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Bar Prep > Wills and Trusts > Flashcards

Wills and Trusts Flashcards

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1
Q

requirements for a trust

A
  • intent to create a trust
  • trust property
  • trust purpose
  • ascertainable beneficiary
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2
Q

inter vivos trust

A

trust created while the settlor is living, designating the settlor or someone else as trustee

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3
Q

pour-over will

A

trust created while living to which the trust property is devised upon death; doesn’t have to meet formalities of a will

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4
Q

testamentary trust

A

trust created upon the death of the settlor; must comply with wills formalities

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5
Q

charitable trust

A

trust created for the benefit of the community at large or a segment of the community; not void for lack of ascertainable beneficiary; not subject to RAP

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6
Q

charitable purposes

A
  • relief of poverty
  • education
  • religion
  • NOT funding a political party
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7
Q

cy pres doctrine

A

if a charitable trust fails for impossibility, impracticality, or illegality, court can modify trust to substitute an alternative charitable purpose if still in keeping with / derived from the original purpose

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8
Q

income

A

money generated by trust property

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9
Q

principal

A

money generated by conveyance of trust property

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10
Q

income or principal: sale proceeds

A

principal

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11
Q

income or principal: cash dividends

A

income

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12
Q

income or principal: rents

A

income

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13
Q

income or principal: interest

A

income

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14
Q

income or principal: stock dividends

A

principal

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15
Q

general rule as to creditors’ right to access trust principal

A

creditors may access beneficiary’s interest if trust property has been distributed to beneficiary

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16
Q

support trust

A

an asset protection trust that allows distribution as necessary to provide for the beneficiary’s support, such as education and health

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17
Q

creditors’ right to access support trust

A

no access unless creditor is the one providing a necessary

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18
Q

spendthrift trust

A

trust in which the beneficiary is restricted from alienating her interest in the trust

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19
Q

creditors’ right to access spendthrift trust

A

no access; limited exceptions for:
- creditor providing necessaries
- child support obligations
- tax liens

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20
Q

discretionary trust

A

trust in which the trustee may distribute trust income and principal at his sole discretion; reviewed for abuse of discretion

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21
Q

creditors’ right to access discretionary trust

A

creditor can access once the trustee has made a distribution

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22
Q

trustee’s powers

A

those powers granted expressly in the trust and those necessary to carry out trust’s terms

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23
Q

trustee’s fiduciary duties

A

duty of loyalty
duty of care

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24
Q

trustee’s duty of loyalty

A

administer the trust in good faith and act reasonably

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25
Q

breaches of duty of loyalty

A

conflict of interest = presumed breach; rebutted by showing fair terms or that an independent party would’ve done it too
self-dealing = irrebuttable presumption of breach, no further inquiry

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26
Q

self-dealing

A

acting for personal gain in the position of the trustee, such as
- buying or selling trust assets
- borrowing from or making loans to trust
- engaging in transactions with friends or relatives

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27
Q

remedy for breach of duty of loyalty

A

beneficiary can rescind the transaction or ratify transaction and receive profits from it

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28
Q

duty of prudence

A

to act as a reasonably prudent investor in similar circumstances with reasonable care, caution, and skill; includes:
- duty to diversity
- duty to be impartial in distributions
- duty to make productive
- duty to disclose information to beneficiaries and account for actions taken

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29
Q

revocability of trust

A

presumed to be revocable

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30
Q

modification/termination of trust by beneficiaries

A

consent of all beneficiaries: modify if in keeping with or necessary for material purpose of trust
consent of all beneficiaries and settlor: modify regardless

31
Q

disclaimer of trust interest

A

in writing within nine months of interest vesting

32
Q

modification/termination of trust by court

A

if unanticipated changes frustrate purpose of the trust

33
Q

intestate succession

A

plan for splitting up an estate developed by the legislature when there is no will; decedent’s intent is irrelevant

34
Q

simultaneous death

A

to take by intestate succession, must survive the decedent; if simultaneous, must have clear and convincing evidence of survival by 120 hours

35
Q

spouse’s intestate share when: just spouse

A

spouse takes entire

36
Q

spouse’s intestate share when: spouse + shared descendants

A

spouse takes entire

37
Q

spouse’s intestate share when: spouse + decedent’s parents

A

spouse takes 75% and $300,000

38
Q

spouse’s intestate share when: spouse + shared descendants + spouse has other kids

