Wills, Estates & Trusts Flashcards
Declaration Trust
Settlor becomes trustee of property held for the benefit of another,retaining legal title and transferring only equitable title.
Conveyance in Trust
Settlor transfers legal title to another person as trustee for a specified beneficiary
Voluntary Trust
Created without consideration, either by declaration or transfer.
Contractual Trust
A promise to create a trust in the future. The requirements for an enforceable contract must be complied with.
Present Creation of a Trust
- settlor with capacity
- intent to create a trust expressed with appropriate formalities
- specific trust property
- reasonably identifiable beneficiary
- proper trust purpose
Cy Pres Doctrine
Situations in which the specific charitable purpose intended by the settlor has been accomplished, can no longer be accomplished, or some other change in circumstances renders it impracticable to administer the trust, allows a court to amend a legal document to enforce it “as near as possible” to the original intent of the instrument
Discretionary Trust
The beneficiary has no right to income until the trustee decides to pay it. Neither the beneficiary not the beneficiary’s creditors can compel payment, but creditors can reach any distribution paid by the trustee.
Support Trust
Contains provisions that only so much of the income as is necessary for the beneficiary’s support may be paid out
Spendthrift Trust
Prohibits anticipatory transfer of the beneficiary’s interest in income or principal as well as making the beneficiary’s interest no reachable by creditors. GA provides that a spendthrift provision prohibiting only involuntary transfers is not valid, instead it is only valid if it prohibits both voluntary and involuntary transfers.
Termination by Execution of Passive Uses
If the owner of property attempts to create a trust in which the trustee has no duty or purpose other than holding title to the property subject to the present and total use by the beneficiary, it terminates automatically and title vests in the beneficiary.
Termination by Beneficiaries after Settlor’s Death
The trust will not be terminated after settlor’s death so long as there is a material purpose of the settlor remaining to be accomplished, even though all beneficiaries approve of such termination.
Resulting Trusts
Implied for the benefit of the settlor or her successors in interest when it is determined that the settlor didn’t intend that the holder of the legal title to the trust property also should have the beneficial interest in the property under any of the following circumstances:
- trust was created but failed
- a trust is fully performed without exhausting all the trust property OR
- purchase money resulting trust is established
Constructive Trusts
Equitable device employed to avoid unjust enrichment of one party. A court may declare a constructive trust where legal title to property was obtained either by
- fraud
- violation of fiduciary duty or confidential relationship
- testamentary devise or intestate succession in exchange for a promise to hold in trust
Powers of Trustees
Instrument can limit powers.
- has the power to invest trust property and generally must not leave trust funds uninvested
- has duty to make property productive and use reasonable care and skill in choosing and managing investment
Modern Portfolio Theory
Prudence is determined by the trustee’s investing of the entire portfolio. Trustee must exercise the judgment and care, under the circumstances then prevailing, of a prudent person acting in a like capacity and familiar with such matters, considering the purpose, provisions, and distribution requirements of the trust.
Remedies for Breach of Trust
Trustee may be personally liable
- specific performance
- injunctive relief
- appointment of temporary trustee
- removal of trustee
Duties of Trustee
Exercise reasonable care and skill in managing the trust, unless instrument imposes lesser duty. Trustee with special skills will be held to higher standard.
Owes a duty of loyalty and utmost good faith in all matters pertaining to the trust
Avoid conflicts between the trustee’s own interest and those of the trust. Must not enter into transactions with the trust in an individual capacity unless the instrument authorizes such action, the court grants permission, or all of age beneficiaries consent.
Order of Inheritance
- spouse
- children, grandchildren
- parents
- siblings
Survived by Child and Spouse
Spouse shares equally with the children, provided however that the spouse’s portion is not smaller than 1/3 share.
Heir who Kills Decedent
Forfeits the right to inherit from the estate. Killer’s descendants are not precluded from taking from the decedent’s estate, but they cannot get more than than the share the killed forfeited.
Transplant Theory
An adopted child loses any right to inherit from or through the natural parents and acquires inheritance rights as a child of the adoptive parents. The rule doesn’t apply when the adopting parent is the spouse of the natural parent.
Uniform Simultaneous Death Act
When the title to property or the devolution of property depends upon priority of death and there is insufficient evidence to determined that the individuals died other than simultaneously, the property of each is disposed as if that individual had survived.
Legal Capacity to Make a Will
Must be 14 to have legal capacity and to have the required mental state the testator must possess both testamentary intent and capacity.
Testamentary Capacity
- must understand that the doc to be signed is a will
- must understand that the effect of the doc is to distribute property after death
- must know the nature and extent of the property subject to distribution
- must know the natural objects of the testator’s bounty
- must comprehend these four elements at the same time when the will is executed
Will Requirements
- written
- signed by testator
- signed by two or more competent witnesses
Holographic Will
Will in the handwriting of the testator and signed by the testator, but unattested by witnesses. GA doesn’t recognize these.
Self-Proved
Testimony of the witnesses in the probate court regarding the execution of the will is made unnecessary by the affidavits of the testator and the attesting witnesses before a notary public.
Revocation
Testator can change or revoke at any time prior to death. A subsequent instrument may expressly or implied revoke the former will. Can be effected by any destruction or obliteration of the will done by the testator with an intent to revoke or by another at the testator’s direction. A cancellation is also effect and is done by drawing an X across the face of the will.
Partially Revocation
Occurs when
1. testator marries
2. birth or adoption of children by the testator
unless will was executed in contemplation of the subsequent marriage, birth, or adoption
Expressly Revoked
If a will that expressly revoked a previous will in its entirety is subsequently revoked by a later will, other will, or physical act, the previous will remains revoked unless it is revived.
If a will that expressly revoked or amended a previous will is subsequently revoked by a latter will, the revoked or amended part is revived to the extent it appears from the later instrument that the testator intended the previous will to take effect.
Republication
First will is revived by a writing that is signed by the testator and two witness in the same manner that a will is subscribed and attested.
Codicil
Addition or amendment to a will. Must be executed with the same formalities as a will. It modifies rather than replace a will absent contrary language or inconsistency.
Construction of Wills
Testator’s intent governs
Ambiguities
Admission of parol evidence of the circumstances surrounding the testator at the time of execution is allowed to explain all ambiguities.
Plain Meaning Rule
If not ambiguous, extrinsic evidence to explain or contradict the will is inadmissible.
Integration
Proponent of the will must show that the will offered for probate is actually the will that the testator intended to make and that no insertions or removals of pages from the will have occurred.
Vesting of Contingent Gifts
GA favors vesting of title in the beneficiaries at the time of testator’s death. Vesting of a remainder contingent upon surviving the life tenant must be clear and unambiguous. A construction favoring a vested remainder will prevail over a contingent remainder if ambiguous.
Personal Representative
Fiduciary who is under a general duty to settle the estate as expeditiously and with as little sacrifice of value as is reasonable under all the circumstances. The person representative must give notice to creditors, who submit against the estate for payment.
Inter Vivos Gift
- present donative intent
- deliver, actual or constructive AND
- acceptance by donee
Gift Causa Mortis
- object of the gift must be personal property
- donor must be in his last illness or in peril of death
- gift must be intended to be absolute only in the event of death
- gift must be perfected by either actual or symbolic deliver AND
- gift must be proved by one or more witnesses
Year’s Support
Testator is free to give all property away, but there is protect for spouse and minor children as they must receive at least 1 years support in the form of property for 12 months from the date of testator’s death.
Omitted Children
GA looks at the testator’s family at the time the will was written and attempts to preserve testator’s testamentary scheme to the extent possible.
