Wills & Trusts Flashcards
KEY TOPICS: WILLS
- EXECUTION OF WILLS
- REVOCATION OF WILLS
- INCORPORATION BY REFERENCE AND FACTS OF INDEPENDENT SIGNIFICANCE
- CHANGES IN BENEFICIARIES AND PROPERTY AFTER WILL’S EXECUTION
- AMBIGUITIES AND MISTAKES
- INTESTATE SUCCESSION
- RESTRICTIONS ON POWER OF TESTATION
- PROTECTION ON THE CHILD
- CONDUCT BARRING HEIR OR BENEFICIARY FROM TAKING
- WILL CONTESTS
- PROBATE AND ESTATE ADMINISTRATION
KEY TOPICS: TRUSTS
EXECUTION OF WILLS
STATUTORY FORMALITIES
- Age 18 or over
- In Writing
- Testator Must Sign (Liberally construed)
- At the End of the Will
- Two Attesting Witnesses
- Witnesses must sign in testator’s presence and in the presence of each other
NOTE: no publication requirement in FL, witnesses don’t need to know that they are witnessing a will and no particular order of signing is required
TESTATOR’S SIGNATURE
Signature: mark affixed by the testator with the intent that it operate as a signature. May be made by another person at the testator’s direction and in the testator’s presence.
Signature marks the end of the will
Signature At End Requirement: If a portion of the will follows the testator’s signature the entire will is invalid. Testator’s signature must follow immediately after the final dispositive provision of the will.
If a will provision is added after the testator’s signature after the will is executed, the will is valid, but the provision is not
Electronic Signature is Permitted: for any instrument under the Florida Probation Code
HOLOGRAPHIC AND ORAL WILLS
NOT VALID IN FLORIDA
Holographic Wills: meaning a will in the testator’s handwriting and without witnesses. Not valid in FL even if validly made in another state
PRESENCE REQUIREMENTS
Presence: Scope of Vision v. Conscious Presence
- Scope of Vision: in presence only if they could see each other sign if they were to look-no impediment to visual contact (minority rule)
- Conscious Presence: witnesses are conscious of where each other is and what each other is doing (majority of jurisdictions)
REMOTE WITNESSING
FOREIGN WILLS
A will executed by a non-resident of Florida is valid in FL if validly executed under the law of the place where the testator was at the time of execution
Foreign Domiciliary with Land in Florida:
- Primary administration in place of domicile at death
- Ancillary administration anywhere testator owned real property
- Will in Foreign language valid but English translation must be provided
- Will recognized if complies with law of place of testator’s domicile at the time of execution (EXCEPTION - no unattested holographs)
ANCILARY ADMINISTRATION
INTERESTED WITNESS
At Common Law: witness who is also a beneficiary wasn’t competent, and the will couldn’t be probate unless there were two other witnesses.
FL has abolished this rule and allow interested witnesses to take under the will
PROOF OF WILLS
To be probated a will must be proved
- Oath of one attesting witness before circuit judge or court clerk; or if not possible
- Oath of personal representative named in will
Self Proving Wills: During testator’s lifetime: testator and witness sign affidavit under oath before notary public. Execution of formalities conclusively presumed
Witness signatures on self-proving affidavit satisfy witness signature requirement for will
ELECTRONIC WILLS
FL permits a will to be carried out online
Signature, attestation of witnesses, and the execution of a self-proving affidavit may all be done remotely (by supervised video conference with an online notary)
Remote witnessing provisions don’t apply in a will for a vulnerable adult
May be self-proving: must be attached or associated with the electronic will with a designated qualified custodian (consistantly maintains a system for controlling electronic materials)
REVOCATION OF WILLS
Best way: Expressly and executed just like a will
Other Methods:
- Revocation by Physical Act - burning, tearing, canceling, defacing, obliterating, or destroying it with the intent to revoke. Intent must be concurrent with act. Note - cancellation act must touch some language of the will - MUST CROSS THE LANGUAGE OF THE WILL IT’S SELF, NOT A COPY OR PICTURE
- Revocation by Written Instrument - all or part of a will may be revoked or altered by a subsequent instrument executed with the same formalities as a will. If there is an inconsistency, later document controls
- Revocation By Operation of Law
REVOCATION BY PHYSICAL ACT
Burning, tearing, canceling, defacing, obliterating, or destroying it with the intent to revoke.
