Wills and Trusts Flashcards

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1
Q

Will validity/creation

A
  1. Execution
    - writing
    - signed by T, or in his presence and at his direction
    - signed by 2 witnesses
    - witnesses know T’s will
    - witness see T sign or acknowledge T signature at same time
  2. Holographic will
    - T’s signature
    - material provisions in T’s handwriting
    - invalid if no date and unclear which will is new
  3. Capacity
    - 18 yrs old
    - sound mind/competent, understand:
    - - nature of testamentary act;
    - - situtation of his property; and
    - - relations with family members
    - no duress, fraud, undue influence
    - fraud in the execution (forgery)
    - fraud in the inducement (misrep)
    - undue influence
    - - unnatural disposition
    - - opportunity to influence
    - - T susceptible to influence
    - - beneficiary active in procuring disposition
  4. Rebuttable presumption fraud/undue influence if devise is:
    - drafter
    - one in fiduciary relationship with T
    - care custodian w/in 90 days
    - employee of any of the above
    - exceptions:
    - - blood relative
    - - less than $5k
    - - ind attorney reviewed w/out beneficiary present
  5. Conflicts of laws
    - valid if complies w/ laws of state of:
    - - execution
    - - place of death
    - - domicile
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2
Q

Will components

A
  1. Integration (usually papers attached to will)
    - present at the time of will
    - T’s intent (internal coherence)
  2. Incorporation by reference
    - existed at time of will
    - will shows T’s intent
    - sufficiently identifies papers
  3. Acts of independent legal significance
    - separate from effect in will
  4. Codicil
    - amendment to will
    - republishes will as of date of codicil
    - same formalities of will or holographic will
  5. Pour-over will
    - identifies trust in will
    - terms set forth in document other than will
    - trust executed before or at same time as will
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3
Q

Will revocation

A
  1. By physical act
    - intent to revoke must be concurrent
    - presumed destroyed if will last with T and now gone
    - burning: slightest, part burned need not be material
    - tearing, obliteration: tearing must touch material part
    - cancellation: drawing lines through words of will
    - increases not permitted, only decrease
  2. By subsequent will
    - express
    - implied by inconsistencies b/w wills
  3. By operation of law
    - previous spouse after divorce
    - omitted child/spouse, unless:
    - - intentionally omitted on face of will;
    - - otherwise provided for outside will; or
    - - child(ren) at time of will and substantially all estate to other parent of omitted child
    - - spouse valid agreement waiving right
    - omitted spouse gets intestate share up to 1/2 SP
  4. Dependent Relative Revocation (DRR)
    - T revokes 1st will
    - mistakenly believes 2nd will valid when it isn’t
    - if T knew 2nd will not valid, would not have revoked 1st will
    - 1st will probated anyway
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4
Q

Will revival

A
  • 1st will revoked
  • 2nd will revoked
  • 1st will revived if T intended to revive it
  • extrinsic evidence ok
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5
Q

Will distribution

A
  1. Classification of gifts
    - specific gift
    - - identifiable property
    - - stock splits follow original stock
    - - stock dividens look to T’s intent
    - general gift
    - demonstrative gift
    - - general, but specifies property or fund to take from
    - residuary: remainder
  2. Ademption
    - by extinction
    - - gift no longer there
    - - look at T’s intent
    - by satisfaction
    - - given to beneficiary during T’s life
  3. Abatement
    - gifts reduced to pay all debts
    - reduced in order:
    - - property not in will
    - - residuary gifts
    - - general - nonrelative
    - - general - relative
    - - specific - nonrelative
    - - specific - relative
  4. Exoneration
    - property doesn’t abate to exonerate mortgage, lien, deed of trust, etc. unless specific intent
    - specific gift of other property cannot be abated to exonerate
  5. Lapse/antilapse
    - predeceased beneficiary gift lapses to residue
    - if beneficiary kindred, antilapse, so gift to issue
    - simultaneous death: apply lapse or antilapse
  6. Survivor’s rights
    - widow elects under will or statutory share of her 1/2 of CP or QCP
    - omitted heirs take intestate share, except:
    - - T’s intent in will
    - - otherwise provided for
    - - all of estate to other parent
  7. Bars to succession
    - no contest: ok to bring if probable cause
    - killers treated as predeceased
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6
Q

