Trust and Estates Exam

Role of extrinsic evidence

" • Older law often invoked the "four corners" rule - if something wasn't found in the four corners of the document, the court could not consider it. • Here, that would preclude a remedy, because a lawyer would not usually state an objective behind the client's plan. • Watch for expanding role of extrinsic evidence throughout T & E law."

Written waivers, always!

" • Clients should be informed in writing of information sharing policies • Meeting separately with family members to ferret out hidden conflicts is a good idea • Written conflict waiver agreement or engagement letter covering conflict issues is essential"

Quinlan, Cruzan, Schiavo

"Karen Ann Quinlan • Could parents remove their daughter from a respirator? • Karen had fallen into a coma (alcohol + drugs) - a persistent vegetative state - and her prognosis was grim. • The parents wanted to let nature take its course. • State court case, did not reach the US Supreme Court. Parents "won." Nancy Cruzan • Could parents remove the feeding tube from their daughter, who was in a persistent vegetative state? • For the first time, the U.S. Supreme Court said that conscious, competent adults have a federal constitutional right to make decisions about their own treatment (this was the state presumption). Five of the nine justices defined a feeding tube as "treatment." - we don't usually think of food and hydration as treatment but here, she's in a care setting and is incapable of doing it herself o However: • Case did not give parents or other relatives the right to make those decisions for their incapacitated relatives. States could require evidence of the patients' own directions and desires about their own care. • The Cruzans had a second trial in state court, and won the right to have the feeding tube removed. Aftermath of Cruzan • This case led states to clarify laws about advance health care directives. • See Wis. Sections 154 and 155. Terry Schiavo o Although states clarified their laws, Terry Schiavo case showed that there is still much more reform needed • Husband - In 1990,Terry Schiavo suffered cardiac arrest and subsequent brain damage from lack of oxygen, placing her in a persistent vegetative state. Eight years later, her husband Michael petitioned the guardianship court to authorize removal of life-prolonging procedures (in this case, feeding and hydration tubes)- beyond just feeding tubes, also hydration • Parents - Terry's parents opposed this. people were angry that he had another girlfriend • The trial court granted the petition, finding Terry would not have wanted life-prolonging procedures if she were competent - made decision based on circumstantial evidence and statements she had made • The fight was just beginning o Order was affirmed on appeal and Florida S. Ct. denied review - normally would be the end of the trail but there was substantial political movements o Florida legislature passed a bill allowing the governor to stay removal of nutrition and hydration tubes in similar cases. Gov. Jeb Bush issued a stay - gave him the ability to overturn the state supreme court ruling o The Fla. S. Ct. found the Act authorizing the executive order was unconstitutional infringement on judicial power violating separation of powers = Unconstitutional • The petition and appeals had gone through the accepted judicial procedure, and the order removing treatment was a final order. • Legislative encroachment on judicial power violated separation of powers under Florida constitution - separation of powers in FL constitution and US • The Act improperly delegated legislative power to the Governor, because it gave him unlimited discretion to issue a stay & keep it in effect. o Decision hinged on legal/constitutional/procedural issues, rather than the right to life issue • Aftermath: o US Supreme court refused cert, and Terry's tubes were removed. o 3 days later, Congress passed an ambiguous statute giving federal courts jurisdiction to intervene - responding to political forces o US Supreme Ct then denied a motion to stay the Florida Supreme Court order. o Terry died March 31, 2005 - Autopsy showed devastating brain damage; brain was less than half the size of normal, what the doctors had determined was accurate • Note: o Spouse almost always has priority over parents in making medical decisions for an incompetent patient. o One small silver lining: this case brought end-of-life care into public discourse: we DO have SOME ability to control our end-of-life care. o A few more people probably made advanced healthcare directives; teachable moment for the public"

In re Riddle

"• Grantors' trusts benefitted Ralph and Beverly for life, then grandchildren Donald and Nancy until age 35 when they would receive principal in equal shares (pretty standard age) • Ralph petitions court to consolidate and modify the trusts. Why? o Grandparents set this up before Nancy was diagnosed with schizophrenia - needs significant care and has poor prognosis; father wants to modify the trust so that hers can still be held in trust and used for her benefit and modify the term for which it could be used - under the current version, the trust was for education and medical care ---> they want it to be a limited trust for disabled person o Can structure trusts that they aren't providing for support but providing for extras • Trial court denied motion to modify • Said trust was for support, education and medical care - to become ""luxury trust"" • Modification would allow the family to get out of paying the state for Nancy's medical care - not good public policy • Ralph appealed • If grandparents were alive, could they be forced to pay for N's care? [No] Could parents be forced to pay?[Usually no] Why not? o Staggeringly expensive • Appeals court -applies doctrine of equitable deviation - in order for court to justify deviating from the terms of the original trust, two prongs must be met • Two prongs: • Circumstances not anticipated by the settlor • Modification will further the purposes of the trust o Are these present? o First one - yes o Second one - more problematic; grandparents would not want $ to go to state, they wanted to set up a supplemental trust o Understand that state has an interest in preserving disability funds - needs-based program with loss asset thresholds for getting kicked off; she may not get anything additional • Court remands: • Finds clear unanticipated circumstances - prong 1 • Remands for trial court to find what exact equitable deviation plan would best carry out the grantors' intentions. • Why wasn't the appeals court swayed by the argument that it was against public policy to let Nancy's family off the hook with respect to her medical care? There were intervening years between drafting and now - law now allowed people to create supplemental trusts to provide for extras that the state does not provide; many people do not have the money to support someone in inpatient care for forever and may disinherit disabled child o Note - many courts would side with trial court - Recent developments o Takeaway: Under the UTC, it has become much more possible to make changes or get courts to approve changes to reform a trust - used to have to be a procedural error but courts have become more generous in correcting drafting errors and modification to achieve what the settlor probably would have wanted o Don't just have equitable division in administrative - sometimes distributive too • Correction of drafting errors to obtain tax advantages - a type of "reformation," a remedy that changes the instrument to reflect what the settlor intended at time of execution • Modification to achieve settlor's probable intent in light of changed circumstances (Riddell) is "equitable deviation" formerly available only for administrative provisions, now - sometimes - for distributive provisions • See UTC Flexibility with court approval: • 701.0412 • 701.0414 • 701.0415 • 701.0417"

Do we have an advancement?

"• Written note from decedent? • Written acknowledgment from donee? • What about extrinsic evidence?"

Mistakes in Wills

ambiguous language or errors of fact

Uniform Prudent Investor Act

"• Wisconsin Chapter 881 • Addresses prudent investments in light of risk/return issues. • Diversification is an important tool to reduce risks."

Revoking Document

"•Clear statement of will revocation -E.g. I, John Doe, revoke my will dated 1-1-2010 •Must be executed with will formalities!"

Parentelic system

" • To grandparents and their descendants or, if none, to great- grandparents and their descendants or, if none, to great- great-grandparents and their descendants and so on. • Some states, like Wisconsin, use this system but stop at the level of grandparents and their descendants. • Other states combine this system with degree of relationship system."

Dependent relative revocation

"(common law doctrine) •Valid revocation requires an act or subsequent document plus intent to revoke. What if the intent to revoke is formed because Testator is mistaken about the law or some essential fact? Can the intent be conditional? •Yes, if we can show that the testator would not have intended a certain result, but would have preferred a different outcome, DRR can sometimes make the "second best" will operative. - conditional •Confusing because Equitable solution that is as close as possible to what the T wanted but the court cannot do anything because it would be against laws of revocation and revival - intestancey vs. evidence à which one is close to what the T would have wanted?"

Types of delivery for a gift

"1. Actual - donor hands the gift to the donee and the donee take it 2. Constructive - donor gives donee a means of obtaining the property 1. Example: When donor hands them the key to the safe, the gift is complete 3. Symbolic - donor gives donee something symbolic of the property. 1. Example: IOU picture at Christmas, represents the object in an intended way and then is given to the donee and the gift is complete"

Elements of a valid trust:

"1. Intent 2. Property (sometimes called ""res"" Latin) 3. Beneficiary 4. Trustee (but trust won't fail w/o) 5. Valid purpose"

Four Elements Test

"1. T is susceptible to undue influence - factors are dependency, sickness, etc. 2. Opportunity - isolation, absence, illness 3. Disposition to influence unfairly and procure improper result - difficult for courts to assess motive o Result clearly appearing to result from improper influence - question of the person being accused actually ending up with the property o But you do not see cases where the surviving spouse gets the entire estate because that is expected - people do not expect undue influence in these cases even if the elements are present"

Two Elements Test

"1. alleged influencer had confidential relationship with T 2. suspicious circumstances "

Adult adoptions

"Allowing adoption through an adoptive parent mitigates the harsh "stranger to the adoption" rule •Adoption of an adult can alter an intended dispositive scheme. See Minary •Sometimes adult adoptions are to solidify the adopter's estate plan, as with gay partners. Adoptions are rarely set aside, and disappointed would-be heirs lose standing to contest a will."

murderous beneficiaries

"Ancient equitable principle: you cannot benefit from your own wrongdoing •In re Estate of Mahoney -Wife is convicted of manslaughter for death of husband, and the probate court declared that under the circumstances, H's parents would be his heirs - despite the Vermont intestate succession statute which made W the heir. There was no "murdering heir" statute in VT at the time. Common law theories for withholding title described by the court: •Title passes to the killer under intestate statute because causing a forfeit would be a second punishment. •Legal title passes as if the killer had predeceased his victi, because the killer cannot be allowed to benefit from his wrong. •Title passes to killer who holds it in constructive trust for the victim's (other) heirs."

Power of disposition

"Basic model: • Original model: dower/curtesy rights attached automatically to real property owned by one spouse. • Dower = share / life estate that a wife had in her husband's property • Curtesy = right a husband had to wife's property; more limited, usually only had if they had children o Applied automatically to land owned by one spouse; agrarian society so this made sense, could live and support for remainder of life o Then property rights and society changed.... • Modern model: Surviving spouse can choose between abiding by the will and taking an alternate gift. Affirmative action to opt in is required. o Surviving spouse can either abide by will or take an alternative gift under a statute that protects the spouse from being disinherited; need to opt into the statute and comply with all provisions How it works • Situation: man invests in property with his own money and then leaves wife nothing • Survivor or her representative formally elects - or declines - to take the statutory spousal election. • Care must be taken to avoid undesired consequences - sometimes people disinherit their surviving spouse because the spouse actually has their own property already and having two estates = more taxes OR there is a situation where you don't want creditors to get at property OR they want to leave it all to their children from prior relationships • Want to make sure it doesn't undermine a well-thought out estate plan • Variation among states as to what property the election can be taken against. • In some you can only do it for probate property; others you can go for trust property"

posthumous children

"By definition they are non-marital •Common law rule: child will be treated as in existence as of the time of conception for property or inheritance purposes if child is later born alive. •New reproductive technologies present problems for the law to resolve. - Compare government with parent(s) & child interests."

non-marital children

"Common law allowed inheritance from neither mother nor father. •Later common law allowed inheritance from and through the mother. •Now, most states permit inheritance from and through father if requirements for establishing paternity are met. See e.g. 852.05"

Summary of IRC requirements

"Disclaimer must be: •Irrevocable and unqualified •In writing filed w/in 9 months of the transfer (or the disclaimant's 21st birthday •Interest must pass w/o direction by the disclaimant to either the transferor's spouse or a person other than the disclaimant. •The disclaimant must not have accepted any benefits from the property. •See Wis. §854.13"

What if attempted exercise is ineffective? See problem set

"Doctrine of allocation • Friend is not a permissible appointee of the $100,000, but Sister is. • A one-half share of the total $300,000 (T's estate plus the appointive property) is $150,000. • Sister's share is the appointive property plus $50,000 of T's estate, Friend takes the rest of the estate. How allocation works • If property can be allocated so only permissible appointees get appointive property, the doctrine of allocation will work to save the gift. • Friend cannot take the appointive property - even if that means she gets a reduced share under T's will."

What if appointment under a general power fails?

"Doctrine of capture • Where the holder of a general power of appointment has shown intent to exercise control over the property for all purposes, the property will be treated as part of her estate. Release of a power of appointment • A donee of a testamentary power cannot enter a valid contract to assign it. • A donee of a presently exercisable OR testamentary power of appointment CAN validly release the power. This causes the property to vest in any takers in default. o If you enter K and sign it promising to give to X and Y - if you release it, your promising not to exercise it and that is acceptable • Vests the appointed property in any takers in default "

grantor, trustee, beneficiary powers

"Grantor powers • Can amend or revoke if trust was revocable. • Common law treated trusts as IRREVOCABLE unless power to revoke was retained. Some states reverse this presumption. - led to horrible cases where people thought they could revoke a trust but couldn't; starving even though they had money in the trust, etc. • Generally, creditors cannot compel revocation, 701.0602 o BUT if grantor retained a life interest, judgment creditors can petition the court reach to principal and income. See 701.0505 Trustee powers • T has power to terminate to carry out the terms of the trust - exercised in accordance with fiduciary standards • Power to invade principal may result in de facto termination. o One cumbersome thing that she needs to do if the trust is for her benefit is file taxes differently - trusts are a separate tax entity Beneficiary powers • American rule: Termination if and only if ALL beneficiaries (including possible unborns) consent AND • All material purposes of the trust have been accomplished. (CLAFLIN rule). o When beneficiaries want the $$ right now --> in other countries, once the settlor is no longer the beneficiary, they give great deference to the intent of the settlor and give beneficiary the money"

Adopted children

"Inherit from and (in modern times) through their adoptive parents. •In step-parent adoptions, some states allow inheritance through biological parents AND adoptive parents, but the majority do not allow double-dipping. See Hall •Adult adoption allows the adoptee to inherit from the adopter. It may allow adoption through the adopter - states differ. See e.g. 854.20"

extent of creditors' right

"Issue: extent of creditors' rights • *****MOST BASIC PRINCIPLE = A creditor can usually reach property to the extent of B's interest. • So - if B can compel payment, creditors can get it. • In the absence of trust restrictions, B could even assign future rights in trust income or principal. Options to protect B from creditors 1. Spendthrift trusts 2. Protective trusts 3. Self-settled asset protection trusts 4. Medicaid-qualifying trusts"

Good practice to draft documents with more than 120 hours survival required.

"Life-saving techniques make it more likely that someone might linger after a common disaster. • Keeping someone alive on machines could be motivated by a desire to inherit. • With elderly spouses, deaths in quick succession can lead to higher expenses of administration without any real benefit to the spouse who survives only a bit longer. • Three months survival or even longer is a good practice in many cases. See 854.03(5)(am). "

Spendthrift clause - american rule/majority

"Spendthrift clauses: effective -but exceptions: 1) A grantor cannot transfer property into trust in fraud on his creditors. 2) A grantor cannot transfer property into a trust, retain benefits as a beneficiary, and thereby avoid creditors - for people that might spend a bunch of money 3) Certain classes of creditors cannot be excluded by a spendthrift clause, even where B, but not G, is the debtor. See 701.0503. o In US there is no obligation to pay for children 18+ o On EXAM: o Identify the issues - Dory has right to income but not principal, spendthrift clause; is there discretion? o Does a statute apply? Yes here, WI version of the UTC, spendthrift clause is valid unless beneficiary is settlor not dos it fit under a provision o Exception for child support under (c) "

Equitable adoptions?

"Statute-based adoptions usually required to establish inheritance rights. •This does not comport with the cultural customs of many groups in the US. •See O'Neal v. Wilkes •In rare cases, equity will intervene"

strict compliance

"Testator and all witnesses must fulfill every statutory requirement read literally. •E.g.: In re Groffman (note p. 153), where T's friends witnessed will at dinner party. Court interpreted "presence" literally. •Did the difference in the two will dispositions affect the outcome?"

Trusts - Nonprobate Transfers & Planning for Incapacity

"Tools • Property management • Trusts • Power of attorney • Health management • Living will • Power of attorney for health care • Do not resuscitate order"

Other relatives

"• Ancestors - people above the decedent on the family tree (e.g. parent, grandparents) • Descendants - are people below the decedent on the family tree (e.g. children, grandchildren). • Collaterals are other blood relatives that are neither ancestors nor descendants."

What if the appointee predeceases the donee?

"• Anti-lapse statutes apply to the exercise of powers of appointment. o Governing instruments include power of appointment instruments = lapse statutes apply to powers of appointment"

disinheriting children

"Traditional rule • You can disinherit one or all of your children if: o You express intent to do so and o You effectively dispose of all of your estate by will or lifetime transfer or invoke 852.10 - negative will provision • Used to not be possible but after UPC, statue said named person disinherited will be treated as if they predeceased o Note: is common for testators to disinherit their children by giving all to the surviving spouse Reality check • Disinheritance of children is asking for a will contest - unless their surviving parent takes all. • Statutes have been flexibly applied by courts to protect disinherited children in many situations o Flexibly applied e.g. there is a kid left out of a will without an unambiguous statement that child is disinherited and will interpret the omission as a mistake instead Different approaches • Family maintenance statutes give courts discretion to award property to children who were disinherited - based on equitable considerations. (what T should have done) o Not popular in US = sacredness of freedom of testation • Omitted child statutes provide for children to receive shares in certain circumstances where they were not intentionally disinherited (what T intended to do) o Instead we have statutes where will can be fixed if children were omitted unintentionally or based on a mistake of fact; or children born after the will is drafted o There are some situations where some people actually want to omit their children - statute wants evidence of intent, like in other scenarios: o What was the nature of the relationship? o Kinds of lifetime gifts and were they equal o Advancements? o Expectations? o Statements to other people?"

types of trusts

"Types of trusts • Living or testamentary • Mandatory or discretionary • Other types as well - labels refer to features the trusts may have. • More than one label may apply to the same trust. Four types of trust in which this conflict often arises: 1. DISCRETIONARY TRUSTS 2. SUPPORT TRUSTS 3. SPENDTHRIFT TRUSTS 4. SELF-SETTLED ASSET PROTECTION TRUSTS Note: • Trusts can be hybrids of these types. • E.g. a support trust (with respect to income), discretionary trust (with respect to principal) and a spendthrift clause."

Power of appointment terms

"Vocabulary (see 702.02) • DONOR of a power - the person who conveys the right to distribute property. o May or may not be conveying property at the same time; could have also set up a trust and added a power to it later; or the power could come to fruition at a later time (i.e. could put it in will) • DONEE of a power - the person who has the ability to distribute property (holds the power). o Gets the right to distribute • OBJECTS of a power - people who are eligible to have the power exercised in their favor. o Also called "permissible appointees"" - meaning they are eligible to get the property by the terms of the power; important to look at wording o E.g. 5 people in the class • APPOINTEE - a person in whose favor a power has been exercised. • APPOINTIVE PROPERTY - property subject to a power of appointment • TAKERS IN DEFAULT - persons who get the property if the donee fails to exercise the power o varies based on circumstances"

What is a constructive trust?

"We find it in cases where: - title to property has passed to someone -the title holder is unjustly enriched thereby (i.e. in equity, the person should not be allowed to keep the property) Remedy disguised as a trust •In a trust, the trustee holds property for the benefit of someone else: the law differentiates between legal title (your name is on title) and equitable title (you are entitled to the benefits of property). •Constructive trust treats the title-holder as trustee: a person who holds title only for purpose of passing benefits to another. It is not a true trust - more of a legal fiction."

Power of appointment

"What is a power of appointment? • Power to decide who will get designated property • At certain times • Or certain conditions. o Usually created in trust - e.g. someone has trust with conditions (income, principal, remainder, etc) and remainder might say ""and to such persons my granddaughter appoints in her will"" = power of appointment Power of appointment uses • To retain flexibility in planning by giving discretion to a trusted person who will have more information in the future o This does not preclude leaving property in trust. o Power of appt. would have been useful in some situations we have seen already! o Almost always created in trust to protect property and beneficiaries and reach into the future Example: In re Riddell (p. 736) - would have been useful! • George's will left estate in trust for his wife, son & grandchildren. • Grandchild Nancy was schizophrenic and permanently disabled - payout to her at age 35 would go all to the state. • Court held that equitable deviation would allow a special needs trust to be established to carry out George's intentions. • A power of appointment could help! o Would give the trustee discretion to apportion property at a later time when more information is available. o Adds flexibility to carrying out Settlor's intent - to look out for grandchildren; anyone named to have the power of appointment can rely upon new information "

Anti-lapse statutes

"instead. As we saw above, normally this would cause the gift to fail entirely. However, anti-lapse statutes change this result in some circumstances. Situation where the decedent has to survive in order to inherit property and doesn't; common law rule is it would fail entirely; anti-lapse statutes change this outcome in some circumstances but not all o Does not prevent the lapse o Spells out certain situations where the common law doesn't' kick in • Who is covered by an anti-lapse statute? o Only beneficiaries specified in the statute o Type of predeceased legatee that is protected is limited by statute. Usually, only includes close relatives; sometimes only descendants. Sometimes step-children are included and sometimes not. Spouses are NOT included. o Typical situation: only close relatives of T; in some states you need to be an actual descendent; it's the relationship to the decedent that counts o Anyone not included is governed by common law rules."