NOTE: accidental destruction of a will or codicil does not revoke it, the intent to revoke must be present at the time of the physical act of destruction.
Duplicates: ACT OF REVOCATION ON ONE EXECUTED COPY REVOKES ALL EXECUTED COPIES)
NOTE: Electronic - deleting, canceling, or obliterating with the intent and for the purpose of revoking shown by clear and convincing evidence.
PRESUMPTIONS:
- Will found in mutilated condition - presumption is the testator did that act with intent to revoke
- Will last seen to be in T’s possession and control and can’t be found - presumption is reason it can’t be found is that T destroyed with intent to revoke
Revocation by Proxy: FL permits a will to be revoked by a physical act by another person, provided that the revocation is [Intent+Act+Presence]
- At the testator’s direction and
- In the testator’s presence
LOST OR DESTROYED WILLS
The lost will statute must be satisfied by proving the testimony of two disinterested witnesses or by one disinterested witness and a photocopy or carbon copy (but not a draft) of the will
Due execution by the oath of one of the attesting witnesses and specific contents by the testimony of to disinterested witnesses or by one disinterested witness and a photocopy or carbon copy of the will
REVOCATION BY WRITTEN INSTRUMENT
All or part of a will may be revoked or altered by a subsequent instrument executed with the same formalities as a will. If there is an inconsistency, later document controls
Effect of Revoking a Codicil: revocation of a codicil to a will does not automatically revoke the will - it is presumed that the testator intended their will as originally executed
REVOCATION BY OPERATION OF LAW
A will may be partially or totally revoked by operation of law in the event of subsequent marriage, divorce, annulment, or birth or adoption of children. We assume the testator wouldn’t want the will to operate in view of the changed family situation
Petermitted Spouses and Children: marriage after the execution, or children born or adopted after the execution of the will are pretermitted and entitled to a share of the estate
Divorce or Annulment Revokes All Provisions in Favor of Former Spouse: the will is read as if the former spouse predeceased the testator - REVOKES ALL PROVISIONS IN FAVOR OF THE EX-SPOUSE, CONSTRUE THE WILL AS IF SPOUSE IS DEAD
Mere separation has no effect on rights under a will UNLESS in conjunction with complete property settlement - the rights waived
Effect of Remarriage: Will provisions remain revoked, but FL probate code says status in most non-probate transfers are revived (life insurance, POD TOD accounts, joint back accounts) unclear what happens with a revocable trust
INTERLINEATIONS AND CHANGES AFTER EXECUTION
Disregarded unless they are so extensive as to show intent to revoke the entire will. They can be given effect only if the will is republished by codicil or re-executed
NOTE: Can’t revoke part of a will by physical act in FL
NO REVIVAL OF REVOKED WILLS
Revival: at common law an earlier will is automatically revived when a later will is revoked
In FL - once a will is revoked by language of revocation contained in a later will, it is legally dead and cannot be revived unless the will is:
- Re-executed with the necessary formalities
- Republished by executing a codicil to the will
Merely destroying the later will and the language of revocation therein doesn’t revive the earlier will
DEPENDENT RELATIVE REVOCATION (DRR)
Doctrine allowing courts to disregard revocation that would not have occurred but for the testator’s mistaken belief that another disposition was valid
Applies when a testator revokes their will under the mistaken belief that another disposition of their property would be effective, and but for this mistaken belief, they would not have revoked the will.
