Wills and Trusts Flashcards

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1
Q

Testamentary Intent

A

Testator must have the present intent to make the particular instrument their will; wills executed as a sham or a joke are invalid.

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2
Q

Formal Execution of a Will

A
  1. In writing
  2. Signed by the testator, or someone at his direction
  3. Testator must acknowledge the will in the joint presence of at least 2 witnesses
  4. Witnesses must sign during the testator’s lifetime
  5. Witnesses must understand that they are witnessing a will, and cannot be interested witnesses
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3
Q

Harmless Error Standard

A

For a testator who dies after January 1, 2009, if the court finds substantial compliance with the formalities required of a will, the will may still be admitted to probate if the proponent can show, by clear and convincing evidence, that the testator intended the document to be his will.

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4
Q

Holographic Wills

A

Require the material dispositive provisions, as well as the testator’s signature, to be in his handwriting. Testator must also have capacity and intent.

Handwritten changes made by the testator to a holographic will after completed will be given effect; however, if made after execution of a formal will, will be invalid unless constitute a codicil.

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5
Q

Integration

A

Physical attachment or an internal sense of coherence raises a presumption that the pages were intended to be a part of the will when executed.

-Can be proved through testimony or extrinsic evidence.

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6
Q

Codicils

A

A codicil modifies a previously executed will, and must be executed with the same formalities as a formal will.

-A will will be treated as being republished as of the date of the codicil.

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7
Q

Incorporation by Reference

A

A document may be incorporated by reference into the will, if it was:

  1. In existence at the time the will was executed,
  2. Sufficiently described in the will, and
  3. The will shows testator’s intent to incorporate

Note: CA exception for a list disposing of tangible personal property; no single item can exceed $5,000 and total cannot exceed $25,000.

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8
Q

Acts of Independent Significance

A

Ambiguities in a will may be resolved by reference to acts and events outside the will, if they have significance apart from their effect on the disposition of property.

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9
Q

Pour-Over Trusts

A

UTATA permits the pour-over of assets into an inter vivos trust, as amended on the testator’s death, so long as:

  1. The trust is identified in the will, and
  2. Terms are set forth in an instrument executed before or concurrently with execution of the will.

The pour-over trust can remain unfunded until testator’s death

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10
Q

Contracts Related to Wills

A

A contract to make, not to make, or to revoke a will is valid, and contract law will govern.

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11
Q

Joint and Mutual Wills

A

A single instrument, executed by two or more testators, and intended to be the will of each testator.

-Does not raise a presumption of undue influence

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12
Q

Revocation of Wills

A

A will can be revoked by a testator with testamentary capacity at any time prior to his death, by operation of law, by subsequent instrument, or by physical act.

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13
Q

Revocation by Operation of Law

A

Occurs upon divorce or termination of a domestic partnership

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14
Q

Revocation by Subsequent Instrument

A

A will can be expressly revoked by a later will or codicil executed with formalities required; an attested will can be revoked by a holograph, and vice versa.

To the extent that a subsequent instrument makes an inconsistent disposition of property, the terms of the prior will are superseded and nullified.

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15
Q

Revocation by Physical Act

A
  1. Burning, tearing, cancelling, obliterating, or destroying, with
  2. SIMULTANEOUS INTENT to revoke
  • The physical destruction of one of two executed, duplicate wills revokes all copies.
  • Physical destruction of a codicil does not revoke a will, even if the testator so intended; however, revocation of a will revokes all codicils
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16
Q

Pretermitted Spouse

A

California’s “Omitted Heir” statute protects a surviving spouse from being unintentionally omitted from a deceased spouse’s will, and allows them to take the intestate share of decedent’s estate, UNLESS:

  1. Failure to provide for omitted spouse was intentional, as appears on the face of the will,
  2. Spouse was provided for in a transfer outside the will, or
  3. Spouse made a valid agreement waiving the right to a share
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17
Q

Pretermitted Child

A

A child who was born after the will was executed and who was unintentionally omitted will take their intestate share, UNLESS:

  1. Child was intentionally omitted, as appears on the face of the will
  2. Child was provided for in a transfer outside the will, or
  3. Child’s surviving parent took all or substantially all of the estate

Also applies if testator did not know of the child, or believed they were dead.

