Wills and Trusts Flashcards
Valid will
An individual must be at least 18 years old and of sound mind to make a valid will.
- Writing
- Signed
- Two witnesses
a. know the document is a will
b. both are present at the same time
If not properly witnessed then must establish by clear and convincing evidence that the testator intended the document to be his will.
An interested witness creates a rebuttable presumption that the wtiness exercised undue influence.
Holographic will
A will that does not comply with the formalities required for a valid will can qualify as a valid holographic will if the signature and material provisions are all in the testator’s handwriting.
Undue influence
Common law
1. Susceptible to influence
2. Opportunity to influence
3. Unnatural disposition
4. active in procuring
CA
1. Excessive persuasion
2. Causes to act or refrain
3. Overcoming free will
4. Inequity
Fraud or undue influence is presumed…
When a transfer is made to
1. the person who drafted it
2. a person with a fiduciary relationship to the transferor who transcribed it
3. Care custodian within 90 days of serice
4. Cohabitant or employee of any of the above people
5. Exceptions
a. beneficiary is blood relative or cohabitant of transferor
b. property transfered is 5k or less
c. independent attorney reviews it
Presumption can be rebutted by clear and convincing evidence.
Integration
Papers are integrated into the will if they were present at the time of the execution of the will and the testator intended them to be part of his will.
Incorporation by reference
A writing outside the will may be incorporated by reference into the will if the writing existed at the time the will was executed and the will manifests the intent to incorporate it and sufficiently describes the writing.
Acts of independent legal significance
A will may dispose of property by reference to acts and events that have independent legal significance.
Codicil
A codicil is an amendment to an existing will and must meet the same formalities as a will or holographic will. A validly executed codicil operates as a republication of the will and cures interested witness issues if a holographic codicil or needs new witnesses if properly typed.
Pour-over will
A POW identifies a trust in which he can pour over probate assets less than $100,000.00. A POW is valid if:
1. trust is identified
2. terms are set forth in an instrument other than the will
3. trust was executed concurrently or before the will execution
Revocation
- Revocation by physical act
a. presumed revoked
b. duplicate revoked
c. if one of two beneficiaries are crossed out that portion goes to the will residue - Revocation by subsequent will (either express or implied by inconsistencies)
- Revocation by operation of law (accommodates an unintentionally omitted spouse or child or remove all devises to a previous spouse after divorce)
a. omitted spouse will recieve intestate share if married after the will was made unless
i. intentionally omitted
ii. otherwise provided for
iii. waived their right to a share
b. Omitted children will recieve intestate share if born or adopted after the will unless
i.intentionally omitted
ii. otherwise provided for
iii. decedent had one or more children and devised substantially all of the estate to the other parent of the child
Deprendent relative revocation
If a substantially similar will revokes an earlier will but is not effective, the court will disregard the revocation made by the subsequent will and allow the first will to take effect. If the second will is invalid due to undue influence then revocation was never valid and DRR is not applicable.
Revival of a will
When a will is revoked by a subsequent will the first will is revived if the testator intends for it to be revived.
Types of gifts
- specific gift (identifiable property)
- General gift (money)
- Residuary gift (what remains of estate)
A specific gift adeems by extinction. Courts will look at testator’s intent and beneficiary may be entitled to general pecuniary gift of equal value.
Abatement
Gifts are reduced to enable the estate to pay all debts
Order of abatement:
1. property not disposed of by will
2. residuary gifts
3. general gifts to nonrelatives
4. general gifts to relatives
5. specific gifts to nonrelatives
6. specific gifts to relatives
Exoneration
A gift of property subject to an encumberance is required to be paid off from the estate. Follows order of abatement but may not use other specific gifts.
Lapse and antilapse
When a beneficiary related to the testator predeceases the testator the issue of the beneficiary takes in his place to avoid the lapse of the gift unless a contrary intention appears in the will.
Simultaneous death
Beneficiary is determined to have predeceased.
Widow’s election
Allows a widow to keep his share devised or take a statutory share.
Property transfers
Surviving spouse can set aside transfers of CP to the extent of half or half the proceeds.
No contest clause
Penalizes a beneficiary for contesting the instrument.
Killers of testator
Do not take under the will or intestacy.
Intestate distribution
Surviving spouse takes all of the CP. If no issue spouse takes all SP, if one child or parents spouse take 1/2, if more than one child 1/3.
120 hour rule
For intestate succession to apply the heir must survive the decedent by 120 hours or he predeceases. Unless the result would be an escheat to the state.
Intestate children
- Parent child relatrionship exists between natural and adopted children.
- Adoption severs the relationship with the natural parent unless spouse of natural parent adopts the child.
- Step and foster children
1. relationship exists only if began during child’s minority, continued throughout the lifetime of parties, and a legal barrier prevented adoption.
Trust
A trust is a relationship in which the trustor gives a trustee the right to hold legal title under a fiduciary duty to manage trust assets for the benefit of the beneficiary. Requires:
1. intent
2. indentifiable property
3. purpose (not illegal)
4. identifiable beneficiary unless charitable trust
5. trustee need not be names court will appoint
Limitations on trusts
- Real property - Writing and signed
- Personal property - oral ok by clear and convincing evidence
- 21 year limit on trustee performing after settlor’s death
Spendthrit trust
Occurs when beneficiary cannot voluntary alienate his interest.
Cy pres doctrine
When a charitable objective becomes impossible courts will substitute another similar charitable object.
Resulting trust
Implied-in-fact based on presumed intent that will transfer the property back to the settlor or his estate when:
a. Purpose of trust ends
b. express trust fails
c. charitable trust ends
d. trust is illegal
Powers of the trustee
Trustees have the implied powers necessary and appropriate to carry out the terms of the trust.
Duties of the trustee
- Account to beneficiaries
- Not delegate his duty (modernly allowed if due care in selecting)
- Be impartial with income beneficiaries and remaindermen
- Use due care as a reasonable prudent person
- Segregate and not commingle the trust funds with own funds
- Duty of loyalty must avoid conflicts of interest
- Prudently invest
- Defend actions and enforce claims
Termination of the trust
- Trustee has no power to terminate
- Beneficiary may compel termination
- Settlor can terminate if he reserved power to do so
- Court may terminate
- Lapse/antilapse rules apply
