Wills, Trusts, and Estates

Formal Requirements of Wills

Formal Requirements of Wills 1.A valid attested will must be: a. In writing (1) Any reasonably permanent record is sufficient. (2). Signed by the testor or in the testor name by some other indiducal in the testaro's conscious prence and by the testator's direction; (1) Conscious presence includes within earshot. (2) Assisted signatures are permitted, whether or not the testator requested assistance, provided the testator was the motivating force of the signature (signifying intent). (a) Distinguish this from a directed or guided signature, whereby somebody grabs the testator's wrist and moves the pen for him. (3) There is no requirement that: (a) the signature is in the testator's name; it can be anything which indicates the person's intent that the document be that person's will. (b) The signature is in a specific place in the will, as long as it is signed and in the testator's own handwriting; it does not have to be at the end, and can appear in the beginning. c. Witnessed or Attested: One of two requirements (witnessed or attested) must be met, EITHER: (1) Signed by at least two individuals each of whom signed within a reasonable time after the individual witnessed either the signing of the will or the testator's acknowledgement of that signature or acknowledgment of the will . (a) There is, however, no requirement that the witnesses sign before the testator's death. In a particular case, the reasonable-time requirement could be satisfied even if the witnesses sign after the testator's death. (b) The rule regarding contemporaneous acts says: if the witnesses sign the will before the testator, but all in the same event, act, or time frame, it is permissible. (c) There is no requirement that the witnesses who sign the will do so in each other's presence; each can sign it separately if within a reasonable time. 1) But recall that the will is not formally executed: until the second witness signs the will. (2) OR acknowledged by the testator before a notary public or other individual authorized by law to take acknowledgments. (a) A will, whether or not it is properly witnessed, can also be acknowledged by the testator before a notary public or other individual authorized by law to take acknowledgments. EXAMPLE: Alice signed her will across the front of the document after reading and folding it up. Is her signature valid? Yes, because there is no requirement that she sign any place specifically on the will. 2. Harmless Error Rule a. Any attempt to make a will, notwithstanding its failure to meet these requirements, will be validated if: the proponent proves by clear and convincing evidence that the testator intended the document to constitute his will 3. Integration Rule a. Any pieces of paper actually present at execution that are intended to be part of the will will in fact be part of the will. In other words, when the will consists of several sheets of paper, the testator need not sign each page if the sheets compose one instrument connected in composition. B. Qualifications of Witnesses Generally, a witness is competent if he has the ability to observe the testator affix his signature: , coupled with the ability to comprehend the nature of his act. 1. 2. Interested Witnesses (frequently tested topic) a. An interested witness is a witness who is also a beneficiary of the will to which they are witnessing. b. Under the Uniform Probate Code, an interested witness is perfectly fine; the will will be valid, and the gift to the witness will be valid. (1) Additionally under the Code, an interested proxy is permissible. c. If an interested witness is involved in the will, it may give rise to questions as to whether or not the witness had undue influence over the testator in writing the will. EXAMPLE: Arnold executes a will signed by two witnesses: his wife Maria and his attorney Wellington. The will's primary beneficiaries are Maria, Arnold's children, and several nonprofit organizations. Is this will valid? Assuming all other formalities met, the will is valid because an interested party can serve as a witness. C. Probate of Will 1. The "proving" of a will involves the process by which the testator's signature is established. 2. Self-Proving Will a. If the will is self-proved, the will satisfies the requirements for execution without the testimony of any attesting witness, upon filing of the will, the acknowledgment, and affidavits, unless there is evidence of fraud or forgery affecting the acknowledgment or affidavit. Thus, execution of a self-proving will avoids problems with hostile or unavailable witnesses. b. A will may be made self-proved if it is simultaneously executed and attested by acknowledgment of the testator and affidavits of the attesting witnesses, each made before an officer authorized to administer oaths and evidenced by the officer's certificate, under official seal. c. A will may also be made self-proved at any time after its execution by acknowledgment of the testator and affidavits of the attesting witnesses, each made before an officer authorized to administer oaths and evidenced by the officer's certificate, under official seal.

MODIFICATION AND TERMINATION OF TRUSTS

MODIFICATION AND TERMINATION OF TRUSTS A.Termination by Settlor 1. A trust will be irrevocable unless the terms of a trust expressly provide that the settlor may revoke or amend the trust. a. The Uniform Trust Code reverses this presumption. Under the UTC, unless the terms of the trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust after the effective date of the Code. 2. A settlor may terminate an irrevocable trust:only with consent of all the beneficiaries who must living at that time B. Termination of a Trust by Merger 1. If a sole trustee becomes the only beneficiary:the trust ceseaes to exist and he personally becomes the woner of the trust assests C. Termination by Operation of Law 1. A trust is terminated by operation of law where: a. The trust res has been consumed, destoyed, or lost or b. The trusts purposes have been fuly accomplished c. Accomplishment of the material purpsoes of the trust have become illegal, impossible, or impractical HYPOTHETICAL Timmy Testator creates a trust to provide for the special tuition and costs associated with his daughter Debra's training to become a concert violinist, with the residual to be donated to Timmy's alma mater, Carmi High School, for the purchase of new farm equipment. Shortly thereafter, Debra is involved in a car accident that damages the nerves in her fingers. As a result, any future prospects of her becoming a performing musician have been terminated. The Carmi school district brings suit to terminate the trust. How will a court rule? ANSWER: Could be terminated HYPOTHETICAL Harry, a very successful industrialist, wanted to protect his funds from creditor attack. He created a trust, naming himself as trustee, which was to pay all trust income to his wife, Wanda, for her life, and then, if Harry had no issue, for Harry or his successor to distribute the trust principal to his surviving nieces and nephews. Harry did not designate who would succeed him as trustee were he to die prior to the termination of the trust. Harry died after Wanda. Did the trust terminate at Harry's death because there was then no trustee? ANSWER: the ocurt could appoint a trustee unless the trust term said it wouldn't happen D. Administrative Deviations 1. Where exact compliance with the administrative provisions of the trust would, as a result of unforeseen circumstances, frustrate or substantially impair a material purpose sought to be accomplished by the trust, the court, on petition of the trustee, may allow deviance from those administrative provisions as necessary to accomplish the settlor's purposes. 2. The administrative deviance doctrine may not, however, be used to change the beneficial interests in the trust. E. Termination by Beneficiaries After Settlor's Death 1. The Claflin Doctrine (this is to get the property) a. After the settlor's death, the trust cannot be terminated before the time specified by the settlor, even if all of the beneficiaries agree, if the material purpose of the trust has not yet been accomplished. b. A material purpose of the trust may include: (1) Staggered districution of the trust property (Example: a bike to go to A at 18 then a car to go to A at 25,) (2) Discretionary trusts (3) Spendthrift clauses HYPOTHETICAL T's will directs his executor to sell certain real property and hold the proceeds in trust for his heirs, paying income for life to his widow. Twenty years later, the widow and all of T's children, now of legal age, seek termination of the trust. What will be the result? ANSWER: Is it material purposes, argue both ways F. Natural Expiration 1. Where the trust was to be in operation for a specified number of years or until the occurrence of a prescribed event, and that period of time has elapsed or the incident has occurred, the trust ordinarily terminates in accordance with the instrument's terms.