2 types of modification of trusts

"• Distributive - more $ or broader standard, payout sooner • Administrative - monthly instead of quarterly, how taxes should be paid out • Traditionally, easier to get administrative changes. But hard to pinpoint what IS an administrative change. • See Wis. Stats. §§ 701.0412, 701.0414, 701.0415, 701.0417 o In general, the stricter the rule, the more incentive the court has to stretch the rules in sympathetic cases"

A v. B

"• Husband and wife hire law firm to draft estate plan for them • Another women employed the same firm to bring a paternity action against H • W did not know about the other woman or the other child • Why is this a problem? Who gets property under the plan? • H and W give to each other • Each gives to their issue if the other does not survive (contingent beneficiaries) • W's property could potentially go eventually to his "other" child • Quite possibly she would not want this outcome!"

When is language ambiguous?

"o *****These distinctions are not widely followed anymore; WI has been at the forefront of admitting extrinsic evidence so this distinction may not have ever really existed here; case law does not define clearly and it doesn't really matter because the distinction is eroded over time • Patent ambiguities o Apparent on the face of the will. o E.g. I give my car to A and I give my car to B. Contradict each other o Under traditional rule - no extrinsic evidence because if someone so obviously contradicts themselves, maybe T wanted that ambiguity to result so the court would say it's a failed gift and the car would be sold and added to the residue of the estate and those receiving the residue would take • Latent ambiguities o Become apparent only when will language is applied to persons or things that it's ambiguous • E.g. "my cousin Mary" when there are two cousins named Mary or cousins are Maryann & Marilyn. o Two or more persons or things fit the will language. (Equivocation) e.g. two houses. o No person or thing fits the will language exactly. o Oral statements by testator are usually allowed as proof in these cases. o Exactly the kind of evidence probate courts didn't want to let in - people testifying might be self-interested"

Protective Trusts

"o ***Wisconsin doesn't allow - entirely unclear whether they would be enforceable in a state that has not adopted this type of trust • Trustee is directed to pay income to B EXCEPT • If B's creditors attach B's interest, the mandatory income automatically becomes discretionary with the Trustee. • Very popular in England and other jurisdictions where spendthrift trusts are not allowed."

WISCONSIN STATUTES §854.18

"o Assets are depleted in the following order: • First, intestate property • Second, residuary property • Third, general transfers • Last, specific transfers o Abatement w/in each classification is in proportion to the shares each would have received under the governing instrument. o Intent exception • 854.18(3) is especially broad, and seeks to save important residuary beneficiaries from unintentional disinheritance. o Nonetheless, you should draft to avoid this problem: • One possibility: limit specific or general gifts to a percentage of the estate: • E.g. "$100,000 or 10% of my estate, whichever is less.""

Class Gifts

"o Class gifts: gifts that are presented that give a recipient in a class (share significant thing in common e.g. cousins, aunts and uncles, siblings) something; some states require that T have a ""gift mindset"" meaning they understand that as time passes, the groups shift • If a member of a class dies, the gift to him fails and the other members of the class divide it up. o E.g. Gift to T's sisters. At the time of will execution, T's sisters are A, B, and C. If C predeceases T, A and B will divide the gift among themselves."

pour over will

"o D had a pour-over will in State Street bank --> This is a will that gives the estate to an existing trust, to be governed and distributed under the trust. o Will gets it into the trust and then the conditions apply to beneficiaries o Early cases justified this on incorporation by reference- don't want to undermine the law of wills; but are supposed to be in existence at the time the will is executed o But some trusts were unfunded or amended after the will. o Statutory solution here too."

Secret or semi-secret trusts

"o Doesn't come up often • What if a will gives property to B, but the testator privately instructed B to use the property for the benefit of C? Secret trust because its existence not apparent on the face of the will. • What if a will gives property to B "in trust" but sets out no instructions? Semi-secret trust because we know there is one but we don't know for whose benefit. o Who is it for? Are they acceptable beneficiaries? What's the purpose?"

Estate of Carson

"o Facts: Woman dies and leaves her estate to her ""husband"" who was younger; he also had 2 other wives, oldest marriage gets precedence and other marriages are invalid because the person wasn't free to enter into the marriage K o Should this stand? Court says that question is complicated - o did he lie? (yes) o we're they married? (no) o But if she knew they were not legally married, would she have wanted him to have had it anyway? o Here, the Court considered the context -> you cannot always know what motivates people & mixed motives are okay o With fraud in the inducement, did they actually succeed in tricking them and would they want to take away the gift if they knew the fact? o ""Perhaps the court underestimated the power of a scored woman"" <3 o Takeaway: Fraud occurs when the misrepresentation but be intentional and with the purpose of including the will disposition and then it must proceed"

Clymer v. Mayo

"o How different are trusts from wills? Which rules apply, especially if trusts are now being used as will substitutes o Here, common way to use trust - beneficiary on life insurance policy was trust ""Clara Trust"" and then paid out by the provisions of the trust; good for people with young children • Clara and James divorced after many years of marriage. Clara had an estate plan with life insurance and a pour over will both funneling property into a revocable trust. At the time of Clara's death, James was still listed as a beneficiary of the trust. • Issue - Should the statute that revoked wills upon divorce also apply to a revocable trust? The theory is that the trust was a will substitute intertwined with Clara's will. o This is an intertwined estate plan • Held - Where statute implies intent NOT to benefit a former spouse with a will, a trust that is constructed as part of an estate plan featuring a pour-over will is also presumptively revoked by divorce. o You could have a divorce settlement agreement that does leave something for the ex-spouse, perhaps for minor children - not a great idea o UPC codifies this by making revocation apply to all "governing instruments." • What about other forms of wealth? o Two forms of weath that people have that they cannot draw upon daily- (1) vested interest in pension plans and (2) life insurance policies o Neither will pass by will - need to name a beneficiary on the forms "

Tortious interference with an expectancy

"• Not a will contest • Seeks damages from a third party - what it was that someone was supposed to get • Most states allow it, but usually, plaintiff is required to exhaust probate remedies first. • Elements: o 1) Existence of expectancy of inheritance o 2) wrongful interference o 3) causation - interference caused the expectant person not to get the inheritance o 4) damages - usually amount of money they didn't receive "

duty of prudence

"• Objective standard of care: reasonable person standard • Trustee shall exercise reasonable care, skill and caution, acting as a prudent person would. • If T has expertise, he is obligated to use it. - with his or her own money o If you're with Northern Trust Company, you can expect more sophistication "

Jimenez v. Lee

"o Main point: demonstrates how trusts don't need to be in writing or formal = looking for meaning, rather than lingo • Daughter brought suit against her father to compel him to account for assets that she claimed he held in trust for her. • The assets came from two gifts: a $1,000 savings bond from her grandmother, to be used for her education; and a $500 gift from one of the father's clients. • What did the father do with the money? • How Dad held the $$$ o Cash was placed in a joint account with Dad and the 3 kids (each of whom got a $500 gift) o Savings bond was cashed and invested in stock, held by Dad as "custodian" under the Uniform Gifts to Minors Act. o Joint account closed, and $ invested in stock. o What kind of records did Dad keep? Record of funds and spending • Spotty - Reconstructed after the fact from check stubs; didn't have a great reputation • Only some expenditures were arguably for education of daughter. o Why does this matter? He is a fiduciary - if he spent the funds improperly, he needs to give the $ back; burden of proof is on the trustee o Fiduciary always has the burden of proof if someone is claiming they did not act properly; the fiduciary must prove they were acting within fiduciary duties • Court held there was a trust o Transfer was made to someone with the intent to vest the beneficial ownership in someone else - this is what Grandma & the generous client did. o Express words of "trust" are not necessary. o If this was a trust, did Dad act properly? No! • Trustees must manage and distribute money as intended by the grantor. • Beneficiaries have a right to an accounting. • Trustee must keep the trust property separate AND must keep meticulous records. o Did Dad do these things? No, and the grantee is entitled to records of how the $ was spent o *****Trustee must keep property separate from everything else (including his own property) • What if not a trust? • If this were a custodianship under a Uniform Transfers to Minors Act, the father would have had broader discretion to use the funds and less record-keeping"

What is the best action that expectant heirs can do if they suspect undue influence before the T dies aside from talking to them?

"o Try to have a guardian appointed but can often cause permanent rifts within families o If someone is acting as a fiduciary, can report for discipline "

WISCONSIN STATUTES 854.08

"o Wis. Stat. 854.08 o Common law of ademption stands EXCEPT for situations set forth in the statute - look through realistic lens to try and see what would happen if T had known and planned for this; if we can trace proceeds, this could soften the result o No ademption if: • Sale within 2 years of T's death • Destroyed, damaged, lost or stolen property, if it is insured and benefits are paid within 1 year of decedent's death. • Property is taken by condemnation and proceeds are paid within a year of D's death. • Sale or mortgage by guardian, agent or conservator (under certain circumstances) o General Limitations: §854.08 (6) • Section does not apply (to save the gift) if: • D made a lifetime gift to the beneficiary that was intended to satisfy the specific gift - presume you meant to give that gift • D had contrary intent - always • If only part of the gifted property was damaged, sold, etc, the remaining part of the property is not affected by this section - e.g. insurance proceeds for loss of building could be covered by the section by the other property is not because it still exists • The amount of the substitute gift may be reduced by expenses of sale, taxes, insurance, etc. - costs that are directly associated with the gift can be deducted from the whole gift "

Trust definition

"• "A right of property, real or personal, held by one party for the benefit of another." (Black's Law Dictionary). A trust is characterized by a separation of legal and equitable title. • Legal title - who the owner of title of the property • Equitable title - who is entitled to the benefits of that property • *****You can be a trustee and a beneficiary of the same trust BUT you cannot be the sole beneficiary of the trust • Did not want expansive view of trust law to invalidate will formalities; if people started using trusts to accomplish what wills were doing, wills would become obsolete o People pushing back on requirements "

living will

"• "written document signed by competent adult, states that if the signer becomes terminally ill and is incompetent to participate in decisions concerning medical treatment, life-sustaining procedures should not be used to postpone his death. Withdrawal or withholding life-sustaining care is authorized without prior court approval and without adverse legal consequences." Wis. Stat. 154.03 o A persistent vegetative state does not meet the definition of terminal illness"

WISCONSIN STATUTES §701.0814

"• (1) "Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as "absolute," "sole," or "uncontrolled," the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries." • Not the same as "what the court would have done" • Not an abuse of discretion just because the court would have exercised the discretion differently. Exculpatory clauses • Farr inserted one to protect himself. • See UTC §1008 (Wis. Stats. 701.1008) o Quoted p. 612 o Clause cannot protect from liability for bad faith or reckless indifference to the purposes of the trust or interests of the beneficiaries. • Farr inserted one to protect himself o Discretion is not unlimited even if it says unlimited discretion à need to act in the mindset of the grantor & trust o Farr was supposed to be in the Sara's mindset à o No matter what the trustee does à he cannot be held personally liable. "

community property

"• ***Wisconsin is one of 9 community property states, but as only adopter of uniform Marital Property Act, it uses different vocabulary. • Marital property = community property • If is purchased during the marriage or accumulated during the marriage = 50/50 • Surviving spouse already owns ½ interest in marital property. o Language in 852 - ""property that is not disposed of by will is dispersed as follows...."" talks about the decedent's interest in marital property • Deceased spouse can give away his share of MP by will, etc. See Chapter 861."

What is an advancement?

"• A gift given during the lifetime of the donor to an heir apparent • Intended to be an advance on what the donee will take from the donor's estate when the donor has died • Reduces share the donee will receive from intestate estate at donor death"

What about conflicts of interest?

"• A lawyer owes duties of zealous representation, confidentiality, etc. to a client • A lawyer cannot represent two people where the interests of one actually conflict with the interests of another"

The problem

"• Once you find out that the drafter has breached a duty, the only person who is entitled to hold him accountable is dead • The beneficiaries are out of luck • Note 9 states still follow this rule. • The rationale is that the testator might have wanted the 3rd party to get less, but did not want to tell the possible B"

Issues with Representation

"• Option 1: divide the estate into shares at the generational level immediately below the decedent •OR • Option 2: divide the estate into shares at the first generational level where there is a descendant still alive. • ALSO • Do we treat descendants who are related in equal degree equally or not?"

EXAMPLE (taken from Howard S. Erlanger, WISCONSIN'S NEW PROBATE CODE)

"• A provision in A's will reads: "I leave the family spittoon to my longtime friend, Friend; if Friend does not survive me, then I leave the spittoon to my child, Child; if Child also does not survive me, then I leave the spittoon to my first cousin, Cousin. Friend, Child, and Cousin all predecease A; Friend and Cousin are survived by issue, but Child is not. • Analysis: 1. First, work through the named beneficiaries, because if any survive, the will provision controls. 2. Since none survived, we look to the antilapse statute. o Where does the statute attach? 854.06(4)(b) • tells us to start with the first group or individual. Here, that is Friend. • Is Friend covered by the statute? not covered under the statute because Friend is not a grandparent, issue of a grandparent or stepchild of A. • Next we look to Child- Is child covered by the statute? Child is a covered beneficiary, BUT the statute can't kick in because Child left no surviving issue. • Finally we look to Cousin. As a first cousin, Cousin is issue of a grandparent of A, and hence is covered. Therefore, Cousin's issue take the spittoon, per stirpes."

Beneficiaries

"• A trust cannot exist without one or more definite, human (or charitable) beneficiaries who can enforce the trust. B can be unborn or unascertained when the trust is created, but a beneficiary must be identifiable when his interest becomes ripe."

Trust Termination

"• A trust may (and usually does) end by its own terms when either the purpose has been accomplished, or the money runs out. • What if this hasn't happened yet? • Can the grantor, trustee, beneficiaries, court, or some combination thereof, terminate a trust?"

WISCONSIN STATUTES 701.0408 Animal care trusts

"• A trust may be created for the care of an animal or animals, and terminates upon the death of the last surviving animal. • May be enforced by a person named in the trust or by someone appointed by the court. A person interested in the welfare of an animal may request the court to appoint or remove a person. • If the court determines the value of the property exceeds the amount required for the intended use, the excess must be distributed to the settlor (if living) or to the settlor's successors in interest. o Not an uncommon issue; in drafting, reference the statute"

trustee

"• A trustee must be a person or corporation capable of taking and holding title to property; usually someone that has a lot of wealth to protect • The trustee can also be A beneficiary but cannot be THE ONLY beneficiary. • If the latter occurs, there is a merger of legal and equitable title, and the trust fails. • REMEMBER: A TRUST WILL NOT FAIL FOR WANT OF A TRUSTEE. • If a trustee fails or ceases to act and the trust instrument does not provide a replacement trustee, a court will appoint one."

ADVANCE HEALTH CARE DIRECTIVES:

"• A written document that either gives instructions for health care (or discontinuation of health care) if at some point in time the person executing the document becomes unable to make health care decisions. Types: living wills, health care agents, DNRs, • Why have one? o What happens without one isn't pretty..."

Exceptions to confidentiality

"• ABA model rule - only if necessary to prevent a client from committing a crime that might result in imminent death or bodily harm • New Jersey (and Wisconsin) 1.6 also allow disclosure to prevent significant financial injury • Clients can waive in writing • Here, firm can go ahead and disclose"

Modern trend

"• Admit extrinsic evidence to resolve both latent and patent ambiguities OR • Ignore latent/patent distinction altogether o Probate courts have been reluctant to admit the kind of evidence that other civil courts admit all the time; it's the job of a court to evaluate credibility in situations like that and why probate courts felt like they could not do that is mysterious (probably goes to fact that probate courts weren't considered ""real courts"" but a lot of it came from fear that if you let a little bit in, the entire system of wills will come crashing down and there will be no predictability) "

WISCONSIN STATUTES 701.0408 and 701.0409

"• Allow trusts with non-human beneficiaries in limited circumstances. • Trusts may also be created for other non-charitable purposes without a definitely ascertainable beneficiary. "

English per stirpes

"• Also called "strict per stirpes." • Treats each line of descent equally • Divides property into as many shares as there are living children and deceased children who have living descendants."

Estate of Russell

"• An example of common law lapse rules. • T leaves holographic will (on a small card!) giving a $10 gold piece and diamonds to Georgia, and the residue "to Chester H. Quinn & Roxy Russell." did not want Georgia, her niece, to get much at all • Roxy Russell was the first of two Airedale dogs owned by T - dogs cannot inherit • How to construe the gift to Roxy Russell? o Lower court found that T gave the residue of her estate to Chester with precatory instructions (giving something to someone and requesting that they do something with it - not legally binding) to use some of it to care for the dog. o This court looks at "clear and unambiguous language" saying property goes to Chester and Roxy. What's the problem? Man's best friend, but dogs cannot own or inherit property. • Gift to Roxy fails • What happens to Roxy's ½ share of the residue? State follows "no residue of a residue" rule... o No residue of a residue...The gift fails and "falls out" of the residue --> goes to intestate • ½ of the residue goes to Georgia (as T's niece and only heir) • Note extrinsic evidence that T did not want G to take any share of the residue - why wasn't it considered by the appeals court? Was not a statute; wasn't a situation where appeals court was willing to look at it and just look at language; no ambiguity so no extrinsic evidence "

Disposition of body

"• An individual may request certain dispositions, but this is not binding o Under Wis. 154.30, a person may appoint a representative to have control over disposition of remains (sort of like an agency). Form allows stmt. of preferences. • All states have requirements of autopsy in certain circumstances, and there are restrictions on proper disposal of human remains. See e.g. Ch. 157. • DO NOT include funeral instructions in a will. Why not? Ask: when does family typically first see the will?"

Majority rule

"• An intended B has a cause of action against a lawyer if the facts show an attorney has negligently failed to carry out the T's intent as explained to the lawyer • Extrinsic evidence is admissible to prove this"

In re Wright's Estate

"• Appeal from a denial of probate of will on grounds that the testator lacked testamentary capacity • Will left house #1 and cash and other personal property to friend Charlotte. o Daughter(contestant & only heir) got house #2 o Granddaughter got interest in an estate o Grandson & others got $1 each o Anyone named under the will and any intestate heirs are interested parties and have standing to bring a challenge to the will; in-house nurse cannot • What was evidence of incapacity? o Lawyer who drew will and witnesses who signed it testified that they believed T was of unsound mind - WHAT IS WRONG WITH THIS PICTURE? o Witnesses should be attesting to T's sound mind and they signed it anyway o Attorney should not ethically draft a will that the lawyer believes does not have testamentary capacity - can use common sense (i.e. do not need to hire a team of psychiatrists); can also say this was a ""lucid interval"" and that's ethical o What evidence did each offer? (see testimony) • Eccentric life-style • Gave away a fish soaked in kerosene as a joke • Tried to buy an acquaintance's furniture • Chased children out of his yard by turning a hose on them • Was drunk a lot • Ran out of house half-dressed • Rummaged for treasures in garbage • Told people he had bought them Christmas presents when he hadn't • Acted weird • Sometimes recognized his granddaughter on the street and talked to her and sometimes didn't • Pretended to be dead to scare his neighbors • Held: he had capacity! o What did the evidence show? o T could care for himself o He went to the Scriver with a thought out plan outlined o He knew what he owned o He was mindful of his relations and obligations to others o Point is the T does not need to explain why he's giving away the property in an unexpected way - just needs to meet the elements of capacity "

In re Estate of Myers

"• Appeal from probate court ruling that three POD assets (payable on death to her daughters but surviving spouse wanted to get their share) should be included in her surviving spouse's elective share. • Probate court reversed - POD assets were NOT subject to election. Why not? • Old case, amended statute - any property D had control over at the time of his death was eligible for election • Probate court relied on Sieh case, which applied spousal election to any property over which the decedent had had the power to revoke, withdraw, invade or sever. • Iowa statute was amended after that. Why did this matter? See language p. 538 o People want to share in spouse's estates even if spouse wants to leave them out but Iowa Legislature said there should be some vehicles where people can take it away from spousal election - this is one of those situations"

Who owns appointive property?

