Wills and Trusts

Question 1

Wills - standard execution requirements

Answer 1

Writing
Signed by T (or in his presence and at his direction)
Signed by 2 witnesses
Witnesses know that the document is a will
Witnesses are present at the same time to see T sign or acknowledge T signature. (Witnesses need not attest at same time)

Question 2

Holographic will

Answer 2

T signature
Material provisions in T’s handwriting
Invalid if no date and unclear which will is newer

Question 3

Wills - Capacity

Answer 3

18yo
Sound mind/competent (understand nature of testamentary act, AND understand nature and situation of T property, AND remember and understand relations with family)
No fraud in execution (forgery) or inducement (misrepresentations).
No undue influence (opportunity to influence, T susceptible to influence, beneficiary active in procuring disposition)

Question 4

Undue influence is assumed when will makes a gift to….

Answer 4

Drafter
Person in fiduciary relationship w/ T
Care custodian w/in 90 days of such care
Exceptions: T’s blood relative or cohabitant, gift is less than $5k, or an independent attorney was consulted without the beneficiary being present

Question 5

Conflict of laws for wills

Answer 5

Valid if complies with laws of state of execution, place of death, domicile

Question 6

Will integration

Answer 6

Papers are integrated into the will if they existed at the time of will execution AND the testator intended for them to be part of the will.

Question 7

Will - requirements for incorporation by reference of a non-will document

Answer 7

OK if the doc existed at time of will, the will shows T’s intent to incorporate the doc, and the will sufficiently describes the doc.

Question 8

Codicil execution requirements

Answer 8

same as will

Question 9

Effect of codicil as to date of will

Answer 9

Republishes will as of date of codicil

Question 10

Methods of will revocation

Answer 10

By physical act (tearing; burning; crossing out; will presumed destroyed if it was last with T and is now gone)
By subsequent will (express or implied)
By operation of law (omitted child/spouse)

Question 11

Dependent Relative Revocation

Answer 11

T revokes 1st will, mistakenly believes the 2d will is valid, and T would not have revoked the 1st will if T had thought the 2d will was invalid, the court will probate the 1st will.

Question 12

Will Revival

Answer 12

If T revokes the first will and later revokes the second, extrinsic evidence will be admissible to determine whether T intended to revive the first will.

Question 13

Classification of gifts

Answer 13

Specific gift, general gift, demonstrative gift, residuary

Question 14

Wills - specific gift of stock - how to deal with splits and dividends?

Answer 14

Splits go to identified gift beneficiary. For dividends look to T’s intents.

Question 15

Wills - ademption - two types

Answer 15

By Extinction (gift no longer there, and T did not intend gift to survive)
By Satisfaction (gift given to beneficiary during T's life)

Question 16

Wills - abatement - defined

Answer 16

A court will reduce the gifts in a will in order to pay all estate debts

Question 17

Wills - Order of abatement

Answer 17

Property not in will
Residuary
General - nonrelative beneficiary
General - relative beneficiary
Specific - nonrelative beneficiary
Specific - relative beneficiary

Question 18

Wills -Lapse/Anti-lapse Requirements

Answer 18

• Predeceased beneficiary gift lapses to residue, BUT:
• If beneficiary is kindred OR a class, anti-lapse statute applies, so gift goes to issue
• Simultaneous death – gift lapses

Question 19

Survivor’s Rights

Answer 19

• Widow can elect under will or “statutory share,” i.e., their half of the CP and QCP if the testator attempted to devise it.
• Spouse can set aside transfer of CP or QCP.
• Omitted heirs take intestate share, except when otherwise provided for or all of the estate goes to the other parent.

Question 20

Bars to succession

Answer 20

• Slayer statute: Killers treated as though predeceased

* No-contest provisions cannot bar claims based on probable cause

Question 21

Intestate Succession

Answer 21

If no other lineal heirs, parents, or parents’ issue, spouse takes all SP.
If one child, spouse takes 1/2 SP.
If two+ children, spouse takes 1/3 SP.

Question 22

Intestacy – If no surviving spouse/registered domestic partner, then to

Answer 22

Issue, parents, Issue of parents, grandparents, issue of predeceased spouse, etc.

Question 23

Intestacy - Heir must predecease decedent by at least….

Answer 23

120 hours

Question 24

Intestate distribution methodology

Answer 24

California distributes intestate property per capita with representation. This means that the property is split equally at the first generation at which an heir is entitled to take. If someone in that generation is already deceased, that person’s share is split equally at the next generation.

Question 25

Wills and intestacy - treatment of Adopted children

Answer 25

Treated as natural children

Question 26

Wills and intestacy - Step-children take under intestacy if

Answer 26

Relationship during child's minority, Continued through life, and Legal barrier prevented adopted.

Question 27

Trust creation requirements

Answer 27

* Intent to create a trust (precatory language, e.g., "I hope" is inadequate) * Trust property * Legal purpose (not unlawful or against public policy) * Ascertainable beneficiary NOTE: Trustee not necessary - a court can appoint.