CREATING EXPRESS TRUSTS

CREATING EXPRESS TRUSTS A. Parties to a Trust 1. Every trust has three parties. a. More than one party can fit each role; and b. Each party can fit more than one role. 2. The Parties a. Settlor: The person who sets up the trust b. Trustee: The perosn who has legal title to the tust c. Beneficiary: The perosn who has eitable title and who uses and enjoys the property of the trust (1) Income beneficiary: Present interest int the tust fund (2) Remainder beneficiary: Remainder interest in the trust fund 3. The settlor creates the trust by transferring assets to a trustee with manifest intent to create a trust relationship. a. A settlor can set up two types of trusts: (1) Intervivios trust during his lifetime as a gift (2) Testatmentary trust through his will (trust in a will) b. When a settlor makes himself trustee, the trust is created by declaration of trust. (1) In some states, titled assets (i.e., assets whose ownership is reflected in a written document such as a title, deed, or stock certificate) must be retitled in the name of the settlor "as trustee" in order for the trust to be valid. (2) The declaration can be oral unless: (a) The trust assets include real property in which case the SOF that it be it written or (b) Of the trust is a testamtenry, in which case the statue of wills requies that it be written 4. The trustee is the legal owner of trust property, who holds it for the benefit of the beneficiaries. Legal title to, and responsibility for, the management of the trust property resides in the trustee. a. A trust must have a trustee, but failure to designate or appoint a qualified trustee will not necessarily cause the trust to fail. Instead, the court will appoint one. b. Co-Trustees (1) Where two or more persons have been named as co-trustees, they are ordinarily considered: joint tenants with regard to the legal titile oover the trust trust fund (if the first dies the other trustee takes everything however, look directly below) (2) The will may override this and name a successor trustee to step in and serve instead of or along with a prior trustee. (3) Co-trustees who are unable to reach a unanimous decision: may act by majority decisison (4) A co-trustee may formally dissent and: protect himself from liablibty down the road ifth other trustees have acted imprudently (5) A trustee may resign or be removed for cause. (a) The trust will not terminate another trustee will be appointed (6) When the trust terminates: The trustee transfers his interest to: the beneficiaries anc ceases to have legal authirty to exerty control over the property beyond what is necessary to wind up the affairs of the trust 5. Beneficiaries are the equitable owners of the trust property. a. Ther must always be a beneficiarty in existence who can enforce the trust against the trustee EXAMPLE: Settlor directs trustee to pay the income to A and B for the next 10 years, then pay the income to John, if living. If John is not then alive, or if he is, then upon his death, distribute the property to X, Y and Z. A, B, John, X, Y, and Z are all beneficiaries of the trust. More specifically: A and B have an equitable term of years, John has an equitable remainder in a life estate, and X, Y, and Z have an equitable remainder in fee. (1) A settlor can be the trustee so long as there is a beneficiary in existence who can enforce the trust against the trustee. (2) The settlor may also be the beneficiary of the trust. EXAMPLE: A gives his property to Mike as trustee and Mike shall hold the property and pay the income to A for the rest of his life. A is the settlor and the beneficiary, and this works. (its fine if you are the beneficiary and settlor) EXAMPLE: A transfers in trust to trustees B and C to hold for the benefit of C for the rest of his life. C can't sue himself, but can enforce the trust against B, and this works. (3) If a sole trustee is the sole beneficiary, the trust will collapse because the interests will merge. B. General Effects of Trust Creation 1. Rights of the Settlor a. Once a trust has been created, unless the settlor is also a trustee or a beneficiary: the settlor no longer owns the assets because they have been transferred into the trust 2. Rights and Duties of the Trustee a. The trustee has legal title to the assets and is obligated to adhere to the terms of the trust with respect to the preservation, enhancement, and distribution of the trust property to the beneficiaries. (1) A trustee is a fiduciary of the trust. (2) A trustee must be given some active duties to direct him with respect to the trust property in order for the trust to be valid. (a) If the trustee does not have active duties: 1) The trust is considered passive or dry and titile to the trust will pass directly to the benefaciieriis 2) Beneficiaries will then hold both legal and equitable title or full fee simple absolute. (3) Duties do not have to be spelled out. (a) The court just must be able to reaosanbly interpret wha tis to be done (4) Duties of the trustee vary by trust. (a) Duties commonly assigned by statute or legally implied include the obligations to: 1) Preserve property 2) Invest prudently 3) To administer the trust purant to the settlors directions 4) Exercise fairness with respect to all benefaciieries regardless of the nature of their interest 3. Rights of the Beneficiaries a. The beneficiaries are the equitable, beneficial owners of the trust assets, but cannot ordinarily affect or alter the dispositive or administrative provisions of the trust. b. Instead, beneficiaries must wait for the property to be distributed to them before being able to exercise full control over the property, free of the trust. C. Elements Necessary to Create a Trust 1. t intent to create presnt turst 1. A valid trust requires: 2. A settlor with the requiste capacity express a peresnet intent to create a turst 3. Delivery of specific trust property 4. An ascertainable beneficiary 5. Ac active duties imposed on the trustee 6. A property trust prupose and 7. trustee NOw this is the breadown: 2. Intent to Create a Trust a. No particular words (e g "trust") or actions are neceasary to manifest the settlor internntion to creat a trust b. Mandatory vs. Precatory Language (1) Mandatory language: Shll, must creatw a trust (2) Precatory language: (3)"with the hopr" will nor sufficenti to create a trust unless other circumstatnces reflect atht a dury was intended EXAMPLE: A transfers $5000 to Carl, and states that A would like Carl to invest the money in an annuity that will pay $200/month to A's sister. Even though the language is precatory, there is so much specificity that the courts will interpret it as mandatory. c. The intent to create the trust must be a present intent to create the trust. EXAMPLE: "I will put $5000 in trust for Terry next week" does not create a trust. It is a mere promise not supported by consideration. d. If the trust states that it will name the beneficiaries later, it is a resulting trust. (1) The trustee has legal title but he has not been told what to do with the equitable interest. (2) The settlor still holds the equitable title; trustee passes legal title back. e. If the settlor does not own the trust property and then subsequently buys the property, there is no trust created unless the settlor manifests trust intent or there was a binding contract to enforce it. HYPOTHETICAL Sam, having recently been called up for active duty in the military, sends a letter to his bank asking that his savings account be held in trust for his fiancée, Bobbi, until his return from the war. Will his letter create a valid trust? ANSWER: Yes, there is s precepatory trust 3. Trust Property a. Must be transferred to a trustee and it must be an intent to to do it right now and not in the furuture b. Almost everything can be subject to a trust. (1) EXCEPTIONS: (a) Mere expectations (b) Unearned proprfits EXAMPLE: A will give all of the profits he will earn from his sales of IBM and ATT stock in trust. A still owns the stock, so there are no profits. When the stock is sold, those profits are not in trust. (c) Debt owed by the trustee c. There must be some certainty over what is the trust property. EXAMPLE: If A declares himself trustee over some of the stocks he owns, it is not a valid trust. EXAMPLE: If A declares himself trustee over all the stocks he owns in his E-trade account, he does not have to identify the stocks because he has identified where they are. EXAMPLE: A could declare himself the trustee over 40% of Blackacre. If he owns the whole thing, he is trustee over 40% and will be tenant in common with himself. 4. Trust Beneficiaries a. Every trust must have ascertainable beneficiaries. (1) Must be determinatable when the trust is to be distrubeted EXAMPLE: S gives income to A for life, remainder to A's children. When A dies, we will be able to ascertain who his children are. EXAMPLE: Income to A for life, remainder to those students who graduate from XYZ Law School in the year 2010. We will know by the time A dies, who graduated in 2010. (2) "To my friends" is too vague. (3) "To my family" is also vague, but the courts will interpret it to mean heirs (intestate succession). (4) If the settlor provides some objective standard by which to identify beneficiaries, then those beneficiaries are ascertainable. (a) The criteria must provide a reasoanble basis for identifying beneficiaries EXAMPLE: Hold the property in trust for "the person who provided the best health care for me before my death." (b) The court will defer to the trustee's discretion unless: Arbitrary, capricious, or used bad faith 1) A trust may give the trustee the right to invade the trust corpus for the benefit of the beneficiary, subject to his discretion. a) The trust may give partial or total discretion. 5. Active Duties a. A trustee must have active duties and know what to do with the trust. b. If he does not, it will be a dry or passive trust, and he will transfer his title to the person who holds equitable title, ending the trust. 6. Trust Purpose a. A trust can be created for any purpose except those that are: Illegal, fradualent and agisant public policy (1) A purpose that is against public policy may include: (a) Providisons designed to encourage diveroce (b) Provisons designed to prevene marriage (2) You must determine the intent of the settlor. b. When there is a trust purpose that violates public policy: (1) Detlete offending language and read whats left (2) Try to determine what eh settlor is what closely intended D. Types of Trusts 1. Creation of an inter vivos trust requires present intent. a. The trust propert has to be placed into the trust for it to exitst 2. A testamentary trust is created by the testator's valid will. a. Even if a will is valid, there may be problems with the trust. EXAMPLE: A will devises Blackacre to Tom as trustee. There are no other provisions in the will relating to that trust nor is there any document that can be incorporated by reference into the will that relates to the trust. The trust must fail. Blackacre will pass through the residue. If the residuary estate had been left to Tom as trustee, it would result in intestacy. b. Wills frequently contain "pour over" provisions that direct the transfer of the decedent's property into a trust established either by the testator during his lifetime or by another person . 3. Totten Trusts a. An arrangement with a bank that allows the depositor to open a bank account in his own name, as trustee for other parties. (1) The only right the beneficiary has is: To take whatever is left in the account when the despitor dies ift hey are still alive E. Limits on Trust Duration 1. All private, non-charitable trusts must comply with the Rule Against Perpetuities. a. No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest. HYPOTHETICAL A, the fee owner, devises Blackacre in trust "to the children of my son, B, who reach the age of 25." At A's death, B has four sons ranging in age from 14 to 22. B dies 10 days after the death of A, leaving no other children. Is the trust for the children valid under the Rule Against Perpetuities? ANSWER: 2. Most jurisdictions have modified the common law Rule Against Perpetuities in some way. a. Wait-and-see doctrine: b. Some states will reduce the age requirement to 21. c. The Rule Against Perpetuities does not apply to charitable trusts. HYPOTHETICAL Settlor created a document stating that Trustee should pay "all of the trust income to my son Zack for life, with Zack to use such income to send Zack's children to college." Settlor then stapled a single one-dollar bill to the document and mailed it to his bank. Furthermore, upon Zack's death, the Trustee was to "distribute the trust corpus in equal shares to Zack's children, issue of any deceased child to take his or her parent's share." Zack's son Brian now seeks reimbursement of his college expenses, including tuition, travel to and from home, apartment rental, books, and what Zack calls "entertainment" costs from the trust. Can Brian impose a trust upon the income distributed to Zack from Settlor's trust to pay for Brian's college education?

Types of Trusts

1.Express Trusts (Trusts Created Intentionally) a. There are two types of express trusts: (1) Private express trusts (a) Created to benefit private, non-charitable beneficiaries. (2) Charitable trusts (a) Resemble private express trusts but have some significant, distinguishing characteristics, including creation for some charitable purpose or to benefit charitable beneficiaries. 2. Implied Trusts (Trusts That Arise by Operation of Law) a. There are two types of implied trusts: (1) Constructive trusts Imposed to deprive a wrongdoer from retaining improperly obtained property (2) Resulting trusts Imposed irrespective of wrongdoing when the circumstances require it (a) Most often arises when a settlor transfers full legal but fails to transfer full equitable title. 1) Settlor's reversion in equity is called a resulting trust. EXAMPLE: Settlor transfers 100 dollars to trustee A to use for the benefit of beneficiary B for life. Settlor's reversion after that life estate is a resulting trust. b. Implied trusts are: equitable tiitle

COMPRISING AND CONSTRUING THE WILL: SPECIAL STATUTORY PROVISIONS

A. Disqualifications 1. Slayer Act a. Any person who participates, either as a principal, co-conspirator, or an accessory before the fact, in the felonious and intentional killing of any other person: May not acquire Any porpert or receive any benefit as a result of the death do decedent (1) This will most often arise with insurance proceeds, contracts, and pension plans. b. The slayer rule does not apply: If the killing was accidental EXAMPLE: Howard dies of gunshot wounds inflicted by his spouse, Charlotte, who is later convicted of voluntary manslaughter. He died intestate, leaving Charlotte and his parents, George and Diane. Who takes his property? Because it is a felonious intentional slaying by Charlotte, she cannot take as an heir. The parents will split the property equally. c. Distribution of Property (1) The slayer will be deemed: to have predeceased the decendet (2) This applies to property that would have passed from the decedent or his estate to the slayer under the statutes of descent and distribution or by statutory right of the surviving spouse. (3) For joint tenancy property, the property is converted from joint tenancy to tenancy in common, and the interest of the slayer prior to the slaying will be kept, but the other half (which the slayer would otherwise have gotten) passes as tenancy in common property to probate estate. d. Proceeds of Insurance (1) If the slayer is the beneficiary or assignee of a policy insuring the life of the decedent, or is the survivor of a joint life policy, the proceeds will be paid to the decedent's estate, or, if designated, to a contingent beneficiary, even if the contingent beneficiary is a relative of the slayer. 2. Other Circumstances a. Refusal to support; Desertion The upc requires some definitive legal act in order to var the surviing spouse b. Effect of divorce and remarriage upon wills (1) If there is a divorce and the testator dies, the spouse is no longer the surviving spouse because she is not a spouse anymore. (2) This ends heirship rights at a minimum. (3) There must be a final legal decree of divorce; separation is not sufficient. B. Simultaneous Death 1. Under the UPC, a person who cannot be established: a. To have survived the decdent by 120 hours b. By clear and convincing evidence is deemed to have predeceased the decedent. 2. If the time of death of the decedent or the heir, or both, cannot be determined so as to establish that the decedent survived the heir by 120 hours: each will deemed to have failed to survive the other EXAMPLE: A and Spouse, B, die together in a car crash. Witnesses report that B survived A by two hours. B is treated as having predeceased A for purposes of succession, despite sufficient evidence of B's chronological survival. 3. For joint tenancy property, the 120-hour survivorship rule is still applied. EXAMPLE: A and B are sisters and joint tenants in Blackacre. A and B die together in a car crash within 24 hours of one another. They are survived by their brother, C, and a woman named Louise. Sister A died intestate; her closest relative is her brother, C, who is her heir. Sister B died testate, and had a will specifically bequeathing all of her estate to her sister, A, with the residual to her friend Louise. A's share of the joint tenancy will pass to her brother C through intestacy. As to B's half of the tenancy, it cannot go to A, because A failed to survive B. Therefore, B's half of the tenancy will fall into the residual estate, which means Louise will take B's half of Blackacre. The result is that Louise and C will be tenants-in-common of Blackacre. EXAMPLE: Same facts as above, but A, B, and Louise all own Blackacre in joint tenancy. Louise will take the property fully. HYPOTHETICAL Tom and Samantha are married; Tom is Samantha's next of kin; Tom's parents will inherit if Tom survives Samantha. Tom and Samantha are in a car accident together. Tom is declared dead at the scene. Samantha is declared dead ten hours later at the hospital. Who will inherit the estate? ANSWER: She did not survivie 120 hours so the parents get the property C. Disclaimer of Property Interests 1. For a devisee to refuse a devise: The perosn files a formal disclaimer stating that they do nowt wanit 2. In order to be effective, a disclaimer must: a. be in writing or other record; b. declare the disclaimer; c. describe the interest or power disclaimed; d. be signed by the disclaiming party; and e. be delivered or filed. 3. It is permissible for a disclaimer to be only a partial disclaimer and disclaim less than the full bequest, as opposed to having to disclaim all of it. 4. It is impermissible to disclaim where: a. the person receiving the property has waived his right to disclaim the bequest; b. the person has already received the property and accepted it; c. the interest in the property to be disclaimed has been assigned or encumbered (i.e., by mortgage); or d. the property has been sold in a judicial sale. 5. Effect of Disclaimer a. A disclaimer relates back: to the date o fhte death of the decenet b. The disclaimant is treated as having: preceased the testor even where the deislcaimer is made after the death of the testaro c. Two reasons people disclaim are: (1) to defeat creditors, because they are treated as having predeceased and thus would not take at all under the will for that property; and (2) tax purposes. EXAMPLE: Father dies intestate, and is survived by Son. Son has two children—X and Y—who also survive the death of Father. Father also had a daughter, Daughter, who predeceased Father, and who had a child of her own, Z. In an intestacy proceeding, Father's estate will pass by representation, and so half would go to Son and half would go to Z, Daughter's only child. If Son disclaims his share, it will be as if he predeceased Father, so X, Y, and Z—all the living persons in the next generation—will share Father's estate equally and take one-third each. This would give Son's children two-thirds of the total estate, as opposed to the one-half Son normally would have taken. d. Under the UPC, a disclaimer cannot be used to alter distribution in this way. (1) As a result, a disclaiming party's children will only take: the share the disclaiming party would have taken.

