Wills & Trusts Flashcards
Testator’s Signature
Will must be in writing and signed by T or by someone at T’s discretion
Witnesses’ Signatures
Witnesses, both being present at the same time, must witness either T’s signature or T’s acknowledgement of the instrument as his will
Witness Signatures for Deaths after January 1, 2009
Can overcome invalid witnessing requirements with clear and convincing evidence that T intended the instrument to be their will
Interested Witnesses
There’s a presumption of undue influence for those taking gifts exceeding what they’d get under intestacy
Appointment as executor or trustee doesn’t make someone an interested W
Holographic Wills
Don’t need witnesses
Requires T’s signature and all material provisions to be in T’s handwriting
Undue Influence - Three Types
Common law presumption
Standard
Statutory
Undue Influence - Common Law Presumption
1) Bene is in a confidential relationship to T;
2) Bene participates in any way in procuring the gift; &
3) The gift is an unnatural bequest that favors the bene
Undue Influence - Statutory
Instrument prepared by fiduciary who takes the gift
Undue Influence - Standard
1) There was influence exerted on T;
2) The effect of which was to overpower the free will and mind of T; &
3) The product of the influence was a will which wouldn’t have been exercised but for the influence
Capacity - Insane Delusion
But for the insane delusion, the bequest wouldn’t have been made
Fraud in the Execution
T is defrauded as to the nature or content of what T is executing
Fraud in the Inducement
False representations made to get T to give a gift one way and not another
Mistake in the Execution
T mistakenly thinks she’s signing something else
Mistake in the Inducement
T’s will names the wrong bene or makes the wrong gift due to an accidental omission or addition
Mistake and alternative disposition must appear on the face of the instrument
But can use clear and convincing extrinsic evidence to establish mistake and actual intent to reform the will
Revocation Methods
1) By subsequent physical instrument
2) By physical act
3) By operation of law
Revival of a Revoked Will
1) Will #2 revokes will #1;
2) Will #2 is revoked by physical act; and
3) Contemporaneous or subsequent declaration by T showing intent to revive will #1
Dependent Relative Revocation
T revokes part or all of a will based on a mistake of fact or law
If revocation is by physical act, extrinsic evidence of mistake or intent allowed
If revocation is by subsequent will, mistake must appear on the face of the will
Codicil
To the extent the will isn’t changed by the codicil, it’s deemed to speak as of the date of the codicil so the unaltered parts of the will are republished by the codicil
Integration
The will consists of all papers or writings actually present at the time of execution and that T intended to constitute the will
Incorporation by Reference
1) The writing is in existence as of the date of the will;
2) The will shows T’s intent to incorporate the writing; and
3) The writing is sufficiently described in the will
Acts of Independent Significance
Non-testamentary acts of T used to resolve ambiguities on the face of the will
Interpreting Wills - Extrinsic Evidence
Admissible to explain any ambiguities in the will
Inadmissible to show a provision has a meaning to which it isn’t reasonably susceptible
Specific Legacy
Gift of a particular item
General Legacy
Gift of general economic benefit
Increase/Accretion
When the value of a specific gift increases, the increase goes to the bene of the gift
Ademption - General
Occurs when the specific gift identified in the will is no longer there when T dies
Bene isn’t entitled to the specific gift upon T’s death
Ademption by Extinction
When the specific is no longer owned by T at the time of T’s death
Ademption by Satisfaction
When T gives bene a substitute gift during T’s lifetime
Lapse & Anti-Lapse
If bene predeceases T, the gift lapses and falls into the residue
Anti-lapse saves the gift if 1) the deceased bene is T’s kindred or kindred of T’s spouse/partner; and 2) the decease bene leaves surviving issue
If anti-lapse applies, the gift goes to the bene’s surviving issue
Simultaneous Death
In the case of a simultaneous death, the bene is deemed to predecease T
Simultaneous death if bene doesn’t survive decedent by 120 hours
Intestate Succession
Spouse receives CP and:
1) 100% of SP if no issue, parent, sibling, or issue of deceased sibling
2) 50% of SP if one issue, parent, sibling, or issue of deceased sibling
3) 1/3 of SP if more than one issue or issue of deceased sibling
