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49 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Agency - Subject Outline
Principals CORRAL Their agent's activities. |
CREATION
OBLIGATIONS RIGHTS RATIFICATION AUTHORITY LIABILITY TERMINATION |
CREATION of agent/principal relationship
OBLIGATIONS – loyalty, obedience, stewardship RIGHTS of parties RATIFICATION by principal AUTHORITY – express, implied, apparent LIABILITY - primary & vicarious (respondeat superior) TERMINATION of agent/principal relationship |
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Agency - Creation
Creating an agency relationship is as easy as ABCD. |
ASSENT (usually requires mutuality)
BENEFIT conferred upon principal CONTROL of agent by principal DURING and within scope of agent's employment |
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Commercial Paper
Elements of Negotiability Rights of Holder in Due Course WOSSUPP! if WE FUC, you'll get DAFFIDILS. |
WOSSUP - elements that make an instrument negotiable
WE FUC - an HDC takes instrument free of all claims and personal defenses DAFFIDILS - an HDC takes instrument subject to real defenses |
WOSSUP:
in WRITING (statute of frauds) payable to ORDER of or to bearer (negotiable words) SIGNED by the maker or drawer SUM is certain (principal only - amount of interest flexible) UNCONDITIONAL promise with no other promises attached PAYABLE on demand or at a definite time PAYABLE in sovereign currency only WE FUC: WAIVER ESTOPPEL FRAUD in inducement (impostor) UNCONSCIONABILITY CONSIDERATION lacking (for the note) DAFFIDILS: DURESS - threat of violence (not economic duress) material ALTERATION of instrument FORGERY Fraud in the FACTUM (signor did not know it was a negotiable instrument) ILLEGALITY DISCHARGE in bankruptcy of maker or drawer INFANCY of maker or drawer LACK of mental capacity STATUTE of limitations has expired on the debt |
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Corporations - Piercing The Corporate Veil
TWIST the knife to pierce the corporate veil. |
TEN sh
WORKER's comp ILLEGALITY SALES/corp tax unpaid TORTIOUS acts |
TEN largest shareholders of private company are personally liable for unpaid wages/benefits
WORKER's compensation insurance must be obtained. If not, officers are criminally, strictly liable to injured employee. ILLEGAL conduct by shareholders. SALES or corporate income tax not paid renders directors & officers (D&O) responsible to taxing authority. TORTIOUS conduct of D&O, employees and shareholders cannot use corporate veil to hide from personal liability. |
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Corporations - Contents of Articles of Incorporation.
It's A PAIN to write the articles of incorporation. |
AUTHORIZED shares
PURPOSE AGENT authorized to receive service of process INCORPORATORS NAME and address of corporation |
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Corporations - Contents of Certificate of Incorporation
the corporation's certificate of incorporation lists PVT MCLAW |
PREEMPTIVE rights
VALUE of par TRANSFER restrictions MAJORITY CUMULATIVE voting LESS than maj to dissolve sh AGREEMENTS at WILL |
PREEMPTIVE rights
VALUE of par shares (if to be fixed by shareholders rather than directors) stock TRANSFER restrictions MAXI-MAJORITY, super-majority, quorum voting requirements CUMULATIVE voting rights when electing directors whether LESS than majority of shares can vote to voluntarily dissolve corporation shareholder AGREEMENTS regarding actions authorized without SH meetings, restrictions on D&O powers, or if SH can directly manage company (no BoD) corporate dissolution at WILL or upon specific event |
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Corporations
Actions Requiring Shareholder Approval Shareholders deserve A DAMN SALAD if the corporation makes a big change. |
AMENDMENT
DISSOLUTION ASSET MERGER NAME SURETY AGENT LOCATION ABOLISHING liability DIRECTOR loans |