Trust

A.Overview 1. A trust is nothing more than the splitting of legal and equitable title. a. Technically, it is a fiduciary relationship where one party holds legal title to property for the benefit of another who holds equitable title.

Testamentary Intent

A.Testamentary Intent 1. At the time of the execution: a testator must intend that this particular document be his or her will EXAMPLE: A testator sends a letter to his sister saying he intends to make up a will next week and details how he wishes to have his property distributed. If testator dies before making that will, can the letter be admitted into probate? No, because at the time the testator wrote the letter, he did not intend that letter to be a will. The letter cannot be deemed to be the testator's will because the testator lacked testamentary intent. EXAMPLE: Tom sends his niece Caroline a handwritten, signed letter that professes his love for her and promises to leave her his entire estate. However, Tom dies before making a will. Does this letter constitute a will? This letter was not intended to be a will, so it is not a will . 2. Three concepts that prevent testamentary intent: a. Undue Influence (the most tested) b. Fraud c. Mistake 3. Undue Influence a. Undue influence is sufficient to void a will if: (1) A constestatnt can prove the worong doe a contestant can prove the wrongdoer exerted such influence over the donor that it overcame the donor's free will; and (2) caused the donor to make a donative transfer that the donor would not otherwise have made. b. A presumption of undue influence arises if: (1) The alleged wrongdoers influence arises if the alleged wrongdoers was in a confidential relationship with the donor and (2) There were suspicious circumstances surrounding the preparation, formulation or excutition of the will (a) Factors to consider include: 1) The extent to which the alleged wrongdoer participated in the proepratoion of the will 2) The extent to which the donor was in a weakened condition, physically, mentally or both and therefore susceptible to tuned influence 3) a substantial devise by will to a person who is one of the witnesses to the execution of the will. (3) This rule also covers a relationship whereby: the testator is reliant on someon else for day to day affairs, most often caring for an elderly testor (4) If these factors are shown by clear and convincing evidence, the burden of proof returns to the proponent of the will to show that the gift or bequest was not the product of undue influence. NOTE: The existence of a confidential relationship is not sufficient to raise a presumption of undue influence. There must also be suspicious circumstances surrounding the preparation, execution, or formulation of the will raising an inference of an abuse of the confidential relationship between the alleged wrongdoer and the donor. In evaluating whether suspicious circumstances are present, all relevant factors may be considered, including: (1) the extent to which the donor was in a weakened condition physically, mentally, or both, and therefore susceptible to undue influence; (2) the extent to which the alleged wrongdoer participated in the preparation or procurement of the will; (3) whether the donor received independent advice from an attorney or from other competent and disinterested advisors in preparing the will; (4) whether the will was prepared in secrecy or in haste; (5) whether the donor's attitude toward others had changed by reason of his relationship with the alleged wrongdoer; (6) whether there is a decided discrepancy between new and previous wills of the donor; (7) whether there was a continuity of purpose running through former wills indicating a settled intent in the disposition of his property; and (8) whether the disposition of the property is such that a reasonable person would regard it as unnatural, unjust, or unfair. EXAM TIP: The fact that a parent does not leave property to her children without disclosing her reasons for disinheriting them, without anything more, does not by itself raise a presumption of undue influence. c. If undue influence is proven:it will void the provisions of the will that benefit the perosn exerting the undue indluence d. The fact that a parent does not leave property to her children without disclosing her reasons for disinheriting them does not require a finding of undue influence. HYPOTHETICAL From 2004 on, Roger repeatedly threatened his sick brother George that he would "pull the plug" on him if he did not leave him money in his will. George died in 2009, leaving Roger a large bequest. George's son, Barry, moved to have the will set aside for undue influence, but notes found in George's effects showed that George had always intended to leave most of his estate to Roger, but simply had never wanted to tell Roger that. Can Barry succeed? ANSWER: No, no undue influence because found in George's effects were he had always intended to leave most of his estate to Roger, but simply had never wanted to tell Roger that 4. Fraud a. Fruad In the execution (1) Fraud as to the nature of contents or writing itself. (2) If shown to be fraud in he execution, the will is invalid. EXAMPLE: Radar O'Reilly presents a stack of papers for Colonel Henry Black to sign, stating they are all important documents. Radar inserted a piece of paper that states, "I, Henry Blake, leave all my property to Radar O'Reilly." Radar used fraud to have Colonel Blake sign the document. Will is invalid. b. Fraud In the inducement (1) Intrinsic facts that induce someone to take action that affects the distribution. (2) The test is: Would the testator have made this gift if the testator knew the true facts? (3) Fraud in the inducement is established upon proof that a beneficiary made a knowingly false representation to the testator for the purpose of inducing the testator to draw a will in his favor, and that the testator made a different will than he would have made in the absence of the representation. EXAMPLE: A child fraudulently claims to be the testator's illegitimate son. As a result, the testator leaves half of the estate to the child. Would the testator have left half of the estate to the child, if the testator had known the true facts? If no, then invalidate the gift. If yes, then effectively the fraudulent claim is ignored and the gift stands. c. If fraud is alleged with respect to only a part of the will, the court may reject that part and admit the rest to probate. The legacy that is void due to fraud then falls into the residue, or, if there is no residuary clause, passes by intestacy. d. If the entire will is tainted, all the property will pass by intestacy. HYPOTHETICAL T, a Giants fan, made a will that left his estate to Al and Sara. Sara fraudulently persuaded T that Al was an avid Giants fan. This was a lie; Al was a diehard Dodgers devotee. T died leaving property to Al based on a mistaken presumption. How will the court divide T's estate? ANSWER: 5. Mistake a. In the execution (1) Mistake as to the nature of the document. (2) Will is invalid. b. In the inducement (1) The testator executes a will or a clause in the will because the testator is mistaken to the true facts. (2) This does not affect testamentary intent, thus no relief is granted. NOTE: When a mistake is made, there is very little that a court may do. There are some circumstances where a court may reform the terms of a will, but they require clear and convincing evidence .

ALIENABILITY OF TRUST BENEFICIARIES' INTERESTS AND CREDITORS' RIGHTS

ALIENABILITY OF TRUST BENEFICIARIES' INTERESTS AND CREDITORS' RIGHTS A.Beneficiaries' Interests 1. In the absence of a restrictive provision to the contrary: a trust beneficiary may freely assign (graciously or for consdirariton ) his right to recive income or principal from a trust 2. Types of Interests a. Support (1) Based on the beneficiary needs b. Discretionary (1) Trustee pays as much income as he believes desirtable (2) A creditor of the beneficiary could attack the trust and get a lien, but the trustee would never have to pay out. 3. A spendthrift provision is one that says the beneficiary cannot voluntarily transfer his property and a creditor cannot attack it. Makes it inalienable. a. These are not absolute and cannot be used to defeat a claim of: (1) Alimony or child support (2) Someone who is furnishing necessities to the beneficiary (3) Governmental claims against eh beneficiary B. Settlor's Interests 1. A settlor has no interest in the trust unless he has reserved it or has made himself a beneficiary of the trust. a. A settlor cannot make his interest subject to a spendthrift provision. 2. Settlors often reserve the right to revoke the trust. a. A creditor cannot force him to exercise this right to revoke, but a bankruptcy court can.

Testamentary Capacity

Age 1. Age To execute a valid will, a person must be 18 years of age or older. Mental Capacity 2. Mental Capacity a. Testator must be of sound mind at: the time the will is executed b. Sound mind is determined at: the time the will is executed c. Generally, sound mind means that the testator, at the time the will is executed, must have the ability to understand: (essentially what, how, and to whom) (1) Nature and extent of property (2) The nature of the disposition that is making of his property (1)The names and his relationship to the natural objects of his bounty b. The fact that a testator may be eccentric or may have unusual opinions or behavior does not necessarily render him mentally incapable of making a will. Insane Delusion This can be broken down to two rules Elements 1 An insane delusion is defined as: an irrational belief that has no grounding in reality or fact Elemnt 2 the transfer must be a product of that insance delusion (2) A person who suffers from an insane delusion is not necessarily deprived of capacity to make a donative transfer. (3) Mere eccentricity does not constitute an insane delusion. (4) Similarly, a suspicion with some basis in fact is not an insane delusion. n

CHALLENGING THE WILL: WILL CONTESTS

CHALLENGING THE WILL: WILL CONTESTS A. In General 1. In a will contest, a person interested in the distribution of the estate objects to the admission of the will to probate on the ground that the will is invalid for some reason. B. Standing to Object to Probate or Contest the Will 1. Only someone who will have a beneficial interest if he succeeds can challenge a will. Heirs always have an interest, even if not named in an earlier will. C. Grounds for Contesting a Will 1. The grounds for contest of a properly executed will are: a. Lack of tenstmaety capacity b. Undue influence c. Mistake d. fraud 2. Ambiguity a. Patent ambiguities: Appear on the face of the document b. Latent ambiguities: Ambiguities arising with the language of the will when a gift can go to multiple parties due to lack of specify c. Once an ambiguity, patent or latent, is established, both direct and circumstantial evidence of the donor's intention may be considered in resolving the ambiguity in accordance with the donor's intention. D. In Terrorem Clauses (No-Contest Clauses) 1. Generally, an in terrorem clause in a will attempts to disqualify anyone contesting the will from taking under it. (Example: any person to challenge this will , will get one dollar) 2. These clauses are permitted, but courts dislike them and tend to construe them narrowly. 3. If the challenge goes to some kind of fraud: the court will never hold the in terroem clause valid against the challenging party 4. Most states hold that the clause is ineffectual if the person affected: had reasonable cause to contest the will

