Wills/Trusts Flashcards
validity of a will
e c c
execution
capacity
conflict
execution
s 2
a valid will must meet the formalities of being in writing, signed and witnessed
writing - must be in writing
signed - signed by testator or acknowledgement of testator (for testator at his direction)
witnessed - 2 witnesses who know the document is a will, and both are present for the same time
witness issues
not properly witnessed - if proponent of the will establishes by clear and convincing evidence that it is testator’s will
interested witness - an witness who stands to receive more than an intestate share is considered an interested witness and will have to overcome the rebuttable presumption that the witness procured the document by fraud, duress or undue influence. unless there are two other uninterested witnesses who sign. Does not invalidate will, simply the provision
holographic will
a will that does not comply with the formalities of a will can qualify for a valid will if the material provisions are in the testator’s handwriting and so is the signature
undated holo will
any inconsistencies will be invalidated
capacity
legal age and sound mind - old enough, sober enough, sane enough
understand the nature of the testamentary act
understand the nature and situation of his property
understand the relations with family members affected by his will
duress, menace fraud or undue influence
the execution or revocation of a will is ineffective as far as it was produced by fraud, menace, duress or undue influence
fraud
misrepresentation of a material fact known to be false to the wrongdoer, with the intent to deprive a person of property or legal rights and in fact does deprive
fraud in the inducement - doesnt know he’s signing a will
fraud in the execution - wrongdoer influences a testator by misrepresenting provisions in the will and those provisions will be invalid
fraud preventing revocation - fraud is implemented to prevent a revocation
undue influence 4`
leaves an unnatural disposition in his will
beneficiary had opportunity to influence
testator was susceptible to influence
beneficiaries were active in procuring disposition
fraud or undue influence is presumed if:
d f c c r
an instrument makes a donative transfer to :
drafter if instrument
fiduciary of the transferor who transcribed the instrument
care custodian during period services were provided
cohabitant or employee
BUT..blood relative, less than 5k, reviewed by independent atty. without beneficiary present
rebutted by clear and convincing evidence
conflict of laws
a written will is validly executed if its execution complies with the law of the place where T is domiciled at the time of execution or domiciled at the time of death, or complies with the law where the will is executed
components of will
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integration - papers are integrated into the will if they were present at the time of the execution of the will and the testator intended them to be a part of the will
incorporation by reference - a writing outside the will may be incorporated by reference into the will if the writing existed at the time of the will was executed and the will manifests that intent to incorporate it and sufficiently describes the writing
special rule - for ltd tangible that cannot be incorporated by reference = must be lass than 5k, referred to in will, dated and testator’s handwriting, describes items and bene’s
acts
Acts of Independent legal significance - a will may dispose of property by reference to acts and events that have independent legal significance apart from the will
Codicil - an amendment to an existing will made by the testator to change, explain or republish his will. same formalities of will.
revocation doesn’t effect will unless will is revoked and then codicil will also be revoked.
valid codicil functions as republication of will
pour over will - a will that identifies a trust created by the T so that he can “pour over” his probate assets into and thus avoid going into probate. req’s
trust is identified in will
terms are set forth in an instrument other than the will
trust was executed before or concurrently with will
revocation by
p s o
- revocation by physical act - a will or part of the will may be revoked by a physical act of the testator or another person in the T’s presence. Burned, torn ,marked through with intent to revoke.
presumed revoked if can’t find one and T was competent until death and will can’t be found
cross out of beneficiaries - goes to RRR - revocation by subsequent will - a will or part of a will is revoked through the execution of a subsequent will either by express revocation or impliedly through inconsistencies
- revocation by operation of law - to accommodate an omitted child or spouse or to remove all devises to a previous spouse after divorce or annulment
omitted child or spouse
an omitted child or spouse will receive an intestate share if they were born or married after the execution of the will UNLESS…
intentionally and expressly omitted in will
otherwise provided for outside the will in lieu of
decedent had one or more children and devised substantially all off the estate to the other parent of the omitted child
Dependent Relative Revocation
will apply if testator revokes his first will on the mistaken belief that a second will or codicil will be effective but is not effective and but/for the mistake, T would not have revoked his first will Court will disregard second will. If second will is invalid due to fraud, duress or undue influence then the revocation of the first was never valid! so there
revival
when a will is revoked by a physical act or second will, and then the second will is revoked as well, the first will is revived if the T intended. Can use extrinsic evidence when performed by physical act
distribution issues
c a a e l/a s b
classification ademption adeemed exoneration lapse.anti-lapse survivor rts bars to succession
classification
testamentary gifts
specific - specific identifiable property.
