Wills & Trusts

Question 1

Revocation by Physical Act

Answer 1

1) a testator can revoke a will by burning, tearing, canceling, destroying, or obliterating it;
2) and intent to revoke

• revocation by tearing must be through a material part
• cancelling must be through material part or at least touch the words of the will

*witnesses are not necessary for a valid revocation by physical act

Question 2

Intestate Succession

Answer 2

Any part of a decedent’s estate not properly disposed of by will, passes to the decedent’s intestate heirs by statute

1) if there is no surviving spouse, a decedent’s intestate estate passes to her issue
2) issue of the same generation take equally
3) CP and SP are treated differently

Question 3

Revival

Answer 3

If a will is revoked by a subsequent testamentary instrument, and the subsequent instrument is revoked, then the original will survives.

Question 4

Holographs

Answer 4

CA recognizes holographic (handwritten and unattested) wills and codicils if it is in the testator’s writing and has

1) testator’s signature
2) material terms of gifts made and names of beneficiaries/other material provisions/dispositive provisions

Question 5

Codicil

Answer 5

A codicil is a testamentary instrument INTENDED to modify, amend, or revoke an existing will and must be EXECUTED with the same FORMALITIES as a will.

Question 6

Integration

Answer 6

A will can be all pages

1) present at the time of the EXECUTION; and
2) the testator INTENDED to CONSTITUTE her will
* extrinsic evidence can be used to show which papers were intended to be included
* the witness requirement doesn’t require the witnesses to observe what papers were present, merely that it was in fact, a will

Question 7

Omitted Child

Answer 7

1) A decedent may disinherit a child from their will.
2) CA provides protections for children thought dead, parent unaware of the birth, or born after the will was executed.
3) the omitted child would take intestacy shares

Question 8

Resignation of a Trustee

Answer 8

1) A trust needs a trustee to have LEGAL title but a trust does to fail due to lack of designated trustee
2) the court can appoint a trustee
3) in the interim, the trust resides with the settlor’s estate or with the court
4) Once assigned, a trustee can only resign by

 (a) permission of the court
 (b) as authorized by the trust
 (c) consent by all beneficiaries

Question 9

Trust Termination by Beneficiaries

Answer 9

1) must be unanimous amongst ALL BENEFICIARIES (including existing, potential, unborn or unascertained, of present and future interests)
2) must not impair the MATERIAL PURPOSE of the trust as determined by analyzing the instrument as a whole and the surrounding purpose.

Question 10

Trustee Duty of Care

Answer 10

In a revocable trust, duty is to the settlor

In an irrevocable trust duty is to the beneficiaries

Duty of care is the same care, skill, and caution that a reasonably prudent person would use in managing her own property.

Question 11

Trustee Liability to Beneficiaries

Answer 11

If a trustee BREACHES the trust, beneficiaries may sue for a

SURCHARGE- the amount needed to RESTORE trust PROPERTY and DISTRIBUTION to what it would have been BUT FOR the BREACH, for which the trustee is personally liable

Question 12

Trustee Duties

Answer 12

1) LOYALTY AND IMPARTIALLITY:
Duty to ADMINISTER solely in the beneficiary’s interest, and if there is more than one, then to act impartially.

2) ACCOUNT
Keep and render accounts, and furnish information to beneficiaries at their request.

3) PRESERVE TRUST PROPERTY and MAKE PRODUCTIVE
Implied duty to make the property productive, Which include the duty to invest. The trustee must invest trust funds within a reasonable time after receiving themand continually review those investment.
*If the trustee fails to invest, she is chargeable the amount of income that would normally accrue from appropriate investment.

4) SEPARATE and EARMARK
trust assets must be kept physically separate from the trustee’s personal assets and titled in the trustee as trustee.

5) INVEST
as a prudent investor as determined
a) general economic conditions
b) the possible effect of inflation/deflation
c) tax consequences
d) role each investment plays in the overall portfolio
e) other resources of the beneficiaries
f) expected return from income and appreciation of capital
g) needs for liquidity, regularity of income, preservation or appreciation of capital
h)an asset’s special relationship or value to he purpose of the trust or one or more of the beneficiaries

6) DIVERSIFY
diversify investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversification.

Question 13

Defenses to Trustee Duty of Care Breach

Answer 13

1) Consent : beneficiaries expressly or impliedly consented to the breach
2) Time: laches, statute of limitations
3) Discretion under the trust: power/discretion/flexibility bestowed on trustee in the trust

Question 14

Re-execution

Answer 14

A will can be re-executed by

a) a testator acknowledging her signature; or
b) a testator acknowledging the will and having witnesses attest to it

Question 15

Re-publication

Answer 15

A physically revoked will cannot be republished.

