Wills & Trusts Flashcards
Validity of a Will under California Law
A will is valid in California if it is valid under the laws of:
- California;
- the state where it was executed; OR
- the state where the testator was domiciled at the time of execution or death.
Will Execution Requirements
A valid will requires
- a writing concerning the distribution of property upon death
- signed by the testator or someone at his direction and in his presence;
- the signing must be witnessed by 2 disinterested individuals present at the same time;
- the witnesses must sign during the testator’s lifetime; AND
- the witnesses must understand that they signed the testator’s will.
After January 1, 2009, a will that complies with the writing and signature requirements may still be admitted to probate if clear and convincing evidence shows the testator intended the document to be her will at the time it was signed.
What is a holographic will and when is it valid?
A holographic will is handwritten and signed by the testator, but not witnessed. It is valid if signed by the testator AND all material terms are in the testator’s handwriting. Material terms include the names of beneficiaries and the gifts they will receive.
The lack of a date does not affect the validity unless there is an issue with testamentary capacity or inconsistent wills.
Modification of a Will by Codicil
To modify a will through a codicil, there must be intent to do so. A codicil must satisfy the same formalities as a will. The execution of a codicil republishes the will.
Ambiguities in a Will
A court may consider extrinsic evidence to clarify any ambiguities in a will.
What are acts of independent significance and how are they used?
Acts of independent significance are acts with significance outside of the will-making process (acts that have no testamentary affect).
A court may use acts of independent significance to fill in the gaps of a will.
When will documents be integrated into a will?
Documents will be integrated into a will if the testator intended them to be part of the will AND they were physically present at the time of the will’s execution.
When will a document be incorporation by reference into a will?
A document may be incorporated into a will by reference if it was:
- in existence at the time the will was executed;
- sufficiently described in the will; AND
- intended by the testator to be incorporated.
What may a testator gift of their Community & Separate Property?
A testator may only gift their share of the community property. A married testator may gift any separate property owned.
Revocation by Physical Act
A will is revoked by physical act if the testator intended to revoke it and the will is burned, torn, destroyed, or cancelled by the testator or someone at the testator’s direction.
Revocation by Subsequent Will or Codicil
A testator can revoke a will by executing a subsequent valid will or codicil.
Revocation by Divorce
In California, any gifts to a spouse are revoked upon divorce.
Partial Revocation of a Will
A testator may make a partial revocation by crossing out a portion of it, but cannot increase a gift through partial cancellation.
Dependent Relevant Revocation
The dependent relevant revocation doctrine cancels a revocation made under a mistaken belief of law or fact.
Revival of Revoked Wills & Republication by Codicil
Revoked wills may be revived if a testator shows intent for its revival or republishes the will by a subsequent will or codicil.
Revocation by Operation of Law
Gifts to beneficiaries may be fully or partially revoked by operation of law in certain circumstances.
Testamentary Capacity
To execute a will, a testator must (1) be at least 18 years old; (2) understand the nature and extent of her property; AND (3) understand the natural objects of her bounty.
Interested Witness
A will is only valid if signed by the testator in the presence of two disinterested witnesses. Gifts to an interested witness are presumed invalid.
Insane Delusion
A will is invalid if it is the result of an insane delusion that caused an unnatural result.
Fraud
A will is fraudulent if a person intentionally made a misrepresentation of material fact to induce the testator to sign or change the will.
Undue Influence
Undue influence occurs when a person exerts influence that overcomes a testator’s free will and judgment.
A prima facie case is established if the testator had a weakness, the wrongdoer had access, participated in drafting the will, and there is an unnatural result.
Individuals Who May Make a Will
Any individual 18 years or older who is of sound mind may make a will or codicil.
Terms of a Will Given Effect When Probated
The terms of a will are given effect at the time the will is probated OR after the testator’s death.
Lapse of Gifts & Anti-Lapse Statute
If a beneficiary does not exist at the time of death, the gift lapses. However, CA has an anti-lapse statute where a gift will pass to the deceased beneficiary’s issue if certain conditions are met.
Per Capita by Representation Distribution
Under Per Capita by Representation distribution, the estate is divided into equal shares based on surviving descendants and deceased descendants who left surviving descendants.
Per Stirpes Distribution
In a per stirpes distribution, the estate is distributed equally among beneficiaries, with shares passing to surviving descendants of predeceased beneficiaries.
General Gifts
A general gift is nonspecific and is satisfied from any of the funds remaining in a testator’s estate.
Specific Gifts
A specific gift is one that is specifically identified, such as real property or personal property.
Demonstrative Gifts
A demonstrative gift is a hybrid of a specific and general gift where the testator makes a general gift but identifies the specific source.
Residual Gifts
A residual gift is a gift of any property remaining after the distribution of the estate to identified beneficiaries.