stock rules: splits follow original stockare distributed to bene of original stock, dividends juris split, usually bene
general - a gift from the general assets of the estate
demonstrative - general gift that comes from specified property or particular source
residuary - gift from what’s left
ademption
applies when the property has changed form from that identified in the will
specific gift -adeems by extinction if the specific item named in the will is not part of the estate at the time of T’s death. courts can look at T’s intent to see if bene takes nothing
bene takes equivalent pecuniary gift if involves securities, conservator sold property or eminent domain
adeemed by satisfaction - if T’s will provides for deduction of the lifetime gift, declare in writing that gift is satisfied, or given to bene during T’s lifetime
abatement
occurs when the gifts are reduced to enable the estate to pay all debts adn legacies that it otherwise would be unable to pay
property not dispose of by will
residuary
general gifts to nonrelatives then relatives
specific gifts to nonrelatives then relatives
exoneration
applies when a gift of property is made that is subject to an encumbrance and the will requires it to be paid off so that devisee takes free and clear. general rules of abatement apply except another specific gift may not be abated
lapse and antilapse
lapse - when a beneficiary predeceased the testator the gift to the beneficiary lapses and falls into the residue antilapse - modernly when a bene predeceases the T, the issue of the bene take in his place thus avoiding lapse unless will states otherwise . only applies to kin of T or spouse also applies to class gifts. simultaneous death, unless clear and convincing that bene died first then presumed lapse
survivor rts
widow’s election - allows a widower to elect to keep their share under will or to take their statutory share which is their half of the CP if deceased spouse attempted to dispose of more than share
property transfer - surviving spouse can set aside half of the transfers made by the spouse during the marriage
bars to succession
no contest clause will penalize a beneficiary if he contests the will in a direct contest without PC on the grounds of fraud, forgery etc
trust creation
m r t
methods
req’s
trustee need not be named
methods for creating a trust
d t t p e
declaration by a property owner that he holds the property as a trustee
transfer of property during the owners lifetime to another as trustee
transfer of property by means of will taking effect at T’s death
exercise of the power of appointment to another person as trustee
enforceable promise to create a trust
req’s for valid trust 4
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in addition to the method of creation a valid trust requires that the following requirements are met:
- intent - settlor must manifest intent (precatory language such i wish are not adequate
- property - trust must have identifiable property, cannot be an expectancy under a will or liiusory
- purpose - must have lawful purpose
- beneficiary - must be an ascertainable beneficiary
trustee need not be named, court will appoint
limitations on trusts
rp o 21 i
real property - must be in writing and signed
oral trust - existence must be proved by clear and convincing evidence
21 years max for non-charitable trust
invalidation - execution or revocation of trust is invalidated by force, duress, fraud, etc
Types of Trusts 13
e t p s ss s s d c h t r c
Eric Takes PiSSSS During CHurch To Relieve Capacity
express -
testamentary
pour over
support
secret
semi-secret
spendthrift
discretionary
charitable
honorary
totten
resulting
constructive
Types of Trusts 13
e t p s ss s s d c h t r c
Eric Takes PiSSSS During CHurch To Relieve Capacity
express -
testamentary
pour over
support
secret
semi-secret
spendthrift
discretionary
charitable
honorary
totten
resulting
constructive
express
where property is transferred from one owner to another such that a trustee holds legal title for the benefit of a beneficiary with the settlor having the present manifestation of intent to create the trust for a legal purpose
testamentary
a trust created by a will that the will contains the material provisions of the trust and arises upon the death of the settlor
pour over
one that is structured to receive and dispose of assets at the settlor’s death
secret
occurs when the settlor leaves a gift for the bene on the face of his will without indicating an intent to create a trust but does so in reliance that the bene will hold the property in trust for another
semi-secret
leaves a gift in his will to a person in trust but does not identify the bene. maj. hold its a resulting trust min allow extrinsic evidence
spendthrift
occurs when the bene cannot voluntarily alienate his interest and are protected from creditors unless child suppport
support
directs the trustee to make limited distribution to pay for the beneficiary’s support, health, maintenance or education and can be accessed by creditors when it would interfere with that support
discretionary
gives the trustee discretion to distribute or withhold income, principal or payments form the trust to the trustee
charitable
a trust that is for a charitable organization and benefits society
cy pres - when charitable objective becomes impossible to fulfill, courts can sub in another sumilar charitable object. if none found, resulting trust
honorary
neither a private beneficiary nor a charitable purpose. trust are generally invalid except to care for pets then resulting
totten
where the settlor places money in the bank acct with instructions that the named beneficiary takes any amount left at death of settlor
resulting
implied-in-fact trust based on the presumed intent of the parties and will transfer the property back to settlor or his estate when: purpose of trust ends express trust fails charitable trust ends and no cy pres trust is illegal excess corpus in trust a purchase money resulting trust
constructive trust
applied as a remedy to prevent unjust enrichment req's self-dealing fraud in inducement or self-dealing secret trusts are involved oral real estate trusts are created
trust administration - powers
trustees have all enumerated powers expressed in the trust itself and pursuant to the law. trustees have implied power necessary and appropriate to carry out the terms of the trust such as to sell or lease trust property incur reas. expenses borrow money or operate a business
trust admin - duties 8
- account to an inform beneficiaries with a statement of income and expenses of the trust on a regular basis even if not requested
- not delegate his duties to others
- be impartial when dealing with beneficiaries
- due care and act as RPP, duty to investigate any investment and diversify
- segregate funds
- loyalty - no self dealing and avoid conflicts of interest
7/ prudently invest - statutory list or under UPIA will look at whole portfolio. risk and return suitable - defend actions and enforce claims
trust admin - liability
personally liable for :
violating duties
torts
contracts made
allocation
beneficiary - entitled to income but must pay interest on any loan debt or repairs
remainderman - entitled to principal from the net proceeds on a sale of an asset, stick etc but must pay principal part of the loan debt
subj to trustees best judgment - can do something different if he wants
modification
settlor (maj. juris) can modify or revoke trust only if the power is expressly stated in will, court can modify trust to meet settlor’s intent
termination
a trustee may not terminate trust except as stated in trust.
beneficiaries may compel termination of the trust if they are all competent, all consent, and termination does not frustrate the purpose of the trust
settlor may terminate if power reserved in trust
ourt may terminate
remedies
breach of trust - include damages, constructive trust, tracing and an equitable lien on the property, sue for resulting loss, or remove the trustee