"• At common law, the donor remained the owner until the power was exercised. o Property was considered to have come from the donor directly to the appointee without ever being owned by the donee. o Donee acted as agent of donor. o Know as the relation-back doctrine. "

Protective function

"• At least in olden times, prescribed forms protected T's from deathbed abuses •Required formalities at least reduce the opportunities for frauds and forgeries."

See also: Brainard v. Commissioner (note)

"• B orally stated in Dec. 1927 that he declared a trust of his expected profits from 1928 for the benefit of his wife, mother and two minor children. (stock market is booming right before the crash) • Did B's declaration create a trust in 1927? o The court held no because there was no trust res at that time. • Why no res? • Profits did not exist at the time of the declaration. • No evidence on the record that B owned stock at the time of the declaration. • Real concerns: • B's only witnesses to oral declaration were interested family members. • B did this to avoid taxes. o No longer in the case book because the logic is confusing; the court says there was no record of his stocks but what they were really worried about were the fact that the oral declaration was only made to interested parties (mother and wife) and he was making this statement to avoid taxes (no longer allowed) "

Court discretionary powers

"• BOGERT ON TRUSTS: "Sec. 146. The court [has] power to alter the administrative provisions of a private trust where, due to [ unanticipated circumstances or unwise provisions] a change is necessary or highly convenient to insure the accomplishment of the settlor's fundamental purposes." o Just cannot envision everything that can go wrong over time = give trustees discretion and allow them to make some adjustments, which is why you don't just give outright gifts"

Health care decisions

"• Basic principle: a competent adult can consent to - or refuse - medical treatment. • State has limited interest in interfering, e.g. to prevent suicide, to protect children of sick parents, etc."

WI 853.325

"• Basically codifies the common law doctrine of acts of independent significance. • If you are drafting a will: make sure client understands the risks of utilizing this method!"

Varela v. Bernachea

"• Bernachea, a married Argentinian attorney, moved his mistress, into • his Florida condo. • Opened Joint accounts - While they lived together, Bernachea showered Varela with gifts, including setting up two large joint accounts to which Varela had full access; like a settlor in a trust • Bernachea had a heart attack, daughters showed up & kicked Varela out. • Varela transferred $$$ from one account to an account in her own name. • Did Varela have a right to the money? o Turns on what Bernachea intended when he set up the accounts in both of their names? o Did he have donative intent? o Was her name on the account only for convenience or POD? • Court awards Varela half of the account o Why don't they take Bernachea 's word for what his intent was (he claims it wasn't a true gift)? He's a retired attorney - he should understand what joint accounts mean"

Olliffe v. Wells

"• Ellen Donovan left the residue of her estate to the Rev. Wells "to carry out wishes which I have expressed to him or may express to him." • Ellen's heirs claimed the residue - no valid trust here • Secret vs. Semi-secret trust o If secret, Wells would appear to get an outright bequest, and there could be evidence as to whether he owes a duty to others o Slow to let in extrinsic evidence but did if there would be injustice o Either way, the heirs are out of luck - either Wells gets it outright or he holds as trustee - the heirs only take if the trust is for an unlawful purpose. o Either it will go to him personally or he is holding it as trustee for someone other than the heirs o But that isn't what happened here... • Ellen set up a semi-secret trust We can see from the face of the will that she did not intend Wells to take personally. The trust cannot be enforced without knowledge of its purpose or beneficiaries. Resulting trust for next of kin. = resulting trust This is the majority rule in the U.S. o Didn't let in extrinsic evidence - only had evidence that he wasn't supposed to take it personally; today this would be different "

Brown v. Miller

"• Bill was trustee and lifetime beneficiary of a trust created by his late wife, Elinor. • The trust directed payouts for Bill's support, additional amounts "as he may from time to time request," and directed payout at Bill's death "to such person or persons and in such manner as he shall appoint [by his will]." Anything not appointed would be held in trust for son, Tom (taker in default) • Bill transferred the balance of the trust (about $7 million) to another trust. • After Bill's death, Tom challenged the transfer in trust - this was not an appropriate exercise of the power of appointment • Trial court held for Tom, finding that the transfer of funds and purported exercise of the power of appointment were improper - sympathized with Tom • Appeals court reversed and upheld the transfer in trust. o Reasoning: Bill had unfettered access to the $7 million AND Elinor clearly intended that Bill could withdraw any and all money from the account. • General power of appointment • Could take out at any point • Eleanor clearly intended that he could take all of any amount at any time • Did not reach the appointment issue, but almost all states allow appointment in further trust. Why? o Why argue about appointment in trust because all he had to do was take it out and make a new trust - no problem, if you have that kind of power, the donor clearly intended you to have broad power o Almost all states allow appointment to be transferred directly into another trust"

In re Gleeson's Will

"• C leased farmland from T over a period of years. Two weeks before expiration (and probable renewal) of lease, T died. C was named as trustee of the land by T's will. C extended his lease for one more year, but raised his rent and gave a % of profits to the trust. (Note this difference from Hartle) • What were C's arguments? • C's reasoning o The farm year was beginning in two weeks, and he doubted another tenant could be found - short notice o He already had crops in the field. o The lease terms were very favorable to the trust beneficiaries - wasn't out to cheat anyone o C acted with good faith and honesty. o Was this sufficient? NO • Breach of duty of loyalty o Major Takeaway = When you're talking about fiduciary duty of loylaty- Good faith and honesty are irrelevant; cannot self-deal • C had to turn over all his crop profits for the year to the trust because he had no right to the land for that year • Important Note: he could have gotten court approval to lease the land for one more year - but he could not decide this on his own - need court order to be protected from liability "

Confidential relationship - Term of Art

"• Categories in Restatement (3rd) of Property • Fiduciary relationship Example: lawyer • Reliant relationship (sometimes): T has reasonable belief that he can rely on the person's advice. Example: financial planner and customer • Dominant/subservient relationship (sometimes): Examples: caretaker or adult child/ill elderly person o A bit more subjective; degree of control and dependency can often influence courts to find confidential relationship • The latter two are questions of fact."

Living children omitted by mistake

"• Child or his issue receives the share he would have received if he had been born after will execution. • Mistake must be shown by clear and convincing evidence. • Failure to mention a child or issue is NOT in itself evidence of mistake or accident."

Republication by codicil

"• Codicils operate to re-execute or republish a will as of the date of the codicil. • Sometimes this is advantageous: e.g. codicil with 2 disinterested witnesses saves a gift which would have been purged because a beneficiary served as a witness to the will. • Sometimes, this is not advantageous: e.g. Azcunce case (where daughter born between will and codicil was unintentionally disinherited)."

oral trusts

"• Common Law allows oral wills, unless there is a state statute that requires writing. • Obviously, problems of proving existence of the trust and its content make this a less than optimal way of creating a trust... o Almost never upheld"

Integration

"• Concept of integration means that all papers present when the will was executed are part of the will. • Remember execution procedures: papers should be fastened together and Testator should sign or initial each page. o These will formalities will be sharply contrasted with the lack of formalities required for Trusts "

Modern exceptions - fees and corporate trustees

"• Corporate trustees may invest trust principal in mutual funds operated by the corporation. • Trustees may be paid fees. o If you have a large trust, you have a large company manage it "

Note on Greenhalge and Elements of Incorporation by Reference

"• Court's language in Clark v. Greenhalge: "it appears clear that (T) intended by the language used in Article Fifth of her will to retain the right to alter and amend the bequests of tangible personal property in her will without having to amend formally the will." but common law doesn't allow, you may be able to persuade a sympathetic court • This is usually T's intent, but the common law doctrine of incorporation by reference does not allow it."

Erosion of latent/patent distinction

"• Courts increasingly declared "latent" ambiguities when cases were sympathetic ones • Courts dropped "erroneous" parts of descriptions, declared the remaining language ambiguous, and admitted evidence to resolve the ambiguity."

Judicial sympathy for T

"• Courts sometimes stretched the strict doctrine of incorporation by reference to carry out T's intent - at least when the court was certain what that intent was. o E.g. documents have been deemed "sufficiently identified in the will" even when the dates, titles and other descriptions do not match."

Unthank v. Rippstein

"• Craft wrote a letter to Mrs. Rippstein in which he said "I...hereby and herewith bind my estate to make the $200 monthly payments" (the first week of each month for the next five years). • Mrs. R argued that Craft had created a trust, and had impressed with a trust however much of his property would have been necessary to accomplish this. What would happen to the rest of the estate on her theory? • Why did the court find no res? o Craft did not expressly declare that all of his property was in trust o Craft did not declare that any specific portion of his property was in trust. o This could not be inferred from the language. o Craft simply promised to make future gifts. (Not enforceable). o Really all he was doing was promising to give her a gift of $200 gift for the next 5 years - nice if he followed through but not legally enforceable as a gift OR a gift in trust o Not set aside and given to someone to manage o Property was not defined (where the funds would come from)"

WI- words of survivorship

"• DOES NOT FOLLOW THE UPC ON THIS POINT! • If the will includes "if she survives me," under Wisconsin law the words are taken as an indication that the testator's intent is that the gift will lapse if the beneficiary does not survive. o This result is achieved by WI not enacting the UPC provision - and by WI case law. 854.06(4) o This is the majority rule - only a handful adopted ruling in Ruotolo/UPC • What is the rationale? o Wills law gives effect to provisions in the will as they are written. o "If she survives me" is an expression that has a commonly understood meaning. o It does not advance T's intent to presume she did not mean what she said (absent clear proof of mistake or wrongdoing). o Yields to contrary intent. o Don't need a law degree or dictionary to interpret that language; doesn't advance T's intent that she didn't know what she was saying when she's speaking in plain language • Lesson for attorneys: o Good drafting requires at least two contingent beneficiaries for gifts. o Example: I give my house to A, but if A does not survive me to B. If neither A nor B survive me, I give my house to C. o Possible contingencies - especially unexpected order of deaths - should ALWAYS be discussed with clients, and specific wishes should be set out in the governing instruments. • What if the gift is to a group? o T's will gives his property to his brothers. T has three brothers, A, B, and C. o A dies before T. o Who gets A's share? • A's descendants under the anti-lapse statute? OR • B and C divide it? Class gifts common law rule would allow the surviving members of a class to divide a deceased class member's share. Under §854.06, class gifts are covered by the antilapse statute if a member of the class dies after the execution of a governing instrument. • When is a gift to numerous people a class gift? When people all fit the definition of a group and T was "group-minded." o This is litigated over often - need to have all the people in an alleged class fit a description and ""group minded"" "

Patterson v. Patterson

"• Darlene created a Family Trust in 1999 which named her children as beneficiaries. In 2006 (shortly before her death), Darlene executed an Amendment removing son Ron as a beneficiary. o Ron argued that the Amendment was void because it violated the terms of the Trust. • Revocation under UTC o Trust allowed for written revocation or amendment by written instrument. o Trustee Ron argued - and court agreed - that this was not an exclusive method of amendment or revocation. o The Amendment was a clear expression of Darlene's intent. o Takeaway: UTC was broadly looking for intent just like the UPC - there are still rules o ***The WI rule allows substantial compliance OR evidence of intent - 701.0602"

Lambeff v. Farmers Co-op Executers & Trustees Ltd.

"• Daughter abandoned by her father as a child made a claim against his estate under the Australian Inheritance (family provision) Act. • The father's will had left everything (value = $210,000) to his two adult sons from a later common law marriage. • What were the relative economic circumstances of the daughter and the two sons? • Children's circumstances • Daughter: good job, $50,000 in equity in a flat, no dependents. • Son #1: Manages family trailer park, not much education, wife, two kids and one on the way. Assets worth about $27,500 • Son #2: not much education, various jobs, common law wife and two kids. Assets = $30,000. • Court awards $20,000 to daughter - WHY? • Basis for daughter's award • Where a family member under the act was left without provision for maintenance, education or advancement... • The Court may make a fit award out of the estate according to what the testator "ought to have done in all the circumstances of the case." • Likely scenarios where kids get nothing • After-born children are omitted through "oversight" • Living children (at the time of the will) are omitted by mistake • Living and after-born children are omitted on purpose. Why might they be omitted? • Omission on purpose • Courts often insist on specific language disinheriting children. See Anna Nicole Smith • Good practice: list all children by name and state that testator intends the will to apply to all of the children, including any hereafter born or adopted. • Some courts will not accept the latter language to preclude claim by after-born (unless all named children were disinherited)."

Nunnenman v. Estate of Grubbs

"• Decedent named Jeannie Christine Nunnenman as beneficiary of his IRA in the event of his death (2003). • June 2005 - D executed a deathbed will leaving "all" of his estate to his mother. o What happened in between? Not a lot of information but Jeannie is SOL now and Shervena gets it all • Handwritten note found in Bible • Signed by D, giving "all" his worldly goods to his mother and mentioning the IRA account specifically. • Dated May 2005 • Mother says she found it in a Bible in D's home after his death. • Issue • Did the note in the Bible or the June, 2005 will change the IRA beneficiary designation to D's mother? (Lower court said yes.) • Here, the court overrules. Why? • What was the note? o Was it a holographic will? Was it then revoked by deathbed will? Yes, it was revoked by inconsistency o If a holographic will, it was revoked by D's deathbed will. Why? Revoked by inconsistency • If merely a change of beneficiary designation, mother had to prove that D intended the note to be a beneficiary change AND that he did everything reasonably possible to effectuate a change. o Court says he has to prove he intended to change the will and that he did everything possible - here they don't think he did it o Why did the court think he did not do everything reasonably possible?? o She found this note in his Bible - some inconsistent testimony, story doesn't quite add up o If it was an effective change? If it's not an effective will then the rule doesn't apply o If it was a will it was revoked; now she has the burden of proof to show that he did everything he could to change it but he never made a call or did much else o He didn't do everything reasonably possible but also the court doesn't really believe the note is legit - therefore, she's not getting the IRA - the beneficiaries in an IRA are governed by contract "

Typical Pattern

"• Decedent to Spouse and/or Descendants ( also known as Issue). • If no Spouse or Issue, go up family tree to parents, then their issue (D's Siblings). • If no Parents or Issue, up to Grandparents and Issue of Grandparents. • Wisconsin stops there (see 852.01), but other states go up family tree."

Wis. §853.25

"• Designed to carry out testator's intent where: o There are after-born or after-adopted children OR o Living children are omitted by mistake. • Legislators clearly had in mind that omission of children might be intentional. How to calculate the share? • If T had no living child at execution o Omitted child is entitled to intestate share UNLESS the other parent of the child receives substantially all of the estate • If T had at least one living child at execution o The child may receive a proportionate share of the property left to the other children. Note: if the other children got nothing, the after-born gets 0. Example • T executed her will, leaving $10,000 to each of her two children, A & B. • After T executed the will she had two other children, C & D. • C & D will take pro rata shares of the property left to their siblings: • $20,000 divided 4 ways = $5,000 to each child. • Court can make adjustments to preserve T intent o Part 5 of 853.25 - court determines in a different amount or form than T would have wanted - can use courts discretion"

Acts of independent significance

"• Doctrine permits extrinsic evidence to identify beneficiaries or property passing under a will. - courts were very hesitant at first so this doctrine tried to illuminate T's intent by bringing in extrinsic evidence for a few narrow cases o Property or recipients are identified by acts or events with a lifetime motive or significance apart from effect on the will, so the gift will be upheld without need for additional testamentary formalities. • Examples: • "the house I own at my death" - court can look at that and then assign either the house they grew up in or her new condo in FL to the daughter • Gifts to "employees working in my company at my death." o Main point: buying or selling a house and hiring or firing employees have reasons and motives apart from who gets a bequest at T's death. Trying to prevent backdoor sneaking in provisions but even the strictest courts realize this is rare that people will sell their house to avoid changing their will • Closer cases- o the contents of different envelopes in my desk or safe-deposit box to the persons designated... • Technically, these gifts should fail as attempted testamentary dispositions without will formalities. • BUT courts often search for independent significance (Sue always kept jewelry in that drawer for convenience!) or treat names on envelopes etc. as incorporated by reference. Courts tended to interpret these independent significance cases pretty broadly"

Elements of incorporation by reference

"• Document in existence at the time the will is executed. (This requirement is often met by later codicils to a will that makes the original reference.) • The document is sufficiently identified in the will. Depends on the state, some rely on common sense • There is intent by T that the document be incorporated into the will. - Like other will cases - subjective determination of what the T wanted to do via testimony"

Preventing a Will Contest

"• Document proper will execution (self-proving will) • Create record of T's capacity: video, statements from experts or relatives, memo of your own perceptions • Create record of reasons for T's unexpected disposition: a letter from T or memo to the file about your discussions is better than a will clause."

Privity of contract?

"• Does a drafting attorney owe a duty of care to intended beneficiaries? • Why are they even asking this? • Because under the traditional rule, you had to be a party to a contract in order to get damages when the contract is not fulfilled: • The parties would be the lawyer and the client who hired him/her"

How are powers of appointment created?

"• Donor must manifest intent • Manifestation of intent can be express or by implication. • Words "power" and "appointment" need not be used - Clark case, could say it was perhaps a power • Confers discretion to appoint - or not - on the donee. • A donee is not a fiduciary - even if they have the power to appoint, they don't need to Part 2 Exercise of a power • What does the donee have to do? • How do we know whether the donee intended to appoint the property? o Hint: we shouldn't have to guess - or litigate! o Two answers: o Client says they have power of appointment under dad's will - what do I do to exercise? Should be able to give specific guidance: i. Under common law - specific written reference to power unambiguously set out in the granting institute Common law rules • Powers of appointment are ideally exercised by specific reference to the power, or in a manner unambiguously set out in the granting instrument. • Under majority rule, powers of appointment are not exercised by general residuary clauses - not enough o Clause like Dory's ""I give all my property to Jill"" - would not be enough to exercise general power of appointment; if she said ""I give all my property including powers of appointment given by my father"" then that would be specific • Under minority rule, powers are exercised by general residuary clauses, unless a contrary intent affirmatively appears."

State Street Bank v. Reiser

"• Dunnbeier created a revocable inter vivos trust and transferred the stock of 5 corporations into it. He later referred to it as his own property when obtaining an unsecured loan. • After D died... o His estate was insufficient to pay his debts. o Upon his death, the trust assets vested in his residuary beneficiaries. o Could the bank get payment from the trust? Yes- psychologically he thought he could do whatever he wanted with the property o He put this in a trust to possibly save money and wasn't expecting to die soon; tells the bank that he owns this property and they can use it as collateral; put most of his assets in his trust so didn't have enough to cover debt • Held: Yes - the trust should pay the bank. o The bank could have gotten payment from the trust during D's life because he had complete use and access to the property - so now that he's dead, it shouldn't change what he was able to do during his lifetime = against public policy o The creditors should pursue payment first from the estate, but then from the trust if the estate is insufficient. • This is the majority rule. o ***WI Rule is 701.0505"

Lawyer's duties to client

"• Duty of confidentiality • Duty to inform clients of material facts • What if these duties to one client conflict with duties to another client? • Law firm wants to disclose existence of other child to W - is this allowed?"

trust fiduciary law subrules

"• Duty to collect and protect trust property • Duty to earmark trust property o Includes duty to keep clear records • Duty not to mingle trust funds with trustee's own funds • Duty to inform and account to the beneficiaries. See 701.0813. • Does beneficiary have a right to know everything? • A grantor may limit the trustee's duty to give information, but cannot eliminate it. • Beneficiary has a right to knowledge of the existence of the trust and knowledge about its terms sufficient to enforce his interest under it. • Trust Protectors o See WISCONSIN STATUTES §701.0818. • Controversial whether a 3rd party "trust protector" could be used to limit info given to B."

