Wills and Trusts Attack Cards

Question 1

Will Formalities/Execution

Answer 1

In CA, the will must be in writing, signed by the testator in the joint presence of two witnesses who understand that the instrument they sign is the testator’s will.

Interested witnesses: In CA, a will is valid if it is signed by an interested witness. However, unless there are two disinterested witnesses present, there is a presumption of duress, meance, fraud or undue influence if the will makes a gift to the interested witness. If the presumption is not rebutted, then the witness may not take more than he would have received had the testator died intestate.

Question 2

HOLOGRAPHIC WILL

Answer 2

A will is recognized as a holographic will if it is signed and the material portions are in the testator’s handwriting.

Question 3

CAPACITY/INTENT

Answer 3

An individual must be at least 18 years old and of sound mind to make a valid will.

• T must understand nature of testamentary act
• T must understand situation of his property and relations with family members

If suffers from mental disorder that results in hallucinations or delusions that cause him to devise property in a way that he would not have done so then no capacity to make will.

Courts can appoint conservators to make wills on behalf of people who lack capacity.

Question 4

Harmless Error

Answer 4

CA law states that a will may still be admitted to probate if the proponent establishes by clear and convincing evidence that the testator intended the document to be her will.

Question 5

Fraud in Execution (forgery)

Answer 5

The execution or revocation of a will or part of will is ineffective to the extent that it was procured by duress, menace, fraud, or undue influence.

Fraud in execution occurs when T is unaware he is signing a will or the will is forged by another, resulting in the entire will being invalid.

Question 6

Fraud in Inducement (misrepresentations)

Answer 6

Fraud in the inducement occurs when a wrongdoer influences the testator through misrepresentations to include provisions in a will, resulting in only those particular fraudulent provisions being invalid.

Question 7

Fraud Preventing Will Execution or Revocation

Answer 7

Fraud preventing will or revocation occurs when fraud is implemented to prevent a will execution or revocation, courts are split when a will was not executed. Some apply intestate succession and others create constructive trust.

Question 8

Common-Law Undue Influence

Answer 8

• T susceptible to influence
• Opportunity to influence
• T left an unnatural disposition
• Beneficiary active in procuring disposition

Question 9

CA Statutory Undue Influence

Answer 9

• Excessive persuasion
• That causes another to act or refrain
• By overcoming their free will
• Results in inequity
• Can use circumstantial evidence for proof and use factors such as vulnerability, influencer’s authority, and actions of influencer

Question 10

Presumption of Fraud/Undue Influence

Answer 10

If devise is to

• drafter
• one in fiduciary relationship with T/transcribed
• Care custodian w/in 90 days
• Employee or cohabitant of any of the above
• EXCEPTIONS:
  
  • Blood relative
  • less than 5k
  • Attorney consult

Question 11

CONFLICT OF LAWS

Answer 11

Valid if complies with laws of state of

• execution
• place of death
• domicile of T

Question 12

INTEGRATION

Answer 12

• papers present at time of will (stapled, folded together)
• T’s intent
• extrinsic evidence okay to show intent

Question 13

INCORPORATION BY REFERENCE

Answer 13

• existed at time of will
• will show T’s intent
• sufficiently described in will

A writing that is not valid as a will may be incorporated by reference into a will if the will manifests an intent to incorporate the writing and the writing is identified with reasonable certainty. This writing must exist at time the will is executed. (CA also allows a testator to make a tangible list of personal property which may be prepared before or after the execution of the will)

Question 14

Share for Surviving Spouse

Answer 14

Community property: If the decedent is married, the spouse will receive one-half of community property and one half of quasi-community property acquired by the decedent. The spouse had already owned his or her one-half of the community property. Thus, this means that the spouse will receive all of the community property and quasi-community property.

Separate property:

• Spouse gets everything if the decedent did not leave issue, parent, brother, sister, or issue of deceased brother or sister.
• Spouse gets one-half of the separate property if the decedent is survived by one lineal descendant or by a parent or issue of a parent.
• Spouse gets one-third of the decedent’s separate property if the decedent is survived by more than one lineal descendent.

Question 15

Share for Children

Answer 15

In CA, if there is no surviving spouse, the entire estate passes to the decedent’s surviving issue. If the issue are of the same generation, they take equally (per capita). If they are not of the same generation, they take per capita with representation.