BUT FOR is the key to this test - to apply this test - compares the consequences of undoing the revocation of will 2 with not undoing the revocation - undo the revocation when that comes closer to meeting the testator’s intent
Other Circumstances: defective execution of a second document (i.e. only one witness) and will one is revoked by physical act, because of the mistake belief that 2 was valid, can undo the revocation of will 1
INCORPORATION BY REFERENCE AND FACTS OF INDEPENDENT SIGNIFICANCE
Incorporation: When can you incorporate extrinsic documents by reference/
INCORPORATION BY REFERENCE
- Writing in existence at time of will execution
- Will must manifest intent to incorporate documents, AND
- will describes writing sufficiently to permit identification
EXCEPTION - LIST DISPOSING OF ITEMS OF TANGIBLE PERSONAL PROPERTY
In FL - permits will to refer to written statement that disposes of tangible personal property
- must be signed by the testator
- must describe property with reasonable certainty
- list may be written or altered at any time
TANGIBLE PERSONAL PROPERTY ONLY - NO MONEY, REAL ESTATE, STOCKS OR BONDS
FACTS OF INDEPENDENT SIGNIFICANCE
A will may dispose of property by reference to acts and events, even though they are in the future and unattested, if they have significance apart from their effect on dispositions made by the will
Acts having an independent lifetime motive may impact on the will as well
Any lifetime motive will allow impact to a will
CHANGES IN BENEFICIARIES AND PROPERTY AFTER WILL’S EXECUTION
MOST FREQUENTLY TESTED WILLS ISSUES - Post execution, pre-death changes
LAPSE
ADEMPTION
EXONERATION OF LIENS
LAPSED GIFTS AND ANTI-LAPSE STATUTE
Lapse (most frequently tested wills issue!) - when the beneficiary names in the will or revocable trust dies before the testator it lapses (IT FAILS, falls to the residue, and passes as part of the residuary estate)
UNLESS - saved by the state anti-lapse statute
FL STATUTE: applies when the predeceasing beneficiary is the:
- Testator’s grandparent OR
- Lineal descendant of grandparent AND
- Leaves issue
If satisfied, substituted in to take the person’s place.
Anti-lapse statute doesn’t apply if there is an “if x survives me” clause
CLASS GIFT
If a will makes a gift to a class, only the class members who survive the testator take a share of the gift, unless the will provides otherwise or the anti-lapse statute’s requirements are met
LAPSE IN RESIDUAARY GIFT
“All the remainder to….”
If the residuary estate is devised to two or more persons and the gift to one of them fails for any reason, the surviving residuary devisees take the entire residuary estate in proportion to their interests in the residue
CLASSIFICATION OF TESTAMENTARY GIFTS
- Specific Devise: Gift of specific asset
- General Legacy: is a gift of a general economic benefit payable out of the general assets of the estate without requiring any particular source of payment - specified pecuniary amount
- Demonstrative Legacy: Gift of specified pecuniary amount with funding instructions
- Residuary Bequest: rest, reside, and remainder of estate
ORDER OF ABATEMENT
Abatement is the process of reducing testamentary gifts in cases where the estates assets aren’t sufficient to pay all claims against the estate adn satisfy all bequests adn devises
- Intestacy Property
- Residuary Estate
- General Legacies
- Demonstrative Legacies
- Specific Gifts
In FL - this is the process used when you need to raise money for share amounts (more on this later)
ADEMPTION
Specific gift not in estate at death fails - beneficiary takes noting
Applies only to specific gifts and bequests
FL Law: Special Rules (outline these more) - Ademption does not apply:
- Testator Incapacitated - if specifically devised property is sold by a guardian, or if condemnation award or insurance proceeds relating to the property are paid to the guardian, the specific devisee has a right to a general legacy equal to the net sale price, condemnation award, or insurance proceeds unless the testator’s disability has been adjudicated to have ceased and the testator survives the adjudication by one year
- Certain Proceeds to Extent Unpaid at Testator’s Death - In cases not involving sale by guardian, a specific devisee has a right to the remaining specifically devised property and:
- any balance owing under a contract that’s still executor at the testator’s death
- Any amount of a condemnation award for the taking of property by eminent domain - but only to the extent that the award is unpaid at the testator’s death
- Any fire or casualty insurance proceeds unpaid at the time of T death
- Property acquired as a result of a foreclosure of a security interest on a specifically devised note
INCREASE IN STOCK
Specific Devisees take the increase caused by stock split or dividend
A SD of stock is entitled to any additional or other securities of the entity owned by the testator because of action initiated by the entity, excluding shares acquired by the exercise of purchase options
BEQUESTS OF SECURITIES
The courts will construe a bequest of securities as a general legacy, if it is possible to do so, in order to avoid application of the ademption doctrine. The cases turn on whether the testator made a gift of “x Shares” or of “my x shares”
EXONERATION OF LIENS
No exoneration unless intent shown in will -
AMBIGUITIES AND MISTAKES
LATENT AMBIGUITY
Exists when the language of the will is clear on its face but cannot be carried out without further clarification.
