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Wills & Trust > Wills & Trust Final > Flashcards

Wills & Trust Final Flashcards

1
Q

Will

A

a testamentary instrument that transfers property upon death

must be at least 18 years old and of sound mind

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2
Q

Will Requirements

A
  1. Must be in writing
  2. Signed by the testator
  3. Dated
  4. Showing testamentary intent
  5. two disinterested witnesses
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3
Q

Freedom of Donor’s Intent

A

The donor of a will has the freedom of disposition. The donor may choose who to give his estate to, unless an exception/restriction applies such as marriage, religion, creditor rights, etc.

Professor: Freedom of disposition is the center of at-death transfers. The intent of the decedent is of primary concern, so long as that intent does not violate law of public policy.

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4
Q

Will Revocation

A
  1. Wills can be revoked by
  2. Subsequent Instrument (new will or codicil) or
  3. Physical Act (shred or burn the will)
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5
Q

Holographic Will

A

Has all the material terms in the testator’s hand writing signed. It does not require a date nor witnesses.

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6
Q

Intestacy

A

Dying without a will.

Intestate succession is a statutory distribution system of property when the testator has no testamentary instrument in which property will be distributed.

A statutory distribution of assets of a decedent when there is no testamentary instrument or alternative distribution in place.

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7
Q

Abatement

A

Occurs when there are not enough assets in the estate after payment of taxes, bills, fees, and costs to give the awards specified in the will.

Gifts must be “abated” or reduced in order to try to effectuate the intent of the testator.

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8
Q

Abatement List

A

Abatement can be ordered by the Court specifically, but generally gifts are abated pro-rata based on the order of abatement outlined in the probate code.

  1. Property not disposed of by the instrument.
  2. Residuary gifts
  3. General gifts to persons other than the transferor’s relatives.
  4. General gifts to the transferor’s relatives.
  5. Specific gifts to persons other than the transferor’s relatives.
  6. Specific gifts to the transferor’s relatives.
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9
Q

Ademption

A

Occurs when a specific gift is given in a will, but that gift is no longer in the estate at the time of death of the testator.

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10
Q

Codicil

A

An amendment to a will that must satisfy the formalities for the type of codicil that is being executed (partial revocation) (think partial intestacy)

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11
Q

Republication of Codicil

A

When a testator amends his or her own will by codicil, the date of the codicil becomes the new execution date of the original will.

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12
Q

Interlineation

A

Sections added by hand writing in an attested will are NOT valid because this would be a codicil that is not properly attested.

Also applies in deletions.

Signing it and dating it will now make a holographic codicil making it valid.

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13
Q

Acts of Independent Significance

A

A will may dispose of property by reference to acts and events that have significance apart from their effect on the will.

Example: In my will, I will give all my books to my law clerk, the exact law clerk is not listed in my will but in 2022 I had Billy law clerk, 2023 I had I had Jimmy law clerk.

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14
Q

Advancement

A

A gift given inter-vivos that is designated in writing as an advanced on an intended inheritance.

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15
Q

Advancement Requirements

A

For a gift to become an advancement, it has to have ONE of these:

1) The instrument provides for deduction of the lifetime gift from the at-death transfer.

2) The transferor declares in a contemporaneous writing that the gift is an advancement.

3) The transferee acknowledges in writing that the gift is an advancement.

4) The property given is the same property that is the subject of a specific gift to that person.

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16
Q

Lapse

A

Occurs when a gift is intended for a specific beneficiary, and that beneficiary has died prior to distribution.

As a general rule, a lapsed gift would be distributed through the will’s residuary clause unless some alternative distribution is made.

This reinforces the “risk of residuary.”

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17
Q

Anti-Lapse

A

Allows a lapsed gift to be distributed to the issue of the deceased beneficiary if that beneficiary is a blood relative.

Anti-lapse is strictly statutory.

Example: Golf clubs - I give my golf clubs to my friend Billy, I die, and Billy is dead. Can the golf clubs go to Billy’s kids? No, becaues Billy’s kids are not a blood relative and Billy was named as the beneficiary.

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18
Q

Caretaker Presumption

A

A gift to a caretaker in a will is presumed to have been procured by undue influence.