Arnheiter

"• Facts: Will gave 304 Harrison Ave, but T didn't own it and never had; T owned 317 Harrison Ave. - addresses are dicey • Court dropped 304, then admitted evidence as to which Harrison Ave property T intended • Court rejected the erroneous description but did NOT reform the will. o Does this make sense? Only if you figure the courts were not willing to do what the Cole court did because of public policy reasons => here they wanted to be more subtle"

Durable power of attorney

"• Power survives the principal's incompetence BUT principal MUST be competent at the time power is signed. • People are often uncomfortable giving the power too soon - but it's not possible when principal is incompetent...sometimes ethical dilemma for lawyer o Too soon - someone could abuse the power of attorney like a child o Too late - can't execute it because they're incompetent "

***Exam Practice***

"• Example: Tillie Testator, 85 years old, lives alone. Her only daughter lives 1,000 miles away and visits twice a year for 4 days each time. Her neighbor, Donna, visits everyday, drives Tillie to appointments, and brings her dinner 3 times per week. Tillie's will leaves all to Donna. Daughter claims Undue Influence. Who wins? • Two sides to the story: o Daughter believes Donna has turned Tillie against her, maybe even threatened, bribed or brainwashed her. o ""Wow your daughter never visits"" or ""I'll take you to the doctor if you..."" o Donna may have had genuine affection for Tillie, or she may have had ulterior motives, BUT she spent time with Tillie. o Perhaps just two lonely people who found one another o How did Tillie feel about it? Was she hoodwinked or grateful for the attention, whatever the motives? o Can have mixed motives and think perhaps she would get something in the will = that's not disqualifying because she DID spend time with her o Emphasis is on T's intent - how did she feel about it? If she was tricked- UI. If she was grateful and wanted Donna to get the property = T's intent. "

Duress

"• Extreme form of undue influence • Involves threats of wrongful acts, including physical and emotional harm, confinement, etc."

Wilson v. Lane

"• Facts - Greer left will with 17 beneficiaries: 16 relatives and one caretaker. The drafting attorney and various friends testified that they believed Greer was mentally competent at the time she signed the will. Greer was also eccentric: e.g. a phobia of water, trouble doing self-care, etc. • Holding - Court upheld the admission of the will to probate. • Testamentary capacity o Court says that it can exist despite "eccentric habits and absurd beliefs." o Greer needed only the capability to form "a certain rational desire with respect to the disposition of her assets." o Just needs to form it - doesn't need to be rational according to the people it affects; the more unexpected the disposition, the harder the court looks to see whether the T was able to form requisite intent to make that disposition o The fact that Greer had "senile dementia" and was the subject of a guardianship petition did not necessarily mean she had no capacity. Must relate to his assets • Why require mental capacity? o Remember, the standard is LOWER than necessary to enter contracts or to make gifts. o Do not need to live on your own or care for yourself or have a great memory, as long as you have lucid intervals o This will be relevant to our future as Baby Boomers live longer o Mental capacity - (absence) of insane delusion, undue influence, duress/fraud o Policy reasons • Protects a sane person's desires and dispositions in the event he later becomes incompetent • Protects testator from exploitation • Protects the decedent's family (In practice, sometimes the family is protected from the testator's actual desires!) o Insane delusion: o A false conception of reality o Held against all evidence and reason to the contrary o Causes a particular distribution under the testator's will."

Farkas v. Williams

"• Facts- • Farkas set up 4 separate stock accounts "as trustee for Richard J. Williams." • He executed 4 different applications to the investment company and signed 4 separate declarations of trust. • Issue - Did the instruments create valid, inter-vivos trusts OR were they failed testamentary instruments? o Could have been a romantic partnership? • Why couldn't they stand as wills or codicils? They weren't executed correctly • Did Williams acquire an interest when the "trusts" were created? o Why does this matter? If he did then there would be more evidence of intent • Did Farkas owe him any fiduciary duties? • Could Williams exercise any rights? • Would it matter if he didn't know about the existence of the "trusts"? • Held - The accounts were valid inter-vivos trusts. • -Farkas could no longer act as an outright owner. (Why not?) he can't waste it now • -Williams had beneficiary rights. (How could he ever exercise them?) • What does the court say about will formalities and trusts like this? • We don't need to worry about fraud because with trusts there's plenty of paperwork and therefore, we're going to uphold this; confused people for decades in the sense that everyone knew it was a legal fiction"

In re Gibbs' Estate

"• Facts: Gift to" Robert J. Krause, now of 4708 North 46th Street, Milwaukee" • Long time employee of T's husband was Robert W. Krause who lived in same general part of town. • Robert Krause, clearly the friend and employee, had been named in the wills as early as 1953 • Robert J Krause claimed the gift! • Argued he alone matched the words of the will - plain meaning rule • What was his theory for why he received a gift? He was a taxi driver and this was his tip from the lady and he was very kind and she was sympathetic and approving of his life story - his fairy godmother came through! • Could the court give the gift to Robert W? • Court claims no reformation but... just figure middle initials and street address can be ignored • Ignores the middle initial and street address • There is more than one Robert Krause • Hears extrinsic evidence about the relationship of the two Robert Krauses to the decedent • Robert W. Krause was the person with significant relationship to D. - friend and EE for decades • Court says, "There is no ambiguity." • Openly reforming wills • When there is reliable evidence of mistake and reliable evidence of T's intent, why not allow a court to reform the will? Don't courts evaluate evidence like this all the time? • Does the whole law of wills really come crashing down? No, courts do this all the time "

In re Estate of Cole

"• Facts: Ruth Cole's will states: "I leave the sum of two hundred thousand dollars($25,000)" to her friend Veta Vining. • This is a PATENT ambiguity because it is apparent on the face of the will --> numbers contradict • Traditionally, courts would NOT consider extrinsic evidence to resolve patent ambiguities... • Trial Court Holding: Trial court rejects latent/patent distinction! • Said distinction served no useful purpose • Admitted scrivener testimony about copy and paste error & testator intent to give $25,000 to Veta • Found evidence credible, construed give to Vining as $25,000 - no good reason not to give her the $25,000 • Appeals court affirms • ***Cites Wisconsin case Lohr saying that if ambiguity persists after examining surrounding circumstances at time of will execution then evidence of testator's intent should be considered; not just some other random thing => Extrinsic evidence should be used "to determine what the testator meant by the words used.""

lmitiations on exercise of power

"• How broadly can you exercise it? • Donees of general powers can appoint outright or in further trust. (even if the granting instrument does not expressly say so) • Modern view is that donees of special powers can also appoint in further trust."

Lost will

"•If known to have been in T's possession, presumed T destroyed with intent to revoke if it can't be found after T's death. •Proponent has burden to rebut presumption. •If known, or can be proved, that T did not intend revocation, will can be proved by a copy or other evidence of contents."

Breeden v. Stone

"• Facts: Spicer Breeden, a child of inherited wealth, lived a wild life involving large amounts of alcohol and cocaine. He committed suicide after being involved in a hit-and-run accident in which the other driver was killed. He left a handwritten document leaving "everything" to Sidney Stone. (See TB for picture of doc.) • Will challenge - why were they interested? o Petitioners were father, brother and sister of Spicer - they have standing because they would have inherited under intestacy (Remember: must be mentioned in the will or be an intestate heir to have standing to challenge) • Note: Spicer had a previous will (1991) that did not leave his estate to Sydney S. • Basis for challenge: lack of testamentary capacity. o Evidence of lack of capacity: • Mood swings & paranoia • Excessive use of alcohol and drugs (always, but especially in the days and hours leading up to the will and suicide). • Remember: presumption is that will is valid (Colorado recognizes holographic wills so yes) - contestants must prove fatal defect by preponderance of the evidence. • Tests for capacity: o Cunningham rule (basic elements of testamentary capacity) - knows the nature and extent of the property, knows the natural expectants of bounty, etc. and the absence of an insane delusion that led to the challenged disposition. o Here, the Court believed he disinherited his family because he was acting sane - not at his best and had some paranoia but on the other hand, he knew the nature and extent of his property, included categories of property, no causation because he didn't have a great relationship with them in the first place) • Did probate court apply these correctly to find the will valid? o Will held valid • The document met requirements for holographic wills in Colorado. (entirely in handwriting of testator...) • Spicer knew the nature and extent of his property (he listed categories) and omission of relatives did not prove he didn't know about them (testimony about lack of closeness of family, infrequent contact, etc. See p. 280) • No insane delusion caused the will disposition - just saying someone did cocaine and alcohol is too high of a standard to preclude the will"

Erickson v. Erickson (note)

"• Facts: T and his fiancée executed reciprocal wills 2 days before their marriage. The wills gave everything to each other and, at the death of the survivor, everything half to his children and half to her children. o The Probate Court admitted the will to probate. o Upheld by the trial court on the grounds that the will provided for the contingency of marriage. • Issue: Should the court have admitted extrinsic evidence as to T's intent that his will not be revoked by his subsequent marriage? o Note - CT had a statute that provided for revocation of a will by a subsequent marriage unless the will provided for the contingency of such marriage - you might sign this before the divorce is final but statute should not reach back on it; trying to prevent people that got divorced 10 years ago to have someone try to use that old will • Holding: The will itself did not provide for the contingency of a subsequent marriage and would have been revoked under the statute - didn't say this is my will and I'm creating it in consideration of upcoming marriage because the lawyer didn't think of it - lawyer mistake o Where there is evidence of mistake by a scrivener that would permit the finding that the will provided for such contingency, the court must admit that evidence - why? If evidence is available, we need to admit it o Reasons to admit evidence of scrivener's mistake: • There is no practical difference between allowing extrinsic evidence of a scrivener's mistake and admitting extrinsic evidence that T acted on a mistake based on fraud, duress or undue influence (where such evidence is routinely admitted.) - we've always let extrinsic evidence in for these cases and now all of a sudden, we are unable to analyze this type of evidence??? No • Risk of subverting T's intent if we don't consider evidence of scrivener error - lawyers are human and make mistakes • Extrinsic evidence will be manageable, just as it is in parole evidence cases over contracts."

Stevens v. Casdorph

"• Facts: T's nephew and nephew's wife took him to the bank to execute his will. T was in a wheelchair, so after the 1st witness, a notary, witnessed the will, she took the signed will back to the desks of two other employees for them to sign as witnesses. These two witnesses did not actually see T sign the will, nor did he see or talk to them. • Held: Admission of will to probate reversed. Why? Presence •Testator was not in sight of the witnesses when he signed or they signed. •The parties also did not acknowledge their signatures to each other. •Despite lack of evidence of fraud or undue influence, the fact that everyone knew what was occurring and T apparently wanted it was not enough. Why not? •Presence - different types •Physical presence: line of sight and in same room. No exceptions. •Conscious presence: if T through sight, hearing or awareness knows that the witness is signing. This is the trend. •How would Casdorph be decided under Wisconsin §853.03? Writing •Minority of courts recognize electronic records as writings - usually you need a printed, signed copy. •Videos, DVDs, etc, not recognized as writings, but can be evidence of intent, competence or due execution. •Remember - these exceptional arguments are NOT for prospective reliance! Remember! •Two relevant questions: •What do we need to do to get it exactly right? Refer to state statute. Do more. •What might get admitted to probate, even if it isn't perfectly compliant with the statute? •Exceptions to literal rule are for retrospective damage control only! •Always insist on will execution that goes by the book! "

In re Strittmater

"• Facts: Testator left her property to the National Woman's Party. She had been a member. A single woman, she lived with her parents until their deaths (not typical for single women to live alone) (circa 1928). Beginning in about 1934, she wrote scathing statements about men and her hatred for them. Her relatives challenged the will, claiming insane delusion. • Holding: o Probate set aside. Testator was insane, and her irrational beliefs led to the will o Her relatives -"some cousins whom she saw very little during the last few years of her life" - inherited as intestate heirs. • Ask: o Why might the testator have hated men in general, or her father in particular? Abuse was not discussed and her venom would fit a pattern of abuse/trauma o Why did testator disinherit her relatives? She didn't like them and they didn't hang out with her o Assuming her beliefs were irrational, did they lead to the will disposition? Must relate to the will - single woman without friends and she wanted to give the property to the Women's Party o What could her lawyer have done to avoid this result? Anytime you have someone disinheriting their heirs - red flags - the expectant heirs will nto be happy o Lawyer should have a written record outside the will that indicated how much she was dedicated to the Women's Party, and the less insulting the better; today, you can use videotapes or memo to the file that the lawyer writes after having a discussion with her"

Latham v. Father Divine

"• Facts: Testator's will left the bulk of her estate to Father Divine, a charismatic religious leader in the early to mid 20th century. Her cousins alleged that Father Divine and his fellow church members used duress to prevent T from executing a new will leaving most of the estate to the cousins. o Allegation was that she wanted to revoke a new will but she was physically prevented from doing so - physically prevented and when she tried again, Father Divine subjected her to surgery that killed her o Remedy cousins wanted = court to construct a trust as equitable remedy that can be flexible in cases like this o Why didn't they oppose admission of the will to probate in the first place? They were related to her but not intestate heirs but there was evidence that she wanted to give them things under the will - don't want the will thrown out because they would not take under intestacy o Court must take allegations as true and the remedy would be a constructive trust because in NY, constructive trusts were used in cases where there is fraud; here, the duress here prevented the will that was desired from ever being made at all; Court cannot admit the desired will to probate because it never existed • Judgment dismissing the complaint reversed o Where force is used against a testator, equity cannot permit the wrongdoer to inherit. o Constructive trust can be imposed to force Father Divine to transfer his ill-gotten gains to the rightful owners. o The rightful owners are the ones who would have taken but for the wrongdoing. • Constructive trust remedy: o Not really a trust that's imposed on Father Devine, but rather means that there is an imposition of an obligation that gives the court the legal ability to force him to give up the property to prevent unjust enrichment of Father Devine and his followers because of their wrongdoing o Can be used against wrongdoers to prevent them from profiting from their wrongs. Theory: prevent unjust enrichment. o Can also be applied to prevent innocent bystanders from being unjustly enriched. See Pope v. Garret- o T wanted to revoke a will on her deathbed and there was a scuffle at the deathbed that prevented her from doing that; person that ripped it was clearly the wrongdoer so he cannot take because of the doctrine of unjust enrichment o Court here said that the other innocent third parties had an equitable obligation to turn it over if they received property they would not have because of the unjust enrichment • Note - attempt to honor T's presumed intent"

Ritual function

"•Impresses upon the testator that his will is of legal significance •Justifies the court in assuming that T knew he was doing something binding."

Mahoney v. Grainger

"• Facts: Will gave residue of the estate to "heirs at law living at the time of my decease"... "to be divided among them equally..." o Who was the sole heir at law? Maternal aunt. o What was the problem? What testator really wanted: to be split among the 25 first cousins • Lawyer asked: "Whom do you want to leave the rest of your property to? Who are your nearest relations?" • Testator replied: "I've got about 25 first cousins - let them share it equally." • Lawyer drafts will, reads it to her, she executes it. o Why didn't she correct the provision? She didn't know what ""heirs of law"" meant and assumed this meant her cousins • Holding: The aunt is "next of kin" so she gets everything. o Why?? State follows Plain meaning rule: • Where words of a will have commonly understood meaning (by lawyers that look the words up in a legal dictionary), they will be accepted as the testator's intention. • Any proof from outside the will of testator's intention is inadmissible. • Where language is ambiguous, a court may let in outside evidence only to clear up the ambiguity. o No discussion - inflexible "

Timmons v. Ingrahm

"• Frank and Myrtle each had children from previous marriages. Frank's will created two trusts, with income for life to Myrtle and principal as necessary for her support. • At Myrtle's death, remainder to be divided into equal shares for Frank's children, which he defined to include both his and Myrtle's children. • The second Family Trust also gave Myrtle a limited power of appointment to appoint any part of principle during her lifetime to Frank's "then living lineal descendants. • What did Myrtle do? o She appointed all principal and income of the Family Trust to her own 4 children. o This disinherited Frank's 2 children - they challenged. • Issue: was this a permissible appointment? o Held: NO! • Intent of the Testator should prevail. • In interpreting intent, the language should be given its usual legal definition unless the document gives it a new definition • Other usage of the term "lineal descendants" in Frank's will matched the legal definition = people who were directly in line from Frank - did not include step children who were not adopted • The fact that Frank expanded the definition of "children" does NOT reflect an intent to grant Myrtle the power to disinherit Frank's children if favor of her own - he used a different term when he gave her that power (narrower) • Note: o Attempted appointment that tries to circumvent a limitation on a power is known as a fraud on the power, and is invalid to the extent of the fraud! • Myrtle's kids were not • Now they need to put back the money"

Mistaken terms

"• Frequently made by lawyers rather that T - although T has mistakenly relied on the lawyer • Remedy of malpractice is available (for acting in a way that defeats the T's intent), but was not available in the past. Burden of proof is very high - impossible in many cases without the lawyer's admission of his error. o If you are an heir and malpractice occurred, should not be barred for lack of standing because you're not in privity of contract with someone • UPC 2-805 allows reformation in the case of mistake. o Wisconsin did NOT adopt this, but does allow for admission of extrinsic evidence of T's intent in many specific circumstances - summarized, not written exactly"

types of power of appointment

"• General power OR • Special power o Mutually exclusive; can have mandatory power or permissive power • Unclassified power (old Wisconsin term, only in use until July 2014 - but will linger in old cases and documents) General power of appointment • Allows the donee to give the property to anyone including himself, his estate, his creditors or the creditors of his estate. o Anyone in the whole world Special (non-general)power of appointment • Donee cannot exercise the power in favor of himself, his estate, his creditors or the creditors of his estate. o In other words, any power that is not general. o Appointment may be limited to a certain group or may just forbid appointment to those 4 entities. o Basically everything else; anything that is not a general power is a special power o Can vary a lot Unclassified power (old Wis. Term) • A special power of appointment that is described as giving the donee the power to appoint to anyone EXCEPT himself, his estate, his creditors or the creditors of his estate. o Extra broad - no idea why it needs a different term in WI where other states just call it a special appointment but gone now Note: • Appointive property is usually property held in trust, although it need not be - but usually talking about large amounts of money • Powers may be exercisable by will or deed only or by either (at donee's option) - give someon power over property to decide conditions on exercising it • Presently exercisable powers are those which can be exercised any time after their creation. • Inter vivos powers can be exercised by the donee during her lifetime • Testamentary powers are exercisable by will."

How can we tell an outright gift from a gift in trust?

"• Gift: donor must deliver the property and donee must accept it to complete the gift • Once the gift is completed, the donee owns it • Trust: donor must undertake to hold - or appoint someone else to hold - subject to fiduciary duties, property for a third person."

In re Estate of Sharis

"• Grandson Spinelli (one of 16 grandchildren) moved in with his grandparents and took over their financial affairs. • Wrote checks • Got a durable power of attorney - can act as the person, can pay bills, cash checks, sign checks, etc. • Arranged for his grandma to execute a will • Transferred money into a trust account and spent money from it • Probate court disallowed will on what grounds? Undue Influence • 4 Elements test o T is susceptible to undue influence - yes, elderly, 7th grade education, he was already in control of her finances o Opportunity - Spinelli was the only one that knew about the estate plan and he hired the attorney; she never even met with the attorney o Disposition to influence unfairly and procure improper result - self-dealing evidence o Result clearly appearing to result from improper influence - would get the property over the 15 other grandchildren • Normally, party contesting the will bears the burden of proof, but here Spinelli had the burden. o Why? Fiduciary relationship because of Power of Attorney - when you are a fiduciary position, you are held to a higher standard and no self-dealing is EVER allowed • Evidence of wrongdoing with the will itself? o From the lawyer's perspective - major errors by not checking in with Grandma Spinelli for proper disclosures, knowledge of rights; Grandson Spinelli is controlling the drafting of the will o No prior will to go off of so less evidence of what she would have wanted in sound mind • Evidence of other wrongdoing? o Did not disclose to other family members = secrecy becomes a major factor courts consider o He hired the lawyer- a different lawyer she had used in the past o Created a trust account transferring over $70k that would give him a larger share of the estate o Restricting access "

Sullivan v. Burkin

"• Husband created a revocable inter vivos trust, and his widow tried to claim a spousal share out of it. • H & W had been separated for many years but were still legally married - just never got around to getting divorced; must be legally married to the decedent at the time of death so separation is irrelevant to property transfer and many other issues that come up when someone dies • Two rules: • Old rule: spousal election does not extend to property conveyed during life, but over which the deceased spouse retained control. o Didn't extend to property that was conveyed during life even if D that conveyed it maintained control; not in your probate estate = out • New rule: assets of intervivos trust created during marriage by the deceased spouse who retained a general power of appointment WOULD be available for election. Intent of D is irrelevant. Why? o Creating a living trust during the marriage and kept a general power of appointment (meaning you'd get to decide who got it) then it's available for election o Intent of D in setting it up this way is irrelevant because there were lots of courts that created common law rules based on whether the D had a good or bad intention in setting up the trust (i.e. for his mistress vs. for his sick mother) o Courts did not want to get into subjective examination of motives because the policy question is do we have a spouse without their fair share of the wealth they helped initiate? If yes, the statutes needs to protect them "

WISCONSIN STATUTES §854.06

"• If a beneficiary of an outright transfer does not survive the decedent by at least 120 hours, the statute kicks in IF: o Predeceased beneficiary is one of the decedent's grandparents, the issue of one of decedent's grandparents OR a stepchild of decedent; AND the predeceased beneficiary has surviving issue. o In that case, the issue of the deceased beneficiary take by strict per stirpes. • Statute applies to any "revocable provision" in a "governing instrument executed by the decedent," including: o Gift to an individual, even if the individual was not alive when the will was executed. o Share in a class gift, but only if the deceased class member dies after the instrument is executed; o *****Presumption and probable intent - probably wanted your sibling's line to inherit; only applies if deceased class member dies after the instrument is executed, it is assumed they only meant the siblings alive at the time of execution o Appointment of property by the decedent under a power of appointment."

