Wills & Trusts

Question 1

Trust (definition)

Answer 1

A trust is a fiduciary relationship with respect to property whereby one person, the trustee, holds legal title for the benefit of another, the beneficiary.

Question 2

Creation of a Valid Trust

Answer 2

Creation of a valid trust requires: (1) a settlor with capacity and present intent to create a trust; (2) a trustee; (3) trust property (res); (4) beneficiaries; (5) a valid trust purpose; and (6) delivery of trust property from the settlor to the trustee.

Question 3

Revocation of a Trust

Answer 3

In most states a trust is presumed to be irrevocable unless there is an express reservation by the settlor of the right to revoke. Under the Uniform Trust Code (UTC) and by statute in several non-UTC states (including CA), a trust is presumed revocable unless the trust instrument expressly provides that it is irrevocable. In any case, where there is a power to revoke, that power generally lies with the settlor, although all beneficiaries may consent to terminate a trust if no material purpose will be impaired. A trustee, however, generally may not unilaterally terminate a trust.

Question 4

Undue Influence (definition)

Answer 4

Undue influence exists where the testator was mentally or physically coerced to such a degree that her free will was subjugated.

Question 5

Undue Influence (categories)

Answer 5

There are three bases for undue influence: prima facie case, presumption, and CA statute.

Question 6

Undue Influence (prima facie)

Answer 6

The will contestant has the burden of proving undue influence. Undue influence is usually proven by circumstantial evidence. This generally requires showing a number of factors that, when combined, justify undue influence. These factors include: (1) opportunity to exert influence; (2) susceptibility of the testator to influence; (3) whether the beneficiary was active in procuring the will; (4) whether depositions in the will are at variance with the expressed intentions of the testator; and (5) whether the will provisions seem unnatural.

Question 7

Undue Influence (common law presumption)

Answer 7

At common law, a presumption of undue influence, which shifts the burden of proof to the will proponent, can arise when: (1) a confidential relationship exists between the testator and the beneficiary; (2) the beneficiary participated in procuring, drafting, or executing the will; and (3) the will provisions favor the alleged influence. In addition to the usual common law confidential relationships (e.g. doctor-patient, attorney-client), a confidential relationship may exist whenever one party relies heavily on or reposes more than the normal amount of trust in another.

Question 8

Undue Influence (CA statutory presumption)

Answer 8

In California, a statutory presumption of undue influence arises when a donative transfer is made to: (1) the person who drafted the instrument or her relatives; (2) a person in a fiduciary relationship with the testator who transcribed the instrument; or (3) a care custodian of a dependent adult.

Question 9

Codicil (definition)

Answer 9

A codicil is a testamentary instrument intended to modify, amend, or revoke an existing will. It must be executed with the same formalities as a will.

Question 10

Intestate Succession

Answer 10

Any part of a decedent’s estate that is not properly disposed of by will passes to the decedent’s intestate heirs as prescribed by statute. Community property is treated differently from separate property under the statute.

Question 11

Incorporation by Reference

Answer 11

To incorporate a document by reference: (1) it must be in existence at the time the will was executed; (2) it must be sufficiently described in the will; and (3) there must be proof that the proffered document is the one described in the will.

Question 12

Death of Trust Beneficiary

Answer 12

A private trust requires that there be definite beneficiaries. If a trust fails for lack of a beneficiary, a resulting trust in favor of the settlor or his successors is presumed. The trustee’s only duty is to convey title back to the settlor or, if he is dead, his estate.

Question 13

Anti-Lapse Statute (Trusts)

Answer 13

Lapsed gifts may be saved by an anti-lapse statute, which provides that the issue of certain predeceasing beneficiaries may take in their place. CA’s anti-lapse state applies to trust as well as wills. The statute applies only if the predeceased beneficiary was kindred (a blood relative) of either the settlor or of the settlor’s surviving spouse or domestic parter.

Question 14

Simultaneous Death

Answer 14

In CA, if title to property depends on priority of death and it cannot be established by clear and convincing evidence that one person survived the other, the property of each person is death with as if he had survived the other.

Question 15

Lapse

Answer 15

A will cannot convey property to a dead person. Accordingly, the property to be conveyed will instead fall into the residuary of the estate, unless the anti-lapse statute applies.

Question 16

Acts of Independent Significance

Answer 16

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

Question 17

Incorporation by Reference

Answer 17

In CA, a writing may be incorporated into a will by reference if: (1) the writing is in existence at the will’s execution; (2) the will sufficiently describes the writing so that its identification is clear; and (3) there is satisfactory proof that the proffered writing is the writing described in the will. If these requirements are met, courts will infer that the testator intended to incorporate the writing into his will.

Question 18

Omitted Child Statute

Answer 18

Under CA’s omitted child statute, if a decedent fails to provide for a child born or adopted after the execution of all of the decedent’s testamentary instruments (will and/or revocable trust), the child is entitled to her intestate share of the decedent’s property.