Question 28

Ways of showing settlor's intention

Answer 28

* Settlor's declaration * Transfer of property during owner's life to trustee * Transfer by owner in will * Enforceable promise

Question 29

Oral trusts

Answer 29

* Not OK to transfer interest in real property (must be signed by settlor or trustee) * Must be proven by clear and convincing evidence

Question 30

Trust capacity

Answer 30

Same as will capacity 18yo Sound mind/competent No fraud in execution (forgery) or inducement (misrepresentations). No undue influence (opportunity to influence, T susceptible to influence, beneficiary active in procuring disposition)

Question 31

Types of Trusts

Answer 31

Express, Testamentary (in will), Pour-over (identified in will, terms set forth in document other than will, trust executed before or at same time as will), Spendthrift (beneficiary cannot alienate interest) Support (for health, education, maintenance) Discretionary (Trustee can distribute/withhold from beneficiary) Charitable (must benefit society generally, not specific persons/animals. Remember possibility of cy pres) Resulting trust (implied-in-fact trust that goes back to settlor's estate, if purpose of trust ends, trust fails, trust illegal, excess corpus, semi-secret)

Question 32

Resulting trust

Answer 32

Implied-in-fact trust that transfers trust property back to settlor or settlor's estate, if purpose of the main trust ends, trust fails, trust illegal, excess corpus, semi-secret

Question 33

Cy pres

Answer 33

doctrine for court to substitute trust beneficiary for charitable trust so it doesn't fail

Question 34

Powers of trustee

Answer 34

Express and implied

Question 35

Duties of trustee

Answer 35

``` Account and inform Not to delegate w/out skill and due care Impartiality towards all beneficiary Due care (investigate AND diversify) Segregate and earmark Loyalty (no self-dealing or conflicts of interest) Prudently invest (diversify to mitigate risk, look to portfolio as a whole to determine whether reasonable IN LIGHT OF TRUST PURPOSES) Defend actions against trust Enforce claims in trust's favor ```

Question 36

Liabilities of trustee

Answer 36

Personally liable for breach of fiduciary duties

Question 37

Liabilities of trustee in contract and tort

Answer 37

Trustee is liable for torts and Ks if within scope of trustee duties, unless trust instrument states otherwise

Question 38

Transfer of trust property to BFP

Answer 38

Cuts off beneficiary's interest, but beneficiary may be able to recover from trustee

Question 39

Transfer of trust property to non-BFP

Answer 39

Can be set aside by beneficiary, or 3d party can be turned into constructive trustee

Question 40

Trust modification

Answer 40

Majority: Settlor can modify or revoke trust only if right is reserved Minority: Settlor has implied right to modify or revoke Court can always modify to meet settlor's intent or for cy pres

Question 41

Trust Termination

Answer 41

* Beneficiaries can terminate if all competent, all consent, and it doesn't frustrate trust purpose. * Court can terminate if trust purpose frustrated/impossible. * Trustee cannot terminate a trust unless trust instrument says so.

Question 42

Breach of Trust - Remedies

Answer 42

Damages, constructing trust, tracing, equitable lien, remove trustee, surcharge for resulting loss.

Question 43

Trust Income Allocation

Answer 43

The trustee can use best judgment in allocating. Default rule is income to beneficiary, principal to remainderman.

Question 44

Revocation of a codicil - effect on will

Answer 44

Leaves remaining will valid

Question 45

Revocation of a will - effect on codicil

Answer 45

Revokes both will and codicil

Question 46

Pour-over trust

Answer 46

Valid if * The trust is identified in will, * The trust terms are set forth in document other than will, AND * The trust was executed before or at same time as the will.

Question 47

Wills - effect of crossing out one of two beneficiaries

Answer 47

That beneficiary's portion goes into residuary

Question 48

Gift adeems by extinction - what next?

Answer 48

* Look to testator's intent to determine whether the gift adeems * Give the beneficiary a general pecuniary gift if the adeemed gift involved (1) securities that changed form, (2) a conservator that sold the property, or (3) eminent domain.

Question 49

Gift encumbered by a lien - does the residuary estate pay the lien off on behalf of a beneficiary?

Answer 49

Not without clear T intent to do so. A specific devisee of encumbered property is not entitled to have the debt paid off by the residual estate unless the testator’s intent to do so is clear in the will. A testator can specifically require that a lien be exonerated, in which case the encumbered property will not abate to exonerate the lien unless specifically stated in the will. A general directive to pay debt is insufficient.

Question 50

What counts as an advancement for purposes of intestacy?

Answer 50

A gift is an advancement only if (1) the decedent declared in a contemporaneous writing (or the heir acknowledged in a writing) that the gift was an advancement; or (2) The decedent’s contemporaneous writing or the heir’s written acknowledgement otherwise indicates that the gift was to be taken into account in computing the division and distribution of the decedent’s intestate estate.