A

spouse takes 50% and $225,000

39
Q

spouse’s intestate share when: spouse + decedent has other kids

A

spouse takes 50% and $150,000

40
Q

will formalities

A
  • writing
  • signed by testator
  • testamentary intent
  • two witnesses
  • capacity
41
Q

purge theory

A

the presence of interested witnesses invalidates the will as to its portions that provide in excess of their intestate share; do not share if two other disinterested witness
UPC has abolished

42
Q

presence of witnesses

A

majority rule: each sign in each other’s presence
UPC: witnesses sign in reasonable time after

43
Q

traditional presence

A

line of sight

44
Q

modern presence

A

conscious presence—awareness of act being performed, even if not presently perceiving it

45
Q

capacity / sound mind

A

ability to know
- nature of the act
- nature and character of property
- natural objects of the bounty
- plan of disposition

46
Q

substantial compliance

A

defect doesn’t invalidate will if clear and convincing evidence of intent to act as will; UPC/modern rule

47
Q

holographic will

A

informal, entirely handwritten will signed by testator without witnesses

48
Q

nuncupative will

A

oral will; invalid in most jurisdictions

49
Q

codicil

A

supplement to a will; requires same formalities as will itself

50
Q

three ways to revoke a will

A
  • subsequent instrument
  • act of destruction
  • operation of law (e.g., divorce)
51
Q

lost will

A

a missing will at the time of testator’s death creates rebuttable presumption that the testator destroyed and revoked the will

52
Q

dependent relative revocation

A

equitable doctrine that invalidates a mistaken revocation and revives earlier revoked will

53
Q

conditional will

A

will that takes effect dependent upon the happening of a certain condition; if ambiguous, courts will construe language as not a condition

54
Q

incorporation by reference

A

can incorporate separate document by reference if
- document existed at time of reference
- document is clearly identified in will with sufficient certainty
- testator intended to incorporate the document

55
Q

lapse

A

a testamentary gift fails because the beneficiary predeceases testator

56
Q

anti-lapse statute

A

allows a lapsed gift to pass to beneficiary’s issue; usually only if beneficiary is a blood relative

57
Q

abatement

A

if estate cannot afford all of its gifts, gifts are abated in the following order
- intestate property (not addressed in will)
- residuary
- general gifts
- specific gifts

58
Q

resulting trust

A

trust created by a court when settlor’s trust fails that requires holder to distribute trust property to the settlor/settlor’s estate

59
Q

elective share

A

surviving spouse can choose to take a certain share instead of taking under the will
- common law: 1/3 of all decedent’s property
- community property state: 1/2 of marital property (property before marriage)
- UPC: 50% of augmented estate (property before and during marriage)

60
Q

omitted spouse doctrine

A

omitted spouse entitled to intestate share unless
- valid prenup
- spouse received property outside will in lieu of devise
- spouse specifically excluded

61
Q

doctrine of advancements

A

applies in intestate succession; a gift during life may be viewed as an advancement of the child’s share if:
- common law: any lifetime gift
- UPC/modern: contemporaneous writing declares it an advancement or otherwise indicates it’s meant to be taken into account upon death

62
Q

Hotchpot analysis

A
  • add value of advancement back into estate
  • divide estate among children
  • subtract value of advancement from child’s share
63
Q

omitted child

A

omitted if had child after will and didn’t amend
does not apply if
- had child at time of will and left all/substantially all of the will to the spouse
- omission was intentional
- child received property outside will in lieu of devise

64
Q

remedy for omitted child

A

no other children: take intestate share
other children: equal share from portion devised to other children

65
Q

disclaimer

A
  • signed writing
  • filed with court or communicated to administrator/executor of estate
  • identifies decedent, property disclaimed, extend of disclaimer
  • within nine months of death
66
Q

insane delusion

A

false belief adhered to despite reason and evidence to the contrary that is but-for cause of disposition

67
Q

undue influence

A
  • susceptibility
  • motive
  • opportunity
  • causation
    presumption based on confidential relationship
68
Q

administrator

A

appointed by court to administer the estate

69
Q

executor

A

named in the will to administer the estate

70
Q

power of appointment

A

permits donee to dispose of property; can be general or specific (limited)

71
Q

power of attorney

A

empowers donee to make decisions during periods principal is unable to; can be general or specific;

72
Q

healthcare advance directive

A

living will, healthcare power of attorney, or both; must be a signed writing witnessed by two people

73
Q

living will

A

describes the desired medical care and requires agent to enforce these wishes

74
Q

healthcare power of attorney

A

permits donee to make medical decisions on principal’s behalf when principal is incapacitated

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