Anticipating a will contest - RED Flags

"• If a wife is getting only the statutory minimum, and she is the mother of one or more D's children • If a second wife is taking substantial property • If descendants are being cut out (especially D's own children) • If equally related persons are taking unequal shares o If non-related persons or entities are taking in place of relatives, even if they're lovely people"

What if donee fails to appoint?

"• If the power is general, the property passes in default of appointment. If there is no gift in default of appointment, the property goes back to the donor's estate. • If the power is special, the property passes in default of appointment o If you have a special power, you usually have a small, defined class; know how many people are in it • Implied gifts...law does this in favor of that group in equal shares Where there is no express gift in default, and the objects of a special power constitute a relatively small, defined class (such as "my grandchildren"), a gift in default is usually implied in favor of the objects of a special power, who share equally. "

Reece v. Elliott

"• Illustrates principal that spousal election can be waived, either at time of election by not taking it or prior to death of first spouse, by pre-nuptial or ante-nuptial agreements. o People will have estate plans that state ""forced share"" is off the table- often if they have children from a previous marriage • What do you need to have valid waiver? • Prenuptial/ante-nuptial agreements o Prenuptial o Ante-nuptial - during the marriage; often part of estate plan • Favored by public policy • Valid if (in order to waive spousal election)- Voluntary Full and fair disclosure Independent counsel not necessary, but advisable - even if you're not concerned about it o In Reece v. Elliot - she signed the prenup but wasn't aware of the value of stock o Court upholds the agreement - enough disclosure - he didn't hide the stock but she didn't look into it o Illustrates the importance of having separate counsel and the importance of protecting your own interests • State variation • When do we assess fairness? • At time of agreement? • At time of proposed enforcement? • Both? o Presumption is that marital agreements are valid; burden on person arguing there was unfairness • See e.g. Wis. Stats. 766.58"

Summary - Fraud

"• In the context of wills, a misrepresentation made with both intent to deceive the testator and the purpose of influencing the will disposition." o Any part of a will which results from fraud is invalid; if the whole will was procured by fraud, the whole will is invalid. o CAUTION: This is different from mere mistake."

Wood v. U.S. Bank, N.A.

"• John Wood created a revocable trust with wife Dana as a beneficiary with a share of remainder upon his death. • John was trustee, Star Bank (which morphed into Firstar) was successor trustee. • Key Facts: o 80 percent of the trust assets were in Firstar stock; the rest was in Cincinnati Financial stock. o Trust instrument gave trustee the power "to retain any securities in the same form as when received ... as they deem advisable or proper." o After John's death • Meeting between Firstar (trustee) and beneficiaries. • Trustee proposed selling trust stock to pay $4 million in estate debts. • No plans to diversify, and Cincinnati Financial stock was to be sold first. • What was the problem? o Strategy backfired o Firstar stock went from $21 per share to $35 (whereupon Dana orally requested diversification which didn't happen) o Stock plummeted to $16 per share. • Would a prudent investor act like this? o According to research, Firstar underperformed the S&P 500 by a factor of 1.6, but was 6.6 times more volatile. o Failure to diversify led to excessive risk (volatility) without offsetting benefit - actually LESS benefit. • Dana Wood sued o Claimed Firstar had duty to diversify unless "special circumstances" and there weren't any. o Firstar argued discretion unlimited unless bad faith or dishonesty. • Trial court finds for Firstar, Dana appealed, Ct. of Appeals reverses. Why? o General language doesn't eliminate duty to diversify o Language allowing retention if inception assets only overcomes the ban of duty on loyalty about T trading in its own stock. o Special circumstances is meant to allow only for holdings in, for example, a family farm or company. o Difference between power to hold and duty - which is to exercise that power prudently in B's interests. Note - remanded to determine whether Firstar met the standard."

The rule of second-best

"•In DRR cases, we typically know what T's true intent was - but the law does not allow it. •The doctrine is applied when it appears that reinstating an apparently-revoked will comes closer to carrying out T's intent than intestacy would."

Gray v. Gray

"• John executed a will giving all to his wife Mary, and giving nothing to his two children from a prior marriage. John & Mary later had a son, Jack. • John and Mary divorced, and the divorce judgment included a trust for Jack, to be funded by any inheritance John would receive from his mother's estate. • John dies suddenly o He had not re-done his will, and divorce revoked the gift to Mary, and his brother Terry, the executor, was the contingent taker. o Son Jack claimed under the pretermitted heir statute. o Court denied Jack's claim. Why? Construe the statute very strictly; statute requires that • Strict construction of statute! o Only two conditions necessary for excluding omitted child from estate: • T had one or more children at time he executed the will (He did - from previous marriage from previous wife) and • T's will devised substantially all of his estate to the parent of the omitted child (He did - Mary was Jack's mother) • Right result? • Is this what the legislature had in mind? o When we talk about having a kid when the will is executed and then giving all property to spouse and what's left over = the kids get o Language of the statute didn't differentiate between these children and children from previous marriage- so checked the box and then the money was devises to the wife o Is this what T intended? Unclear whether or not John wanted; divorce lawyers need to remind their divorce lawyers to change their estate plan o Insurance policies o Revocation plan o Change beneficiaries o Fix the trust o People don't expect to die young and there is a natural tendency to procrastinate "

Irwin Union Bank v. Long

"• Laura creates a trust for son Philip, giving him "the right to withdraw from principal once in any calendar year... up to four percent of the market value..." • Philip's ex-wife Victoria seeks the 4% to satisfy her divorce judgment. • Can Victoria reach the 4% over which Philip has a general power not yet exercised? (and he doesn't want to) • Held: NO - relation back o Court says Philip has no interest in the property until he exercises the power. He hasn't exercised his right to get the 4% out o The common law rule is that the donee of a general power is NOT considered the owner for purposes of creditors. A power is not property. - Just because you have a power over something doesn't mean that you own it o What is the actual difference between Philip's power to get 4% out of trust whenever he wants and the same amount of $ in a savings account? (which wife could definitely get to) • Other arguments supporting the holding - policy arguments o The donor clearly did not intend the donee's creditors to be able to reach the property (but so what - some creditors can get at $ in a spendthrift trust for public policy reasons - why should this be different?) - this mother had no obligation to pay Victoria anything - not her intention when she created the power o Slippery slope: if an ex-wife can get it, maybe all other claimants and creditors could as well. (but why not? - the donee effectively owns the property) • We saw this with spendthrift clauses - children in Wisconsin can get child support money from spendthrift trusts; in some states, they would extend this to ex-wife; but in general, the common law treated this as a spendthrift and she cannot • But in general, why not let creditors get at it because in effect, the donee owns this money"

Assisted Suicide

"• Legal in Oregon, Washington, and some European countries. • Arguments for allowing? • Arguments against allowing? • Data shows that not all patients who obtain the lethal prescriptions use them - some people that have painful terminal illnesses just want to have the reassurance that they can get out"

Wisconsin §854.09

"• Lifetime gift is treated as full/partial satisfaction of gift on death to heir if at least one of the following: o The gov. instrument says gift should be considered o Decedent said in a document that gift is an advance against share donee would receive at decedent's death o Transferee acknowledged in writing either before or after D's death that the gift was an advance o Writings need not be formal or express: they may be construed by extrinsic evidence."

Maybe a trust or gift is better than a will!

"• Lifetime gifts • Living trusts - courts are less likely to throw out because there is a record of a period of time the T allowed this trust to operate and is apparently happy with the result o Both involve lifetime transfers by the donor, and they are difficult to set aside."

Beals v. State Street Bank

"• Lots of family money • T had a general power of appointment under her late father's will. • She partially released her power of appointment (that is, she limited or gave up her right to exercise it) by converting it into a special power of appointment in favor of the descendants of her father who survived her. o Appointive property goes to whoever receives in default of appointment - i.e. you may want it to get to your children faster so you purposely release the power o Partial release - was a general power so now it's a special power in favor of any descendants of her father that survive her • She made this change for tax reasons. • T died with a will that did not expressly exercise the power of appointment under her father's will - surprising because they were rich • Issues: o Did a general residuary clause exercise the power? If so, the issue of her sister Margaret would take all, if not they would share with the issue of her sister Jane. o Which state law would apply to decide? One was majority and one was minority • Holding • Court applied the law of the donor's domicile - he was drafting in light of his laws • The power was exercised. o Court pointed out that exercise would have been presumed if T had a general power and o This power started out as a general power, and was only changed to a special power for tax reasons and - same rule didn't apply to special power o T had treated the appointive property as her own throughout her lifetime - crux of the argument about general powers of appointment - even though you don't own the property right now, you can get it with the stroke of a pen and are treated as you own it for tax reasons Note - majority rule • A residuary clause does not presumptively exercise a power of appointment held by the testator. • States differ on whether intent (i.e. to exercise) must be in the will itself, or whether it can be demonstrated by extrinsic evidence."

Policy justifications for spousal elections

"• Partnership theory of marriage assumes each spouse contributes to the other spouse's acquisition of wealth - therefore each deserves a share. • Paid and unpaid labor is valued • Adequate support objective tries to be sure the decedent's estate (and not society at large) supports the surviving spouse. • Rules for the share vary depending on the justification for it. Examples • Partnership theory assumes the survivor has an entitlement to a share because she helped build the estate - so she should get it even if she doesn't need it. • If the goal is adequate support, a person with assets or employment prospects should take less than a survivor who is destitute. Two Models • Forced share statutes - 40ish states • ***Community property states - 9 states including WI"

Degree of relationship system

"• Passes to the closest of kin, counting degrees of kinship. • To count degrees of relationship, count steps from the decedent (one step for each generation) up to the nearest common ancestor, and then steps down to the living relative. • The total number of steps is the degree of relationship. • The closest degree (lowest number) takes. • States have different approaches for ties - usually the claimants take equal shares."

In re Estate of Kurrelmeyer

"• Louis gave durable powers of attorney to his wife and one of his daughters. Later, when he was incompetent, wife Marina established a trust in her husband's name, and transferred certain real estate to the trust. L's will had given Marina only a life estate in the real estate, but the trust gave her more powers and benefits. After L's death, his son challenged the trust and the property transfer to it. o Trust gave her more power which she could set up through the P o A • Issues o Did the durable POA give Martina the power to create a trust? Does her ability to act as the principal as the agent extend? o Did Martina's transfer of the Clearwater property to the trust (which gave her benefits) constitute a breach of her fiduciary duties as trustee? Trustees cannot self-deal and the definition of self-dealing is strict • Held: Martina had power to create a trust. The fiduciary issue was remanded because of lack of evidence on the record. o Reasons? Power to create trust • The instrument said she could do it - it gave her the power to "deliver...trust instruments..." and to transfer any property to such trusts. o She had the power to make the trust- remand on fiduciary duties o Courts have been inconsistent on boilerplate provisions - some assume the settlor meant what they said and the language said she had the power to deliver trust instruments and to transfer property to trust • On remand, the court considered testimony about Louis' intentions from his estate planning lawyer and upheld Martina's actions. o Vt. Supreme Court affirmed this, 2010. o Takeaway: you can expand powers of attorney almost as much as you want to; if the client has specific parameters, those should be spelled out in the language of the instrument "

In re Estate of Prestie

"• Maria and W.R. were married then divorced. o They maintained a "close" relationship... o They remarried 9 months before W.R.'s death. • W.R.'s estate plan o After divorce, W.R. executed a pour over will (whatever's left after you've paid your fees goes into a trust) and inter vivos trust (made and operated while you're alive), naming son Scott as trustee and a beneficiary. Maria was named in neither. o W.R. amended the trust to give Maria a life estate in the condo. o W.R. remarried Maria, but did not execute a new estate plan thereafter. • Was Maria entitled to a share? perhaps • She argued: o (1) that they remarried without a marriage contract o (2)The will was revoked as to her because of Nevada statute - see text on p. 573. • Scott's arguments o The life estate in the condo "provided for" Maria under the statute. o The amendment to the trust rebuts the presumption of revocation by subsequent marriage. • Court finds for Maria! • Looks at literal language of statute: o Only relevant questions were: • Was there a marriage contract? No • Was there a provision providing for the spouse in the will? No - the condo was in the intervivos trust o Was there a provision in the will expressing intent NOT to provide for the spouse? No, he doesn't even mention her in the will o This is the checklist - don't have those things- therefore Maria is entitled to get a spousal share o *****Courts are not particularly sympathetic to people trying to disinherit living spouses and will adhere to the statue but often circumvent "

types of risks

"• Market risk: reflects general economic & political conditions, interest rates, etc. Applies to all securities. • Industry risk: specific to certain industries • Firm risk: factors relevant to a particular company"

trust purpose

"• May be created for any purpose not contrary to public policy. • Basically, a trust may be created for any purpose that is not illegal or immoral. o Not about if it's a good idea, but rather if it's illegal or immoral"

Minimum age and mental capacity

"• Most common minimum age is 18. • Mental capacity means that T is capable of generally understanding o the nature and extent of his property - generally o The natural objects of his bounty - who would in the ordinary order of the world would you expect to inherit if you died tomorrow; don't need to give it to them, but must understand that they exist o The disposition he is making of the property AND o The relation of 1-3 to each other - realistic appraisal of how people are going to take it when you die (ex: you give all of your money to the Zoo unexpectedly)"

Intent

"• Most common terms for person creating the trust is grantor or settlor • The grantor must have intent to transfer property subject to fiduciary duties. (or to HOLD the property) For an INTER VIVOS (aka ""Living Trust"") trust, the grantor must intend that the trust be created immediately. For a TESTAMENTARY TRUST, the grantor must have normal testamentary intent when the document containing the trust terms is signed. • Review: Mental Capacity o Mental capacity means that T is capable of generally understanding o the nature and extent of his property - generally o The natural objects of his bounty - who would in the ordinary order of the world would you expect to inherit if you died tomorrow; don't need to give it to them, but must understand that they exist o The disposition he is making of the property AND o The relation of 1-3 to each other - realistic appraisal of how people are going to take it when you die (ex: you give all of your money to the Zoo unexpectedly) o Traditionally less of a problem than with wills No formula language is required o Example: Lux v. Lux where will gave property to grandchildren in equal shares BUT went on to say that any real estate "shall be maintained for the benefit of said grandchildren" and should not be sold until the youngest turned 21. o Held: grandma intended a trust - she intended to hold the property for someone else's benefit o Can be written or even oral Effect of precatory language • Words like "request" or "desire" (PRECATORY expressions) do not normally create a trust under American law. (under British law it is) o However, where such words are accompanied by very precise directions, a court may find a trust. "

evolution of trust law

"• Most states now presume a trust is REVOCABLE unless otherwise stated in the trust (common law presumption was the opposite). 701.0602 • Methods of revoking are more flexible. 701.0602."

In re Estate of Anton

"• Mother's estate consisted of a duplex (bequeathed to her son Robert and her stepdaughter Gretchen) and other assets (beqeathed to daughter Nancy and to Robert). • Mother was also supported by her late husband's trust. • Nancy used all assets and then sold the duplex to pay for Mother's nursing home. • Was there ademption?"

trust protectors

"• New category created by 701.0818 • It is in addition to, NOT instead of, a trustee • May have a variety of duties as specified by the trust instrument, the court, or a settlement agreement • Neither trustees nor trust protectors are responsible for monitoring the conduct of each other."

When to grant the power?

"• Present power - effective immediately: some people are reluctant to give this power away before necessary. o I want you to sign this lease while I'm gone. • Springing power - effective upon happening of an event, like incompetence. You need to specify what triggers the power, how it will be verified, and attach proof so that third parties will honor the power. o Need to specify what triggers it - verification in writing that you have the P o A and the legal right to do that"

Duty of prudence in modern trust law

"• Primarily seen in law of trust investment. • Older prudent man rule was replaced with the prudent investor rule. • New rule incorporates modern portfolio theory: i.e. distribution of risks; balancing risks and returns; investments varying depending on needs for liquidity, regular income, preservation or appreciation of capital, etc. o How can T protect against risk and still get returns?"

Hebrew University Assoc. v. Nye

"• Professor Yahuda had a valuable library of rare books and manuscripts. After the professor's death, Ethel went to Israel and had talks with officers of Hebrew University, with a view towards donating the books and having the University build a wing as a memorial. • Plaintiff gave a large luncheon at which Ethel announced the gift of the library to the plaintiff. Afterwards, she said she had given it to plaintiff. What else did she do? o Announced at formal luncheon o Approved press release o Began cataloging the collection • Gift, trust or promise to give a gift in the future? o What rights does a person have if: • A gift is delivered to him? Complete • A trust is created with him as beneficiary? Complete, must comply with conditions sent • Donor promises he will give a gift in the future? Nothing. • Did Ethel create a trust? o Court says no (Hebrew Univ. #1) • She did not use trust language • She did not undertake to act as a trustee • She undertook to be a donor • Trusts cannot arise merely to save gifts that have failed for want of delivery - cannot just use trusts to fix something o Did she act like a trustee? She couldn't bring over the books; she flew to Jerusalem, she began cataloging so she was managing the property- but delivery wasn't accomplished • Did Ethel make a gift? o Present gift or promise to make gift in the future? o Actual, constructive or symbolic delivery? • Hebrew University #2 o Found gift by constructive delivery. o What did Ethel deliver that was equivalent to actual delivery? o Ethel's public declaration together with the memorandum itemizing the library materials to be donated constituted constructive delivery and the inter vivos gift is valid o Sufficient because manual delivery was impractical or inconvenient = court declares it constructive delivery o Note - what court describes is more consistent with symbolic delivery."

In re Estate of Fournier

"• Recluse George Fournier gave two boxes of cash totaling $400,000 to two friends, and instructed them to hold on to it until his death, and then deliver it to his sister, Faustina Fogarty, who was also appointed personal representative of his estate. • He also had another sister, Juanita, but he told his friends he wanted Faustina to have the cash because she needed it more. o She went to the court to make sure she should keep it and then she wouldn't have liability • Issue o Was lower court correct in holding that no trust had been created and that the money was to be delivered to Faustina in her role as personal representative of Fournier's estate? • Held: o Oral trust was created o Evidence provided by couple holding the money showed that Fournier intended Faustina to take the money personally o Testimony about T talking about sister's financial hardship; looking at statements on intent to create trust, purpose is to alleviate financial burdens, res of $400,000, trustees present = trust o Note - who brought this action to court? Faustina because she didn't want to be in trouble later • Epilogue • Juanita Flanigan petitioned the probate court for a new trial. • A note written by Fournier was found in his house, saying $400,000 was to "reimburse" Juanita, Faustina and Curtis • It was dated one year after the transfer, and signed by Madore! • Court found the trust was for all 3 beneficiaries."

Fulp v. Gilliland

"• Ruth transfers family farm to a revocable trust after the death of her husband. • Ruth was a beneficiary, as were her three adult children. • Was anyone a primary beneficiary? She names herself - for her care and support; children were not getting any money while she was alive • Ruth sells the farm for living expenses when she moved/possible assisted living o To whom? Harold Jr., he wants it so he can keep it in the family and it will stay a family farm o For how much? $450,252 • What's the issue? Unhappy daughter Nancy! And the actual value is over $1M; previously, she gave a ""sweetheart deal"" to other daughters o She argues that Ruth as trustee owed fiduciary duties to the children, who were remainder beneficiaries. o Claims Ruth breached her duties by selling the farm below market value. • Procedural History- Trial court found for Nancy, Appellate Court reversed, and Supreme Court of Indiana upholds Ruth's sale. • Reasoning- o Settlors of revocable trust continue to use the property and retain the right to revoke or amend the trust at any time for any reason. o While a trust is revocable, the trustee only owes a duty to the settlor (grantor). • Otherwise, the trust would be effectively irrevocable! Ruth's fiduciary duty was to herself! • Are the duties in Article V imposed on anyone? o Yes - on a successor trustee once the trust has become irrevocable AND Ruth is no longer primary beneficiary. o But not before when the settlor is acting as her own trustee and that she is set up as the primary beneficiary • See UTC - Ch. 701.0603 No real downside of allowing more control "

Do-Not-Resuscitate Order

"• See Wis. Stat. 154.17 • NOTE: it must be issued by a physician. • Can be revoked by patient at any time. o Resuscitation is not very successful and can be very violent o DNR bracelets - patient can revoke by removing the bracelet or asking for help; designed for people to have more peaceful deaths"

power of attorney for health care

"• See Wis. Stat. 155.01 (10) "the designation by an individual of another as his or her health care agent for the purpose of making health care decisions on his or her behalf if the individual cannot, due to incapacity." • (The individual so designated is a Health Care Agent). o Cannot make all decisions - e.g. nursing home (see 155.20) - unless specifically provided. o Probably will be structured as a guardianship order from the court to do that"

What powers to delegate?