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18
Q

Dependent Relative Revocation (DRR)

A

Applies when a testator revokes his will, based upon the mistaken belief that an alternate disposition will govern, and but-for the mistaken belief, the testator would not have revoked the will.

-Courts will give effect to the improperly revoked portions, if it can be shown that that is what the testator would have wanted as opposed to intestacy

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19
Q

Revival

A

Only applies in the following situation:

  1. W2 revokes W1
  2. W2 is revoked by physical act
  3. W1 can be revived if it can be shown by evidence from surrounding circumstances or contemporaneous declarations, that that is what testator intended
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20
Q

Lapse and Anti-Lapse

A

If a beneficiary predeceases the testator, their gift will be deemed to have lapsed and will fall to the residue, unless anti-lapse applies.

CA’s Anti-Lapse statute saves a gift if: the deceased beneficiary was kindred (blood relative) to the testator, and they left descendants who survived the testator

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21
Q

Specific Devises

A

A gift of a particular item of property, as distinct from all other objects in the estate

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22
Q

General Legacy

A

A gift of general economic benefit, payable out of the general assets of the estate

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23
Q

Demonstrative Legacy

A

Hybrid between specific and general; a gift of a general amount to be paid from a particular source

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24
Q

Ademption

A

Ademption occurs when a specific gift identified in the will is no longer in T’s estate at the time of his death.

By extinction: the gift was given away or sold during T’s lifetime

By satisfaction: gift already given to the beneficiary.

California courts will take into consideration T’s intent, and whether he intended the gift to adeem.

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25
Q

Testamentary Capacity

A

A testator must be at least 18 years of age, and of sufficient mental capacity at the time the will was executed, which includes:

  1. Understands the nature and significance of his acts
  2. Understands the nature and extent of his property
  3. Understands the natural objects of his bounty
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26
Q

Undue Influence, in General

A

Undue influence is present and can make ineffective the execution or revocation of a will, to the extent that the testator’s free will was destroyed or overcome. Mere nagging, pleading, or begging will not suffice.

Factors to consider include: T’s susceptibility, B’s opportunity to influence, B’s disposition to influence, and whether the gift was an unnatural bequest.

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27
Q

Common Law Presumption of Undue Influence

A
  1. Confidential relationship between B and T
  2. B participated in some way in procuring the gift or executing the will
  3. The gift was unnatural (not to the natural objects of his bounty)
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28
Q

CA Statutory Presumption of Undue Influence

A

A gift to any of the following parties raises the presumption of undue influence:

  1. Drafter of the will
  2. Someone in a fiduciary relationship with T
  3. Care-custodian, unless previous relationship with T
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29
Q

Fraud

A

In the inducement: misrepresentation of fact that influenced the testator’s motives

In the execution: misrepresentation as to the nature or contents of the instrument (“Here, sign this,” and it is a deed)

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30
Q

Mistake

A

In the inducement: no relief for mistake in the inducement, unless the mistake and the disposition the testator would have otherwise made both appear on the face of the will

In the execution: extrinsic evidence is permissible to show that T was unaware of the nature of the instrument she signed

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31
Q

No Contest Clause

A

A no contest clause is a provision in a testamentary instrument that, if enforced, would cause a beneficiary to forfeit his right to take under provisions of the will if they bring a will contest.

In CA, only applicable as to:

  1. A direct will contest brought without probable cause
  2. A claim that the transferor does not own the property and has no right to transfer it
  3. A creditor’s claim
32
Q

Duties of Personal Representatives/Executors

A
  1. Give notice to devisees, heirs, and claimants
  2. Discover and collect decedent’s assets and file inventory
  3. Manage assets of estate during administration
  4. Pay expenses of administration
  5. Distribute property
33
Q

Abatement

A

The process of reducing testamentary gifts in cases where the estate assets are insufficient to pay all claims against it and to satisfy all bequests; occurs pro-rata in the following order:

  1. Property passing by intestacy
  2. Residue
  3. General gifts to persons other than relatives
  4. General gifts to relatives
  5. Specific gifts to persons other than relatives
  6. Specific gifts to relatives
34
Q

Totten Trusts

A

A savings account trust in which the testator can withdraw all funds during life

35
Q

Gifts Causa Mortis

A

A gift of personal property made in contemplation, fear, or peril of impending death, with intent that the gift be revoked if the giver recovers from the illness or escapes the peril

