Wills and Trusts Flashcards
What are the three formailities required for a valid will?
Writing, witnessed, signed.
Are witness signatures valid even if the signatures arent executed at the same time?
Yes
What is the impact of an interested witness?
Rebuttable presumption that witness procured devise by duress, menace, fraud, or undue influence, unless there are two other uninterested witensses, or devise is solely fiduciary.
What is a holographic will?
Will that doesn’t comply with formalities required for valid will if signature and material provisions are all in testator’s handwriting.
At what point is capacity and intent measured for purposes of determining whether a will is valid?
At the time the will is e xecuted.
If there is mental capacity issue, or mental disorder (halluciantions or delusions) how can a will be made?
Court can appoint conservators
Wills: What’s fraud?
misrepresentation of material fact, known to be false, with intent to deprive person of property or legal rights, and does deprive that person.
Fraud in the execution
Testator unaware he is signing a will, or will forged
Fraud in the inducement
Wrongdoer influences testator through misreprsentations, results in only those particular fraudulent provisions to be invalid.
Fraud preventing will execution or revocation
Fraud is implemented to prevent a will execution or revocation.
What are the elements of common law undue influence?
Testator Susceptible to influence, Beneficiaries had Opportunity to Influence, testator left Unnatural disposition, Beneficiaries active in Procuring disposition
Elements of california statutory undue influence
excessive persuasion that causes a person to act/refrain from acting, overcoming free will, results in inequity. Can be proven by circumstantial evidence. Vulnerability, influencers authority.
Under what circumstances is there a presumption of fraud or undue influence?
Gift to drafter, person in fiduciary relationship with transferor who transcribed instrument; care custodian of transferor, cohabitant of any of above people. Exceptions: blood relative of transferor, property transferred valued at 5k or less, independent attorney reviews. Can be rebutted.
Integration of a will - what is part of the will?
Papers present at time of e xecution and testator intended them to be part of the will.
Incorporation by reference
Writing outside will can be incorporated by reference if writing existed at the time will was executed and will manifests the intent to incorporate it, and sufficiently describes the writing.
can a will itnegrate acts of independent legal significance?
Yes - ex: Income to A for life through trust…”
What is a codicil?
amendment to an existing will to change/explain/republish will.
Does a codicil have to meet the formality requirements of a will?
Yes
What happens to will if codicil is revoked?
Nothing
What happens to a codicil if a will is revoked?
codicil revoked.
How can a will be revoked?
Physical act, revocation by subsequent will, revocation by operation of law, dependent relative revocation
Does destroying a duplicate of a will constitute revocation?
Yes if there was intent to revoke it
Does crossing out a beneficiary increase the amount distributed to other beneficiaries, or does it go to the residue?
Residue.
Omitted spouse or domestic partner - do they have an interest in the will?
Will get intestate share unless intentionally omitted, otherwise provided for outside the will (with intent to do so in lieu of will); or waived right to share in valid agreement.
How are omitted children treated?
Receive intestate share if born or adopted after will made unless intentionally omitted, otherwise provided for outside the will, or decendent had one or more kids and devised substantially aoo of state to other parent of omitted child
When do courts apply doctrine of dependent relative revocation?
When testator revokes old will (or parts) under mistaken belief that substantially similar will or codicil would e effective, but not effective at death. Court will disregard revocation and allow first will to take effect.
Classes of testamentary gifts
Specific gift, general gift, demonstrative gift, residuary gift.
Specific gift
Gift of specific identifiable property (diamond earrings, beach cottage in malibu, etc)
General gift
gift from general assets of estate; doesn’t include specific property
Demonstrative gift
General gift that specifies the property or specific fund from which gift should be made.
Residuary gift
what remains of the estate after all other gifts have been satisfied and debts and taxes paid
What is ademption?
Applies where specific gift devised has changed form from that identified in the will or no longer exists.
What are the ways a gift can adeem?
Extinction, satisfaction
when does a gift adeem by extinction?
Specific item identified by will isn’t part of the estate at time of testator’s death. Beneficiary entitled to general pecuniary gift of equal value if specific gift involved securities that changed form, conservator that sold property, or eminent domain
When does a gift adeem by satisfaction?
