WILLS/ESTATES Flashcards
What are the requirements for a valid express trust?
A valid express trust requires: 1) a definitive beneficiary, 2) a settlor with capacity, 3) intent to create a trust, 4) a named trustee, 5) a valid trust purpose, 6) trust property, and 7) compliance with state formalities.
Who are the roles in a trust?
Roles in a trust include: 1) Settlor/grantor: creates trust using their own property or assets, 2) Beneficiary: can be natural persons, corporations, or organizations, 3) Trustee: manages the trust property for the benefit of the beneficiaries.
What is the effect of precatory language in trust formation?
Precatory language such as ‘hope’ or ‘request’ does not create a valid trust or legal obligation; specific settlor intent is required.
What is the majority view regarding revocable trusts?
A trust is revocable unless otherwise stated.
What defines a discretionary trust?
In a discretionary trust, the trustee has absolute discretion and power to decide when and how to make distributions to a beneficiary, and must act in good faith.
What is a charitable trust?
A charitable trust is created for a charitable purpose to confer a substantial benefit to society, and the beneficiaries may be indefinite or a class of people.
What is the cy pres doctrine?
The cy pres doctrine allows a court to modify a charitable trust to align as closely as possible with the settlor’s intent if the original purpose becomes impractical or impossible.
What is a pour-over trust?
A pour-over trust occurs when a will gifts property to a previously established trust and must be connected with a trust created during the testator’s lifetime.
What is a support trust?
A support trust directs the trustee to pay the beneficiary as much income as necessary for their support; it can be a pure support trust with no discretion or a discretionary support trust.
What is a spendthrift trust?
A spendthrift trust restrains both voluntary and involuntary transfers of a beneficiary’s interest, preventing creditors from collecting until after distribution to the beneficiary.
What are the duties of a trustee?
The trustee must administer the trust with skill, care, and prudence, act solely in the best interest of the beneficiaries, and administer in good faith according to the trust’s terms.
What is the duty of loyalty for a trustee?
A trustee must administer the trust solely in the best interest of the beneficiaries and cannot engage in self-dealing.
What is the prudent investor rule?
The trustee must exercise care, skill, and prudence of a reasonable investor, diversify assets, and avoid risky investments.
What is the rule against perpetuities (RAP)?
Under Common Law, a gift must vest within a life in being at the time of the grant plus 21 years; RAP invalidates any gift that will not vest within that time period.
What is intestate succession?
Intestate succession occurs when property not passed by will goes to heirs if a decedent dies without a will or if their will does not dispose of all property.
What are the formalities for a valid will?
A will is valid if it is in writing, signed by the testator, and witnessed by two witnesses within the testator’s range of senses.
What is a codicil?
A codicil is an instrument made after a will is executed that modifies, amends, or revokes the will and must satisfy the same execution formalities.
How can a will be revoked by physical act?
A will is revoked by physical act if the testator intended to revoke it and it is burned, torn, destroyed, or canceled by the testator or someone at their direction.
What is the effect of advancements in wills?
Under common law, gifts to heirs during the testator’s lifetime are considered advancements and will be deducted from their shares of the estate.
What is the slayer statute?
If a beneficiary feloniously and intentionally kills the decedent, they forfeit all gifts and benefits from the decedent’s estate.
What is a class gift?
A gift to a group of persons described collectively; the class closes when the testator dies.
What is the rule of convenience in class gifts?
When a gift is made to a group, such as ‘my children,’ the class closes when at least one member is entitled to distribution.
What happens to gifts to predeceased members in a class gift?
If named, the gift will lapse; but if named as a group, the gift is divided among other members unless the antilapse statute saved the gift.
How does common law define children in terms of inheritance?
Children are only biological, full-blooded children who can inherit.
How does modern law define children for inheritance purposes?
Children includes any child, including adopted children; out-of-wedlock kids must establish paternity.
Do children have inheritance rights if left out of a will?
Children have no inheritance rights if a parent leaves them out of the will.
What are pretermitted children entitled to?
A child born or adopted after the execution of a will is entitled to an interstate share unless intentionally omitted from the will.
What is the standing to challenge a will?
Must be an interested party with a financial interest who is adversely affected.
What is testamentary capacity?
The testator must have mental capacity to execute a will, knowing the nature and extent of property, natural objects of bounty, and the disposition being made.
What is the burden of proof in testamentary capacity contests?
The burden of proof rests on the contestant; mental capacity is presumed unless otherwise contested.
What constitutes undue influence in will contests?
A wrongdoer exerts influence over the testator that overcomes the testator’s free will and judgment.
What are the elements required to prove undue influence?
1) Testator has a weakness, 2) wrongdoer had access and opportunity, 3) wrongdoer participated in drafting the will, 4) an unnatural result occurred.
What rights do co-tenants of a joint bank account have?
Co-tenants have a right of survivorship, automatically entitled to funds upon death.
What is the convenience account exception?
If the account was set up only for the convenience of the parties, it may not confer a right of survivorship.
What power does a policyholder have regarding life insurance beneficiaries?
The policyholder can change beneficiaries during their lifetime, except need beneficiary’s consent if irrevocable.
How must a durable health care power of attorney be executed?
It must be in signed writing and witnessed or notarized.
What do family consent laws allow an adult to do?
An adult may designate any individual to act as a surrogate to make decisions by personally informing the surviving health care provider.
What is an advanced directive?
It specifies a patient’s preferences for treatment or non-treatment in the event of incapacity; must be in signed writing and notarized or witnessed.