AMENDMENT of certificate of incorporation that changes quorum, maxi/super majority, preemptive or cumulative voting rights, and/or corporate purpose
DISSOLUTION (voluntary) ASSET sale, lease or exchange (>75% of assets) MERGER or consolidation NAME change SURETY interests in debt not acquired for corporate purposes change of AGENT for service of process change of LOCATION of corporate office ABOLISHING or limiting directors’ liability for negligence DIRECTOR loans |
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Corporations - Appraisal Rights of Shareholders
if PAM C dissents, she gets appraisal rights. |
PREEMPTIVE
ASSET MERGER CUMULATIVE |
PREEMPTIVE, redemptive or other share of ownership rights affected
ASSET sale, lease or exchange (>75% of corp assets) MERGER or consolidation into another entity CUMULATIVE voting rights affected |
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Corporations - Appraisal Right Valuation
The court will AIM for fair value in determining appraisal rights. |
ASSET
INVESTMENT MARKET |
net ASSET value - where company holds substantial tangible assets (e.g. real estate investment holding co's, retail and wholesale co's)
INVESTMENT value - earning power of corporate stock MARKET value of stock (court considers arms-length similar sales in same community or marketplace) |
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Corporations - Duties of Directors & Officers
Directors & Officers who get SUED For being OLD can fire a FLARE. |
SUED - types of conflict of interest
FOLD - usurpation of corporate opportunity tests FLARE - defenses to usurping corporate opportunity |
SELF-dealing
USURPATION EXECUTIVE compensation unreasonable DIRECT conflict of interest FITNESS & fairness of transaction OPPORTUNITY was available to corporation LINE of business was same as corporation's DISCLOSURE was not proper FINANCIAL incapacity of corporation to enter K LEGAL incapacity of corporation to enter K ABANDONED (purposeful failure to deal) REJECTED (purposefully declining to transact) EXPLICIT approval by uninterested BoD or SH |
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Corporations -
Actions of Directors that cannot be indemnified Directors can't be indemnified for RIBALD Gains. |
REDEMPTION
INTENTIONAL misconduct BAD faith ASSETS before creditors improper LOAN DIVIDEND unjust GAIN |
REDEMPTION of shares when not permitted (no surplus)
INTENTIONAL misconduct or knowing violation of law BAD faith conduct ASSETS distributed to shareholders before paying creditors LOAN granted improperly to fellow director without dissent declaration of improper DIVIDEND (no surplus) GAINS personally derived due to misconduct |
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Corporations - Shares With No Preemptive Rights
If your shares have a STAMP, you don't have preemptive rights. |
STOCK INCENTIVES
TREASURY AUTHORIZED w/in 2 yrs MERGER PURCHASE w/o cash |
STOCK incentives used to retain and attract corporate talent
TREASURY stock AUTHORIZED in certificate of incorporation and sold within 1st 2 years (no preemptive rights for 2 years) MERGER or consolidation caused shares to be created PURCHASE of shares occurred without cash |
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Corporations - Irrevocable Proxy Voting Rights
You can't revoke a proxy for PEACE. |
if PLEDGED
not ENTITLED AGREEMENT by sh CREDITOR EMPLOYEE w/proxy |
PLEDGED shares (for loan)
ENTITLEMENT to vote is not vested on record date (bought/sold too early/late) AGREEMENT executed for specified period between shareholders CREDITOR holding shares as collateral for extending credit EMPLOYEE owned shares issued with specified proxy requirements |
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Corporations - Elements of 10b-5
Stock Transfer Liability In the MIDST of the STORM, it feels like a category 10b-5. |
MATERIAL fact
INTERSTATE DAMAGES STANDING TIPPER/TIPPEE SCIENTER TARGETED sh OMISSION RELIANCE MISSTATEMENT |
MATERIAL fact – is the information important?
