Wills and Trusts Bar Flashcards
What are some examples of non probate property?
Intervivos gifts
Intervivos transfers
Future interests
Joint tenancy
Assets held in pay on death format including
- bank accounts
- corporate securities
- life insurance
- retirement plans
- annuities
- 401ks
- pensions
3 overall requirements for a valid will
(1) Testamentary capacity;
(2) Testamentary intent; AND
(3) Execution of will formalities.
Define testamentary capacity
Legal and Mental
Legal - testator must be at least 18 years old
Mental
Testator must:
(1) Understand nature of act;
(2) Understand general nature and extent of property; AND
(3) Understand who family members are.
- Note: Cannot be suffering from an insane delusions/hallucinations.
- Note: Mentally challenged can make will so long as they comply with above. If adjudicated incompetent, raises rebuttable presumption of lack of mental capacity.
Define testamentary intent
Testator must intend that the document be his will.
4 requirements for execution of will formalities
(1) A writing;
(2) Signed by the testator or by a proxy in the testator’s presence and under the testator’s direction;
(3) Two disinterested witnesses who are both present to witness the signing and understand that the document is a will; AND
(4) Both witnesses sign the will at some point prior to the testator’s death.
- Signature: Any mark by T (initial, nickname, rubber stamp)
- Signature can appear anywhere on the document
- Witnesses do not need to know specific contents of will
Define interested witness
An interested witness is one who takes under the will. This raises a presumption of undue influence and the respective part of the will is ineffective unless the proponent rebuts by clear or convincing evidence or by having two disinterested witnesses.
What is the harmless error rule?
If the will is otherwise invalid, the proponent of the document can show by clear and convincing evidence that the testator intended the document to be their will. The court will probate the will.
- If will might be invalid, run it both ways. If valid, this is how distribution works. If not valid, then apply intestacy laws.
- A spouse needs permission of other spouse to fund a trust with CP funds.
What is the rule on conservators?
A conservator may make a will or a codicil so long as the court appoints the conservator. The conservator owes the testator fiduciary duties including the duty of care and the duty of loyalty.
Define the Savings Statute
A will is valid if validly executed under:
(1) California law
(2) The laws of the state where the testator was domiciled when the will was executed, or
(3) The laws of the state where the testator was domiciled at his death.
Which state law do we use when looking at real property versus personal property?
For real property, we use the laws of the state in which the real property sits
For personal property, we use the laws of the state in which the testator was domiciled at the time of his death
What are the 4 situations in which undue influence is presumed?
When the following 4 people take under the gift:
(1) The person who drafted the will
(2) A person who drafted the will in a fiduciary relationship with the testator
(3) Care custodian during care period or within 90 days of provision of services
(4) Employee or cohabitant of any group above
3 exceptions to rebut the presumption?
(1) Beneficiary is blood relative or cohabitant
(2) Property valued at $5K or less
(3) Independent counsel reviews instrument and counsels testator without the beneficiary being present
Note: Surviving spouse and children are not on this list except as an exception.
3 requirements for undue influence
(1) Influence exerted;
(2) Overcoming the free will of the testator; AND
(3) Caused an unnatural devise where the Testator would not have made the decision but for the influence.
Notes
If only a portion of the will is through undue influence, only that part is void.
Analyze age, actions, tactics, vulnerability
Where confidential relationship exists, burden of proof shifts to that party
Define duress
Duress is similar to undue influence yet involves a physical threat or physical force
4 requirements for fraud
(1) False representation;
(2) Made knowingly by the person who made the statement;
(3) Reasonable reliance; AND
(4) Testator would not have made executed the will had it not been for the statement
Effect: Only fraudulent provisions invalid
What are the 3 types of fraud
(1) Fraud in execution
(2) Fraud in inducement
(3) Fraud preventing will execution or revocation
2 elements for fraud in execution
(1) Testator did not know he was signing will or will was forged; AND
(2) Entire will invalid.
2 elements for fraud in the inducement
(1) Misrepresentations cause T to include provisions in the will; AND
(2) Only fraudulent provisions invalid.
What is the rule for fraud in attempts in will execution or revocation?
Split Jx
- Some courts apply intestate succession
- Some courts apply a constructive trust
But a court will likely probate the will and apply a constructive trust
2 instances where the court can consider parole evidence to resolve a mistake or ambiguity?
(1) Words added
(2) Mistake in the description
Words added: court can strike out words
Mistake in description (ambiguity): allow parole evidence to determine T’s intent
Examples that court can resolve
* I leave 50% to each of A, B, and C.
* To my sister Pat, but the brother is Pat.
2 situations where the court will not be able to provide a remedy for a mistake?
(1) Words were left out of the will
(2) Mistake made due to an external, erroneous belief like something belonging in another country
Define a codicil.