Testator’s will provides for deduction of the lifetime gift, testator or the beneficiary declare in writing gift satisfied, same property given to beneficiary during his lifetime
Under what process are gifts reduced to enable estate to pay all ebts and legacies it would otherwise be unable to pay?
Abatement
Order of gift abatement
Property not disposed of by will
Residuary Gifts
General gifts to nonrelatices
General gifts to relatives
Specific gifts to nonrelatives
Specific gifts to relatives
Exoneration
gift of property made that is subject to encumbrance and will requires encumrance to be paid off
Do the rules of abatement apply to enable exoneration?
Yes
Lapse rules
Traditionally, if a beneficiary predeceased testator, gift to beneficiary lapsed and fell into residue (or distributed by intestate succession)
antilapse rules
Beneficiary predeceases testator, issue of beneficiary take in his place, avoiding lapse, unless contrary intention appears in will.
Does antilapse apply to nonkindred beneficiaries?
No - only to kindred beneficiaries.
Widow’s election
Widow is allowed to keep the share devised under decedent spouse’s will, or take statutory share (half CP and QCP) ; 1/3 if there are kids.
Can surviving spouse set aside transfers of proeprty or interests of cp and qcp made by decedent spouse during the marriage?
Yes, or get half proceeds or value at time of transfer.
What is a no contest clause?
penalizes eneficiary if he contests; enforced only if it is direct contest brought w/o probable cause.
Can killers take under the will or by intestacy?
No
How is CP distributed - intestate distribution?
Surviving spouse takes all CP and QCP.
What portion of SP does widow get- intestate distribution?
If no issue/parent/siblings/issue of siblings - surviving spouse gets all. If one kid/parent/issue; surviving spouse takes 1/2 of SP. If more than one kid/parent/issue; surviving spouse gets 1/3 SP.
How many hours must an heir survive the decedent by to take under intestate successin?
120
When is preoprty that decedent gave to an heir during lifetime considered an advancement, when intestate?
decedent declared and heir ackonwledged such in writing.
Per capita distribution
1st generation with living takers - everyone allocated shares; shares of all deceased persons combined then allocated to next generation.
Per capita with representation distribution
equal distribution at first level of living heirs; if any heirs deceased, what that amount is distributed to the all heirs of the deceased heirs.
Strict per stirpes
equal distribution at first level of living heirs or deceased with issue; issue of deceased heirs share their parents share equally.
Definition: Trust
Trust is a relationship where a trustor gives trustee right to hold legal title to property under a fiduciary duty to manage, invest, and safegauard the trust assets for the benfit of the designated beneficiary.
What are the methods for creating a trust?
Declaration by property owner that he holds property as trustee, transfer of property during owner’s lifetime to another as trustee, transfer by will, exercise of power of appointment to another as trustee, enforceable promise to reate a trust.
What are the requirements for a valid trust?
Intent, beneficiary, identify property, purpose
Can trust be valid without a named trustee?
Yes
Does a trust for real property need to be in writing? Signed? By who?
In writing and signed by trustee or settlor or authorized agent
Does a trust for personal property need to be in writing/signed?
No - oral trust can be estalished by clear and convincing evidence.
How long can a trustee serve for a noncharitable purpose/unincorporated society?
21 years
Are trusts created through fraud/duress valid?
No
Express trust
Trust where property transferred from one owner to another; trustee holds legal title for benefit of beneficiary, settlor having present manifestation of intent to create trust
Testamentary trust
trust created by will; trust arises upon death.
Pour over trust
trust structured to receive and dispose of assets at settlor’s death
Secret trust
settlor leaves gift to beneficiary on face of the will without intent to create trust, but does so in reliance on promise that eneficiary will hold property in trust for another.
semi-secret trust
settlor leaves gift in will to person in trust, doesn’t identify beneficiary. (majority rule: semi-secret trust invalid)
spendthrift trust
beneficiary cannot voluntarily or involuntarily alienate his interests. Result? Interests protected form creditors. Beneficiary protected from his own irresponsibility.