Rule: Extrinsic evidence is admissible to clear up a latent ambiguity
In the absence of clarifying evidence, gift will fail and fall into residue
MISTAKE
If an interested party proves by clear and convincing evidence that a will provision was based on a mistake of fact or law, the court will reform the will to reflect the testator’s intent - even if the language of the will is unambiguous
Court will consider evidence relevant to the testator’s intent even if it contradicts an apparent plain meaning of the will
Mistake in Execution: extrinsic evidence is admissble to show…
Mistake in Inducement:
INHERITANCE
Intestate succession is the statutory method of distributing assets that aren’t disposed of by will
INTESTATE SHARE OF SURVIVING SPOUSE
If survived by a spouse but no descendants - the spouse takes all of the estate
If survived by spouse and one or more descendants who are also descendants of spouse - the spouse takes all if no other descendants of the survivng spouse or one-hald of the estate if there are other descendants of the surviving spouse
If survived by spouse and descendants at least one of whom is not a descendant of the surviving spouse, the spouse takes one half of the estate
The share that does not pass passes to:
- Children, grandchildren, If none to
- Parents, if none to
- Parents descendants, if none to
- One half to paternal grandparents and descendants and one half to maternal grandparents, if none to
- Family of last deceased spouse
- State of FL
Cant disinherit an heir by fiat in FL - heir takes even if you’ve expressed desire that they not share in estate. To disinherit have to leave completely to someone else
HOW TO DISTRIBUTE: PER STIRPES
PROBATE ESTATE
The estate that could have been controlled by will if one was executed, PROPERTY NOT INCLUDED:
- Right of survivorship property
- Life insurance proceeds
- Death benefits
- Property held in trust
- Property over which the decedent had a power of appointment
DISCLAIMERS
A solvent heir or will beneficiary can disclaim their interest in a decedent’s estate. Disclaimer can be total or partial and results in property passing as though disclaimant pre-deceased decedent (lapse potentially subject to anti-lapse statute)
Can be made by guardian or personal representative
FL can be made at any time prior to acceptance, but for tax purposes must occur within 9 months of decadents death
NON-MARITAL CHILDREN
Children born out of wedlock are heirs of the mother but not the father UNLESS he marries the mother, is adjudicated the father before or after his death, or acknowledges paternity in writing (legitimizes)
STEPCHILDREN
Child cannot inherit from stepparent unless unperformed agreement to adopt (virtual adoption)
ADOPTED CHILDREN
Inherit from adoptive family
Do not inherit from biological family
Adoption by a stepparent - From adopted parent and remarried parent, if adopted after death of original parent, relationship not severed. If adoption during original parent’s life, relationship with original parent is severed
Orphan Adopted by close family member, doesn’t affect the family tree
HALF SIBLINGS
Half blood kindred take half as much as whole blood kindred
SIMULTANEOUS DEATH
If no evidence that persons died other than simultaneously, heir or beneficiary treated as having predeceased
Applies to:
- Wills
- Intestacy
- Insurance
- Right of Survivorship
ADVANCEMENT OF INTESTATE SHARE
Common Law: Lifetime gift to child presumed advancement of intestate share
FL: No advancement unless:
- Contemporaneous writing by decedent or will so provides or acknowledgement in writing by heir/beneficiary
SATISFACTION OF LEGACIES
RESTRICTIONS ON POWER TO TESTATION
PROTECTION FOR SPOUSE AND FAMILY ****
Various provisions intended to financially protect a spouse and minor children
Homestead, exempt personal property set aside, and family allowance protections are over and above:
- property given to spouse by will
- elective share award
- intestate share of surviving spouse or children
PRETERMITTED SPOUSE
If marriage occurs after will executed, spouse may claim intestate share unless:
- Antenuptial or Postnuptial Agreement
- Testamentary Gift to Spouse Made in Contemplation of Marriage (made a gift in the will to the spouse in contemplation of marriage)
- Intention not to provide for spouse
SPOUSE’S ELECTIVE SHARE - GO BACK THROUGH THIS
Share of estate.