Intestate distribution

A
  1. Intestate succession
    - all CP and QCP to surviving spouse
    - all SP to spouse if no child; 1/2 if 1 child/parents, 1/3 if 2+ children
    - if no spouse/partner, then to
    - - issue
    - - parents
    - - grandparents
    - - issue of predeceased spouse
    - - next of kin
    - - parents of predeceased spouse
    - - escheat to state
    - heir must survive decedent by 120 hours
  2. Per capita - generation
    - 1st generation with living
    - each living gets one share
    - shares of all deceased split equally between next generation living
  3. Per capita - representation
    - 1st generation with living
    - each living gets one share
    - share of deceased goes to his issue equally
    - if deceased has no issue goes back to all at that level
  4. Strict per stirpes
    - 1st generation with living or deceased with issue
    - each living or deceased issue gets one share
  5. Children
    - adopted treated as natural
    - step or foster take only if
    - - relationship during child’s minority
    - - continued through life
    - - legal barrier prevented adoption
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7
Q

Will contract issues

A
  1. K to make a will, not make a will, revoke a will established by:
    - material provisions of K in will
    - reference in will to K and extrinsic evidence
    - writing signed by decedent
  2. Joint or mutual will do not create presumption of K
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8
Q

Trust creation/validity

A
  1. Trust created by (1 of the following)
    - declaration by owner holding property as trustee
    - transfer of property during owner’s life to trustee
    - transfer by owner in will (testamentary)
    - exercise of power of appointment to another as trustee
    - enforceable promise to create trust
  2. Validity requires
    - settlor’s intention
    - indentifiable trust property
    - legal purpose
    - ascertainable beneficiary
    - court can appoint trustee
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9
Q

Trust limitations

A
  1. Real property needs writing
  2. Oral trust for personal property is by clear and convincing evidence
  3. Performed by trustee only
  4. Invalidation - see Wills (fraud, undue influence, capacity)
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10
Q

Types of trusts

A
  1. Express: all above validity requirements met
  2. Testamentary: in will
  3. Pour over: see pour-over will
  4. Secret: no beneficiary/intent on face of trust
  5. Semi-secret: no beneficiary named, but intent there
  6. Spendthrift: beneficiary cannot alienate his interest
  7. Support: for beneficiary’s health, education, maintenance
  8. Discretionary: trustee can distribute/withhold from beneficiary
  9. Charitable: benefits society
    - cy pres: if can’t be done court tries substitute
  10. Honorary: no charitable or private beneficiary
  11. Totten: beneficiary take money leftover in bank account
  12. Resulting: implied in fact; goes back to settlor’s estate. Arises from:
    - purpose of trust ends
    - trust fails
    - illegal trust
    - excess corpus
    - semi-secret
    - purchase money resulting trust: buyer (beneficiary) pays consideration for property but allows title to be taken in the name of another (trustee)
  13. Constructive: applied to prevent unjust enrichment for fraud, self-dealing, undue influence, secret trusts, etc.
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11
Q

Trust administration

A
  1. Powers of trustee
    - enumerated and implied
  2. Duties of trustee
    - account and inform
    - not to delegate unless uses skill and due care
    - impartiality (treat all beneficiaries fairly)
    - due care: reasonable prudent person dealing with own affairs
    - - investigate
    - - diversify
    - segregate and earmark: no commingle
    - loyalty: no self-dealings or conflicts of interest
    - prudently invest
    - - statutory lists
    - - UPIA: look at portfolio as a whole; reasonable
    - defend actions and enforce claims
  3. Liabilities of trustee
    - personally liable for violating trustee duties
    - liable for torts and contracts if within scope
  4. Duties of 3rd parties
    - transfer to BFP cuts off beneficiary’s interest
    - transfer to non-BFP can be set aside by beneficiary
    - 3P can hold property as constructive trustee
  5. Allocation
    - income to beneficiary
    - principal to remainderman (inherits property on termination)
    - trustee uses best judgment in allocating
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12
Q

Trust modification/revocation

A
  1. Majority: settlor can modify or revoke only if right reserved
  2. Minority: settlor can modify or revoke even if right not reserved unless stated otherwise
  3. Court can modify to meet settlor’s intent or for cy pres
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13
Q

Trust termination

A
  1. Trustee cannot terminate unless trust says so
  2. Beneficiaries can terminate if all competent, all consent and doesn’t frustrate trust purpose
  3. Settlor can terminate if he reserved power to do so
  4. Court can terminate if trust purpose frustrated/impossible/illegal
  5. Lapse and antilapse apply
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14
Q

Trustee breach of duty remedies

A
  1. Trustee cannot offset losses
  2. Damages, constructive trust, tracing, equitable lien, remove trustee, surcharge for resulting loss
  3. Laches if beneficiary waited unreasonably long to bring claim and prejudice trustee/other beneficiaries
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