36
Q

Intestate Succession of SP

A

Surviving spouse takes:
-All, if no surviving children, parents, or siblings
-1/2, if one survivor
1/3, if two or more survivors

37
Q

Shares of Other Heirs

A

If the decedent is not survived by issue, the share not passing to the surviving spouse passes in the following order:

  1. Decedent’s parents
  2. If no parents, siblings
  3. If no siblings, grandparents or their issue
  4. If none, issue of predeceased spouse or domestic partner
  5. If none, decedent’s next of kind
  6. If none, parents of predeceased spouse or domestic partner
  7. If none, escheats to the state
38
Q

Posthumous Children

A

A child conceived and born after the decedent’s death is treated as born during his lifetime, if it can be shown by clear and convincing evidence:

  1. Decedent authorized, in a signed writing, use of his genetic material,
  2. Person in control of his genetic material gave written notice, within 4 months of death certificate, to testator’s estate,
  3. Child conceived in utero within 2 years
39
Q

Simultaneous Death

A

If the right to inherit under the will is conditioned on surviving another person, then it must be established by clear and convincing evidence that the beneficiary survived the other person; otherwise, they will be treated as predeceased.

CA: 120 hour rule

40
Q

Disclaimer

A

A person may disclaim their interest under a will, and the interest passes as though they are predeceasing.

Must be filed within a reasonable time, in writing, signed by disclaimant, stating that it is a disclaimer, and the extent of it

41
Q

Advancement

A

If a lifetime gift is made to an heir with the intent that the gift be applied against any share they would inherit, an advancement has occurred. Must be in writing and indicate that it is an advancement.

-Advanced amount added back into the pot for purpose of computing share; do not have to return excess if advancement exceeds what they would have taken

42
Q

Slayer Statutes

A

Prohibit those who feloniously and intentionally kill the decedent from taking under the will, or from being nominated as an executor or guardian of the property.

-Also prohibit their descendants from taking; anti-lapse will not apply.

43
Q

Trusts, in General

A

A trust is a fiduciary relationship with respect to certain specific property (res) in which the trustee holds legal title, subject to enforceable equitable rights of the beneficiary

44
Q

Trust Requirements

A
  1. Intent
  2. A trustee
  3. Trust property (res)
  4. Definite and ascertainable beneficiaries
  5. Valid trust purpose
  6. Delivery
45
Q

Trustees

A

Once a trust is established, it generally will not fail for want of a trustee, because trustee dies, refuses to accept appointment, or resigns

46
Q

Removal of Trustee

A

A trustee can be removed by the court for serious breach of trust, old age, incapacity, etc.

47
Q

Resignation as Trustee

A

Once a trustee has accepted appointment, they cannot resign without the court’s permission, unless authorized by the trust terms or the beneficiaries cosent

48
Q

Beneficiaries

A

Beneficiaries must be definite and ascertainable. Any person capable of taking and holding title to property can be a beneficiary; beneficiary can disclaim their interest in writing.

49
Q

Inter Vivos Trust

A

A trust created either by a person declaring himself as trustee for another, or by transfer of property to another as trustee.

Must have present intent, manifested by conduct or words

50
Q

Secret Trust

A

A secret trust is a testamentary trust, whereby a will makes a gift that is absolute on its face, but was made in reliance on the beneficiary’s promise to hold the property in trust for another.

-If can show, by clear and convincing evidence, that the promise was made, a constructive trust will be imposed in favor of the beneficiary.

51
Q

Semi-Secret Trust

A

INVALID. The will states that a trust is being created, but does not say for whom. If the gift fails, then the named trustee holds the property as a resulting trust for the testator’s heirs

52
Q

Charitable Trust

A
  1. Must have indefinite beneficiaries (different from private express trusts)
  2. Must have charitable purpose
  3. May be perpetual
  4. Cy pres may apply, if specific charity is no longer in existence and it can be shown that is what the testator would have wanted
53
Q

Honorary Trust

A

Typically established for the benefit of pets or the maintenance of burial plots. Trustee is “on her honor” to carry out the terms of the trust, because no human beneficiary.

