Wills and Trusts MEE Flashcards
Distribution Under Intestacy (No Will)
If there is no will, or a partial will, the decedent’s probate property will be distributed per the state’s intestacy statutes.
How to do it:
Inter-vivos gifts, remainder/executory interests, co-owned property, and assignable contracts are not probate assets.
The distribution of the rest will depend on the distribution rule used by the state- per stirpes, per capita by representation, or modern per stirpes.
The order is: spouse, children, parents, siblings, issue of siblings, grandparents, issue of grandparents.
Who is included:
Heirs include adopted children, non-marital children once proven, and posthumous children according to rules.
Advancements are removed if it was formal. Simultaneous deaths are considered to have survived if it was by 120 hours. Disclaimers don’t receive if it was formal. Slayers don’t receive, it is put in trust or skipped over according to statute.
How to make a will valid
The law of the decedent’s domicile applies to the will execution and personal property. Law of location applies to real property. Sometimes look to law of place of execution if need to save an invalid will.
Will requirements:
Legal capacity, testamentary capacity (understand the action, effects, extent, nature), intent, formalities (signed, attested by 2 witnesses)
Can be holographic- handwriting
Can almost never be oral
Distribution Under Will
Spouse will usually get forced share if not provided for
Ademption- if gift is not found, may be substituted, unless it was satisfied (advanced)
Lapse- if beneficiary is not alive, look to will–> statute–> residuary clause–> partial intestacy. Class gifts either pass to surviving members or heirs.
Debts and liens are sometimes passed and sometimes paid from estate.
Disclaimers allowed.
If money is abated (ran out), follow rules on how to distribute.
Will Interpretation
In general: use newest provisions, construe as whole, use ordinary meaning, look at all of the language
ambiguities- patent and latent can be resolved with extrinsic evidence
No apparent ambiguity- requires high level of proof to change plain meaning
references to outside things - incorporated if there is intent, it was in existence, it’s clearly identified = at time of execution
facts of independent significance- defined at time of death
conditional will- presumed not to be effective if condition takes place
codicil attaches to will if valid
Revocation of will
by operation of law
by physical act- complete, by proxy allowed
by subsequent writing- new will or codicil
by absence- if will cannot be found, presumed to be revoked
should be express, but look to T’s intent if anything isn’t clear to see what was implied
Contesting a will on capacity grounds
insane delusion
undue influence
duress
fraud
look for evidence of T’s intent, circumstances, intentional acts of others
check if there is a no-contest clause
Validity of a Trust
Intent (definite words, not just hope) Identifiable Corpus (property) Ascertainable beneficiaries proper purpose (not illegal or against public policy or RAP)
Trust definition- conveyance of property divided between legal and equitable title
Ways to give it:
inter-vivos
in will (check will validity)
can be oral unless SOF
Types of Valid Trusts
pourover (funded through will and starts then)
testamentary secret- no details to show it’s actually a trust but sounds like one
testamentary semi secret- no ascertainable beneficiaries, not a trust
constructive- money is just held until it’s allowed to be released
discretionary- payments withheld from creditors by executor
spendthrift- beneficiary can transfer when allowed to get plain money, expenses are paid by executor
support- basically an implied spendthrift
express- clearly a trust
resulting-equitable trust bec the trust instructions fail
How to revoke or terminate a trust
Anytime S says, if allowed under the trust rules
can be made irrevocable
Beneficiary can revoke with consent and keeping same material purpose
Trustee can revoke in limited circumstances if very small
operation of law may revoke it
Ct may decide it’s illegal or impossible
Duties of Trustee
Loyalty- no self-dealing
care- prudent investor
Liabilities of Trustee
Can be held liable for damages resulting from breach of duties (unless consent)
If trustee only represents themself as a rep of the trust in all documents, then may not be personally liable
Not liable for agent or employee acts
Common designations of principal and income, unless allocated differently
Principal:
profit from sale of trust property insurance policies balance of deferred compensation taxes extraordinary repairs half of compensation
Income:
rentals interest on assets cash stock dividend payment of deferred compensation ordinary repairs half of compensation income according to generally accepted common principles of business