Adopted children are children for purposes of intestate succession.

Question 16

Codicils

Answer 16

A codicil is a supplement to a will that modifies it, adds to it, explains it, or revokes it. A codicil must generally be executed in the same manner as a will. A codicil is said to republish any will that it refers to. When republication takes place, that republished will is deemed to be executed on the same day as the codicil.

In CA, a codicil can also remedy any issues with the initial will (such as an interested witness problem) as it can be treated as the will and incorporate by reference the will that was not properly executed.

Further, to the extent that the codicil is inconsistent with the will, the codicil controls.

Question 17

Revocation

Answer 17

Revocation can take place by physical act or operation of law. A will may be revoked by the execution of a new will or by some other physical act, such as cancellation or other writings on the will. This must be done with intent to revoke the will. The testator or someone acting at the testator’s direction and in the testator’s presence and by the testator’s direction may revoke the will. Revocation may also occur by operation of law due to changed circumstances such as divorce or annulment of marriage.

Question 18

Revival

Answer 18

If a testator wrote two wills and revokes the second one, revocation of the second will does not revive the earlier will unless it is evidence that the testator intended the previous will to take effect as executed.

Question 19

Lapse and Anti-lapse

Answer 19

If a beneficiary dies before the testator than their gift lapsed and falls into the residue or intestate succession.

Under CA law, if a beneficiary dies before the testator and was related by blood to the testator within a certain degree of relationship and had issue who survived the testator, the gift to the deceased beneficiary is saved from lapse and the beneficiary’s issue will take in lieu of the deceased beneficiary.

In CA, the antilapse statute applies if the gift is to the kindred of the testator’s spouse or domestic partner, but it will not save a gift to a spouse.

Question 20

Pretermitted Child

Answer 20

A pretermitted child is one that is not named in the will because the child was not yet born at the time the will was written. In CA, this also covers a child who the testator believed was dead or if the testator was unaware of the child’s birth.

If testator had no children when the will was executed, the child is generally entitled to whatever share of the testator’s estate the child would have received if the testator had died intestate. EXCEPTIONS:

1. All assets to other parent: an after-born child is denied a share of the decedent’s estate if the decedent gave all or substantially all of his estate to the child’s other parent.
2. Intentionally omitted child: if the omission was intentional, the child is not treated as an omitted child.
3. Other assets given to child: if the testator provided for the child by transfers outside of the will with the intent that it would be in place of a gift given by will, the child will not take a portion of the decedent’s estate.

Question 21

Ademption

Answer 21

If specifically devised property is not in the testator’s estate when the testator dies, the bequest adeems, that is the gift fails. In CA, the testator’s intent is critical in determining whether a gift adeems, and extrinsic evidence is admissible. Ademption is not favored in CA, and generally the beneficiary will recover replacement property if the original gift is no longer in the estate.

Question 22

Valid Express Trust

Answer 22

A trust is valid if the following elements are present: (1) it has a trustee, (2) it has a beneficiary, (3) it has trust property (res), (4) settlor has the present intent and capacity to create a trust, and (5) the trust is created for a valid purpose.

Trustee: A trustee manages the trust property and holds it for the benefit of the beneficiaries. A trust will not fail if a specific trustee is not appointed or it the trustee refuses to serve. The court will simply appoint one.

Beneficiary: in a private express trust, a beneficiary must be definite and ascertainable. (not needed in charitable trust)

Present intent and capacity to create trust: The settlor must have the capacity to create a trust and must intend to create a trust. No specific words are needed but precatory language does not show intent.

Trust property (trust res): trust property can include any presently existing interest in property that is able to be transferred (future interest like remainder). Delivery of trust property to the trustee is not required for a testamentary trust or if the settlor creates a self-declaration of trust (orally or in writing declares himself trustee over particular property).

Valid Trust Purpose: the trust purpose must not be illegal or against public policy.

Question 23

Testamentary Trust

Answer 23

Definition: A trust that is created by a valid will.

Validity: The essential elements must be ascertained from (1) the terms of the will, (2) an existing writing incorporated by reference, or (3) the exercise of a power of appointment created in the will.