"• See Wis. Stats. §244 • You can delegate any power that the principal, when competent, would have to act on his own behalf as to property EXCEPT executing a will. • 244.61 sets out the Wisconsin basic POA form. • Note the list of things the agent can NOT do: create trusts, make gifts, forgive debts, etc... • To empower the above, specific language must unambiguously grant the power - specifically says ""I authorize P of A to give gifts to my grandchildren up to $50k per year"""

REVOCABLE LIVING TRUSTS

"• Settlor usually retains all rights to principal and income during life, and all decision-making authority while healthy. Successor trustee steps in upon deterioration of health or mental capacity. At death, trustee distributes property per instruction as an executor would. (Avoids probate) o Triggering mechanism necessary for successor trustee (same concept as springing power of attorney) - can cause a lot of divide in family as to when the T loses mental capacity; can also do this with Power of Attorney; can have lucid intervals so it causes drama o In many ways, it's like they still own it, but it's in trust o Probate has an unjustifiable bad reputation o Benefits- Streamlines transfer process when the settlor dies or if the settlor becomes incapacitated, a trustee can easily be appointed to manage for the benefit of the settlor for the remainder of their life"

Status of alimony & child support claims

"• Shelley court held that public policy justified allowing these claims against trust income, because otherwise Grant could hide behind the trust to have support while letting society support his families. • This is the majority rule = CANNOT deprive a child of support when a parent has a trust • In the case that Grant was receiving discretionary income (""emergency"" not a standard of living thing) - the claims could not be granted against corpus, because Grant had no enforceable right to principal distribution (because it was discretionary). - could not order the invasion of the principal • In many states, his right to discretionary income could be extended to children • Children had independent right to distributions for "emergency" and court found that desertion without support from their father qualified as an emergency. • But see Scheffel v. Krueger: • Plaintiff obtained a tort judgment against defendant Kyle on behalf of her daughter. Kyle sexually assaulted the daughter, videotaped it, and posted the videotape on the Internet. o Kyle had no money o Kyle was in prison! o Kyle was also a beneficiary of an irrevocable spendthrift discretionary support trust set up by his grandmother. • Plaintiff sought payment of tort judgment from trust. • Court refused to order payment from trust - why??? o Statute allowed spendthrift trusts unless the beneficiary is the settlor OR the assets were fraudulently transferred to the trust (in fraud of existing creditors). • Neither exception was true. • Court declined to create a tort creditor exception."

Lawyering to avoid will contests

"• Size up your client's mental state and capacity - do not need to hire a team of psychiatrists • Ascertain who the "natural objects of T's bounty" are (See p. 309) - draw a chart and put it in the file • Discuss with the client why people who expect an inheritance won't be getting one • Create a record of your findings (recordings, memos, letters from doctors or other witnesses, or a handwritten letter from the client giving reasons for the disposition) o Don't put in will itself because of testamentary libel • Do NOT Accept a testamentary gift under a will you are drafting UNLESS it is less than or equal to your intestate share. See SCR 20:1.8. send them to another lawyer, preferably not at your firm • Do NOT Record negative reasoning (personal attacks, allegations of wrongdoing, etc) in the will itself - wills are public records, memos to the file are not. See p. 306 o Positive = woman did not want one of her son's to inherit because he was a priest and would need to give 1/2 to church, but knew her other son would take care of him o Negative = my daughter is married to a loser that will spend her money so none for her • Do NOT Fail to counsel your client about possible negative consequences of the proposed disposition"

Careful with "per stirpes" terminology!

"• Some states read "per stirpes" to mean the state's own system. • Other states interpret it to mean English per stirpes regardless of the state rule. • Always define the term OR merely describe the desired distribution pattern. • Remember: the will may not be probated in the same state where it was executed, so it should be clear everywhere!"

Modern per stirpes

"• Sometimes called "per capita with representation." • If any children survived the decedent, the results are identical to the English per stirpes system. • If no living children, the property is divided equally (per capita) at the first generation where there are living takers"

Wisconsin Stats. §701.0502

"• Spendthrift trusts are allowed with respect to both income and principal distributions. • Spendthrift provisions are not effective against child support claims - the court can order payment of child support claims by the trustee out of income or principal as the beneficiary becomes entitled to it. 701.0503 • Spendthrift provisions are not effective where the settlor is legally obligated to pay for public support of a beneficiary. 701.0503 • Note - there is an exception to the exception for qualified trusts for disabled individuals, where the trusts are designed to offer supplemental resources but do not result in ineligibility for public assistance programs. - not meant to be beneficiaries sole support • ALSO NOTE - you cannot create a valid spendthrift provision to protect yourself from creditors! *****Remember: 1) A grantor cannot transfer property into trust in fraud on his creditors. 2) A grantor cannot transfer property into a trust, retain benefits as a beneficiary, and thereby avoid creditors. Also remember: 3) Certain classes of creditors cannot be excluded by a spendthrift clause, even where B, but not G, is the debtor. Child support claims can be paid out of a trust regardless of spendthrift restrictions, in most states. • Alimony claims and claims for payment of bills for "necessaries" like food and rent are sometimes allowed, but this was NOT codified by UTC 503. - child support is pretty much a universal exception but UTC did not keep an exception for alimonies and necessaries, on the outs • Underlying principal: A creditor can usually reach property to the extent of B's interest."

Wi Chapter 861

"• Spousal & family allowances o Family allowances - Not uncommon for property title to be in one spouse's name until title was transferred and it took time so court would give allowance that was protected from creditors • Rules for dividing up property that is not marital property... • Issue: Couple owns property in separate names before marriage or before moving to Wisconsin, and presumption of marital property is rebutted. What rights, if any, does surviving spouse have at death of first spouse? • Or what if they lived in a state that's not a community property state = that's enough to rebut the presumption "

Note - Intestancy, Stepchildren, Spouses

"• Stepchildren take only if adopted in most - but not all - states. • Spouses of relatives do NOT normally take (but see California)"

What does undue, improper or coercive mean?

"• Subjective test • Circumstantial evidence o ""On one hand, on the other hand"" flag - remember for exam, case by case basis while applying the principle"

Children born or adopted after will is executed

"• Such child is entitled to a share of the estate UNLESS ANY of the following applies: o The omission was intentional, as shown by the will or other evidence. o ***Note - unlike the UPC, WI statute allows consideration of extrinsic evidence in considering if omission was intentional BUT WI does- WI courts since Gibbs have been very open to extrinsic evidence (THEME) o T provided for the omitted child by a transfer outside of the will and intended that transfer to be in lieu of a share of the estate. This intent can be inferred by the amount of the transfer or other evidence. - similar to an advancement doctrine"

Simpson v. Calivas

"• Suit against lawyer who drafted plaintiff's father's will. • Will left everything to plaintiff (Robert) except for a life estate in "our homestead..." • What did the decedent father intend to do and why? Actual intent of D • Give all land and property to son so he could continue the family business • Allow D's wife to continue to live in their house for the rest of her life Actual result • Wife got a life estate in all the real property • Robert had to negotiate with the wife - his stepmother - and buy out the life estate for $400,000 in order to keep the business running • Robert brought a malpractice action against the lawyer • What was the issue here?"

forced share

"• Surviving spouse has right to choose between taking under the will and taking a share of the estate dictated by statute. • Shares vary state to state, e.g. 1/3 of the estate. • Originally the share extended only to probate property, but some states have extended it to other types of property over which D had lifetime control. • But then people would just take property out of probate so they needed to extend it Example • Ted and Wendy have been married for 40 years, during which time Ted has been the primary wage-earner. • At Ted's death he owns the following (titled in his name): $200,000 house, $300,000 money market account and $100,000 lot in northern Michigan. • His will gives his entire estate to his mistress, Mary. • What happens to Wendy? • If Ted's name is on the property and his wages were used to purchase it, in the absence of a statute, Wendy is out of luck: Mary takes all. • Public interest in keeping W from poverty. Possible argument she helped build the assets • Forced share statutes allow W to elect to take despite the will. • Her share will typically be a fractional share of T's probate estate (e.g.1/4 or 1/3). Advantages of system - forced share • W gets something significant for her support. • W is not penalized for staying married to T - or at least she is not penalized as much: Note that if there had been a divorce she may have taken ½. • She'd get more in a divorce so what would incentivize her to stay Disadvantages of system - forced share • Under-protects W if the statute only applies to probate property: • E.g. Ted puts all property in a living trust with Mary as the beneficiary. W has no recourse. • Husband just had to transfer property out of probate ---> trust and make his mistrass the primary beneficiary of the trust • May over-protect if the disinheritance was part of an overall estate plan: • E.g. Ted gives $500,000 to W as a lifetime gift, then leaves $100,000 to Mary under will. W gets share of $100,000 in addition to the lifetime gift. o Gives Wendy more than she would have gotten; doesn't matter what she already got, it's based on what's in estate at the time of death o More sympathetic - gives a large sum to child from previous marriage but wife can take 1/3 instead Court rulings & Statutes - forced share • Developed to close loopholes"

In re Searight's Estate

"• T bequeathed his dog, Trixie, to Florence Hand, along with a fund of $1,000 to be used at 75 cents per day for Trixie's care. If any funds remained at Trixie's death, T directed that they be paid in equal shares to Florence and 3 other beneficiaries. • Did T successfully establish a trust for Trixie? • Why dogs aren't just beneficiaries in fur coats... • Why do beneficiaries have to be human (or charities)? • What is the Rule against perpetuities problem? • My dog Oliver is quite upset! • Bequest for the care of the dog? • Not illegal or immoral • Power given to recipient of the bequest to carry out T's wishes where, as here, Florence is willing to do so. • Common law doctrine of "honorary trust" covers this situation. • Statutes have refined the concept."

Dawson v. Yucas

"• T devised her interest in her late husband's family farm to two of her husband's nephews, stating in the will that she believed "that those farm lands should go back to my late husband's side of the house." One of the two nephews predeceased T. The court held that the gift lapsed, and fell into the residue, which passed to two beneficiaries who were not on T's husband's "side of the house." • Issue & holding - Was T's gift of the farm intended to be a class gift (which would mean the deceased nephew's share would go either to his descendants or to the other nephew - depending on the Illinois antilapse statute in effect at the time)? o Held - no class gift intended. • Why not? o A class is "a number or body of persons with common characteristics or in like circumstances." o If the number of persons and the amount of their shares is uncertain until the bequest takes effect, then the gift is to a class. o Where a specific number of persons are mentioned by name & shares designated, there is a gift to individuals - here, they were named specifically + there was a group of nephews on the husbands side besides these two men o Would then go to residue - which are HER relatives • Exception: o Some states make the presumption of no class gift where beneficiaries are specifically named a rebuttable presumption. • Note: the Wisconsin statute applies only to dispositions to class members who die AFTER the execution of the governing instrument. Distinguish class members before T died or after because you probably know they died "

Hartman v. Hartle

"• T died, survived by 5 children. Her 2 sons-in-law served as executors. • Will directed that the real estate be sold and the proceeds be divided evenly among the 5 children. • The executors sold part of the real estate for $3900 to one of T's sons, who bought it for his sister (who was married to an executor). o Lots of times there are assets in the estate that one or more beneficiaries would like to have; if you want children to take evenly, you need to sell the property and divide the proceeds • What was the issue? • One of T's daughters challenged the sale. o Why was she unhappy? • Sale was... suspicious Nominal sale to brother Purchase really for benefit of sister #1, who was married to executor. o Cannot buy and sell to themselves because that would be self-dealing- if your spouse is interest = you are interested because you will benefit from that purchase • Executors are fiduciaries: they cannot purchase from themselves and their spouses are also precluded from purchasing. • Self-dealing aspect became apparent when property soon re-sold for a $1600 profit - not even a sale for market value • Remedy o Executors had to give complainant sister her share of the sale profits - going to get a portion of $1900 from resell price in addition to her getting her initial sale value of the property AND they had to pay for the court action because it was filed in trust o Note - they also had the trouble and expense of a court action!"

What happens if a person has no spouse, parents or descendants?

"•In all states, the property passes to brothers and sisters or their descendants. •If none of the above survive, states use either the parentelic system or the degree of relationship system."

Clark v. Greenhalge

"• T executed a 1977 will which named her cousin, Greenhalge, executor and primary beneficiary. The will also said items of personal property should be given to persons designated by a memorandum left by her. In 1972, Greenhalge had helped T draft such a memo. • After the execution of the will... o T also kept a notebook in which she made entries under the title "list to be given to Ginny Clark 1979." (Ginny was a friend of T) List gave farm painting to Ginny • After T dies... o Greenhalge refused to give farm painting to Ginny Clark. o Farm painting was valued at $1800 for estate tax purposes. A later appraisal valued it at $30,000. o Greenhalge argued no incorporation by reference because the notebook list was not sufficiently identified by the term "memorandum." • Holding: o Ginny takes the picture. o The notebook list was a type of memorandum, and there could be more than one memo. - doesn't need to be labeled and can have multiple -The will reference was sufficiently specific. o The notebook list was in existence at the time of the two 1980 codicils. - openly talked about it and was dated properly; date that kicks in is the date of the codicil; whatever date was on the codicil • Memo was dated 1979, but it's possible she was sneaking things into the notebook after this because the man was so awful and was not sympathetic However, know the elements for incorporation by reference set out - may not have been followed and it's presumed it was done properly o There was no doubt that T wanted Ginny to have the picture. o Greenhalge acted improperly! (dicta) - footnotes say he was a terrible man and awarded atty his full hourly rate, settled for $70k because he was fighting so much; his improper actions solidified the court's desire to make sure Ginny had the painting"

Clark v. Campbell

"• T left tangible personal property to trustees to give as mementos to "such of my friends as they, my trustees, shall select." • Issue: should the bequest for the friends fail because the beneficiaries are indefinite? • What was the testator trying to do? o Was this an absolute gift to the trustees as individuals? o Was this a power given to the trustees so that they had the option of giving away the property or not? o Was this an attempt to create a private trust with T's "friends" being the beneficiaries? • Court finds attempt to create a trust • No outright gift because the plain language says "trust." - plain language, called it a trust and the recipients trustees • No optional power because - the court says- the language imposed an imperative duty to dispose of the items among the testators' friends. • No trust because no identifiable beneficiaries. • Why not? What is wrong with "friends"? o Don't have a definition of who the beneficiaries are OR what they should do with the property - if someone brings a claim that the trustee is not acting properly, it's hard to decipher o Property will revert back to the estate o Could have been a power here - used that fiduciary language o Court was relatively dismissive here"

Example- change in property/anti-lapse

"• T originally had three sisters, A, B, and C. T's will leaves her farm to her sisters. A dies before the will is executed leaving a daughter, D. B dies after the will but before T (leaving a son, S) and C survives. S and C share the farm. o Changes in property after will execution o Anti-lapse statute would kick in and create a substitute gift - S and C are going to share the farm"

Lipper v. Weslow

"• T's will left everything to her two living children and nothing to the children of her deceased son. These grandchildren contested the will, claiming undue influence. A jury found undue influence by T's son, Frank Lipper. Proponents appeal. • Issue - was there sufficient evidence to support jury verdict of UI? • What was the evidence ? Son wrote the will with legalese because he was a lawyer; only received a couple cards from other siblings, did not visit • Evidence o Elderly lady - strong-willed and vocal - everyone agrees, estranged from daughter in law o Estranged from children and widow of her deceased son. o Here, it was a bad idea to include all of these details in the actual will ebcause they are assertions of facts and many lawyer litigation fees needed to fight each claim + will is a public document and people do not want friends to know they never sent Grandma a Christmas card o Son Lipper, a lawyer, drafted the will o Lipper had opportunity to deceive T, but did he take advantage of it? Acted as a lawyer, may have hid the cards, called some shots; Appeals says no o Holding: insufficient evidence to support jury's verdict. o Not persuaded because there was testimony that T told people that she was going to disinherit her grandchildren; no hard evidence that he hid these cards; other siblings had the burden and presumption is T intended this disposition • Problems with lawyer Lipper's approach o Ineffective in terrorem clause - (p. 297) any legatee (person named in the will) contests the T that they forfeit all benefits under the will o You should be in terror of losing what you already have under the will by fighting over it; you lose your share if you fight the will o Here, Lipper did not do this correctly - Bernice and children got nothing under the will so the terrorem clause is not a disincentive to them; if the will gets thrown out, they get intestate share and in terrorem clause is thrown out - if you include it, they need to have received at least SOMETHING o Risk of testamentary libel - estate will need to pay for lawyer to fight against this (ex: Sister only sent flowers once) o Attorney ethics issue. • Is it ethical for an attorney to draft a will when he is one of the beneficiaries? See WI SCR 20:1:8 If you're drafting your parents' will and they are disinheriting your siblings - you will benefit more so this is unethical "

Example - anti lapse

"• T's will says: "I give my diamond tiara to my sister, Sonia. I give the residue of my estate to my brother, Benny." o Sonia dies one month before T. Sonia is survived by her husband, Harold and her daughter, Delia. • What would happen under the common law of lapse if there is no antilapse statute? o If no antilapse statute, the gift to Sonia fails. Since it is a specific bequest, it falls into the residue of T's estate, and Benny takes it. (Benny gets the residue) • But - there is an antilapse statute. Does §854.06 apply? o Scope of coverage: §854.06 applies because Sonia is a descendant of T's grandparents. o The statute creates a substitute gift to the issue of Sonia, per stirpes. (strict) o Delia takes the tiara - she has one descendent • Note - this is NOT the same thing as a substitute gift to Sonia's heirs - her husband does not take anything - spouses not in scope of coverage • Statute yields to contrary intent by testator o If the decedent provides for a substitute gift in the event a beneficiary predeceases, this controls instead of the statute. o If my sister survives me, she gets the tiara. If she does not survive me, it goes to my friend Jessica. o If the decedent provides a series of contingent beneficiaries and they all predecease, the statute creates a substitute gift to the issue of the first designated contingent beneficiary who (#1) is a relative "covered" by the statute and (#2) leaves surviving issue."

Possible situations at death

"• TESTATE = died with a valid will • INTESTATE = died without a valid will • PARTIALLY INTESTATE = died with a valid will that doesn't cover everything • Significance of these categories is that different rules apply to determine who inherits property."

Calculation for advancement

"• TOTAL: $330,000 (divided under 852.01) • ½ to W --- $165,000 (Why?) • ½ to be shared by A, B, C --- $165,000/3 = $55,000 apiece • Since $55,000 is less than $60,000, A would probably decline "

Revocation by subsequent will

"•To the extent a later will is inconsistent with an earlier will, the later will revokes the earlier one. •If will is only partially inconsistent, the new parts control - the older will remains in force to the extent it is not superceded."

Wis. Stats § 702.17

"• Takes on the ""why not let them"" stance - clear reversal of Irwin Bank, treated donee with the power as having it, even if not exercising the power • Prior 702.17 clearly reversed the rule in Irwin Bank v. Long. • New 702.17 is more nuanced: o Allows creditors during life or after death of donee to reach property over which donee had a general power of appointment under certain circumstances. • Notice here that in Irwin Bank, he didn't have a general power of appointment over all trust power - but he had a general power over that 4% and could take it out whenever • Here, they treat it as his property based on the following factors.... • Creditor access partly depends on whether the power was exercised, partly depends on who the donor was, and may partly depend on whether the donee has sought payment of the claim. See (2) and (3). o Before going after property the donee has power over = Creditors must look to donee's individual assets or estate assets first. • Remember Dory with spendthrift provision because she was spending all the money - creditors could not get to trust principal, then at her death, she can distribute under will o Under 701 - during Dory's life, creditors could not get to property but THEN... o Testamentary general poewr of appt - 702.17(3) says that the creditors may be able to get at the property • Except as provided in (b)...... • 3(b) if donee fails..... Dory and her spouse are not the donor - then creditors cannot because it was her day • But then the question becomes, did Dory exercise the power???"