A codicil is an amendment to an existing will. The codicil must be executed with the same requirements as those for a will. The codicil and will are treated as a single instrument and are read together. If there are inconsistencies between the two documents, the codicil will be applied. The codicil republishes the will as of the date of the codicil.
- Example – bootstrapping invalid will
1. T executes invalid will. Later, T executes valid codicil. Codicil bootstraps otherwise invalid will.
2. Exam Tip: Valid: Witness is a friend and given a gift in will but T later executes a valid holograph will/codicil, which republishes original will and eliminated interested witness issues
How are alterations to the face of the will treated?
Any alterations on the face of a will are ineffective unless:
(1) The will is re-executed with proper formalities, or
(2) The changes qualify as a holographic will.
Define a holographic will.
A holographic will is an unattested will that is signed by the testator with the material provisions of the will in his handwriting. The testator must have testamentary intent and capacity.
Where a holographic will is missing a date, the will only be given accordance for its consistencies between the holographic will and another instrument.
Listen to some notes on holographic will
Crossing out an item by handwriting (e.g., drawing an X on a disposition to someone) and supplying a signature
Handwritten changes
1. Made to a holographic will: Given affect
2. Made to an attested will: Not given affect and may work a revocation
Note
1. Oral wills are never allowed
define a pour over will and its 2 requirements
A pour over will is created when a testator provides that the residuary or left over of his assets will be poured into the trust. The property goes into the trust on the date of the testator’s death, not the date when the will was written.
Requirements
(1) Trust identified in testator’s will; AND
(2) Written instrument exists containing trust terms, that was made before or concurrently with the will.
Define republication
A validly executed codicil operates as a republication of the will as of the date on the codicil.
Conclusion: The will is republished to 2012.
What are 4 ways to bring in outside information and/or a document into a will?
(1) Integration
(2) Incorporation by reference
(3) California special rule for limited tangible personal property
(4) Acts of independent legal significance
Define integration.
A document will be integrated into the will if:
(1) Testator had an intent to incorporate the document; AND
(2) The document was physically present at the time the will was executed.
Define incorporation by reference.
Incorporation by reference occurs when:
(1) Testator intended to incorporate the document by reference;
(2) The document was in existence at the time the will was executed; AND
(3) The document is sufficiently described in the will.
Define the California Special Rule for Tangible Personal Property
A list of items will be admitted into probate if:
(1) The will refers to the list;
(2) The list is dated;
(3) The list is handwritten or signed;
(4) The list describes the property and beneficiary with sufficient certainty; AND
(5) The entire list does not exceed $25K in value and one item does not exceed $5K in value
One sentence definition for acts of independent significance
A will may identify beneficiaries or dispose of property by reference to acts that have independent significance.
Note: Applies whether events occur before or after will execution or after T’s death
Example: Marriage; identifying who employees are in a class gift; identifying which car to leave Rachel in “I leave my car to Rachel” and event is buying of BMW later; referencing newspaper clippings
EXAM TIP – Issue spotting
1. Anytime you issue spot integration, also run incorporation by reference and acts of independent significance.
What is the rule on revoking a gift?
A person with testamentary capacity may revoke their will at anytime prior to their death.
What are the 3 ways to revoke a will or a part of a will?
(1) By subsequent written instrument
(2) By physical act
(3) By operation of law
Define revocation by subsequent written instrument
A will may be revoked in whole or in part by a subsequent written instrument. The two documents are read as a single instrument. Where there are inconsistencies, the latest instrument will control.
Define revocation by physical act.
- Rule: A will/codicil or part of one can be revoked by a physical act (e.g., by cancellation where lines are drawn through a codicil). The testator’s intention to revoke must be concurrent with the physical act.
Note: Increasing a gift on its own is not OK unless to a residuary. - Duplicates
Revocation by physical act revokes all duplicates. - Codicil
- Physical destruction of codicil does not revoke will, even if T intended
- Physical destruction of will revokes codicil, unless T did not intent to
- When will and codicil on same paper, defacing will revokes codicil but not other way around, unless T intended
listen to examples of revoking by operation of law
Subsequent will or codicil
Adding an unintentionally omitted spouse
Removing all devises to previous spouse after divorce.
Look to see if a codicil was created as it republishes the will as of that date and thus the spouse or child would no longer be omitted.
2 presumptions on revocation
(1) If will found at death in normal place with no suspicious circumstances, will not revoked
(2) If will never found, presumed destroyed with intent to revoke
Define the Dependent Relative Revocation
A DRR cancels the revocation of a prior will where the revocation was based on a mistake. The DRR only revokes the most recent instrument. The more similar the wills, the more likely the court is to revive the first one. Parole evidence is allowed.
Conclusion: The first will is revoked. The subsequent one is voided.
