Wills & Trusts Flashcards
Will Execution Requirements:
A valid will requires (1) a writing concerning the distribution of property upon death (2) signed by the testator or someone at his direction and in his presence (an appointed conservator may also sign); (3) the signing must be witnessed by two disinterested individuals (both must be present at the same time); (4) the witnesses must sign the writing during the testator’s lifetime; AND (5) the witnesses must understand that they signed the testator’s will.
After January 1, 2009, a will which complies with the writing and testator’s signature requirements (but fails to comply with the witnessing requirements) MAY still be admitted to probate if the proponent of the will is able to produce clear and convincing evidence that the testator intended the document to be her will at the time it was signed.
Holographic Will or Codicil:
will that is handwritten and signed by the testator, but not witnessed. In California, a holographic will or codicil is valid if signed by the testator AND all material terms of the will are in the testator’s handwriting. Material terms include the name of the beneficiaries and the gifts they will receive. There is no requirement that a holographic will devise the testator’s entire estate; instead any portion not devised will pass by intestacy.
The lack of a date DOES NOT affect the validity of a holographic will, except when: (a) there is an issue with testamentary capacity; OR (b) there is a possibility that two or more wills should be probated which are inconsistent – in such instance the holographic will is invalid to the extent of the inconsistency (unless the time of its execution is established to be after the date of execution of the other will).
Modification of a Will by Codicil:
A codicil is an instrument made after a will is executed that modifies, amends, or revokes a will. A codicil MUST satisfy the same formalities as a will.
Revocation: To revoke a will through a codicil, there must be intent to do so.
Effect: Execution of a codicil republishes the will, meaning courts will consider the original will to have been executed on the same date as the codicil. A validly executed codicil will also cure any interested witness problems with the original will.
Ambiguities and Acts of Independent Significance:
Those with significance outside of the will-making process (acts that have no testamentary affect). A court may use an act of independent significance to fill in the gaps of a will.
Incorporation by Reference:
A document or writing may be incorporated into a will by reference if it (1) was in existence at the time the will was executed; (2) is sufficiently described in the will; AND (3) the testator intended to incorporate it.
Testamentary Capacity:
To have sufficient 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 (i.e. her relatives and friends). Appointment of a conservator alone, does not prove a lack of capacity.
Undue Influence:
occurs when a person exerts influence that overcomes a testator’s free will and judgment. Prima facie case: (1) the testator had a weakness (physical, mental, or financial) that made him susceptible to influence; (2) the wrongdoer had access to the testator and an opportunity to exert influence; (3) the wrongdoer actively participated in drafting the will; AND (4) there is an unnatural (unexpected) result.
CA statutory presumption: established if the testator makes a donative transfer to (1) the person who drafted the will; (2) a care custodian of a testator who is a “dependent adult”; (3) a person in a fiduciary relationship with the testator; (4) one of those person’s spouse, employee, or relative, OR (5) a partner, shareholder, or employee of the law firm in which a person who drafted the will or one in a fiduciary relationship with the testator has an ownership interest.
Lapse of Gifts:
If a beneficiary does not exist at the time of a testator’s death, the gift lapses and returns to the residual estate, which is distributed under intestate succession rules.
However, CA has an anti-lapse statute, under which a gift will not lapse, but instead pass to the deceased beneficiary’s issue. The anti-lapse statute applies only if the deceased beneficiary: (1) was related by blood to the testator; (2) was survived by issue; AND (3) there is no contrary intent. The anti-lapse statute also applies to a member of a class gift.
Per Capita v. Per Stirpes Distribution:
Per Stirpes: the estate is distributed equally among beneficiaries.
Per Capita: the estate is divided into as many equal shares as there are (1) surviving descendants in the generation nearest to the decedent, and (2) deceased descendants in the same generation who left surviving descendants (if any). Each surviving descendant in the nearest generation is allocated one share. The remaining shares of each deceased member of that generation (who leaves issue then living) are divided in the same manner among the then living issue.
Types of gifts:
- General: A general gift is nonspecific and is satisfied from any of the funds remaining in a testator’s estate.
- Specific: A specific gift is one that is specifically identified, such as real property or personal property.
- Residual: 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. This can occur when the testator makes a specific gift, but the property is later destroyed or sold before the testator’s 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. Additionally, California recognizes four exceptions to the ademption rule: (1) when the stock is changed to another form of stock (i.e. by a merger); (2) when the executor of the estate sells the property; (3) when the Testator receives condemnation proceedings and there’s no issue of traceability; and (4) if the specific gift was destroyed, the beneficiary is entitled to any unpaid insurance recovery or other recovery for injury to the property.
Intestate Distribution:
Divisible property: spouse’s half of community property and all separate property to spouse.
Separate property: if no children, 100% to spouse. If 2+ children, 1/3 to spouse.
If no spouse or children, then nearest generation: parents, parents’ issue, g-parents, etc
Omitted Spouse:
½ community property. If will predates marriage, then spouse receives same as intestacy. But will receive no separate property if: 1) intentionally omitted, 2) received outside property as satisfaction during life, or 3) consistent with a prenup.
Omitted Child:
- If will predates child’s birth, presumed an accident, and entitled to intestate share.
Exceptions: 1) intentionally omitted, 2) child supported by transfers outside of will, 3) T had multiple children and left a substantial estate with child’s parents.
- If will postdates child’s birth, T must have been unaware of child or thought dead.
Trust Formation Elements:
A valid express trust requires: (1) a definitive beneficiary (the beneficiary can be ascertained now or in the future); (2) a settlor with capacity; (3) an intent to create a trust; (4) a trustee; (5) a valid trust purpose; (6) trust property (the res); AND (7) compliance with any State formalities (i.e. signed in front of notary).
Beneficiaries: can be natural persons, corporations, or other organizations.
Trustee: must have duties to perform, and the same person CANNOT be the sole trustee and sole beneficiary.
The trust will NOT fail solely because that person refuses to act as trustee, dies, is removed, or resigns. In such instance, the court will appoint a new trustee.
