fees), securing personal loan
- Trustee’s good faith is irrelevant (e.g., trying to save trust from paying fees by buying trust assets)
- Applies to indirect self-dealing with relatives, business associates, corporations if s/h or on board
What remedies are available if trustee breaches their duty of loyalty?
Beneficiary may set aside the transaction, surcharge (recover any profit by trustee), affirm (waive breach if positive outcome), or recover property (unless buyer was a bona-fide purchaser)