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19
Q

Undue Influence

A

Influence that is exerted upon a testator that overcomes the testator’s free will and that influence affects the will.

this situation calls for Certificate of Independent Review

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20
Q

Drafter Presumption

A

A gift to the drafter in a will is conclusively presumed to have been procured by undue influence.

Certificate of independent review will be needed.

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21
Q

Duress

A

Pressure, less than actual force, instigated against a testator for the purpose of procuring a donative gift.

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22
Q

Amiguity

A

Uncertain and may be two or more meaning to a word.

Every word or phrase is given some meaning. The use of other parts of the will to determine what is meant. Use the normal interpretation of words. Use technical and legal words only when necessary or dispositive.

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23
Q

Insane Delusion

A

Cannot suffer from a mental health disorder with symptoms which affect the will.

mental condition must be present at the time of will execution

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24
Q

Putative Spouse

A

A party who believes in good faith that the marriage they are in is valid.
A determination of putative spouse status will allow the putative spouse to inherit as if the marriage is valid.

-“good faith belief” when analyzing-

25
Q

Omitted Child

A
  1. Child was born after all testamentary instruments have been made.
  2. Child that was unknown to the decedent (the testator) at the time the instrument was created.
  3. A child that the decedent honestly believed was dead at the time of the creation of the instrument. OR. the omitted child receives their intestate share
26
Q

Omitted Spouse

A

A spouse that is married to the testator (decedent) after the creation of all of the testamentary instruments. They are entitled to their intestate share.

27
Q

120 Hour Rule

A

A person who fails to survive the decedent by 120 hours is deemed to have predeceased the decedent for the purposes of intestate succession.

THIS ONLY APPLIES TO INTESTATE SUCCESSION

28
Q

Equitable Adoption

A

(1) The testator and the beneficiary have a relationship from youth throughout most of the life of the testator, and (2) they would have adopted but for a legal impediment.

If a foster or step-child relationship began during the person’s minority and continues throughout the joint lifetime of the person and person fosters parents or step parents

29
Q

Slayer Rule

A

Any person who intentionally and feloniously kills a person may not benefit from the estate of the decedent.

30
Q

Lacking Mental Capacity Pg 11

A
31
Q

Community Property

A

California is a CP state and all assets acquired during the marriage are considered CP. California law states that all CP is passed to a surviving spouse, if one exists at the time of death.

32
Q

Separate Property

A

All assets acquired by either spouse prior to the marriage or during the marriage by gift or devise are considered separate property of the owning spouse. CA law states that separate property will be descended to a surviving spouse and surviving issue.

33
Q

Gifts

A

(a) A specific gift is a transfer of specifically identifiable property
(b) A general gift is a transfer from the general asserts of the transferor that does not give specific property
(c) A demonstrative gift is a general gift that specifies the fund or property from which the transfer is primarily to be made.
(d) A general pecuniary gift is a pecuniary gift within the meaning of Section 21118.
(e) An annuity is a general pecuniary gift that is payable periodically.

34
Q

Widow’s Elective Share

A

Surviving spouse has the widow’s selection. Widow’s “elective share”. With a will or without a will, the surviving spouse is entitled to their intestate share.

35
Q

Trust

A

A fiduciary relationship where one party holds legal title to property for the equitable benefit of another.

36
Q

Trust Requirements

A
  1. Intent
  2. Property
  3. Legal purpose (not illegal nor against public policy)
  4. Ascertainable beneficiaries

(No writing required unless interest in land, then writing to satisfy SoF)

37
Q

Secret Trust

A

A secret trust occurs when the settlor leaves a bequest to a beneficiary but with a private understanding between them as to what the property is to be used for.

(generally not enforceable unless there is a writing to state those “secret terms”)

38
Q

Charitable Trust

A

Created for a charitable purpose. A charitable trust offers more flexibility regarding an ascertainable beneficiary.

39
Q

Cy Pres Doctrine

A

Allows that when a beneficiary of a charitable trust, usually an organization, no longer exists, the trust can be reformed to give the gift to a successor or other organization doing the same work.