Beneficiary and creditor rights to trust distributions:

"• Taking property out of the trust & giving it to someone outside the primary beneficiary. • What kinds of rights do beneficiaries and creditors have à if the trust does not order funds to that person o Force distribution."

trusts regulate access

"• That's why Grantor placed property into a trust instead of giving it outright: concerns with capacity to manage property, tendencies to spend it all, etc. • Often there is a tension between the restrictions the grantor has placed on B's access to trust funds, and B's (or B's creditors') desires for access."

Per capita at each generation

"• The estate is divided into as many shares as there are survivors and deceased descendants leaving descendants, and this is done at the first level where there are living descendants. Each surviving descendant gets one share. • The shares of the deceased descendants who left descendants of their own are combined, and divided in the same manner among the survivors in the next generational level."

contrary intent

"• The operation of the anti-lapse statute yields to evidence of contrary intent. Meaning: the anti-lapse statute won't kick in to create a substitute gift if T doesn't want it to. • Contrary intent may be proved by extrinsic evidence. • Statements of intent in the governing instrument are particularly persuasive. • Example of contrary intent: o T's will says: "I leave my car to my sister if she survives me. If my sister does not survive me, I leave my car to my friend, Sheila." o T's sister would be in the class of persons covered by the anti-lapse statute - but T indicates contrary intent by creating her own substitute gift if her sister does not survive. "

Property

"• There must be a res (a body of property) for a valid trust. However, the property can be a present or future interest, either vested or contingent, in existing property. • What if you don't have it yet? • The property must be a presently existing interest - that is, it must exist as a present legal reality, even if the beneficiary does not currently possess it, and may never do so. However, some states have restrictions on transfers of contingent interests, so trusts cannot always be created with contingent interests. • But...An interest that has not come into legal existence (like an expectation of inheriting) cannot be held in trust. An unenforceable gratuitous promise cannot be trust property - grandma could disinherit you at the moment she takes her last breath"

Personal usage exception (courts expanded latent category)

"• These were cases where one person exactly fit the description, but others claimed to fit it as well in the testator's eyes; T did not mean the commonly accepted meaning o E.g. Moseley v. Goodman • T called cigar salesman "Moseley" and his wife, Lillian ( who was also T's landlady) "Mrs. Moseley" as a kind of affectionate joke. Court admitted evidence to show T's gift was intended for Lillian. o Court admitted evidence that he really intended to give the gift to Lillian, even though there was a real woman named Mrs. Moseley and she would typically take under the plain meaning rule"

issues with special powers

"• This is litigated- • Can be EXCLUSIVE, which means that donee can appoint to one or more of the class of permissible appointees, to the possible exclusion of other permissible appointees. o You can exclude some of them if you want to o Example: Eleanor gave exclusive power of appointment to appoint among his children - might give them this if you wanted the donee to maintain some influence - i.e. they better be nice and productive • Or can be NONEXCLUSIVE, which means that the donee must appoint something significant to each permissible appointee. How much is enough? o Case law is sparse - must be more than $10 but doesn't need to be equal at all - totally unclear ""I know it when I see it"" Fraud on a special power • What happens when donee tries to appoint to someone who is not a permissible appointee? o Appointment is void to the extent it is motivated by the desire to avoid the limitations on appointment - by definition, it is (cannot forget there are other people in the class) "

removal of trustee

"• Traditionally, removal only for cause - beneficiary dissatisfaction is not sufficient reason. o Comes up more than you would expect o Needed strong evidence for removal, not just a personal conflict • UTC is more generous. • See 701.0706 - statute is more generous; ""if any of the following apply"" o Broadening - trustees investing in property that wasn't profitable; beneficiaries would complain and courts didn't do much but now court can make an independent finding that it would serve the best interest o Gives deference to the beneficiaries opinions- before common law did not do that, can almost always find"

uniform trust code

"• Treats discretionary and support trusts as the same in most cases where alienation or creditors' rights are in question. • See 701.0501, 701.0504 and 701.0505."

Noncharitable trust w/o ascertainable beneficiary

"• Trust is possible: see language in (1) • Cemetery trusts specifically authorized. • May be enforced by a "trust protector" under 701.0818. • If court determines property is excessive for the intended use, excess property will be returned to the settlor or his successors in interest. • Broader than animal trusts; would this statute save the gift in Clark v. Campbell?"

Claflin

"• Trust was established for testator's son • Principal payout to son at age 30 • At age 21, son sued to terminate the trust because he was the only beneficiary. • Court refused to terminate the trust because T's intent of keeping the $ safe until son was 30 was not fulfilled yet --> think about how the T's intent with wills was paramount - same goes for the intent with trusts o Opposite rule in England, where trust res is treated as property of the beneficiaries - a lot more control lifetime beneficiaries have over the res o Claflin doctrine: o Beneficiaries cannot compel termination if continuing the trust is necessary to effectuate Grantor's intent (material purpose). • 701.0411. - circumstances where amterial purpose is not me; court can terminate trust if modification would nto interfere with material purpose of the trust; nonetheless, burden is on the beneficiary to show this would not frustrate the material purpose o Can only get to once all trust purposes are completed o Cases deny termination where: (evidence) • Spendthrift trusts - if present, courts tend to deny under Claflin rule because settlor was obvioulsy worrid about them spending money • Payout at certain B age - same • Discretionary trust - tricky because shows they were open but historically courts have looked at that trustee discretion as more evidence of material purpose, trustee's protective element • Support trust for B - support trusts are seen as having a material purpose of supporting the beneficiary; cannot accomplish if paying out in oen sum *****Exam: o Approach the questions like we've been approaching problems in class o Recommends IRAC and determine what the issues are; tell her what the rule is (presume WI law applies unless otherwise indicated; e.g. intestate succession systems) o Look to WI statute - can be highlighted and tabbed o Look to common law doctrines = court made law; statute refers to is (we're not changing it or we are altering it; terminology) o How the facts of the hypo fit into the doctrine + statute - do not rewrite the facts, pick out the facts that are relevant and why o Conclusion - best argument, maybe second best, who is likely to win - answer the question that is asked o Usually there is more than one right answer but there is usually a totally wrong answer; reasoning and analysis is important o Don't throw in irrelevant doctrines to prove you know it o Friday 10-2 and Monday 10-1 - 353 "

In re Estate of Brown

"• Trust was to pay for the education of Woolson's children. After this purpose accomplished, income and principal as needed was to be paid "for the care, maintenance and welfare...of Woolson and his wife, so that they may live in the style and manner to which they are accustomed, for...the rest of their...lives." o Broad discretion in the trustees • Residue? o Children to get residue, if any. - the ones that had been educated by the trustees o Could trust be terminated if all Bs agreed? They all agreed but NO o Do not know how much $ was in it and do not know the terms the parents wanted attached to the $ • Held - no distribution could be ordered • Why not? • Educational purpose fulfilled but this was a • Support purpose not fulfilled under Claflin (according to the court). o Why not? It's unclear based on the facts; support trusts are supposed to support you for the rest of your life unless it says it ends a certain age so they are still alive and the trust has the purpose of supporting them; what did mom and dad want that couldn't just make the trust run out of $$$$ o Some trustees (Masman) will be very stingy giving out $$$ to lifetime beneficiaries to residual beneficiaries o When you're drafting and don't want this to happen = instruct trustees to FAVOR the lifetime beneficiaries *To whom is trustee duty owed? • Grantor • Lifetime beneficiaries • Remainder beneficiaries o Answer is all three but it can be skewed toward one based on the trust document; but in the absence of trust documents and evidence --> left with the Claflin doctrine • Not clear why trustee was reluctant to "use up" trust, to support Woolson and Rosemary."

History of trust law

"• Trusts were known at common law as early as the 14th century, when they were called "uses."" started giving land to beneficiary A for the use of Beneficiary B • These early trusts had land as principal, and trustees were amateurs with little management responsibility. • Beneficiaries lived on the land. o Takeaway- early law did not require much explanation as to what trustee had to do or couldn't' do - basically just paid taxes and beneficiaries supported self on land More recent history • Beginning in the 19th century, the predominant form of wealth shifted away from land - stocks, bonds, cash • Trust principal is usually a portfolio of financial assets. • Trustees need skill to manage the property, and incentive to do it for the beneficiaries only."

Can T utilize extrinsic elements to define disposition of property?

"• Two doctrines: 1. Incorporation by reference 2. Acts of independent significance"

Enter trust fiduciary law

"• Two main principles: o ACT WITH Prudence o ACT WITH Loyalty to the trust beneficiaries o Subrules : e.g. duty of record-keeping, segregation of trust property, etc - are all derivatives of prudence and loyalty. Duty of loyalty • Trustee must administer the trust assets SOLELY in the interests of the beneficiary. • NO SELF-DEALING IS PERMITTED, even if there is trustee good faith and fairness to the beneficiaries!"

In re Estate of Rigsby

"• Two page document handwritten and signed by the testator on the first page. Second page is initialed at the top, but not signed, not numbered, and doesn't contain a reference to the first page. o The pages are folded together in a ledger, but are not fastened. • Court admits 1st page but not second. Affirmed. Why? • Reasoning o Testamentary intent must be clear for both pages. Will follow T's intent if it's clear but no need to stretch the documents o No reference in either page to the other page. o Inconsistent provisions - probably the nail in the coffin because if there are inconsistencies it could likely be a draft o No numbering o No signature on second page • Cannot be brought in by incorporation by reference because it wasn't referenced or any other evidence of T's intent "

Fraud and Tortious Interference with an Expectancy

"• Two types of fraud: 1. Fraud in the inducement - this is when someone lies or misrepresents facts to induce the testator to either make a will or keep a will with certain provisions. Invalid if you can prove T would not have done the same thing if he had known the truth. See Estate of Carson o Invalid if you can prove it was false and the T would not have done this if they knew the truth 2. Fraud in the execution - this is when someone misrepresents what is in the instrument that T is signing."

Erosion of plain meaning rule

"• UPC has advanced this; but courts did not admit they were eroding the plain meaning rule, but chipped away at it piece by piece • Latent ambiguities where two persons or things fit the will language. o Admission of extrinsic evidence began in cases like these. • E.g. "my cousin Mary" where there were two: evidence was admitted to see which one. o Erosions (Summary): o Latent ambiguities o Personal usage exception o Latent/patent distinction --> o Courts increasingly declared ""latent"" ambiguities when cases were sympathetic ones o Courts dropped "erroneous" parts of descriptions, declared the remaining language ambiguous, and admitted evidence to resolve the ambiguity."

Ademption

"• What happens if specifically bequeathed property is not in the estate at the time of T's death. o Abatement - what happens when the estate does not have enough assets to pay all the debts and all the bequests. • Ademption by extinction (more traditional term) o Common law rule: if a specifically devised item is not in the estate at death, the gift fails. o We don't know what the T was thinking - there could be specific facts about the estates that we don't know o Example from TB: T gives Blackacre to A and the residue of her estate to B. She sells Blackacre and buys Whiteacre, then dies without changing her will. The gift to A fails, and B takes everything, including Whiteacre. • Rationale; T knew she didn't own Blackacre - if she still wanted A to get something, she could have changed her will. o Presumption is that if you don't care enough to change the will to reflect the change in that property, you probably intended the gift to fail • But sometimes, the common law rule could have hard - and probably unintended consequences... • Examples Blackacre burns to the ground, and T dies in the fire. Under the common law rule of ademption by extinction, the testamentary gift of Blackacre to A fails. T requires expensive end-of-life medical care, so her guardian sells Blackacre to raise cash. Under the common law rule, the gift of Blackacre fails. o If it's not in the estate at the time of the T's death = fails Sometimes courts softened the results..."

Lapse

"• What happens when there is a post-execution death of a person designated to receive property? • There are common law rules AND Statutory rules o Common law rules of lapse: • Property can only be transferred to a living person: in other words, a devisee has to be alive to take and if he isn't, the gift fails. • What happens to the failed gift under the common law doctrine of lapse? Falls into residue = Lapse of a gift under common law rule If it is a non-residuary gift, it "falls into" the residue, and goes to the residuary devisees. • Non-residuary gifts include specific or general bequests: e.g. I give my copper kettles to A and $1,000 to B. if no one wants the copper kettles, then they would be sold and that money split in the residue If it is a residuary gift fails, there are two approaches: o if there is only one residuary devisee, or if the state follows the conventional "no-residue-of-a-residue-rule," the gift "falls out" of the residue and passes as intestate property; makes sense if you only have one residuary--> falls out of residue and goes to intestate succession o Alternative approach - Some states reject the "no-residue-of-a-residue rule" when there is more than one residuary devisee. These states allow the remaining residuary devisees to divide up the share of the deceased devisee. - there was a group that was specified, better to go to them instead of intestate heirs that aren't even mentioned"

"words of survivorship"

"• What if T said only "I leave my car to my sister, if she survives me." • Does the phrase "if she survives me" indicate T's intent that the anti-lapse statute NOT apply? o There is a lot of disagreement on this issue... o UPC rule • Words of survivorship alone do not indicate intent to defeat the anti-lapse statute • Reasoning: They are frequently used as boilerplate and are therefore inherently ambiguous. • Reasoning (example from Ruotolo) o Presumption that the testator knowingly included words of survivorship is not reasonable because the words are boilerplate. o When the intended beneficiary is younger than T, T does not expect him to die first. o If T wanted the gift to lapse, he could have provided for a substitute gift. o Inferring contrary intent means presuming that T intended intestacy if the beneficiary predeceased."

Abatement

"• What if the estate does not have enough money to pay all debts and bequests? o As always, T has the option of directing whose shares should be reduced and whose should not be reduced - Sometimes there are funds or priorities specified o In the absence of directions, debts are paid: o first from residuary gifts (residue) o second from general devises, o and last from specific gifts. • But... o The residuary beneficiary is often the most important one - often the spouse! o Example: T has an estate worth $1 million. His will gives $100,000 to his son, $200,000 to UNICEF, and the residue to his wife. At his death, the estate is worth $300,000. W gets nothing! - debts paid first • It is important to draft to avoid this result!!! o Even in cases when you think there's no way the $ will run out - transactional attorneys must be like a child in a dark room just LOOKING for things to go wrong! "

Incorporation by reference

"• When can a will be interpreted - or added to - by a document outside of the will itself? • Note the issue: if we require proper execution in order to give effect to a will, how could another non-testamentary document ever be relevant? o Courts resisted because these outside documents are not as formalized or safeguarded as perfectly executed wills- why would we look outside 4 corners of will to determine T intent?"

Group beneficiaries

"• Where beneficiaries are identified by a class description, it must be definite enough that it is possible to identify who are beneficiaries - and who can, therefore, enforce the trust: e.g. "X's children" would be sufficiently specific, but "X's friends" would not. • If the trustee is required to select from an indefinite group like "friends", the trust will fail. (Then what happens to the property?) • There could have been a power: • If T gave property to A & B as individuals, with the power to distribute it, the gift would stand as a power of appointment. • Here, T gave property to A & B as fiduciaries, so the power was no longer optional, but it was not specific enough that someone would have clear standing to enforce it. So the trust fails. • Look at 701.0409"

Exercise by specific reference

"• Where this is required, most courts will not find exercise where there is general language in a will like the following: " I give... all property over which I have a power of appointment." • Reference must be to the power - usually by reference to the document creating it or to the donor that created (Dory would say ""the power of appointment under the will of my father"") o Identifying the power is key • Or not - if extrinsic evidence shows intent. o SEE Wis. Stats. §702.03 • Talks about presumptions - whether or not the language in itself manifests intent - no; but ""in itself"" implies that extrinsic evidence for donor's intent may be accepted "

How to protect beneficiaries from creditors

"• Why? Might have some concerns; If beneficiary is: • Irresponsible with money or immature • Otherwise eligible for public benefits such as Medicaid - may have a disability • Involved in risky business enterprises • Likely to face creditors of some sort"

In re Will of Moses

"• Widowed 57 year-old woman entered a love affair with Clarence Holland, a young man who was 15 years younger than her. • Moses' will gave almost all of her property to Holland. • Her sister and heir successfully challenged the will on the grounds of undue influence. Two Elements Test o Alleged influencer had confidential relationship with T o Fiduciary relationship because Holland was a lawyer. But was he ever acting as HER lawyer? No, and no communication between Shell (the actual lawyer) and Holland o Suspicious circumstances o Suspicious circumstances because she was an alcoholic and was involved with a younger man. Why is that a problem? o Page 291 - disfigured by surgery, hopelessly addicted to alcohol, entertained the pathetic hope that he might marry her - she was unattractive and old so he couldn't have possibly been interested in her • What do we know about Moses? o Majority: • Alcoholic • Breast cancer survivor - they call her disfigured o Dissent: • Shrewd businesswoman - managed her own property, very opinionated • Pursued her own course - no evidence that Holland even knew about the estate plan; fought with her sisters • What about the lawyer who drafted the will? o What did he do? Internal business, drafted and gave it to her to sign o Did he act improperly? Could he have done more to ensure her intent was carried out? o Should have discussed UI factors with her and created some kind of record of that conversation - nature of relationship o ***Main Point: Testators can do what they want but if relatives are likely to be unhappy about it, lawyers need to record and prepare for a challenge to probate"

Marsman v. Nasca

"• Wife's will set up trust for benefit of her husband, Cappy - he is not very intelligent but he's handsome so she sets him up realllll nice; sets up trust for Cappy with certain provisions: o Provisions required mandatory income distribution (The Trustee shall distribute all the income of the trust (a least quarterly)) and discretionary principal distribution (given authority to invade the trust). • Cappy fell on hard times... lost job, married another women, got sick, lost most of money o When he died, he wanted to give his new wife a life estate with the property - • Did lawyer act prudently? Same lawyer that drew up trust for first wife; the family lawyer representing husband and wife---> do they have the same interests? No o Trust - he did not get principal distribution right because trial judge said it was envisioned for Cappy to support himself when he couldn't - he couldn't afford to keep the house up, but when he asked Farr for distribution (which he was entitled to) - Farr made him jump through a lot of hoops; he also didn't seem to understand that he was entitled to that money so Farr just gave him $300 • Did lawyer act prudently? See 701.0804 o Requirements of the statute = Did lawyer/trustee consider the purposes, terms and distributional requirements of the trust with reasonable care? • No! • Did not meet trustee's obligations - purpose was to make sure Cappy was supported and he didn't do that o Had duty to distribute - not just the bare minimum distributed and then hiding behind discretion o Had duty to inquire - about whether or not Cappy was adequately supported; Trustee cannot be passive in carrying out duty of prudence = must be active and follow up o What should the remedy be? Cappy is dead now and Margaret (wife #2) brought this action; asked Sally and her husband for help and they agree to take over the mortgage payments- Cappy transfer property to them; knew she wasn't going to inherit the house o Farr should have inquired and distributed o Remedy would usually be for trustee to make whole - but Sally's husband approached this in good faith and shouldn't need to give house back • Farr's actions o Did lawyer act ethically??? • See SCR 20:1.7 • Does SCR 20:1.8 apply? o What should he have done? Distribute the property and not represent al of them once it became clear they had conflicting interests • Standards for prudent distribution o Support: T should distribute " to maintain the life beneficiary 'in accordance with the standard of living which was normal for him before he became a beneficiary of the trust.'" (Marsman) o Discretionary: even "absolute" discretion is not unlimited. o Takeaways: o When you have a support trust, that means the Trustee should distribute what was normal to them - trustee should be maintaining that or something close to that o Discretionary trusts have their limits - needs to be discretion from the lens of the T"

Guardianship

"• Wis. Stat. Ch. 54 o Requires adjudication of incompetency o May be guardianship of person, estate or both o May be finding of unlimited or limited incompetency: with limited, ward may retain some civil rights. • Benign for minors, but often bitterly contested for adults - can be really painful for adults • If at all possible, plan to avoid needing them!"

mistaken vs. intentional omision

"• With children, unintentional omission is more common because of after-born "surprises" or scriveners' errors listing the kids. • It's harder to "overlook" a spouse, so here unintentional means that a testator marries AFTER his most recent will. "

Statutory solution

"• You can tell clients not to do things, but you cannot prevent them from doing these sorts of things anyway • Picture an elderly lady with an extensive porcelain collection and a lot of nieces and lady friends who might enjoy them... Nana! o How to efficiently deal with her propensity to change her mind about the gifts? • See Wis. § 853.32 (2) (tangible personal prop.) o Document valid even if it didn't exist when the will was executed, it is changed after the will is executed or has no independent significance."