Define the rule for reviving a will
Where an initial will is revoked, and the subsequent will is revoked by physical act, the first will is revived if this is what the testator intended.
Listen to background notes
- SP
Rule: A married person is entitled to dispose of their separate property as death as they wish. - Devise: Gift of real property
- Bequest: Gift of personal property
what are the four types of gifts
(1) Specific
(2) General
(3) Demonstrative
(4) Residual
Define a specific gift
A specific gift is a gift of particular, identifiable property. Such gifts may adeem is no longer available at the time of the testator’s death.
Examples: My diamond earrings, my cottage in Malibu, my ABC stocks
Note: A specific gift may be of general nature. Example: “I leave my computer to Walter.”
Define a general gift
A general gift is a gift from the general assets that is not required to be funded from a particular source. Such gifts should typically do not adeem.
Example: 100 shares of ABC stock
define a demonstrative gift
Defined: A demonstrative gift is a gift of a specified amount of money that is directed to be paid from a particular source.
Impact: These gifts generally should not adeem.
Example: “I leave Bill $500 from my BofA account.”
Note: If designated fund is insufficient, balance will be paid from other assets of the estate.
Define a residuary gift
A residuary gift is whatever remains of the estate after all the debts and taxes are satisfied and the gifts have been distributed.
Example: I leave whatever is left-over to Bill.
What is the distribution rule for these 4 types of gift? Assuming ALL funds and items available
Distribute in the following order of priority
(1) Specific gifts
(2) General and demonstrative gifts
(3) Residuary
EXAM TIP
Argue both ways whether a gift can be specific or general and discuss T’s intent, even if you must make inferences to do so.
Define ademption as it relates to wills
Ademption provides that where a specific gifts no longer exists at the time of the testator’s death, the gift fails and the purported devisee takes nothing.
Note: ONLY applies to specific gifts.
What are the 3 exceptions to the ademption rule
Person can receive money in exchange for the specific gift if:
(1) Balance of a purchase price from a purchaser who owes money to the T
(2) Proceeds from foreclosure or eminent domain
(3) Proceeds from a sale by a conservator or guardian
What is ademption by satisfaction as it relates to wills?
A gift adeems by satisfaction where
(1) Testator or beneficiary declare in writing at the time of the gift that the gift is satisfied, OR
(2) The same property is given to the beneficiary during his lifetime.
Define abatement
Abatement occurs where there are insufficient funds in an estate to pay all of the legacies in full. The legacies must abate in reverse order of distribution. The gifts are reduced proportionately within a certain category.
What is the order of abatement?
To satisfy claims, the personal rep uses:
(1) Any property not disposed of in the will
(2) The residuary
(3) General/demonstrative gifts to non relatives
(4) General/demonstrative gifts to relatives
(5) Specific gifts to non relatives
(6) Specific gifts to relatives (the strongest; least likely to get taken away to pay estate expenses).
Listen to fact pattern involving an omitted child and intestacy and abatement under the will
Example: Omitted child. He is not in will. No surviving spouse. 2 other children but they are in will. Absent a will for a certain individual, apply intestate. Under intestate, children take first, so each child gets 1/3 share. After intestate share calculated, other two children take under the will. In abating shares to pay for the claim of a pretermitted child the other beneficiaries will have their benefit reduced in proportion to the value they receive. We do not go intestate for people in the will, because there is direction in a will. People in the will are going to have their gifts abated down to fund the intestate share.
What is the rule for exoneration?
In CA, liens on devised property are not exonerated (e.g., first paid off with estate funds before distributed).
Define lapse.
Lapse occurs where the beneficiary predeceases the testator. The gift lapses and falls into the residual. If there is no residual, the gifts falls into intestacy.
Note: Deceased class member gifts lapse.
Define California’s Anti-Lapse Statute
Under California’s anti lapse statute, the gift passes to the predeceased beneficiary’s heir. The statute only applies if the predeceased beneficiary was a blood relative of either the testator or the testator’s spouse, former spouse, or deceased spouse.
The Anti Lapse Statute Also Applies to Trusts: Where it lapses, it falls into residuary, look to will to see who gets residuary
Notes
* Anti lapse does not apply to residuary gifts when other beneficiaries remain. Remaining residuary devisees will take the gift of deceased beneficiary.
* Example: Where residual passes to A, B, and C (all are friends), and A dies, A’s portion goes to B and C.
Define class gift
A testator may make a gift to a class of unascertainable beneficiaries so long as the class is capable of being ascertained at the testator’s death and at which time the class will be closed. Only class members who survive the T take unless anti-lapse applies
By how much does an heir have to survive the decedent to take under intestate law?
By 120 hours. Otherwise, treat the heir as predeceased.
Exception
- where application of the rule would result in property escheating to state