INSTRUMENTALITY of interstate commerce used in connection with transaction (mail) DAMAGES – civil, regulatory, criminal Civil: expectation damages or rescission Regulatory: SEC can impose treble damages (triple profits) and order injunction Criminal: Federal DOJ can impose criminal fines and imprisonment STANDING – purchaser/seller who purchased/sold stock in connection with alleged fraud TIP liability – inside tip given for improper purpose where tipper breached duty and tippee knew of the breach SCIENTER – defendant had actual knowledge of material misrepresentation regarding material information TARGETED persons who are already shareholders have standing to sue even if they didn’t buy/sell shares in conjunction with 10b-5 violation OMISSION or failure to disclose material fact by fiduciary will be treated similarly by the court as material misrepresentation RELIANCE on misrepresentation resulted in purchase or sale (exception: non-disclosure cases do not require reliance) MISSTATEMENT of material fact will be treated similarly by the court as material misrepresentation |
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Corporations - Liability Under Sarbanes-Oxley
Get the BAD TIC out of your SOx. |
BANNED loans
ATTORNEY liability DISCLOSE ethics req. TRADING limits INDEPENDENT auditing CERTIFICATION of internal controls SARBANES OXley |
BAN on loans to offficers/directors of large public companies
ATTORNEY liability attaches if aware of illegal transactions DISCLOSURE of ethics requirements must be made to all persons with authority to transact TRADING limitations cannot be exceeded or circumvented INDEPENDENT directors or firms must be appointed to audit records in question CERTIFICATION of internal controls required, with CEO & BoD on the hook for failure to comply. Sarbanes-OXley |
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Corporations
Valid Reasons For Judicial or Voluntary Dissolution To dissolve a corporation, just I.D. the WOLF in the boardroom. |
ILLEGAL conduct
DIVERSION of corporate assets to directors/officers WASTE (including that which results from deadlock) OPPRESSION of minority shareholders LOOTING FRAUD |
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Family Law - Requirements of Prenuptial Agreements
Prenups are enforceable if the spouses SPIED on each other. |
SUPPORT - must be fair at time of enforcement
PROPERTY - must be fair at time of execution IN WRITING - court does not bind on issues involving children ENTERED voluntarily into by both parties with knowing consent DISCLOSURE - full and fair |
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Family Law - Right to Late Spouse's Benefits
A widow can drink all the VINOS she wants. |
VETERAN's pensions
INDEMNITY compensation for service-connected deaths NURSING home and medical care OTHER survivor benefits (i.e. contractual rights, insurance benefits) SOCIAL security pension - supplemental security income |
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Family Law - Validity Requirements of Marriage
To validate his marriage, the groom must CROWN his lovely bride's ASS. |
CONSANGUINITY
RECOGNIZED c/l OBTAIN license WITNESSES NO spouse AGE SOLEMNIZED SIGNED |
CONSANGUINITY - parties cannot be closer kin than second cousins
if RECOGNIZED as valid where contracted under common law, then valid in most non CL states OBTAIN license from county auditor (must be used at least 3 days later, expires after 60 days) WITNESSES - two physically present NO other living spouse at time of marriage AGE of majority SOLEMNIZED by officer authorized by state to perform marriage ceremonies SIGNED marriage certificate (witnesses and person solemnizing marriage) |
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Family Law - Marriage
Grounds for Declaration of Invalidity The FACTOID about the Resident APE getting married was declared invalid. |
FRAUD
AGE CONSANGUINITY TIMELINESS OUT-OF-STATE void INCAPACITY DURESS RESIDENT ANNULMENT PRIOR MARRIAGE EFFECT on children |
FRAUD - essentials of marital agreement based on fraud
AGE - under 18 without parental or court approval CONSANGUINITY - parties are closer than second cousins TIMELINESS - either party may petition for declaration of invalidity at any time OUT of state marriage was void or voidable in contracting state INCAPACITY - mental, physical, 5-year incurable insanity DURESS - party induced to enter marriage by force neither party was a RESIDENT of the court's state ANNULMENT is the term describing the "symbolic" dissolution of a marriage that "never took place." However, if a marriage is legally declared invalid, the court will enter a Decree of Dissolution. PRIOR marriage undissolved at time of marriage sought to be declared invalid. no EFFECT on legitimacy of children despite declaration of invalidity. |
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Family Law - Typical Provisions of a Parenting Plan
Divorcing parents throw DARTS at a board to decide who gets the kids. |
DESIGNATION of primary residential parent
ALLOCATION of decision-making authority RESTRICTIONS on contact, where appropriate TRANSPORTATION arrangements SCHEDULE for residential contact with child |