Ademption
A specific gift is adeemed by extinction if the testator does not own it at the time of death. Ademption does not apply to general or demonstrative gifts.
In California, a specific gift is adeemed only if the testator intended the gift to fail.
Abatement
Abatement occurs when assets are insufficient to cover debts, expenses, and gifts, reducing gifts based on class.
Adopted Children
Adopted children inherit from their parents as if they were natural born children.
Joint Property: Right of Survivorship
Joint-tenants hold property that passes outside of a will, as the surviving joint-tenants have a right of survivorship.
Intestate Distribution
A surviving spouse is entitled to one-half of the decedent’s community property. The intestate share of the surviving spouse varies based on surviving issue.
What happens to shares that do not pass to the surviving spouse?
They pass to the decedent’s issue either equally if they are all in the same degree of kinship, or by Per Capita by Representation distribution.
If there are no surviving issue, how does the estate pass?
The estate passes to the nearest generation equally in the following order: parents, parents’ issue, grandparents, and grandparents’ issue.
What is the entitlement of a surviving spouse not mentioned in a will executed before marriage?
The surviving spouse is entitled to a share of the separate property equal to what they would have received under intestacy, but not more than one-half of the separate property in the estate.
Under what conditions does a surviving spouse not receive the intestate share?
If the spouse was intentionally omitted, given property outside of the will in lieu of a disposition, or if the omission was consistent with a valid prenuptial agreement.
What is presumed about a child not mentioned in a will executed before their birth?
The child is presumed to have been omitted accidentally and is entitled to an intestate share of the testator’s estate.
When is a child not entitled to a share of the decedent’s estate if not mentioned in a will executed after their birth?
Only if the child was intentionally omitted, supported by transfers outside of the will, or if the testator had more than one child and left all or substantially all of the estate with the parent of the omitted child.
What are the elements required 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 trustee; (5) a valid trust purpose; (6) trust property; and (7) compliance with any State formalities.
What distinguishes an Inter Vivos Trust from a Testamentary Trust?
An Inter Vivos Trust is created during the settlor’s lifetime, while a Testamentary Trust is created through the provisions of a settlor’s will and takes effect upon the settlor’s death.
What is the default status of a trust regarding revocability?
The majority view is that a trust is revocable by default unless stated otherwise.
What happens to a revocable trust upon the death or incapacity of the settlor?
A revocable trust becomes irrevocable upon the death or incapacity of the settlor.
What is a Charitable Trust?
A Charitable Trust is created to confer a substantial benefit to society, and the rule against perpetuities does not apply.
What happens if a general charitable trust fails to state a specific purpose or beneficiary?
The court will select a purpose or beneficiary consistent with the settlor’s intent.
What is a Resulting Trust?
A Resulting Trust is implied by law based on the presumed intent of the parties.
What is a Discretionary Trust?
A Discretionary Trust occurs when a trustee has absolute discretion to determine when and how much of the trust property is distributed to beneficiaries.
What is the Cy Pres Doctrine?
The Cy Pres Doctrine allows courts to modify a charitable trust to align with the settlor’s intent if the original purpose becomes impracticable or impossible.
What is a Spendthrift Trust?
A Spendthrift Trust prevents the transfer of a beneficiary’s interest and protects it from creditors, with certain exceptions.
Under what conditions can creditors reach a beneficiary’s interest in a trust?
Creditors can reach the beneficiary’s interest if it is not subject to a spendthrift provision, or if certain exceptions apply.
How can a trust be modified?
A trust may be modified by a settlor who expressly reserved the power to modify, or by court order under certain circumstances.
What conditions allow for the termination of an irrevocable trust?
An irrevocable trust may be terminated if the settlor and all beneficiaries agree, or by operation of law.
How can a revocable trust be revoked?
A revocable trust may be revoked by compliance with methods provided in the trust instrument or by a signed writing delivered to the trustee.
What powers does a trustee have?
A trustee’s powers can be expressly granted in the trust instrument or implied to carry out the trust purpose.
What duties does a trustee owe to beneficiaries?
A trustee owes duties of care and loyalty, requiring prudent management and acting in the best interest of the beneficiaries.
What is the Prudent Investor Rule?
The Prudent Investor Rule requires a trustee to manage trust assets with care, skill, and prudence, including diversification and monitoring investments.
What is the liability of co-trustees?
Co-trustees are responsible for administering the trust and may be liable for breaches of duty by another co-trustee.
What remedies are available against a trustee for breach of duty?
A trustee may be removed and held liable for losses, profits made through the breach, and profits that would have accrued to the trust.
What grounds can a trust be challenged on?
A trust may be set aside for fraud or undue influence, with elements similar to contesting a will.