CHARITABLE TRUSTS

CHARITABLE TRUSTS A. Distinguishing Characteristics 1. A charitable trust cannot have ascertainable beneficiaries unless charitable organiations 2. A charitable trust is not subject to the Rule Against Perpetuities. 3. When the trust purpose has been accomplished or has become impracticable or impossible: The trust does not necessarily end a. A court could allow the trust to continue with a similar charitable purpose under the cy pres doctrine. B. Requirements 1. A charitable purposes a. The major categories of charitable purposes are: (1) the relief of poverty; (2) the advancement of education; (3) the advancement of religion; (4) the promotion of health; (5) the performance of governmental and municipal purposes; and (6) other purposes beneficial to the community. b. A charitable purpose can be broad as long as the trustee is constrained to use the trust exclusively for that objective. c. Distinguish between a charitable purpose and a benevolent purpose. (1) Merely helping others will not qualify as a charitable trust. (2) Transferring the property to named family members simply to "help ease their financial burden" will not qualify as a charitable trust. EXAMPLE: A trust that directs payments to be made directly to elementary school children at Christmas and Easter breaks "to be used by such child in the furtherance of his or her obtainment of an education" is not valid as a charitable trust because its structure does not support the alleged purpose. The form of payment (cash), the timing of payments (at holiday breaks), and the lack of any device for ensuring the funds are used for education suggest that the settlor's true intent was to bestow happiness on school children rather than to promote education. 2. The beneficiaries must be indefinite a. The fact that there are a limited number of persons actually receiving funds does not cause a charitable trust to fail if the recipients are to be chosen from a sufficiently large and indefinite group. C. Cy Pres 1. If the settlor's exact charitable purpose cannot be carried out, the court may direct the application of the trust property to another charitable purpose that approximates the settlor's intention. 2. Cy pres may be applied where: a. The settlor's specific charitable purpose with respect to a valid charitable trust becomes impossible or impractable or illegal to carry out and b. Setlltr had in addition to this specific charitable purpose a general interst (the settlors specific charitable purpose was not intended to be inclusive) 3. If the settlor has provided for a "gift over" in the event that the charitable purpose cannot be accomplished, this is ordinarily viewed as an indication that the settlor lacked a general charitable intent. a. A non-charitable gift-over will likely fail as violating the Rule Against Perpetuities. (1) If it comes back to the settlor as a resulting trust, it is vested at its inception and will not violate the Rule Against Perpetuities. HYPOTHETICAL Testator left a will with the following provision: "As an avid birdwatcher both in-state and around the world, I leave five percent of my separate property in trust to the Colorado Birdwatching Club, a nonprofit corporation that advocates for the preservation of native Colorado bird species." In 2013, the Colorado Birdwatching Club ceased operations. In 2016, Testator died. The National Aviary Society, a nonprofit group that advocates for the preservation of habitats for birds across the United States, has petitioned the court to be substituted as a beneficiary of Testator's estate. Can the National Aviary Society receive anything under the will? ANSWER: There was s general pupsoe as a avid bird watcher

COMPRISING AND CONSTRUING THE WILL: INTERPRETATION

COMPRISING AND CONSTRUING THE WILL: INTERPRETATION A. In General 1. Wills are always to be construed in accordance with the discernible will of the testator. B. Integration 1. However, if a question of integration does arise, the will proponent must show that the will offered for probate is actually the will that the testator intended to make, and that no insertions or removals of pages from the will have occurred. C. Incorporation by Reference 1. The UPC recognizes the common-law doctrine of incorporation by reference, which permits the inclusion by reference of unattested documents as part of a will if: a. the writing was in existence at the time of execution of the will; b.the language of the will manifests this intent; and c.describes the writing sufficiently to permit its identification. EXAMPLE: Jane's will provides, "I want the provisions in the letter written by me on August 10th, 2014, which is now in my desk in my home, to be given effect." When Jane dies, if a letter is found in Jane's desk with that date, it will be given effect and incorporated into the will. D. Facts of Independent Significance 1. Under the doctrine of facts of independent significance, a will may provide for the designation of a beneficiary or the amount of a disposition by reference to some future unattested act occurring after the execution of the will. EXAMPLE: The actual property disposed under a bequest of "all my household furnishings" will be dependent on what kinds of property the testator dies owning. These are facts of independent—i.e., non-testamentary—significance. Alternatively, a bequest to "such persons as I have named in a paper to be found in my desk marked 'Last Instructions'" would require the application of the doctrine of incorporation by reference. 2. An example of this is a residuary clause, which provides for everything not otherwise disposed to go to a particular beneficiary—everything done in life will affect that residuary clause. 3. Personal Property List a. The UPC recognizes the ability of a testator to make a writing that lists personal property the decedent would like to see have passed to certain individuals, if: The writing described the benefaciries and the property to be given away with reasonable certainty b. The writing will dispose of the property even if not properly attested. c. This writing can be created: After the will is in existence as opposed to before which incorporation bt reference requires d. The statute makes clear that money: is not personal property for this purpose Subsequent Writings and Tangible Personal Property In a break from traditional law, UPC § 2-513 (1990) allows a testator to dispose of tangible personal property by a separate writing, even if prepared after the execution of the testator's will, provided that the will makes reference to the separate writing. In effect, this provision authorizes what the court in Clark v. Greenhalge, page 245, said the testator had done in that case — namely, reserve the power to make and then continue to revise a list of bequests of tangible personal property without additional testamentary formalities. 4. Dispositions to Inter Vivos Trusts a. If a testator makes a gift to a trust in existence at the time of the decedent's death, that gift will be a valid disposition: even if the trust is created after the will was executed E. Selected Statutory Rules of Interpretation 1. A will speaks at death, so the situation in existence at the time of death will carry the day—think about after-born children. 2. The UPC takes the position that the will controls all probate assets of the decedent's estate at the time of death, even if: Porpty is purchased prior to deat but after the will 3. Property acquired by a decedent after death may also be controlled by the will, such as post-death bonuses. 4. After-acquired property will not be disposed of by a will if the will does not speak at all to that kind of property interest. EXAMPLE: Testator executes a will giving $500 to X and all real property to Y. After the will is written, Testator purchases a car. When Testator dies, the car will not pass under the will, because the only provisions in the will involve cash and real estate; neither of these gifts could possibly include a

COMPRISING AND CONSTRUING THE WILL: LIMITS ON TESTAMENTARY DISPOSITIONS

COMPRISING AND CONSTRUING THE WILL: LIMITS ON TESTAMENTARY DISPOSITIONS A. Spouse's Elective Share 1. A surviving spouse has the right to decline to: take under the will or pursuant to the intestacy statute, and instead may choose to take an elective-share amount. a. The amount is generally equal to: to 50 percent of the value of the marital-property portion of the augmented estate. b. The right of election survives even where the testator specifically left the spouse out of the will and purposely left nothing to the spouse. c. If the election is not exercised by the surviving spouse personally, it may be exercised on the surviving spouse's behalf by his conservator, guardian, or agent under the authority of a power of attorney. d. In any case, the surviving spouse must: be alove when the election is made 2. Procedure for Election a. The surviving spouse must make her election within: nine months after the date of the decendat death or within six months after the porpbate of the decedent's will , whichever limitation later expires HYPOTHETICAL Herb and Winnie were married for 30 years when Herb died, leaving a will that gave everything to his dear friend Homer. Winnie was outraged. Does she have any recourse? ANSWER: She ecan elect against the will and get her electivde share 3. Property Subject to Election a. The surviving spouse of a decedent has a right to an elective share amount equal to 50% of the value of the marital property portion of the augmented estate. b. The augmented estate consists of the sum of all property, whether real or personal, movable or immovable, tangible or intangible, wherever situated, that constitute: (1) the decedent's net probate estate; (2) the decedent's non-probate transfers to persons other than the surviving spouse; (3) the decedent's non-probate transfers to the surviving spouse; and (4) the value of the surviving spouse's net assets at the decedent's death, plus the surviving spouse's non-probate transfers to others. c. Under the Uniform Probate Code, the amount of the surviving spouse's elective share is calculated by applying a specified percentage to the augmented estate as listed in a chart in the UPC. (1) The percentage of the augmented estate that becomes marital property is 3% if the spouses have only been married for a few months. (2) For a marriage of 15 years or more, the percentage caps at 100%, at which point the spouse takes 50% of that. d. In satisfying the amount of the elective share, the decedent's probate and non-probate transfers to the surviving spouse and the marital portion of the surviving spouse's assets are applied first. (1) If the amount of the elective share is not satisfied from these items: the decedent's probate and non-probate transfers to others are proportionately liable to satisfy the balance. e. The UPC also provides for an amount of a supplemental elective share, a special feature for small estates that is designed to bring the surviving spouse's assets up to at least $75,000, or as close to that figure as the value of the assets permits. 4. Property Not Subject to Election a. The right of election of a surviving spouse may be waived, wholly or partially, before or after marriage, by a written contract, agreement, or waiver signed by the surviving spouse. (1) This often occurs in prenuptial agreements between couples. (2) The waiver will be valid provided there was full financial disclosure, and the agreement is essentially equitable. b. If a transfer was supported by adequate and full consideration, it will be excluded from the augmented estate, even if the purchaser is a relative. B. Additional Spousal Protection 1. If a testator's surviving spouse married the testator after he executed his will, the surviving spouse is entitled to receive: her intestate share unless: a. there is something in the will which indicates that the spouse was not intended to take anything under the will, or b. if inter vivos gifts are made to the spouse in satisfaction of the spouse's share C. Children Not Mentioned in the Will 1. Omitted Heirs: Children Living at Time of Execution of Will a. Generally, under the UPC, a testator can disinherit a child intentionally. There is no forced or elective share for children as there is for a spouse. b. Omitted heirs are children of the testator, living at the time of execution of the testator's last will, who are neither mentioned nor provided for in the will and would have inherited from the testator had he died intestate. c. Recall that the UPC allows: negative wills to disinherit these heirs of the testator, provided it is express or necessarily implied 2. Children Born After Execution of the Will: Statutory Protection a. If the testator fails to provide in his will for his child born or adopted after making his will, the UPC protects such child from unintentional disinheritance, unless it appears from the will that the failure was intentional. (1) If the testator had no child living when the will was executed, an omitted after-born or after-adopted child:receives an intestate share. (a) Exceptions 1) Unless the will devised all or substantially all of the estate to the other parent of the omitted child. 2) Unless it appears from face of the will that testator intended not to provide for child under the will. (2) If the testator had one or more children living when the will was executed, and the will made a devise to one or more of the then-living children, an omitted after-born or after-adopted child is entitled to: to share in the portion of the testator's estate devised to the testator's then-living children as if the child had been given an equal share of that portion of the estate. EXAMPLE: Testator writes a will when two children are alive, giving each $7,500. After the will is executed, a third child is born. There is no indication that the third child was intentionally omitted or disinherited. The after-born child is entitled to receive under the will. The disposition to the first two children will be combined, and the amount will be distributed proportionally to all three children. In this case, the two $7,500 dispositions will combine for a total of $15,000, and each child will get $5,000. (3) If the testator had living children at the time of the will's execution but the children receive nothing: : the after-born child will get nothing, as the already-living children get nothing 3. Special Applications a. Non-marital after-born children are entitled to take under this statute from their mother's estate and from their father's estate, if the father and mother of the child marry, or the father holds the child out to be his during his lifetime, or if there is clear and convincing evidence of paternity. b. If a valid codicil is executed after the birth of the after-born child, the entire will is republished as of that date. Thus, the statute does not apply, and the child is not entitled to an intestate share. EXAMPLE: A will is executed in 2010. Testator has two children at that time. A third child is born in 2012. A codicil is executed in 2015. The codicil republished the will as of 2015. The third child is no longer an after-born child. D. Restrictions on Charitable Dispositions Any rule that a charitable devise is invalid if it exceeds a certain proportion of the testator's estate or if it is contained in a will that was executed within a certain time before the testator's death is abolished