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Family Law - reasons to grant Temporary Restraining Order
a family in DIRE need may request a temporary restraining order |
prevent DISPOSAL or concealment of property
prevent INTERFERENCE or molestation with peace of opposing party or child prevent REMOVAL of a child from jurisdiction of court prevent ENTRY into family home of either party |
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Family Law - Grounds for Dissolution
IF you hit your spouse like a PIÑATA, the court will probably grant their petition for divorce. |
IRRETRIEVABLY BROKEN
FILE in proper venue PERSONAL jx INCARCERATION or INCAPACITY ÑO FAULT CONVERSION ADULTERY TREATMENT (cruel/inhumane) ABANDONMENT |
IRRETRIEVABLY BROKEN marriage - "no-fault dissolution" requires no further allegations to be granted
FILE in proper venue (any county where parties or children reside) PERSONAL JURISDICTION needed for court to impose financial obligation upon a party INCARCERATION or INCAPACITY of spouse for statutory period NO FAULT CONVERSION divorce after statutory period with valid separation agreement ADULTERY (defenses are condonation, recrimination, barred by SOL, procurement by petitioner) TREATMENT that is cruel & inhumane ABANDONMENT (requires intent to leave without consent/unjustified, lasting more than one year) |
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Family Law - Factors Affecting "Just and Equitable" Distribution
Your lifestyle might GET CRAMPED when marital assets are equitably distributed. |
GOODWILL
EXTENT of property TENANCY IN COMMON COMPENSATION right of REIMBURSEMENT ALL property subject to division MARITAL standard of living PENSIONS EARNING capacity DURATION |
GOODWILL of spouse's professional services practice (value intrinsically tied to personal work)
EXTENT and nature of separate and joint property TENANCY IN COMMON results if joint property is discovered after decree of dissolution, to be held jointly with 50/50 split COMPENSATION - all income and earnings are subject to division RIGHT OF REIMBURSEMENT for joint property contributions to separate property assets ALL property, both joint and separate, is to be divided in a just and equitable distribution (some states even permit division of pseudo-joint property acquired during non-formalized meretricious relationships) MARITAL standard of living PENSIONS - railroad, military and government pensions are governed by ERISA (federal law) EARNING CAPACITY at time of separation - "rehabilitative" maintenance may be granted to less fortunate spouse to acquire of sufficient education or training for a limited period of time DURATION of marriage: <5 yrs (division by restitution); 5 to 30 yrs (court discretion, case-by-case); >30 yrs (equalization of assets/income through time of retirement) |
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Family Law - Specific Obligations Included In
Child Support Orders Support HAS TILTeD in favor of the children. |
HEALTH CARE
ACTIVITIES STATE SUPPORT SCHEDULE TRANSPORTATION INCOME recalculation LIFE insurance TAX eXEMPTION downward DEVIATIONS |
HEALTH CARE costs that are extraordinary
ACTIVITIES - day care, athletics, team sports, lessons, camp fees, etc (dovetails with decision-making authority) STATE SUPPORT SCHEDULE - standard calculation TRANSPORTATION for long-distance commuting to accomplish visitation INCOME RECALCULATION due to fluctuations that reasonably affect ability to fulfill support obligations (based upon current pay stubs and tax returns; no retroactive changes) LIFE INSURANCE - court may order parent to obtain life insurance to ensure fulfillment of prospective support obligations TAX EXEMPTION allocations DOWNWARD DEVIATIONS on the basis of support payments required for other children or time spent with paying parent |
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UCC Article 9 Secured Transactions
Classes of Tangible & Intangible Goods a FAN is a SPECIFIC type of goods covered under UCC Article 9. |
FARMING products
ACCOUNT proceeds received upon sale of collateral NOTES (promissory & drafts) STOCKS, bonds & mutual funds PERSONALTY - chattels / movable goods generally EQUIPMENT CONSENSUAL security interests only (not statutory or mechanic liens) INVENTORY FIXTURES annexed to real estate (lighting fixtures, sprinkler systems, furnaces, etc.) INTELLECTUAL properties CONSUMER goods |
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UCC Article 9 Secured Transactions
VCR The 3 Requirements for Attachment |
VALUE must be given by creditor
CONTRACT - the security agreement serves as evidence of the secured transaction unless the secured party has taken possession of the collateral. debtor must have RIGHTS in the collateral. |
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UCC Article 9 Secured Transactions
Priority of Creditors Article 9 dictates which creditor gets to keep the O-PA-L NUG(get). |
buyer in ORDINARY course
PERFECTED ATTACHED creditor LIEN creditor NON-ordinary course buyer attached UNPERFECTED creditor (including bankruptcy trustee) GENERAL unsecured creditor |