Question 24

Pour-over Will

Answer 24

Definition: a will that gives a gift to a trust

Validity: a pour-over will is valid if:

• the trust is incorporated by reference (the trust is identified in the testator’s will and the terms are incorporated in a writing executed before or concurrently with the execution of the will)
• there are facts of independent significance (even without the will, the intervivos trust would exist so the trust instrument is independent from the will), OR
• the trust was valid and in existence before the will was executed or at the time it was executed.

Question 25

Charitable Trusts

Answer 25

A charitable trust may be created for the relief of poverty, or the promotion of education, religion, health, scientific, literary, benevolent, governmental purposes, etc. It must have a large number of not readily identifiable individuals (rather than a few identifiable individuals). Note that charitable trusts are NOT subject to the rule against perpetuities.

Question 26

Modifying and Terminating a Charitable Trust

Answer 26

A charitable trust may fail if “a particular charitable purpose becomes unlawful, impracticable, or impossible to achieve.” However, the cy pres doctrine, which is a common law doctrine recognized by CA, allows the court to save the trust and carry out the charitable intention as nearly as possible.

The doctrine of cy pres provides that if a particular charitable purpose has become unlawful, impracticable, or impossible to achieve, no alternative charity is named in the trust and the court finds that the settlor had general, rather than specific charitable intent, then, the trust will not fail, the trust property foes not revert to the settlor or the settlor’s successors in interest, and the court may apply cy pres to modify or terminate the trust by directing that the trust property be applied or distributed, in whole or in part, in a manner consistent with the settlor’s general charitable intent.

Question 27

Duty to Administer Trust

Answer 27

The trustee shall administer the trust in good faith, as a prudent trustee would, and in accordance with the terms of the trust. If the trust is irrevocable, the trustee must administer the trust solely in the interest of the beneficiaries. If the trust is revocable, the trustee has a duty of loyalty to the settlor.

Question 28

Duty to Account

Answer 28

The trustee must keep and render accounts and furnish information to the beneficiaries at their request.

Question 29

Duty of Loyalty and to act impartially

Answer 29

A trustee has a duty of loyalty. If the trust has two or more beneficiaries, the trustee should give due regard to the beneficiaries’ respective interests when it invests, manages, and distributes trust property.

A trustee may not use trust property for his own profit or for any purpose unconnected with the trust. For example, the trustee may not buy or sell trust assets or personally profit by purchasing stock in his own corporation.

Question 30

Duty of Care

Answer 30

The trustee shall exercise care, skill, and caution in administering the trust.

Uniform Prudent Investor Act (UPIA): Almost all states, including CA, have adopted, in one form or another, the UPIA. This states that a trustee must invest trust assets prudently. This requires the trustee to examine several factors including (1) the distribution requirements of the trust, (2) general economic conditions, (3) the role the investment plays in relation to the trust’s overall investment portfolio, and (4) the trust’s need for liquidity, regularity of income, and preservation of appreciation of capital.

Entire estate portfolio examined to determine prudence: A trustee’s investment and management decisions with respect to individual assets should be evaluated in the context of the estate portfolio as a whole and as a part of an overall investment strategy rather than in isolation. Thus, even if one particular investment looks imprudent, if it is looked in relation to other investments, it might be considered prudent.

Question 31

Duty to Diversify

Answer 31

One of the hallmarks of prudent investing is diversification. The trustee is not liable for declines in value due to a downturn resulting from general economic conditions.

Question 32

Remedies for a Breach of Trust

Answer 32

Include suspending or removing a trustee, decreasing compensation, compelling a trustee to perform trust duties, and compelling the trustee to pay damages to make the beneficiaries whole. If the trustee was self-dealing, the trustee must also pay back any profits from self-dealing.

Question 33

Termination of Trust

Answer 33

Under Uniform Trust Code and CA, a trust is presumed to be revocable unless otherwise stated.

If all beneficiaries of an irrevocable trust consent to terminate a trust after the settlor’s death, they may petition the court for modification or termination of trust.

However, if the continuance of the trust is necessary to carry out a material purpose of the trust, the trust cannot be modified or terminated unless the court determines that the reason for doing so under the circumstances outweighs the interest in accomplishing a material purpose of the trust.