Question 16

Incorporation by Reference

Answer 16

The court will infer the testator intended to incorporate the writing into the will if : a document by reference it must be

1) in existence at the time the will was EXECUTED
2) sufficiently DESCRIBED in the will
3) there is PROOF that the preferred document is the ONE DESCRIBED in the will

Question 17

Undue Influence

Answer 17

1) A will is INVALID if it is obtained through undue influence
2) Undue influence is mental or physical COERCION that DEPRIVES the testator if her FREE WILL and substitutes the DESIRES OF ANOTHER for hers.
3) Will contestants must show
a) INFLUENCE was exerted on the testator
b) the EFFECT of the influence was the OVERPOWER the MIND and FREE WILL of the testator; and
c) the PRODUCT of the influence was a will that would not have been executed BUT FOR the influence

Question 18

CL Presumption of Undue Influence

Answer 18

A will challenger can shift the burden of proof to the will proponent if it is shown that

1) there was a CONFIDENTIAL relationship between the will proponent and the testator (includes fiduciary but also relationships where decedent relies heavily on and places more trust than normal in another)
2) the beneficiary PARTICIPATED in procuring, drafting, or executing the will
3) the will provisions are UNNATURAL and FAVOR the alleged influencer

Question 19

Undue Influence Factors

Answer 19

a) opportunity to exert influence
b) susceptibility of the testator to influence due to age or physical condition
c) whether the beneficiary was active in procuring the will
d) whether the disposition in the will are at a variance with the expressed intentions of the testator
e) whether the will provisions seem unnatural

Question 20

Undue influence statutory

Answer 20

CA provides a statutory presumption that a PROVISION in FAVOR of one of the following people is a product of FRAUD:

1) DRAFTS the will (includes his relatives & associates)
2) TRANSCRIBES the will if a fiduciary at the time of transcription
3) testators CARE CUSTODIAN

Question 21

Failed Gift

Answer 21

A gift fails if the devisee is dead prior to the testator’s death.

A failed gift returns to the testator’s residue.

If there is no residue, it is distributed based on intestate succession.

Question 22

Anti-Lapse Statute

Answer 22

Generally, if a beneficiary dies for the testator, the gift fails or lapses and returns to the residue of the testator’s estate. CA provides an anti-lapse statute if the beneficiary was kindred or “blood relative” of the testator, or the testator’s spouse/domestic partner.

Per CA’s anti-lapse statute

1) the ISSUE OF THE PREDECEASING BENEFICIARY
2) take the beneficiary’s gift
3) PER CAPITA with REPRESENTATION

Question 23

Specific Legacy/Devise

Answer 23

Gift of a particular item of property distinct for all other object’s in the testator’s estate.

• subject to revocation by ademption if no longer in the testator’s estate at his death
• generally regardless of intent, but CA looks at intent
• extrinsic evidence is admissible to prove testator intent

Question 24

General Legacy

Answer 24

gift of a general economic benefit, payable out of the general assets of the estate

Question 25

demonstrative legacy

Answer 25

hybrid, general legacy

1) payable first from the particular property; then
2) out of the estate if the property is insufficient

Question 26

residue gift

Answer 26

1) gift of what remains of the testator’s property
2) after paying debts, expenses; and
3) satisfying specific, general, and demonstrative gifts

Question 27

Trust Intent

Answer 27

Can be by oral or written conduct, but asking, wishing or hoping isn’t enough

Question 28

Will Requirements

Answer 28

1) be in writing
2) signed by testator (or another person in his presence and at his direction)
3) the testator’s signing or acknowledgement of his signature occurs in joint presence of at least two witnesses who sign the document during the testator’s lifetime
4) the witness must understand the document being witnessed is the testator’s will

Question 29

Harmless Error Doctrine

Answer 29

If a will is not executed in compliance with the witnessing requirement, it may still be admitted to probate if the will proponent:

1) establishes by clear and convincing evidence
2) that at the time the testator signed the will
3) he intended the instrument to constitute the will

Question 30

Cy Pres

Answer 30

The court will decide whether

1) the settlor intended the trust to fail; or
2) would have wished the property devoted to similar use

Question 31

Third Party breach of trust

Answer 31

A third party who KNOWINGLY participates in a breach of trust is liable for the regulating loss to the trust estate.

An INNOCENT party in a breach of trust is generally obligated only to return property transferred to him.

An innocent donee who has exchanged trust property for other property can either restore the value of the trust property when received or the value of a substitute, whichever is less.