COMPRISING AND CONSTRUING THE WILL: POST-EXECUTION CHANGES TO PEOPLE AND PROPERTY

COMPRISING AND CONSTRUING THE WILL: POST-EXECUTION CHANGES TO PEOPLE AND PROPERTY A. Classification of Testamentary Distributions A specific bequest or specific devise is: a gift by will of a specific article or other real or personal property, which is identified and distinguished from all other things of the same kind, and is satisfied only by delivery of the particular thing. a. The use of possessive words (e.g., "my") indicates that a specific legacy was intended. (VERY IMPORTANT) 2. A general legacy is: one payable out of the general assets of the decedent's estate and not in any way separated or distinguished from other things of like kind. - Like 100 acres 3. A bequest or devise is classified as demonstrative when: it is a bequest of a certain sum to be paid out of a particular fund. If the fund is not in existence at the testator's death or if it is insufficient: : the legatee will be entitled to satisfaction out of the general estate. EXAMPLE: "100 shares of ABC stock to B," or "$100 to A." Note that the 100 shares of stock are not a specific devise of "my 100 shares of ABC stock." The executor could buy any 100 shares of ABC stock (assuming it is publicly traded) and satisfy the legacy. B. Ademption 1. Ademption is what happens when a gift under a will fails for whatever reason. (like its been sold por destroyed) 2. Ademption by Extinction a. Ademption by extinction can only occur with: If it is a general gift: (1) A specific bequest/gift/devise; (2) if it is a general gift, it cannot adeem by extinction. (1) b. A testamentary gift is adeemed by extinction—i.e., it fails—when: property specifically bewuetheathed or devise the testator estate at his death EXAMPLE: If the testator specifically devised Blackacre to X, and then exchanged Blackacre for Whiteacre prior to death, the devise of Blackacre would be said to be adeemed by extinction. c. The reason the property is not there is irrelevant; only the fact that it is not there at all matters. d. Conveyance of an incapacitated person's property (1) However, if specifically devised property is sold or mortgaged by a conservator or agent acting by a durable power of attorney for an incapacitated principal: the devisee has the right to a general devise equal to the sale price, the unpaid loan amount, or the recovery. e. Non-ademption; Balance (1) A specific devisee has a right to specifically devised property in the testator's estate at the testator's death, and to: (if you have a transfer of that specific property and some amount of that hasn't been paid that unpaid balance or replacement cn go to th edivesee - this summarizes everything below ) EXAMPLE: R provides in his will, "I devise Orangeacre, my vacation property, to J." Prior to his death, R sold Orangeacre and bought Greenacre, a property that he used until his death as a vacation property. Under the exception to the ademption rule, Greenacre will be considered a replacement of Orangeacre, as they are both vacation properties, and J will get Greenacre. EXAMPLE: Same facts as above, but Orangeacre was commercial property (and specified as such in the will). Greenacre, used as vacation property, will not be deemed a replacement to Orangeacre, which was commercial property, and the specific bequest to J will therefore adeem. (2) Stock (a) Dispositions of stock are often troublesome because it is unclear whether the testator intended a general or a specific bequest. (b) If the will says "my fifty (50) shares of Wood stock to Jimmy," the possessive pronoun makes this a specific disposition of the identified shares (i.e., those the testator owns); if she owns none at her death, the bequest is adeemed. (c) If the will says "fifty (50) shares of Vladivos stock to Leonid," and the testator owned no such shares at her death, the court interprets this as a general bequest, and Leonid is entitled to the value of 50 shares of Vladivos stock as of the date of the testator's death. 3. Ademption by Satisfaction a. An ademption by satisfaction occurs when a testator makes an inter vivos gift of property to a beneficiary of a general or residuary disposition with the intent that the provision of the will be thereby satisfied. b. Property a testator gave in his lifetime to a person is treated as a satisfaction of a devise only if: (1) the will provides for deduction of the gift; or (1) 1. the testator declared in a contemporaneous writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise; or (2) the devisee acknowledged in writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise. (3) c. An inter vivos gift may satisfy a will bequest partially or in total satisfaction. EXAMPLE: T's will provides, "I leave $10,000 to J." During T's life, he makes a gift of $3,000 to J, and in writing at the same time states, "This gift reduces the amount of any gift J takes under my will." This will be sufficient to find that the gift will satisfy the will bequest. It will not be total satisfaction, however, because the gift is below the value of the will's bequest. J will therefore take $7,000 under the will. If there were no writing at all, it would not be a satisfaction, because a contemporaneous writing is absent. HYPOTHETICAL Tara leaves "my car to my niece Sarah." When Tara wrote her will, she owned a 1967 Firebird. Tara subsequently gave the Firebird to Sarah and purchased a 1998 Honda minivan, which she still owned at the time of her death. What should be the result? ANSWER: Sarah will end up with two car; One because a life time gift under the will And the other based on a inter viovos transacton C. Encumbered Property: No-Exoneration Rule 1. If a person is given property under a will, and the property is subject to a lien: the benficiriary take the property subject to that obligation 2. However, if the testator in the will specifies for the executor to pay the debt on the property, the executor will do so, and the devisee will take the property free of the mortgage. a. Exception: A direction to pay "all debts and expenses" is considered boilerplate and will not cover mortgages. D. Abatement 1. If the assets of the testator's estate are insufficient, after payment of all claims against the estate, to satisfy all the bequests or devises, the beneficiaries' shares will abate, or be reduced. 2. Order of abatement: a. Property that wouls pass intesanacy b. Residuary bequests c. General bequests d.demonstrative bequests e. specific bequests 3. Accordingly, the estate will be distributed as follows: a. Specific devisees get first and get their full bequests. b. Then general devisees will take, but their shares will be reduced as necessary (and proportionally) due to abatement. HYPOTHETICAL Testator wrote a will that left Blackacre, the family home, to Sister. Testator later sold Blackacre, and reinvested the sales proceeds in Whiteacre, which became Testator's new family home. What is Sister entitled to receive from Testator's estate? ANSWER: Replacement option should be arguesd, if not replacement sisiter will not recieve HYPOTHETICAL Tara leaves an estate consisting of Blueacre (worth $50,000) and $25,000 cash. Tara's will devises Blueacre to Jill, and the balance of her estate to Robin. There are, however, debts against Tara's estate in the amount of $15,000. What should be the result? ANSWER: Pay credits Go to robin ext because she is a residuiary Then .. just go with the char 4. If a class is receiving a gift and an abatement must be done, the whole class will share in the abatement proportionally to the value of their gifts in the will. E. Class Gifts 1. A class gift exists when the testator makes a gift to a number of persons as a group, and the size of the group may either increase or decrease in size. The share of each depends upon the ultimate number in the class. 2. Closing of Class: Maximum Membership a. As a general rule: class gifts clost at the time the the will is mad effective (in other words when the testator dies) F. Lapse 1. Under the common law, a lapse occurs when a disposition fails because the beneficiary predeceases the testator. 2. Unless saved by the anti-lapse statute: a. A lapse in the body of the will falls: into the residuary if there one or if not to intestacy i. If a specific or general devise lapses, the devise falls into the residue. i. If the residuary devise lapses, the heirs of the testator take by intestacy. b. A total lapse in the residuary of the will falls to: will fils to intestacy i. If the devise is to a class of persons and one member of the class predeceases the testator, the surviving members of the class divide the gift. c. A partial lapse in the residuary falls to: to the other tatkers d. A lapse in a class gift falls to: the other class member 3. Anti-Lapse Statute a. Under this statute, a gift is saved if: (1) The predeceasing beneficiary was closely enough related to the testor and (a) Narrow view: Any descendant. (b) Broader view: Any relative but a spouse. (c) Broadest view: Any beneficiary no matter the relation. (2) The predeceasing bebfieary was surivied by descendants who also survived the testoraor b. Those descendants will take by anti-lapse unless: the will clearly expresses a contracy (1) Examples of an expressed contrary intent include: (a) Testaor specifically says that the anti alapse statue not apply (b) By specifying survivial a as a requirement and stating lapse as a result of failrure or (c) By impllicaiton by naming a contigent beneficiary HYPOTHETICAL T devises the "rest and residue" of his estate to Bob and Fred. If Bob predeceases T, who will receive Bob's share of the residue? ANSWER: Fred unless saved by anti lapse 4. Class Gifts a. The UPC requires that words of survivorship for class gifts be explicit that they do not want the anti-lapse statute to apply; otherwise, there is a presumption that it should. EXAMPLE: T has three daughters, A, B, and C. A dies in 1977, leaving issue. T executes a will in 1978, leaving his entire estate "to my daughters." B dies in 1979, leaving issue. T dies in 1980. The disposition lapses with regard to A, and her issue take nothing. The disposition to B is saved from lapse by the statute. Her issue take her one-half share of the estate per stirpes, and C takes the other half. HYPOTHETICAL Adam died at the scene of a car accident at the age of 92. The driver was his grandson Sam. Adam's will had the following devises: "I give $25,000 to Bob, my dear friend. I give Blackacre to Carla, my loving niece. I give the rest of my estate in equal shares to Donald, Edna, and Faye." Although all of the persons named in the will were alive when Adam executed it, each of them, except for Faye, pre-deceased Adam. Bob was survived by his only son, who was alive at Adam's death. Carla was survived by two daughters, both of whom were alive at Adam's death. Donald was survived by his son Sam (the driver of the car). Sam survived the accident but died three days thereafter. Edna was survived by three grandchildren. Distribute Adam's estate. ANSWER: HYPOTHETICAL Andy, who had divorced his first wife Mary years ago, remarried Helen. Andy had one son with Mary, Opie. Helen had two children from a previous marriage, Ernest and Peggy. Andy adopted Peggy, but not Ernest because he was already an adult. Andy and Helen never drafted a will together, but Andy never revoked an old will from his first marriage. The will left the house to his then-wife Mary, sum of $10,000 to Mayberry Church, and the residue to Opie. When Andy died, he owned his home, a boat, and two bank accounts with $25,000 in each account. Assume Andy died with a valid will. Explain who should be awarded what portions of the estate, and why. ANSWER:

EXECUTION OF ORDINARY WILLS

EXECUTION OF ORDINARY WILLS A.In General 1. A will is a document executed by a testator or testatrix that takes effect on the death of the testator or testatrix. 2. Usually, a will disposes of a person's property, but need not actually do so in order to constitute a valid will. 3. A will may also include any codicil and testamentary instrument that: a. appoints an executor; b. nominates a guardian; c. revokes or revises another will; or d. expressly excludes or limits the rights of an individual or class to succeed to property of the decedent passing by intestate succession. 4. Questions pertaining to testate succession generally fall into one of four categories: a. making a will; b. revoking a will; c. challenging a will; and d. comprising and construing a will. 5. There are three types of wills: a.An attested or formal will, one with witnesses b. A holographic will, which is unattested c. An oral will in some jurisdictions, but most do not accept d.these (aka nuncupative will) 6. While the formal requirements of a will depend on what type of will is in issue, all wills require: a. Testamentary capacity b. Testamentary intent c. And the appropriate formailites

EXECUTING THE SPECIAL WILL: SPECIAL WILLS AND CODICILS

I. EXECUTING THE SPECIAL WILL: SPECIAL WILLS AND CODICILS A. Types of Wills 1. Holographic Wills a. A holographic will is one written by the testator, entirely in his own handwriting. b. In order to qualify as a valid will under the Uniform Probate Code: (1) only the material portions of the will must be in the handwriting of the testator and (2) The will be signed by the testator c. Material portions are: those distriuvitnf money and property and opposed to form wills or those downloaded over the internet d. The testator is still required to have: (1) The capacity required to make a will and (2) The intent that the document be a will 1. Conditional Wills a. Conditional wills are permitted; a will can be conditioned upon some event. HYPOTHETICAL While he was in the Navy, Taylor wrote a letter to a friend stating that "if I die by shark attack out in the south pacific," Taylor's bonds, cash, and any pay that was due should go to Betty Black, an old friend. After Taylor left the Navy, unscathed by sharks, he lived with the Black family, and he mentioned the letter many times. When Taylor died, his friend tried to probate the letter; Taylor's aunt contested it. What should be the result? IMPT --- did he have capcity -- did he have intent -- is it a true condition (did he intent this to happen only by the specific condition) or hyperbole (but still wanted it to standa if he died - check out - argue both ways depending on the facts) A. Contracts to Make a Will, and Joint or Mutual Wills 1. The UPC will uphold as valid a contract to dispose of by will all or part of a person's property, whether real or personal. 2. A contract to make a will or devise, or not to revoke a will or devise, or to die intestate, may be established only by: a. provisions of the decedent's will stating material provisions of the contract; b. an express reference in the decedent's will to a contract and extrinsic evidence proving the terms of the contract; or c. a writing signed by the decedent evidencing the contract. 3. In many states, when two persons execute a single document as their joint will, this gives rise to a presumption that the parties had contracted not to revoke the will except by consent of both. Under the UPC, however: the execution of a joint will or mutual will does not create a presumption of a contract not to revoke the will. 1. Both joint and mutual wills: are revocable by either party EXAMPLE: A has three children from a previous marriage. A, who is penniless, marries B, who is very wealthy. A and B have one more child. A and B enter into a contract that the child of their marriage should get half of their property, and the other half should be split among A's children from the previous marriage. A and B execute wills in line with the contract. After B dies, A wants to change her will so that all her children get equal shares of her estate. If the existence of the contractual agreement can be proven because it is stated in the will along with the contractual provisions, then the contract will be honored. However, it will be honored as follows: the changed will will be admitted to probate, but the beneficiary who was negatively affected can sue the estate for damages or for specific performance. Codicils A. Codicils 1. A codicil is an instrument that is executed subsequent to a will and may be holographic. a. As to the original will, a codicil republishes the will to which it refers, which means that the will is treated as if it was written for the first time as of the date of the codicil. 3. A validly executed codicil cures: most defects in the execution of the original will EXAMPLE: In 2012, A signs a typed will witnessed only by J. The will provides, among other things, that Blackacre should go to X. The will is not valid. It is typed, and thus not holographic. It has only one witness, and so fails to meet the attestation requirements, nor was it attested by a notary public. Four years later, A executes a codicil specifying it a codicil of A's 2012 will, making additional dispositions, and specifically republishing the 2012 will in all other respects. If the 2016 codicil is valid—if it is signed by A and properly attested—the invalid 2012 will's provisions will become valid through the formalities of the codicil. Validity of Execution of Foreign Wills A. Validity of Execution of Foreign Wills 1. A will is validly executed if executed in compliance with: a. the UPC sections relating to form and execution of a will (Sections 2-502 or 2-503); in compliance with the law at the time of execution of the place where the will is executed, or b. of the law of the place where at the time of execution or at the time of his death the testator is domiciled, has a place of abode, or is a national. c.

INTESTATE DISTRIBUTION: SCHEME, STATUS, AND ALTERATION

INTESTATE DISTRIBUTION: SCHEME, STATUS, AND ALTERATION A.In General 1. Property of the estate that, for some reason, does not pass under a will passes according to state statutes called intestacy laws, or more specifically, "statutes of descent and distribution." a. Bar exam questions pertaining to intestate succession generally fall into three categories: (1) Questions of scheme (2) Question of status (3) Questions of alteration 2. A testacy proceeding refers to a proceeding to establish a will or determine intestacy. a. Intestacy is total if the person who dies either does not make a will or makes a will that is invalid in its entirety. b. Intestacy is partial when the testator makes a will, but part of the property in the estate does not pass under the will. EXAMPLE: A leaves an estate (after expenses, debts, and taxes) of $1,000. His will states only that C, D, and E are each to receive $300, and does not specify what is to be done with any excess property. The $100 not distributed under the will shall pass by intestacy and be distributed according to the laws of descent and distribution. B. Statutory Provisions (i.e., Questions of Scheme) 1. General Rule: A surviving spouse will always take some portion of the decedent's estate. How much of the estate is taken by the surviving spouse depends on what other relatives of the decedent also survive that decedent. a. If there is no surviving descendant or parents: the entire estate goes to the surviving spouse b. If there is a surviving spouse and all surviving descendants are of both the spouse and decedent, i.e., there are no step-children on either side, again: the surviving spouse will take the entire estate c. If there is no surviving descendant of the decedent, but he is survived by a parent or parents: the first 300k plus three fourths of the blance of the interstat estate foes tot the surviving spouse (1) The remainder of the property: foes tot the surviving parent ofr if thboth parents survivie in equal shares to each d. If there are surviving descendants of the decedent, all of whom are issue of the surviving spouse, and the surviving spouse has one or more surviving descendants who are not descendants of the decedent: (surviving step children of the decedent) (1) the first $225,000 plus one-half of the balance of the intestate estate goes to the surviving spouse; and (2) the remaining portion of the estate is divided among the decedent's descendants. e. If there are any surviving descendants of the decedent who are not also descendants of the surviving spouse: (1) the first $150,000 plus one-half of the balance of the intestate estate goes to the surviving spouse; and (2) the remaining portion of the estate is divided among the decedent's descendants. f. Bottom line: The more it looks like the surviving spouse will take care of the relatives of the decedent fairly, the more likely that she will take everything. But add in in-laws and steps, and the amount she will take goes down. 2. No Surviving Spouse; Spouse Not Entitled to Take a. The shares of the estate, if any, to which the surviving spouse is not entitled, and the entire estate if there is no surviving spouse, pass in the following order: (1) If the decedent's spouse is not entitled to a share in the estate, or does not survive him, or if the decedent is unmarried: thr descendants of the decednt take (a) "Representation" is defined differently in different jurisdictions. https://matthewminer.name/law/outlines/3L/1st+Semester/LAW+575-002+-+Wills,+Trusts,+and+Estates/Representation (HELPS UNDERSTAND ALL THE PER STIRPES) 1)Pure/strict per stirpes 2)Modern/ modified per stirpes 3) UPC approach: Per capita by representation at each generation. (b) All three schemes in play. (c) On the bar exam, look to see if they give you an intestacy statute. (d) By representation through the following steps: English Per Stirpes Under the English Per Stirpes system, shares are divided equally to children, then if dead, divided again to their children. Thus, grandchildren with fewer siblings get more money. English Per Stirpes has vertical equality—bloodlines get equal amounts. Modern Per Stirpes Under the Modern Per Stirpes system, shares are divided equally to children, but if all children are dead, the property is divided among grandchildren. Thus, all grandchildren get the same amount if all the children are dead. If some children survive, it is the same as English Per Stirpes. Modern Per Stirpes applies the same with grandchildren and great-grandchildren. The division does not occur until the first generation with a live taker. Modern Per Stirpes has horizontal equality—children/grandchildren get equal amounts—whenever all children are dead. Per Capita at Each Generation Under the Per Capita at Each Generation system, shares are divided equally to the first living descendant generation (where it is divided equally among the living children and children with living descendants), then if one or more are dead, the reminder is divided again to their children. Thus, all "grandchildren" always get the same amount. Per Capita at Each Generation has horizontal equality—children/grandchildren get equal amounts—always. The UPC uses Per Capita at Each Generation. UPC § 2-103(a). Descendants' surviving spouses (i.e., children-in-law) never get anything in most jurisdictions. Under UPC § 2-106(b), the initial division of shares is made at the closest generation in which one or more descendants are alive (the same root generation as under modern per stirpes), but the shares of deceased persons on that level are treated as one pot and are dropped down and divided equally among the representatives in the next generation. In the situation depicted in Figure 2.4, D takes a one-third share, and the two-thirds that would have passed to B and C had they been living is divided equally among all the children of B and C. Consequently, E, F, and G each take a two-ninths share. 1) Go to the first generation under the decedent with at least one surviving member. 2) Count the number of live roots, not live members, in that generation. 3) Allocate a share to each living member in that generation. 4) Combine the remainder, if any, and repeat by distributing a share to any qualified takers at the next generation. NOTE: If a descendant predeceases the decedent and does not have any descendants of his own to take his share, the share fails, and it is treated just as if that child had never been born. EXAMPLE: X has two children, A and B. A has one child, A Junior. B has twins: C and CeCe. If X died survived by everyone, only A and B would share in X's estate, taking one-half each. If A predeceased X, Junior would take what would have been A's share, or one-half. If B predeceases X, C and CeCe would similarly split what would have been B's share, taking 1/4 each. But if both A and B predecease X, the answer turns on what form of representation the jurisdiction applies. Under a pure per stirpes approach, often referred to as "strict" or "classic," X's estate would be initially divided into shares at the child level, no matter what. Therefore, since there were initially two children or "roots," both of which were still "alive" (i.e., could continue to grow), Junior would take A's one-half, and C and CeCe would take B's one-half, or 1/4 each. Under modified or modern per stirpes, the roots are instead counted at the first generation from the decedent with at least one living member. Here, that would be the grandchildren generation from X. Since there are 3 living roots there, the estate would be divided into thirds, and Junior, C, and CeCe would each take 1/3 of X's estate. EXAMPLE: T has three children: A, B, and C. B and C predecease T, but A survives. A has three children: 1, 2, and 3. B had one child, X. C had two children, Y and Z. T is thus survived by one child and three grandchildren. The estate is divided first by thirds, and A takes a third. 1, 2, and 3 take nothing, because A survived T. X, Y, and Z are treated equally under the rules of representation, so B and C's shares will be combined into one share totaling two-thirds of T's estate, and X, Y, and Z will split that evenly. (2) If the decedent is survived by neither spouse nor descendant: the surving parents of the decendt take in equal shares (a) If only one parent survives: that parents takes all (3) If the decedent is survived by neither spouse, descendant, nor parents: the deescdebts of the decedent parent's or either of them bt reprenstation (4) If there are no descendants, parents, or descendants of parents, go to the grandparents; or if none, to their descendants (e.g., aunts, uncles, cousins). (5) If there is no one there either, the estate will either pass to the next closest relative, or will escheat to the state. (6) Bottom line: Picture the family tree as a series of expanding pyramids. Intestacy laws try to protect those in the closest pyramid to the decedent, based on the notion that those "close in blood" are presumably also "close in heart." The farther away the relative, the less likely that relative will inherit. HYPOTHETICAL Harry dies, survived only by his parents, Herb and Winnie. He is predeceased by his wife Wanda. What share does Herb and Winnie take? Herb and Winnie had two other children, Abe and Alex. Alex has two children, Bob and Benno; Bob has two children, Constance and Callie. If Herb, Winnie, Alex, and Bob all predecease Harry, who takes? ANSWER: C. Uniform Simultaneous Death Act 1. Applies to intestate succession as well. 2. Heir must survive decedent by 120 hours. D. Special Problems of Intestate Distribution (i.e., Questions of Status) 1. Adopted Children a. The UPC follows a transplantation theory with regard to adopted children. (1) The theory holds that an adopted child generally loses any relationship with his natural parents and is generally treated as the natural-born child of the adoptive parents, so that such child can inherit from and through his adoptive parents and their kindred, and the latter can inherit from and through the adopted child. b. However, if a natural parent dies, and the child is later adopted: (1) Within the decedent's family or (2) By surviving parent's new spouse the child will still have inheritance rights through the deceased natural parent's family estate. c. In addition, if the natural parent remarries and consents to the adoption of his child by his new spouse: the right of the adopted child to inherit from both of his natural parents is not affected (1) A parent-child relationship exists between an individual who is adopted by the spouse of either natural parent. EXAMPLE: Following her divorce, Mother M gets custody of Child A and then remarries. If the stepfather, with M's consent, now adopts the child, A will not be cut off from his natural mother and can inherit from M, as well as inherit from his natural father. HYPOTHETICAL Amy married Robert after the death of her first husband, Andrew. Robert adopted Amy's two boys from that marriage. Two years after the adoption, Andrew's only brother, Charles, dies intestate. Amy's children are the closest next of kin to Charles. Can they take by intestacy? ANSWER: Yes because og the post death adopotion , they still remain in the biological famililt 2. Stepchildren a. Stepchildren have no inheritance rights unless they are adopted, or unless they can prove adoption by estoppel (which is essentially an unperformed contract to adopt). 3. Half-Blood Relatives a. Half-blood relatives are siblings of the decedent by only one of his parents: their representative take equally with relatives of the whole blood and their representatives EXAMPLE: If the decedent is survived by a brother who shares the same mother and father, and by a half brother who only shares the same mother, both brothers are on an equal footing for inheritance purposes. 4. Non-Marital Children a. A child born out of wedlock is considered the child of his mother and her kindred for purposes of intestate inheritance. b. For purposes of descent, a child born out of wedlock is also considered to be the child of his father if paternity is sufficiently established, such as where: (1) The parents eacj othe r During the lifteme of the cild the father openly holds out the child to be his and receives the child into his home (2) 5. Posthumous Children a. Persons conceived before the decedent's death but born alive thereafter, take as if they were born in his lifetime. b. If the child does not survive 120 hours after its birth: it is not deemed as having survived the parent EXAMPLE: While A was pregnant with B's child, B dies. B's will provides that each of B's children will get $25,000 from his estate. X, the unborn child, was born three months after B's death. As long as X survives 120 hours after his birth, he will get $25,000 from B's estate. HYPOTHETICAL Fred died of cancer in 2008, but not before making deposits in a sperm bank to ensure his bloodline. If his wife, Sarah, goes through an in vitro fertilization process after Fred's death and successfully carries fertilized embryos to term, can the after-born children claim against Fred's estate? ANSWER: The children will take id the are in utero E. Advancements (i.e., Alterations) 1. Similar to ademption by satisfaction. 2. If a person dies intestate as to all or any part of his estate, property that he gave to an heir in his lifetime is treated as an advancement against the estate only if: a. It is specifically or generally declared in a contemporaneous writing by the decdent or b. Acknowledge in any writing by the heir as an advancement 3. If property given is an advancement, it will reduce the amount of the person's intestate share by the value of the advancement. 4. If the recipient of the property fails to survive the decedent, the property is not taken into account in computing the division and distribution of the decedent's intestate estate, unless the decedent's contemporaneous writing provides otherwise. HYPOTHETICAL Dorothy had three children and six grandchildren. Five years before her death, Dorothy gave one of the grandchildren $60,000 to buy a home and stated, "This is for you because I love you." Dorothy did not give similar transfers to any of her other grandchildren. Dorothy's three children predeceased her, and Dorothy left a $120,000 estate at her death. To whom should Dorothy's $120,000 estate be distributed? What is the amount of each person's share? ANSWER: HYPOTHETICAL Dan and his daughter Clara were involved in a car accident. First Dan then his daughter were pronounced dead upon arrival at the hospital. Clara was survived by her spouse, Sam, who was her sole beneficiary under her duly probated will. Clara did not have any children. Dan was survived by a brother, half-sister, adopted sister, and paternal grandfather, and left an estate of $300,000. Who will share in Dan's estate? What is the value of the share each will receive? ANSWER:

Big Picture, Useful Terminology

Probate is the legal process of administering a person's estate after their death The decedent died: Intestate Succession Without having written a will Testate Succession Leaving a validly executed will The decedent is called: Intestate Succession The decedent Testate Succession The testator The decedent's probate estate is the real and personal property the decedent leaves at death and is called: Intestate Succession The intestate probate estate Testate Succession The testate probate estate Property not passing through probate, such as will substitutes, are called: Intestate Succession: The non-probate assets Testate Succession: The non-probate assets The probate estate will pass according to: Intestate Succession Intestate succession, through the state laws of descent and distribution Testate Succession Testate succession, through the state laws of descent and distribution The probate estate will pass to: Intestate Succession The decedent's heirs, i.e. takers under the intestate succession statute Testate Succession The decedent's beneficiaries or devisees, i.e. takers under the decedent's will The broadest groupings of the relevant law: Intestate Succession Scheme, status, alteration Testate Succession Make, revoke, challenge, comprise/construe A. A Few Helpful Hints 1. A decedent can die totally or partially testate or intestate. 2. On a bar exam question, be sure to distinguish between probate and non-probate assets, which pass outside of testate or intestate succession. a. Examples of non-probate assets: joint tenancy, tenancy by the entirety, POD and TOD accounts, revocable trusts, and life insurance policies that pay to a third party rather than to the decedent's estate.

REVOKING AND REVIVING THE WILL

REVOKING AND REVIVING THE WILL A. Methods of Revocation 1. Under the UPC, wills may be revoked by the intent to revoke the will and a: physical act, or performing a revocatory act on the will a. (1) A "revocatory act on the will" includes: burning, tearing, canceling, obliterating, or destroying the will or any part of it, whether or not the burn, tear, or cancellation touched any of the words on the will. (2) The key is that: the physical act is done with the intent that it revoke the will. (3) If the testator does not perform the revocatory act, but directs another to perform the act, the act is a sufficient revocatory act if the other individual performs it in:in the testator's conscious presence. The act need not be performed in the testator's line of sight EXAMPLE: A called her attorney, B, and told him to immediately destroy her will. He did so while she was on the line. The attempted revocation is invalid. Being on the phone line is not enough EXAMPLE: T's will leaves Cynthia $10,000. T becomes disenchanted with Cynthia and crosses out the final zero (0), seeking to reduce her bequest to $1,000. T's reduction of Cynthia's gift is valid because it is a partial revocation by physical act. Cynthia will get $1,000. OR b. executing a subsequent will that revokes the previous will or part expressly or by inconsistency; or (1) A revocation by a subsequent will may be partial to the original will or revoke the will in its entirety. (2) A will, duly executed and proved, that contains an express clause of revocation revokes all former wills. (3) If a subsequent will does not expressly revoke a previous will, the execution of the subsequent will wholly revokes the previous will: by inconsistency if the testator intended the subsequent will to replace rather than supplement the previous will. (4) The testator is presumed to have intended a subsequent will to replace rather than supplement a previous will if the subsequent will makes a complete disposition of the testator's estate. If this presumption arises and is not rebutted by clear and convincing evidence, the previous will is revoked. EXAMPLE: Testator has a first will that says, "Blackacre to A, my car to B, residue of the estate to C." Testator then writes and properly executes a second will that makes no reference to revoking the earlier will. The second will provides, "I give Blackacre to R, and my residue to X." There is no mention of the car in the second will. A and C have clearly lost their bequests by inconsistencies between the wills. B will not receive the car, because the later will makes a total disposition of the estate. (5) If a subsequent will does not fully dispose of the testator's estate, it will revoke the previous will: only to the extent the subsequent will is inconsistent with the previous will EXAMPLE: Testator executes a first will providing, "I give $500 to Sue, my art collection to John, and the residue of my estate to Carrie." Testator later executes a second will providing, "I give $300 to Warren and my art collection to Hank." The second will does not have a residuary clause. If the second will does not specifically revoke the first, all provisions that can be given effect will be followed. Read together, Sue will still get her $500, the art collection will go to Hank instead of John, Warren will get his $300, and the residuary will still go to Carrie. c. Dicorce (1) If the testator is divorced after making a will, all provisions of the will in favor of or relating to the spouse so divorced: become ineffective for all purposes unless it is apparent in the will that the provisions were intended to survive the divorce. HYPOTHETICAL Testator's will left $100,000 to Cousin. After having an argument with Cousin, Testator validly executed a new will that disinherited Cousin, and left two copies of the new will in his safe deposit box, along with the earlier will. Cousin and Testator later reconciled, and Testator went to the safe deposit box, removed a copy of the later will, and tore it up, saying to his neighbor who was present, "I feel better now. Cousin is taken care of." What, if anything, is Cousin entitled to receive from Testator's estate? ANSWER: buring a copy is not revocation as at all HYPOTHETICAL Before his death, Jeff executed a valid, seven-page will leaving his entire estate to his children in equal shares. After Jeff's death, the children discovered that Jeff had defaced the first page of his seven-page will, placing a large "X" across it and printing the words "NO WAY" on the first page. The children also discovered a second will in Jeff's handwriting, which purported to leave the entire estate to Jeff's healthcare worker Helen. The second will does not mention the first will or Jeff's children. Did Jeff revoke his first will? Explain. ANSWER: 2 ways to think about thi s Possibly a revocation beucase of the X and No Way Revocation because of the total dispositon of the property by the subsequesnt document B. Dependent Relative Revocation 1. The doctrine of dependent relative revocation is the law of second best, i.e., its application does not produce the result the testator actually intended, but is designed to come as close as possible to that intent. 2. Rule: DRR (i.e. conditional revocation) says if a revocation was based on a mistaken belief, undo the revocation if that's what T would likely prefer. Dependent Relative Revocation: If a testator undertakes to revoke her will upon a mistaken assumption of law or fact, under the doctrine of dependent relative revocation (DRR) the revocation is ineffective if the testator would not have revoked the will but for the mistaken belief. The basis for disregarding the revocation is that the testator's mistake negates her revocatory intent. A typical DRR case involves a testator who revokes a prior will under a belief that a new will is valid but, in fact, for some reason unknown to the testator, the new will is invalid. If the court finds that the testator would not have revoked her old will had she known that the new will was ineffective, the court will disregard the revocation and probate the destroyed prior will. C. Revival of Revoked Wills 1. The general rule is that: once a will is revoked, it cannot be brought back to life. 2. However, it can be revived: if the will is restated, re-executed, there is an actual republication, or other clear evidence of intent to revive. a. Republication can be made by: resigning the original will that was later revoked, along with having witnesses reattest the will. 3. A codicil to a will: revives a will, so if a codicil is made to a revoked will, it will revive the revoked will as of the date of the codicil. EXAMPLE: Bill writes Will 1, providing "Blackacre to A, $200 to B, the residue to C." Bill then executes Will 2 sometime later, which expressly revokes Will 1 and provides "$200 to X, residue to Y." Later still, Bill executes a codicil to Will 1, which provides "I give my car to Z, and hereby republish Will 1 in all other respects." This codicil now revives Will 1 and makes it a valid will again, as if it were written for the first time as of the date of the codicil. Therefore, all of Will 1's provisions become later provisions in relation to Will 2. When Bill dies, it will be as if his will stated, "I give Blackacre to A, $200 to B, my car to Z, and my residue to C." The impact of the republication of Will 1 by the codicil on Will 2 is that Will 2 will be considered revoked in its entirety, as Will 1 makes a total disposition of Bill's estate, unless some evidence can be brought showing that Bill did not intend for this complete revocation. HYPOTHETICAL Testator had a valid will leaving $20,000 to his sister. Testator decided that he wanted to leave more money to his sister, so he crossed out the bequest reading "I give $20,000 to Sister" on page 1 of the will and wrote above the crossed-out phrase, "I give $40,000 to Sister." How much, if any, will Sister take? ANSWER: This wasn't a valid holographic will because you would have needed a resignature however DRR will revive the 20 k D. Lost Wills 1. If a will is traced to the testator's possession and cannot be found after death: the law presumes that the testor destroyed the will withintent to revoke it 2. If the will is not in possession of the testator: the presumption is not raised HYPOTHETICAL Richard's will leaves Joanne $10,000. Richard gives a copy of the will to Joanne. When Richard dies, the will cannot be found. Joanne seeks to probate her copy of Richard's will, but Richard's family asks the probate court to declare him intestate. What should be the result? ANSWER: You cant probate compies must be able to probate the will E. Copies of Wills 1. Executed Copies a. If testator signs the copy of a will, it becomes an executed copy and functions as a will. b. Revocation of an executed copy is effective revocation. 2. Unexecuted Copies a. Unexecuted copies have no legal effect. b. The revocation of an unexecuted copy means nothing. 3. If there are multiple executed copies, the revocation of one is presumed to extend to and revoke all copies.