Notice must be filed within 6 months of notice of administration
ELECTIVE SHARE TRUST
PRETERMITTED CHILDREN
Child born or adopted after the execution of the will
Entitled to an intestate share UNLESS
- They received an advancement equal to intestate share
- Omission was intentional
- Testator had other children and left most of his estate to the other parent of the omitted child
The intestate share here is the entire estate!!
CONDUCT BARRING HEIR OF BENEFICIARY FROM TAKING
Homicide = no benefit (unlawfully and intentionally killed - involuntary manslaughter, negligent, criminally negligent will not trigger the slayer statute, acquittal at criminal law not controlling, this law is triggered by a civil standard - perponderance)
JT property passes half to the killer and half to decedent’s estate
WILL CONTESTS
Standing: anyone whose share would increase if contest successful has standing (economic stake in winning)
Grounds:
- Testamentary capacity - when the will was executed: did the testator understand nature of the act he was doing, did T know the nature and character of his property and know natural objects of his bounty and the disposition he wished to make (practical effect)
- Insane Delusion: belief with no basis in reason or evidence to which testator adheres despite all arguments to contrary - is gift product of insane delusion
- Undue Influence - must show EACH - existence and exertion of influence, overpowering mind and will of testator, will would not have been executed but for influence
EVIDENCE OF UNDUE INFLUENCE
ESTATE ADMINISTRATION - GO THROUGH THIS MORE CAREFULLY
Pay attention to forms of administration
TYPES OF ADMINISTRATION
- Disposition without administration
- Full Blown Administration
- Caveat Procedures
PERSONAL REPRESENTATIVE
ELIGIBILITY TO SERVE AS PR
POWERS OF PERSONAL REPRESENTATIVES
All powers necessary for the proper administration of the estate, but court orders needed for
- sale of real property or
- continue operation of unincorporated business for more than 4 months
NOTICE TO CREDITORS
NOTICE TO OTHERS
TIME LIMITS ON CREDITORS’ CLAIM
All must file within applicable statute of limitations:
- No notice to creditors published - within 2 years of death
- If notice - 3 months from first date of publication, accept those with actual notice have 30 days
ORDER OF PAYMENT
- Expenses of administration
- funeral expenses up to 6K
- Medicaid claims and debts and taxes with preference under fed law
- Medical expenses incurred in last 60 days
- Family allowance
- Child support arrearages
- Post death expenses in continuing business
- All other creditors
TRUSTS
TRUSTS DEFINED
A trust is an arrangement under which the trustee holds legal title to property for the benefit of the beneficiaries.