See WI STAT §702.03

"• extrinsic evidence acceptance? Some you need an exercise by specific reference and others can be general reference • If a creating instrument is specific what exercise means - that governs • If not, part 2 - if you have a power of appointment over Greenacre property and your will says you give all of your property including Greenacre to Marvin o Language we're really looking at - general power of appointment by will, a residuary clause in donees will purporting to give whole estate - then it is exercised • With Dory - were there takers in default? No - meaning, 702.03(3) if there is a general power of appt and no takers in default = going to assume the general residuary clause exercises the power of appointment but in all other cases, presume the opposite "

Powers of attorney

"• ordinary power of attorney o agent has power to act on behalf of principal, o power terminates on death or incompetence of principal o Give to a child or spouse to manage property and maybe you don't want to put everything in a trust"

deferred marital property

"• property that would have been marital property, except it was acquired before the Act took effect or before the couple moved to Wisconsin • It does not already belong ½ to each spouse because of constitutional principles • Requires special rule at death to protect surviving spouses from disinheritance. • Rule: Surviving spouse has right to elect up to ½ of all deferred marital property of the marriage (AKA augmented deferred marital property estate). However, in calculating whether Surviving Spouse has received the full share, all transfers from the decedent spouse count, whether from his marital property, deferred marital property or individual property. Added to figure out if it matches 1/2 or more of the estate o If these transfers aren't enough, the election is satisfied out of decedent's transfers to third parties...even if that means children from a previous marriage o Want to prevent under/over accumulated problem Example • A and B are married. At A's death, A owns: $40,000 Share of marital property • $60,000 Individual property o $150,000 Deferred marital property • B owns: • $40,000 Share of marital property • $20,000 Individual property o $30,000 Deferred marital property o Add DMP together to get total of what we're working with • B is entitled to ½ of the DMP • DMP = A's DMP + B's DMP ($150,000 + 30,000 = $180,000. B's one-half = $90,000) - adding up property from before they moved here but would be marital property • Assume A's will left $50,000 of individual property to B, and the residue to C. o B's DMP and all transfers from A count towards her share o B already has $30,000 DMP in her own name, and she has received $50,000 under A's will. • 80,000 o Therefore she is entitled to elect an additional $10,000 from A's DMP. Augmented deferred marital property estate • Calculated by adding the total of A's deferred marital property ($30,000) and B's deferred marital property ($150,000), which equals $180,000. • Therefore, B is entitled to ½, or $90,000. • Remember, all transfers from A to B count in assessing whether she has gotten her share. • $50,000 bequest counts, and she already has $30,000 so she can elect $10,000 more. "

Spendthrift trusts

"• trusts in which B is unable to transfer his right to future payments of income or capital (voluntary or involuntary-meaning the creditors attaching that interest to a claim) AND his creditors are unable to subject B's interest to payment of their claims. There is no restriction on creditors' rights to claim property after it has been paid out to B. o Can only be protected if it's in the trust o Once it goes to the beneficiary, it's paid like a salary- creditors cannot get to it until it's transferred so would prefer it stayed with the trustee because beneficiaries can be hard to track down • Justification: a grantor has a right to place conditions on a gift. o i.e. if I set up a trust for my children and they're all adults, I don't have an obligation to give them anything or pay their bills but want to give them a gift - you can set conditions on gifts and can structure gifts in a way that doesn't allow for past bills to be paid with my money • Sample spendthrift clause: • The interest of beneficiaries in principal or income shall not be subject to the claims of any creditor, any spouse for alimony or support, or others, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered. The rights of beneficiaries to withdraw trust property are personal and may not be exercised by a legal representative, attorney in fact or others. • Policy debate: • Should any classes of creditors be able to collect despite a spendthrift clause? • See e.g. Shelley v. Shelley (notes), where G left $$ in a spendthrift trust to Grant (grandson), with income for life and principal distribution to the extent though Grant was capable of investing it OR to Grant or his children in case of "emergency", to be paid for their "proper support and care." o Grant skipped town owing alimony and support to 2 ex-wives and 4 children."

Discretionary trusts

"• trusts in which payout of income or principal is solely up to the trustee's discretion, in the manner intended by the grantor. (within the context of what the settlor intended) • Example: "T shall pay so much of income and principal as he deems appropriate to A or B.""

Exception: Self-settled asset protection trusts

"• trusts in which the settlors act as trustees until "duress occurs, at which point they are removed as trustees and replaced by trustees who will not pay out to creditors of any sort." - when creditors start asking and try to file grievances against them • Allowed in 14 states plus offshore jurisdictions. • Not clear if enforceable in a non-adopting state. Always check state statutes • State version of trust laws sets out creditors' and beneficiaries' rights to distributions. o Not even all the UTC states are consistent "

support trusts

"• trusts that provide for a mandatory payout of income or principal for B's support • Example: "T shall pay out income and principle for B's comfortable support, education and welfare." - usually construed to mean healthcare expenses"

In re Estate of Stoker

"•1997 will listing G and K as primary beneficiaries along with a trust with G as trustee. G was Stoker's girlfriend. •2001 Stoker and G had nasty breakup. •2005: Stoker signed a handwritten will that he had dictated to a friend. Two witnesses saw him sign, but they did not sign as witnesses. Did Stoker revoke the 1997 will? • Court discusses issue of validity of 2005 will. Interprets statute that allows wills not executed in compliance with statute as validly executed if the proponent establishes by clear and convincing evidence that at the time testator signed the will, T intended it to BE his will. Why does this matter? •Possible arguments for revocation •Explicit written revocation •Physical revocation (burning, tearing, cutting, etc.) •Revocation by a subsequent inconsistent will Which, if any, do we have here? Ask: •Did the "will" expressly revoke the prior will? •Did the testator perform one of the physical acts of destruction on the will as required by statute? •Did the subsequent will dispose of the whole estate? Court holds there was revocation •2005 will is held to be valid, and it disposes of his whole estate. Testator's intent to revoke is CLEAR. •Physical destruction may possibly have been accomplished as well BUT why is it problematic that T destroyed a copy rather than original?"

DISCLAIMER - bars to succession

"•A refusal to accept gratuitously transferred property. •Long common law tradition, but almost solely a matter of statutory law now: -State statutes -Federal tax law (IRC) : most state laws track this because disclaimant incurs no federal transfer tax consequences if the disclaimer is a "qualified disclaimer" under IRC rules."

competent witnesses

"•A witness should not be "interested." •Interested means witness or his/her spouse benefits financially from the will. •Common law rule: if a witness is interested, the whole will would be invalid unless there were two other disinterested witnesses. •Modern approach: purging statutes"

Holding in Mahoney

"•Constructive trust approach will be followed in the absence of a statute. •Intent to kill should trigger the remedy. •Probate court did not have authority to make H's parents his heirs. In VT, the probate court had no power to impose a constructive trust. •Reversed and remanded with a stay so parents can petition in equity, and court can determine whether there was intent to kill. •Exceptions? •What about Decedent's intent? •Mercy killing? Assisted suicide? •See 854.14 (6)."

Physical act

"•Cutting, tearing, burning, obliterating, destroying •Must be in a category specifically listed in the statute •Destruction must touch writing of will"

In re Snide

"•Facts: Harvey and Rose executed reciprocal wills. They mistakenly signed each other's wills. The court held that the will should be admitted, and reformed to substitute the word Rose for Harvey and Harvey for Rose. This was reversed on appeal, and now the higher court reversed the denial. •Why the different result?"

In re Pavlinko's Estate

"•Facts: Helen and Vasil Pavlinko executed reciprocal wills: each left the entire estate to the other, with both of them naming Helen's brother - Elias Martin- as the back up residuary legatee. They mistakenly signed each other's wills. Vasil's will was not probated at his death. Helen survived, and died with the will in place. •The will was denied probate. Why?"

Thompson v. Royall

"•Facts: T decided to revoke her will and codicil. Her friend, Judge Coulling, suggested she should save them as a memo in case she wanted to do another will. He wrote on the back of the manuscript cover "This will null and void" signed by T. •The statute required a written executed revocation OR cutting, tearing, burning, obliterating, canceling or destroying with intent to revoke. Held: no revocation •Not by writing because? •No physical canceling or obliterating because? •What would be the result under Wis. Statute?"

In re Estate of Hall

"•Jim & Betty have a draft joint will - they sign it and their lawyer notarizes it but no witnesses were present. •They tear up their prior will. •Jim dies, Betty offers the signed draft for probate. Issue •Did the District Court err in finding that Jim intended the draft to be his will? Held: No error Reasoning • What did Jim and Betty do that supported this conclusion? • Tore up earlier will • Betty testified that they understood the will to be good until they got a clean draft. • Did the lawyer act properly here?"

In re Estate of Kuralt

"•Journalist Charles Kuralt led a double life for years: Long-term wife Petie and their children, and long-term companion Patricia Shannon. •Kuralt had a valid 1994 will which did not mention Shannon. •On June 18, 1997 while hospitalized, Kuralt wrote a letter to Shannon saying "I'll have the lawyer... to be sure you inherit the rest of the place in MT." Issue •Was the letter a valid holographic codicil to Kuralt's will? •Remember: codicil = testamentary instrument that alters or adds to an existing will. Needs will formalities. •Holographic = entirely in handwriting of testator. Holding •Valid holographic codicil - no error by District Court. Why? -Conveyance of 20 acre parcel to Shannon with no consideration. -Extrinsic evidence of Kuralt's intent to convey rest of Mt. property to Shannon."

In re Macool

"•Louise's will left everything to her husband of 40 years, Elmer, with her 7 step-children, step-granddaughter, and step-great-grandson as contingent beneficiaries. •Elmer died. Less than a month later, Louise went to a lawyer with a long note about changes she intended to make in her will. • Lawyer did a rough draft immediately for Louise's review after lunch. •Louise died an hour later & never saw or approved the draft! What now? • Niece Mary, a residuary beneficiary of the new plan (not mentioned in the old plan) argued that the 2008 draft should be admitted to probate. • On what grounds? Two issues: 1- Did plaintiffs prove by clear and convincing evidence that Louise intended the draft to be either her will OR a partial revocation of earlier wills? 2 - Assuming #1 is proved, is the testator's signature required before the document can be probated? Denial of probate upheld •To prove by clear and convincing evidence that D intends a document to be a will, proponent must show: -D actually reviewed the document. -D thereafter expressed final assent. -HOWEVER - if both are true, D's signature is not required under NJ statute."

Federal Government as Creditor

"•No ordinary creditor! •You cannot disclaim to avoid tax obligations. •Disclaiming an inheritance MAY cause loss of eligibility for public assistance programs such as Medicare or Medicaid. •EXAMPLE: Drye v. United States"

Tension in the law

"•Old view: formalities are important and must be preserved for the good of all. They should be strictly and literally upheld. (Strict compliance) •Modern view: too often, formal requirements have been used to thwart what was most likely the Testator's intent. Courts should act with flexibility to carry out T's intentions."

Revival

"•Once a will is revoked does it stay revoked unless it is re-executed with all formalities? • If a will were a living thing, would it be dead after revocation, or is it capable of being resuscitated? • See Wis. Stats. § 853.11 (6) Two part analysis under the statute: •Does will B partly or wholly revoke Will A? •853.11(bm)2 seems to indicate that the subsequent will replaces rather than supplements the prior will because Will B disposes of the entire estate. However, the fact that the bulk of the estate went to Harry in both cases, as well as Tina's statement when revoking Will B, tend to rebut this presumption. •Is Will A revived?"

Methods of will revocation

"•Physical act (something done to the will) •Written instrument of revocation (w/will formalities) •Subsequent inconsistent will •By operation of law •By T or another person in his presence at his direction •Above: ACCOMPANIED BY INTENT TO REVOKE •See Wis. Stats. §853.11"

Revocation by operation of law

"•Possible triggering events: -Divorce -Marriage -Subsequent birth of child -Only divorce leads to complete revocation in most states."

Evidentiary function

"•Records T's wishes in (hopefully) specific and (semi) permanent form •Usually records specifics of execution in clauses associated with signatures"

curative doctrines

"•Substantial compliance - treats will as being in conformity with formal requirements if enough compliance occurred that the court can determine the purposes of formalities were achieved. •Harmless error/dispensing power - the court may excuse defects if there is clear and convincing evidence that T intended the document to be his will."

Harrison v. Bird

"•T executed a will and left the original with her attorney. She later called her lawyer and said she wanted to revoke the will, so the lawyer or his secretary, in the presence of each other, tore the will into 4 pieces. Then, the lawyer mailed the pieces to T with a letter saying he had revoked her will. After her death, the main beneficiary of the will attempted to have it admitted to probate. Held: will was revoked •When was it revoked? •When T called her lawyer? •When the lawyer ripped the will up? •When T received the pieces? •Some other time (when?)"

Nominal compliance, shifting theories

"•T had intent relative to the testamentary scheme as a whole. •Examining both (wrongly-signed) wills allows interpretation of just what that scheme was. •There was no danger of fraud."

Legal issues relative to disclaimers

"•Tax issues (most disclaimers have tax motives) •Creditor's rights issues •Devolution of disclaimed property (who gets the property once it has been disclaimed and who gets to decide?)"

In re Estate of Gonzalez

"•Testator marks up a will form, has witnesses sign a blank form so he can recopy the provisions neatly onto it. He dies before he gets a chance to do this. •Was the marked-up form a valid holographic will? Probate court says yes, affirmed. •Different approaches to forms with handwriting... "

Strict compliance - curing will defects

"•The words of a will must be read literally, and only words found within "the four corners" of the will can be considered. •Courts cannot add words to wills, and cannot ignore irregularities in execution. •Under traditional doctrine, T is said to have lacked intent, because he intended to sign something different from what he actually signed."

Executing a Will

"•Utilize execution procedures that will make the will valid in all states: (see pp. 168-169) -Two (or even 3) witnesses and a notary -Testator and all witnesses present in the same room throughout -The lawyer asks T if the document is his will, if he understands it and if it disposes of his property according to T's wishes. T answers audibly. -Lawyer asks T is he wants to have Ws witness - again, T should answer audibly. •T should sign each page of the will and at the signature line, and all Ws should watch him do so. •All Ws should sign as witnesses, and sign the self-proving affidavit. T and all Ws should see all signatures take place. •Lawyer should check to make sure all have signed in all of the appropriate places. •Will should be photocopied and original should be delivered to the client (Gulbankian) "

Woodward v. Commissioner of Social Security

"•Warren banked sperm before undergoing treatment for a rare form of leukemia. The treatment failed, he died, and two years later his widow, Lauren, gave birth to twin girls who were his biological children. She applied for child and mother benefits from SSA and her claim was denied Issue •Were posthumously conceived twins the intestate heirs of their predeceased father under Massachusetts law? •Why do we care about Mass. Law when Social Security is a federal statute? Party positions were extreme •Lauren argued posthumously conceived children must always be allowed to inherit. •Government argued posthumously conceived children should always be barred from inheritance because they are not in being at the time of the parent's death. Interests at stake •Government - certainty, predictability and efficiency in resolving estates •Parents - reproductive freedom •Children - support Court analysis 1- Best interests of the child This seems to be the court's primary concern. 2 - Administrative efficiency. That is - when can we reliably close estates? 3 - Reproductive rights and consent Did D agree to posthumous children? Result? •Court sends back to federal court to hear arguments on these issues. •Clearly opens door for inheritance by posthumously conceived children. •Calls for clarifying legislation."

Potential issues in cases like Mahoney:

"•What kind of crime is bad enough to deprive a beneficiary of equitable title? -If murder, what degree? -Do you need a conviction -What is the standard of proof? -What transfers are barred - intestate? Wills? Trusts? Others? See Wis. §854.14"

853.11(1m)

"•Will can be revoked "in whole or part by ... canceling, obliterating ... with intent to revoke, by the testator..." •There is not evidence that T marked it, but there is no evidence that anyone else did either. •Will was in possession of T"

LaCroix v. Senecal

"•Will gave residue of T's estate one-half to nephew, Nelson and one-half to Aurea. •Codicil two weeks later revoked the residuary clause, and rewrote it with Aurea and Nelson each still getting ½ , with the only difference that Nelson was identified as aka Marcisse. •Aurea's share is in jeopardy because her husband was a witness. Issue •Did the earlier (will) residuary clause stand? (Note, if it doesn't, Aurea takes nothing because she is not a relative) •Court applies DRR: -Compares dispositive provisions under will and codicil as a way of ascertaining T's intent. -Compares intestacy to what T wanted. -Holds that DRR makes article 5 of the will stand. WHY CAN'T THE REVIVAL STATUTE HELP?"

In re Estate of Javier Castro

"•Will written on Samsung Galaxy Tablet •Was this a "writing" and was it "signed"? •Was there sufficient evidence that this was the last will of Javier Castro? Holding •Clear and convincing evidence that Javier signed the will, intended it to be his will, and signed it in the presence of two witnesses. How does the court define "writing" and "signing"? In re Kimmel's Estate •Rambling letter by barely literate father contains language apparently giving money and a house to "George Darl and Irvin." •Father died later the same day. •Did Father intend this to operate as a will? Issues •Is the paper "testamentary in character"? •Is the signature to it (Father) sufficiently compliant with the Pa. Wills Act? Court finds a valid will! •Language " if enny thing happens" supports idea of testamentary intent. •Gifts following that language have no other contingency. •Death did in fact occur that same day. •Signing "Father" was intended to make gift binding."

Typical required formalities

"•Writing •Signature by the testator •Attestation by witnesses • What purposes do formalities serve?"

Writing, signature, attestation

"•Writing: ideally in ink (but there are exceptions). •Signature: ideally full legal name at end of document. Can be by proxy "at the testator's direction" and in his presence... •Attestation: by at least two witnesses. (Formerly many states required 3). Presence, order of signing & eligibility of witnesses can be issues. Ws should not be "interested." •See Wis. Stats. § 853.01"

Holographic wills

"•Written entirely in the handwriting of the testator and signed by him/her. •Does not require witnesses. •Recognized in about half the states but NOT Wisconsin or Illinois. How do we know T means it? •Many things that are written are not final expressions of testamentary intent. •Can drafts, letters or lists ever have enough finality and convey enough intent that they show true testamentary intent? What counts as evidence of testamentary intent? •Traditionally only form and formalities. •Gradually, extrinsic evidence of what T intended to do"

Undue Influence

Coercive or intrusive actions amounting to wrongdoing that causes T to make a disposition he would not have made

Post-execution events affecting wills

Deaths of persons, changes in things - typical case when people create a will and then things change and they never get around to changing it

Representation

When an heir apparent has died before the decedent leaving descendants, we say those descendants REPRESENT their deceased ancestor in taking the share or that those descendants TAKE BY REPRESENTATION.

"Relation back" feature

•If property is properly disclaimed, it is treated as if the disclaimant never owned it, and any transfer is viewed as being from the original transferor.

Channeling function

•If similar intentions are "channeled" into similar formats and language categories, it is easier to determine T's intent.

Legal realism

•Judicial decisions are not immutably dictated by precedent, but are also the product of the subjective psychological reactions of the deciding judges.

Creditors' rights

•Majority rule in US: you CAN disclaim an interest to prevent creditors from reaching the property. E.g. Smith owes $50,000 to MasterCard His mother's will leaves him $50,000. He can disclaim to keep the money away from MC (and ensure it will go to the next takers, who are likely to be his siblings or his children). See Wis. Stats. § 854.13

DRR Type #2

•Partial revocations and attempted substitutions don't work. (e.g. T crosses out "$10,000 to my housekeeper" and writes in "$20,000 to my housekeeper." The addition fails for lack of proper execution. DRR allows court to disregard the revocation by crossing out.)

DRR Type #1

•Revocation apparently depended on execution of a later will, which either didn't happen or failed. (e.g. Earlier will gives everything to T's friend. Later will revokes all former wills, gives everything to T's same friend but changes the executor. If the gift under the later will fails, first will may be admitted to probate.)

DRR Type #3

•Revocation was due to a mistaken impression of law. (e.g. T revokes Will A with Will B, then destroys Will B saying "Now Will A will be in effect." If state law does not permit the revival of Will A, the court may allow probate of Will B under DRR - if it can be shown that Will B is closer to what the testator would have wanted; if not, then intestacy might be preferable.

NOTE- Revival/revocation

•This is NOT revival (which brings back a revoked will). The theory is that Will B was not revoked at all, because the intent to revoke was conditioned on Will A thereby becoming effective. Therefore, there was no intent to revoke and Will B remains in effect.