40
Q

Resulting Trust

A

Occurs when all of the gifts to beneficiaries, including any residuary gifts, have been made and there are still assets in the Trust. In most cases, the residuary would remedy this.

41
Q

Constructive Trust

A

Created by a court for the purpose of disregarding a wrong doer of unjust enrichment forcing the wrong doer to transfer any property within the constructive trust to the proper beneficiaries.

42
Q

Actual Trust (Pet Trust)

A

A trust for the maintenance of pets or other animals. The funds are given to a trustee who is responsible for the case of the animals.

When the last of the animals dies, the remaining funds are distributed based on any alternative distributions in the trust, or through the residuary.

43
Q

Duty to Administer Trust

A

A trustee has a duty to follow the terms set out in the trust except where they may be illegal or against public policy.

44
Q

Duty of Loyalty

A

The fiduciary responsibility for a trustee is not particularly different from agency/partnership/community property. If there is an act that hinders the Trust, or favor the Trustee over the trust, then is it a violation of duty of loyalty.

This duty of loyalty requires that the trustee not engage in conflicts of interest between the trustee and the beneficiary or accepting other duties in conflict with duties to the trust.
Violations can be seen as: 1. Taking secret profits; 2. Self-dealing; 3. Usurping trust opportunities.

45
Q

Duty of Impartiality

A

Trustee is obligated to treat all beneficiaries equally given the circumstances.

46
Q

Duty to Preserve Trust Property

A

Trustee is required to take steps to assure that trust property is properly cared for and maintained. In the case of financial assets, the duty is to avoid loss.
This rule can arise with physical harm to the actual property like squatters issue.

47
Q

Duty to Make Trust Property Productive

A

Trustee is required to make sure that trust property which can be made productive and produce income for the trust is made productive.

Example: Renting out the property; evicting tenants not paying rent

48
Q

Duty of Care

A

The duty to act in as a reasonably prudent person under the circumstances.

49
Q

Prudent Investor Rule / Duty to Diversify

A

The trustee is to act as a reasonably prudent investor would under the circumstances. As party of the prudent investor rule, the trustee is required to diversify investments to avoid loss under single investment.
If there is a violation of duty to diversify, it is per se a violation of prudent investor rule.

You can’t have duty to diversify without prudent investor rule, but you can have prudent investor rule without duty to diversify.

50
Q

Duty to Separate Trust Assets

A

Trustee has an obligation to keep trust assets segregated from other assets and identified as trust assets.

51
Q

Duty to Enforce Claims

A

A trustee has a duty to enforce claims that are in the benefit of the trust.
The trustee steps in to the shoes of the decedent. You will take steps to enforce a claim.

52
Q

Duty to Defend

A

Trustee has a duty to defend against claims against the trust. This duty does not extend to claims between beneficiaries.

53
Q

Duty to Account

A

A trustee has a duty to account to the beneficiaries. At a minimum, this is annual, but can be compelled additionally by beneficiary demand.

54
Q

Duty to Inform

A

A trustee has a duty to keep the beneficiaries reasonably informed as to trust administration and assets. This includes providing the terms of the trust to the beneficiaries.

55
Q

Duty Not to Delegate

A

The Trustee may not delegate functions that are within the Trustee’s skills. This does not apply to financial assets, the management of which maybe delegated.

Financial assets will always be able to delegate.
Other skills, like real estate, will not be able to delegate.

56
Q

Duty of Co-Trustees

A

Co-Trustees have a duty to act with each other in performance of trust duties, and to manage the other trustee to avoid a breach of duty by another trustee.

57
Q

Modification of trust

A

Unless the trust instrument provides otherwise, if a trust is revocable by the settlor, the settlor may modify the trust by the procedure for revocation

58
Q

Termination of trust

A

(a) a trust terminates when any of the following occurs:

  1. the term of the trust expires
  2. the trust purpose is fulfilled.
  3. the trust purpose becomes unlawful
  4. the trust purpose becomes impossible to fulfill
  5. the trust is revoked

(b) on termination of the trust, the trustee continues to have the powers reasonably necessary under the circumstances to wind up the affairs of the trust

Wills & Trust (1 decks)

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