54
Q

Alieanbility of Trust Interest

A

Absent restrictions to the contrary, a beneficiary may freely transfer their interest in a trust, and creditors can levy or attach the interest.

55
Q

Spendthrift Trust

A

A spendthrift trust precludes the beneficiary from voluntarily or involuntarily transferring his interest in the trust, and also precludes creditors from reaching his interest to satisfy their claims, unless and until income has been distributed to the beneficiary.

Creditors of necessities, or for child support, can always reach the interest

56
Q

Discretionary Trust

A

Occurs when a trustee is given discretion whether to apply or withhold payment to the beneficiary; creditors have the same rights as the beneficiary

57
Q

Support Trust

A

Directs the trustee to pay only so much as is necessary for the beneficiary’s support

58
Q

Termination of Trusts

A

A trust terminates automatically upon expiration of the term specified in the instrument, or when all of the purposes have been accomplished.

A trust can be judicially terminated if the purpose of the trust becomes impossible, illegal, or has been completed.

59
Q

Revocation of Trusts

A

In CA, trusts are presumed revocable unless explicitly stated irrevocable

60
Q

Modification of Trusts

A

Beneficiaries may compel modification of a trust only when they have the consent of all beneficiaries, and the modification will not impair any material trust purpose.

Don’t forget unborn beneficiaries

61
Q

Powers of the Trustee

A

A trustee has all powers expressly conferred by the trust, as well as those impliedly necessary to carry out the terms of the trust

62
Q

Duty of Care

A

If trust is revocable, owed to settlor; if irrevocable, owed to beneficiaries:

Duty of care: care, skill, and caution of a reasonably prudent person

63
Q

Duty of Impartiality

A

A trustee has a duty to act impartially towards all beneficiaries, not just principal or income beneficiaries

64
Q

Duty to Separate and Earmark Property

A

Essentially, to avoid commingling. Must keep trust assets and property separate from personal property.

65
Q

Duty to Perform Personally

A

A trustee may only delegate that which would be unreasonable for her to perform herself; may never delegate entire administration of a trust

66
Q

Duty to Defend Trust from Attack

A

Duty to defend from legal attack, unless the attack was well founded

67
Q

Duty of Loyalty

A

Duty of loyalty: no self-dealing; duty to account for any profits (cannot buy or sell trust assets, even if price is fair, cannot sell property of one trust to another of which she is also a trustee, cannot borrow trust funds for personal use, or use assets to secure a personal loan, corporate trustee cannot invest its own stock in the trust)

68
Q

Duty to Preserve Property and Make it Productive

A

The power to invest is implied from the duty to make trust property productive; also, lease out land

69
Q

UPIA Duties

A
  1. Exercise reasonable care, skill, and caution when investing and managing assets
  2. Loyalty: act exclusively for the benefit of the beneficiary when investing
  3. Impartiality
  4. Prudence in investments: consider things such as general economic conditions, possible effects of inflation or deflation, expected tax consequences of investment decisions, role of each investment in the overall portfolio, etc.
70
Q

Statutory Legal Lists

A

Set forth approved investments for trust assets.

71
Q

Enforcement by Beneficiaries

A

Beneficiaries may seek damages or removal of the trustee for breach of duty

72
Q

Trustee’s Liability for Actions of Others

A

A trustee can be held liable for the actions of others: agents, co-trustees if approved or participated in the breach.

73
Q

Principal and Income Allocation (UPIPA)

A

Income: cash, insurance proceeds, 10% on oil/gas/copyrights
Principal: capital gain or distribution of liquidated assets, business and income loss, 90% on oil/gas/copyrights

Expenses allocated 50/50; ordinary expenses are allocated against income interest

74
Q

Resulting Trust

A

A resulting trust is imposed by law, involves reversionary interests, and is based on the intent of the settlor. Arises where the trust instrument specifically or implicitly provides for distribution of trust property, but the trust fails for some reason

75
Q

Purchase Money Resulting Trust

A

Presumed whenever the beneficiary furnishes the consideration for the acquisition of real property, and some other party takes title; sole purpose of the trustee is to convey title to the beneficiary

76
Q

Constructive Trust

A

An equitable remedy designed to prevent unjust enrichment resulting from wrongful conduct. Only duty of the trustee is to convey the property to the person who would have owned it but-for the wrongful conduct.