Lineal descendants take per capita by right of representation
Pretermitted Spouses
Spouse married after will execution gets intestate share of SP unless 1) omission intentional; 2) spouse provided for by other gifts/transfers outside the will; or 3) premarital agreement
Pretermitted Children
Child born after execution of the will/T didn’t know of child’s existence gets intestate share of SP unless 1) omission intentional; 2) child provided for by other gifts/transfers outside the will; or 3) T left the estate to the omitted child’s parent
Bars to Beneficiary’s Succession
Intentionally kills T
Elder abuse of T
Unsuccessful will contest if the will has a no contest clause
Trust Elements
1) Settlor or trustor;
2) Trustee;
3) Trust property;
4) Delivery of property to trustee;
5) Intent to create a trust;
6) Beneficiaries;
7) A valid trust purpose
Secret Trusts
1) Gift is absolute on the face of the will;
2) Secret agreement to hold gift in trust for benefit of another;
3) Must prove by clear and convincing evidence
Semi-Secret Trusts
Gift in will to T but terms of trust aren’t apparent
Trust fails and results in a resulting trust
Charitable Trusts
Purpose of trust is to benefit the public
Rule against perpetuities not violated if shifting executory interest between charities
Cy Pres
Charitable gift as specified can’t be completed
If gift fails, property passes to settlor’s successor or transfer the gift to a related charity
Spendthrift Trusts
Bene can’t alienate her interest in the trust
Assignee/creditor can’t compel trustee to pay
Doesn’t apply once trustee pays/distributes assets to bene
Exceptions - 1) claims of dependents; 2) gov’t claims; 3) suppliers of necessities
Discretionary Trusts
Trustee has complete discretion whether to pay or withhold payments to bene
Before trustee exercises discretion, creditors can’t reach trust
After trustee elects to exercise discretion, if trustee has notice of assignment or attachment, must pay creditor unless there are spendthrift provisions
Support Trusts
Trustee is required to pay only so much as is necessary for support of bene
Non-assignable; trustee doesn’t pay creditors even with notice of assignment or attachment
Termination of Trust by Settlor
Can almost always terminate or revoke a trust so long as trust is revocable
Termination of Trust by Beneficiaries
Allowed if all benes consent and the termination won’t interfere with a material purpose of the trust
Failure of an Express Trust
When an express trust fails because the bene dies, equity creates a resulting trust, and the court then compels the resulting trustee to distribute the property to the settlor or settlor’s estate
Fiduciary Duties of a Trustee - Delegation
Trustee may delegate management functions but trustee is still liable for delegate’s wrongful acts
Fiduciary Duties of a Trustee - Duty to Earmark
Trustee can’t commingle trust property with personal property
Title the assets “T as trustee of the ABC Trust”
Fiduciary Duties of a Trustee - Duty of Care
Trustee must manage investments as a prudent investor would, and thus must exercise reasonable care, skill, and caution
Care relates to trustee’s diligence and efforts
Skill relates to trustee’s capabilities
Caution is the element of conservatism in managing the trust
Fiduciary Duties of a Trustee - Duty of Prudence/to Diversify
Trustee is required to make prudent investments which requires diversification and placing trust assets into investments that will maximize the value of the trust assets
Fiduciary Duties of a Trustee - Duty to Make Trust Property Productive
Yes
Fiduciary Duties of a Trustee - Duty of Loyalty to Beneficiaries
Trustee can’t purchase trust property for trustee’s own account or that of related persons without court approval
Fiduciary Duties of a Trustee - Duty to Act Impartially
Must act impartially toward both the income and principal beneficiaries
Fiduciary Duties of a Trustee - Duty to Administer the Trust According to the Terms
Yes
Fiduciary Duties of a Trustee - Duty to Allocate Income
Cash to income unless capital gain or distribution in liquidation of corp. or partnership
Stock and capital gains to principal
Insurance proceeds to principal unless from business income loss
Patents, copyrights, royalties, leases: 10% to income, 90% to principal
Fiduciary Duties of a Trustee - Duty to Allocate Expenses
Ordinary expenses - all to income
Trustee/attorney/accountant and other compensation - 1/2 to each
Principal on debt, estate taxes, environmental cleanup - all to principal
Remedies for Breach of Fiduciary Duty
Surcharged for losses
Can’t offset losses with gains
Trustee may be removed