Trustee: has burdens - duty to manage, repair, pay the taxes… with a fiduciary duty (not privileged to use the trust property as their own)
Beneficiaries: hold equitable title, have benefits of property ownership
CATEGORIES OF TRUSTS
EXPRESS: Private and Charitable
IMPLIED: Resulting and Constructive [Prevent UE] (not true trusts, nothing with respect to express applies to implied) These are really remedies
REQUISITES FOR A TRUST
Settlor - creator
Delivers legal title
of trust property
to Trustee for benefit of beneficiaries
with intent to create trust and
for a valid purpose (doesn’t offend public policy)
SELF-DECLARATION OF TRUST
Settlor declares themselves trustee of own property for benefit of others - no delivery requirement
TESTAMENTARY TRUST
Testamentary Trust - trust created by settlor’s will - no delivery requirement
INTER VIVOS TRUST
Has a delivery requirement
INTENT
Present Intentional to Create a Trust - manifested by words, writing or conduct
Intent=legal title to property in one person’s name with a duty to manage it for others
Oral trust of personal property is valid in almost all jurisdictions
Note: precatory language of suggested use = no trust (hope, wish, or mere suggestion that the property be used in a certain way)
PRECATORY EXPRESSIONS
Wish and desire generally doesn’t create a trust UNLESS
- The directions are definites and precise, not vauge
- The directions are addressed by a decedent to their executor or administrator, or to one who otherwise occupies the position of a fiduciary
- …
TRUST PURPOSE
For any purpose that is not:
- Illegal
- Contrary to Public Policy
- Impossible to achieve
ACTS CONTRARY TO PUBLIC POLICY
If there is an unreasonable condition antithetical to public policy the trust may still be valid, but the condition contrary to public policy is void
Provisions that Tend to Violate:
- Prevent marriage
- Encourage Divorce
- Encourage Crime
- Retrain right to procreate
- Restrain right to practice religion
We’re worried about CONDITIONS in this area - you can not provide for someone for any reason, the issues come up when you give to someone with a CONDITION against public policy
REQUIREMENT OF TRUST PROPERTY (RES)
Res: Trust Property
Must be some specific interest in property that the trustee’s duties relate to
The subject matter of the trust must be certain and identifiable
Debtor cannot hold own debt in trust - but a debtor can declare himself trustee of a particular property from which the debt is to be paid, and the debt can be held in trust by another person (go back through this)
MUST BE EXISTING INTEREST IN EXISTING PROPERTY
Trust property must be an existing interest in existing property
A future interest may be held in trust, but an interest not yet in legal existence can’t be held in trust
Expectancy does not equal property that can be held in trust
UNENFORCEABLE GRATUITOUS PROMISE CANNOT BE RES
Where a promise to create a trust isn’t supported by consideration (gratuitous), a trust arises when all elements of a valid trust have been met, if, but only if, at the subsequent time the settlor manifest an intention then to create the trust
- All elements of valid trust met and
- Settlor reaffirms intent to create trust
Need a reaffirmation, inicia of trust might include:
- distributing income to the beneficiary or keeping records like a trustee would, can be conduct doesn’t have to be an express reaffirmation
PROMISE SUPPORTED BY CONSIDERATION
Under K law - trust attaches when property is received, no reaffirmation of attended needed if it’s not a gratuitous promise
NO TRUSTEE NAMED
No trust fails for want of a trustee - if clearly manifested trust, the lack of trustee will just be filled in by the court to execute the trust
POWERS PERSONAL TO THE NAMED TRUSTEE
If trust powers intended to be personal to the named, such that the trust should fail if that person can’t or won’t perform, then the trust will fail
THIS IS RARE
THREE EXCEPTIONS TO THE BASIC PRINCIPLE OF RES
When Otherwise Empty Trust Is Valid: trust names as beneficiary of life insurance policy or pension plan death benefit, or gift under settlor’s will in FL
TRUST BENEFICIARIES
Private trust must have ascertainable beneficiaries
Charitable trust must benefit reasonably large and unidentifiable segment of the public
TRADITIONAL RULE: trust invalidated for want of definite beneficiaries cannot be given effect as power of appointment
FLORIDA RULE: trust invalid for want of definite beneficiaries can be given effect as power of appointment
CLASS GIFTS
A private trust may exist for the benefit of members of a class. As long as the class is reasonably definite, it is permissible that the members of the class are to be selected by the trustee in their discretion, or that the property is to be held for such members of the class as the trustee finds meet certain requirements
Law does not require that beneficiaries need to be alive, guardian ad litem will enforce the trust. If no beneficiaries born - property returned to settlor by resulting trust
RESULTING TRUST
Implied Reversion -
NOT REQUIRED FOR CHARITABLE AND HONORARY TRUSTS
The rule requiring a private trust to have definite beneficiaries does not apply to charitable trusts; beneficiaries of a charitable trust must be indefinite
Honorary Trust - for the care of animals, valid in FL for the lifetime of the animals
- Who enforces the trust: trust or court designates enforcer
WILL SUBSTITUTES
Person wants to transfer property at the moment of death
REVOCABLE TRUSTS