THE TRUSTEE'S POWERS AND RESPONSIBILITIES

THE TRUSTEE'S POWERS AND RESPONSIBILITIES A.Sources of the Trustee's Powers 1. A trustee's powers arise from: a. Trust instrument (either expressly or by implication) b. Granted by statute or implied in law as necessary or appropriate to accomplish the trust's purposes (1) Unless expressly precluded by the trust instrument, a trustee has the power, inter alia, to: (a) Settler or abandon trust claims (b) Borrow money (c) Sell or lease trust assets (d) Incur reasonable expenses, including the purchase of insurance that are necessary to maintain trust property (2) The trustee has no implied power to invade trust principal for a beneficiary who has merely the right to receive income from the trust unless specifically authorized by the trust. 2. A trustee's actions pertaining to matters within his discretion are not subject to attack, unless he has abused his discretion in undertaking the conduct in question. a. A trustee's discretion is generally subject to the standard of: HEMS: the benefieciary HEALTH, EDUCATION, MAINTENANCE, AND SUPPORT B. Duty of Loyalty and Good Faith 1. A trustee owes a duty of utmost loyalty and good faith to the beneficiaries in carrying out her obligations under the trust. 2. A trustee is prohibited from: a. Self dealing in amy manner even if done in good faith b. Obtaining any perosnal benefit other that the agreed upon or statutory fees as a consequence of his position EXAMPLE: The trust needs cash to pay expenses and doesn't want to sell any assets, so the trustee decides he will lend $100,000 to the trust and charge only 1% interest. All of the banks will only lend at 3% interest. This is a breach of fiduciary duty since he is getting a 1% return. c. Interacting with his beneficiaries specifially and cannot have business transantions with them (1) This will only be allowed if: (a) All of thefacts are disclosed ot the benefiacry and (b) Transaction is fair HYPOTHETICAL Tammi, as trustee for the Duvall Brothers farm, decides that it is in the best interest of the trust to enter into a 100-year lease of the farmland to a Chicago developer who plans to construct a high-end "farm resort" for slick Chicagoans who want to spend their vacations on a working farm. As part of the lease, the developer will turn half of the field into a hotel, a spa, and a gourmet restaurant. The daughter, as the sole beneficiary of the trust, contests, claiming that it will significantly alter the purpose of the land. How will a court rule? ANSWER: d. obtaining any personal benefit from a third party with respect to dealings involving the trust estate; and EXAMPLE: Obtaining a personal commission, bonus, finder's fee, or other benefit for placing trust business with others is strictly prohibited. e. permitting himself to be in an apparent conflict of interest with respect to the trust and third parties. EXAMPLE: A bank acting as trustee cannot buy its own stock with the trust funds. (1) Trusts may contain exculpatory clauses that may allow the trustee to compete without running afoul of their fiduciary duties. (a) Still cannot breach the fair dealing standard (2) Any profits earned from self-dealing with the trust belong to the trust. C. Affirmative Duties With Respect to Trust Assets 1. A trustee has an affirmative duty to preserve and enhance trust property. a. Prudent Business Person Rule: you muse the degree of skill care and prudence that would be reasonably used by a busines sperosn in his own perosnal affairs. (1) Where a trustee possesses superior business expertise or is a professional fiduciary: A higher standard is applied. He will be held to the skill, care, and prudence of an individual or entity possessing those capablitlites b. The trustee is obliged to attempt to utilize trust property in a productive manner, subject at all times to the obligation to be prudent. c. A trustee should diversify the trust's portfolio. (1) Acceptable items include government or highly rated bonds, blue-chip stocks, and quality mutual funds. (2) Investments that will be questioned include penny stocks, speculative stocks, commodities, and derivatives. (a) However, modern investment theory permits the trustee to make investment determinations based on the total portfolio in light of risk and return. 2. A trustee generally may not delegate his duties. a. A trusetee may (iand if lacks the necessary background to make a reasonly competent decision mmjuse) delegate investment functions (1) The trustee must be diligent in selecting his advisor. (2) A trustee must inform the beneficiaries of the delegation. HYPOTHETICAL Settlor created a revocable trust, naming Bank as trustee. Settlor funded the trust with cash. Bank promptly invested the cash in a broad range of stocks and bonds. Although the portfolio significantly increased in value, Settlor was dissatisfied with the rate of appreciation. Settlor therefore directed Bank to sell 90% of the trust portfolio and to reinvest the proceeds in the stock of XYZ, a closely held corporation that Settlor believed would substantially appreciate in value. The investment in XYZ appreciated more than 50% during the first two years after Bank purchased the stock, but then the XYZ investment depreciated to about 70% of its initial value. This depreciation was largely due to mismanagement by XYZ's board of directors. Although Settlor was neither a director nor an officer of XYZ, he was fully aware of the management problems. He discussed these problems with Bank and told Bank, "I expect things will turn around soon." Immediately upon Settlor's death, Bank liquidated the trust's interest in XYZ, thus avoiding further losses from this investment. Is Bank liable for the decline in the XYZ stock? ANSWER: D. Trustee's Liability 1. Where a trustee breaches his duty to the beneficiaries, he will always be liable for the results of his breach. a. If the trustee uses trust assets to buy property and it increases in value, he must return both the trust property and the appreciation in value. 2. When a trustee breaches his duty of care in investing: The trustee must personally recompose the tuest for its losses a. He cannot offset money lost by money earned. 3. A trustee will be responsible for any lost interest. 4. A trustee ordinarily has no liability for breaches of duty by the trustee whom he succeeds, except where the successor-trustee: a. Knew or should ahv ebecome aware of the prior trustee's breach and b. Failed to undertake appropertiate aciotn to minimize its effects or to pursure the appriate remedies on behalf the beenfeciairies 5. An exculpatory clause is a provision in the trust instrument that relieves the trustee of liability for potentially wrongful acts. a. Where a beneficiary has full knowledge of the material facts and expressly approves of the complained-of action by the trustee: He may be deemed to have waived the trustee breach or estopped from asseting an aciton E. Removal and Resignation of Trustees 1. A trustee may be removed for cause, such as a breach of duty or if he has become incapacitated. 2. Once a trustee has accepted the appointment to his position, he can resign at any time. a. A successor trustee: b.has the all rights and duties of his predecessor

TRUSTS ARISING BY OPERATION OF LAW: IMPLIED TRUSTS

TRUSTS ARISING BY OPERATION OF LAW: IMPLIED TRUSTS A.In General 1. Any time a resulting or constructive trust arises, it means the trust will end because there is a trustee but no named beneficiaries and no duties imposed on the trustee. a. The trustee will transfer legal title to those with equitable rights, the rights will merge, and they will own the property free of trust. B. Resulting Trusts 1. Resulting trusts arise when: an express trust makes incomplete disposition of assets or fails after property has been conveyed to the trustee a. The only person left holding the equitable interest is the settlor, and he does so in resulting trust. EXAMPLE: S makes a transfer to trustee, T. "I give Blackacre to T as trustee in trust for Carla." It is a simple dry passive trust. Faiels lacks of obligations EXAMPLE: "I give Blackacre to T as trustee" without naming a beneficiary. S is beneficiary under resulting trust. T holds legal title, which he will transfer to S. EXAMPLE: "I give Blackacre to T as trustee to pay income to A for life." A is a beneficiary. S is the remainderman in resulting trust because he had full equitable title and only gave away the income interest, retaining the remainder interest. When A dies, T will transfer title to S, and the titles merge. If S dies before A, his interest will be transmitted to his heirs, residuary legatees, or whoever is named in his will. EXAMPLE: "S to T in trust, income to A for life, remainder to S's heirs." S does not have heirs while he is alive. If S survives A, this is a resulting trust back to S since there is no one else to take. 2. Purchase Money Resulting Trusts a. If a party pays the original purchase price of property, but directs that title to the asset be placed in another's name, then there is a rebuttable presumption that the grantee holds the property in a resulting trust for the payor. b. This is typically a question of whether a gift was intended. (1) When title goes to a close relative: a gift is presumed (2) When title goes to a stranger: a gift is not presumed and it is a purchase money resulting trsut C. Constructive Trusts 1. A constructive trust is an equitable remedy, whereby a trust is erected on the holder of specific property to redress wrongdoing or prevent unjust enrichment. a. It is typically imposed when property has been wrongfully obtained. b. The purpose of a constructive trust is to oblige the holder of property to divest himself of it and transfer it to the person entitled to that asset. 2. Say that a court will "raise," "erect," or "impose" a constructive trust.