Support trust
directs trustee to make limited distributions to pay for beneficiary’s support; not accessible by creditors.
discretionary trust
gives trustee discretion to distribute/withhold payments, principal, income to beneficiary.
charitable trust
one for charitable purposes/ benefits society.
cy pres doctrine
charitable objective becomes impossible or impractable - courts apply cy pres doctrine and substitute another similar charitable object.
What do courts do if cy pres docrine will not fulfill settlor’s intent?
courts will apply a resulting trust
Honorary trust
neither private beneficiary or charitable purpose. Generally invalid ex cept to care for pets or maintain cemetery pots
Totten
settlor places money in bank account with instruction that beneficiary takes any amount left at death of settlor.
Resulting trust
implied in fact trust based on presumed intent of parties - transfers property back to settlor or estate when purpose of trust is satisfied;/ends; express trust fails, charitable trust ends, trust illegal, excess corpus in trust, purchase money resulting trust results; semi secret trust
What is a purchase money resulting trust?
Beneficiary pays consideration for property but allows title to the property to be taken in the name of another
Constructive Trust
remedy to prevent unjust administration
When is a constructive trust applied?
self-dealing or breach of fiduciary duties, fraud/undue influence, secret trusts , oral real estate crusts.
What are the powers of the trustee?
all powers enumerated by trust, implied powers to carry out terms of trust.
What are the duties of the trustee?
Account to and inform beneficiaries regularly, even if not requested
not delegate trustee dutues (modernly, allowed;
be impartial when dealing with income beneficiaries and remainderman beneficieries;
Due care (act as reasonable prudent person - investigate investments and diversify);
segregate and earmark fund to not commingle trust with trustee’s own funds;
Duty of loyalty (no self dealing, conflicts, all beneficiaries equal);
prudently invest trust property; defend actions that may result in loss and Enforce claims.)
Does trustee have duty to account to eneficiaries with statement of income and expenses of trust, when not requested?
Yes
May a trustee delegate his duty to others?
Traditionally, no; modern rule allows allows delegation if trustee exercises due care and skill when selecting agents.
What is a trustee’s duty with respect to income and remainderman beneficiaries?
Be impartial
Does a trustee have a duty to investigate and diversify investments?
Yes
Can a trustee commingle assets with his own?
No
Common law - prudently investing
Various statutory lists of good investments
Prudently investing - UPIA
Uniform Prudent Investor act - investor’s performance measured in context of entire trust portfolio
What are the Liabilities of the trustee?
Violating trustee duties, torts, contracts made within scope of trust supervision
Does a transfer to bona fide purchaser cut off beneficiary’s interest?
Yes
Does transfer to non-bfp cut off beneficiaries interest?
No - beneficiary can set aside the transaction.
How does a third party who knowingly receives trust property hold that property
Constructive trustee
Who is entitled to income from interest income - beneficiaries or remaindermen?
beneficiaries
Who is entitled to principal from net proceeds on sale of asset?
Remainderman
Who must pay interest on loan debt, taxes, minor repairs - beneficiaries or remaindermen?
Beneficiaries
Who pays for major repairs - beneficiaries or remaindermen?
remaindermen
Can trustee allocate trust differently than allowed by default rules?
Yes
what is the majority rule for modification or revocation of a trust?
Settler can modify/revoke ONLY if power expressly reserved in the trust
What is the minority (california) rule for trust modification/revocation?
Trusts revocable unless stated otherwise
Can trustee terminate a trust?
Only as provided in the trust.
Can beneficiaries compel termination of trust?
Yes but all must consent and be competent, and termination doesn’t frustrate trust purpose.
When can settlor terminate the trust?
If he reserved the power to do so
Under what circumstances can a court terminate the trust?
Purpose becomes frustrated or impossible or illegal, or there are changed circumstances.
DO the lapse/antilapse rules apply to trusts?
Yes
What are the remedies for breach of trust?
damages, constructive trust, tracing, equitable lien, ratification of transaction and waiver of breach, suilt for resulting loss, removal of trustee.
Can trustee offset losses where one breach results in gain and another a loss?
No
Can trustee argue laches if beneficiary waited a long period to bring claim, and as a reuslt caused prejudice to trustee or beneficiaries?
Yes