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UCC Article 9 Secured Transactions
Advantages to Purchase Money Security Interest (PMSI) Status HATS off to PMSI creditors because they get top priority. |
HOUSEHOLD goods
mere ATTACHMENT TWENTY day grace SUPER priority on inventory |
a PMSI in HOUSEHOLD goods is effective unlike every other security interest
mere ATTACHMENT perfection TWENTY day grace period to perfect interest in non-inventory goods through filing SUPER priority on inventory if creditor provides advance notice to other creditors who have a security interest (e.g. after acquired interest clause) in that same collateral |
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UCC Article 9 Secured Transactions - Assignees
& UCC Article 3 Commercial Paper - Holder in Due Course three requirements to avoid being subject to personal defenses |
FOR value
IN good faith without NOTICE |
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UCC Article 9 Secured Transactions
Methods of Perfection Perfection Calls For Many Things (5) |
Possession
Control Filing the financing statement in debtor's state Mere attachment (consumer goods and PMSI) Title certificate |
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UCC Article 9 Secured Transactions
Permitted Contents of Security Agreements The FOCAL Point of a security agreement is the collateral. |
FUTURE cash advances
OTHER duties/rights describe COLLATERAL AFTER-ACQUIRED clauses floating LIEN on fast-turning inventory PROCEEDS upon disposition |
FUTURE advances clause - allows further cash advances to be secured by collateral covered in earlier security agreement
OTHER provisions, such as set-off or recoupment rights, debtor duties, circumstances constituting default, remedies, entitlement to costs & attorneys fees, and good faith requirement COLLATERAL description in reasonable detail - specify collateral's primary use in debtor's hands AFTER-ACQUIRED property clauses require that future collateral acquired or manufactured by the debtor later (including unmatured commercial tort claims) be covered by the present security agreement floating LIEN - type of security agreement on retail inventory that turns over frequently (executing new agreements each time not practical) PROCEEDS include whatever is received by the debtor upon the sale, exchange or other disposition of the primary collateral. |
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UCC Article 9 Secured Transactions
Repossession Right of Creditor upon Default by Debtor The repo man SCAR'D the debtor but that's his right. |
STRICT foreclosure
get CONSENT to take judicial ACTION REPOSSESSION DISPOSITION sale |
STRICT foreclosure, where creditor legally retains the collateral and outstanding debt is cancelled
CONSENT, voluntary and contemporaneous, from debtor to enter and take collateral from home or other private property ACTION by judicial writ authorizing Sheriff to repossess self-help REPOSSESSION unless it causes breach of peace DISPOSITION sale. Non-judicial liquidation by creditor (after notifying debtor and other perfected parties). Creditor can obtain deficiency judgment against debtor if collateral brings less than the debt. |
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Trusts - Elements of a Valid Trust I know the PARTS of a valid trust. |
INTENT to create valid PURPOSE ASCERTAINABLE beneficiaries RES named TRUSTEE SETTLOR |
INTENT to create a trust is manifest by conduct valid PURPOSE (not contrary to public policy or illegal) ASCERTAINABLE beneficiaries (directly capable of taking and holding title for their benefit) RES must be a presently existing, identifiable property interestnamed TRUSTEE with active duties who is capable of acquiring, holding and administering the trust res; legal & equitable titles merge if beneficiary and trustee are same person SETTLOR with capacity to understand extent of property, natural objects of bounty and nature of disposition |
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Trusts - Ways a Trust can be Created
it's WICKED smart to create a trust. |
by WILL
INTER VIVOS CONSTRUCTIVE/resulting by K (contract) EXERCISING power of appt. DECLARATION |
created by WILL (testamentary trust)
INTER VIVOS trust created by transfer of property CONSTRUCTIVE or resulting trust created as a matter of law creation of trust by K (contract) creation of trust by EXERCISING the power of appointment DECLARATION of trust by property owner |
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Trusts - Duties of Trustee
The trustee had a duty to make sure the beneficiary wasn't drinking SPOILED CAB. |
SELF-DEALING
PROTECT corpus not usurp OPPORTUNITIES INFORM on big transactions LITIGATE EXERCISE care, skill, prudence not DELEGATE authority COMPLY with terms ACCOUNTING refrain from BORROWING |
refrain from SELF-DEALING (duty of loyalty)
PROTECT the corpus of the trust by preserving principal and diversifying the trust portfolio refrain from usurping OPPORTUNITIES available to trust (duty of loyalty) INFORM settlor and beneficiaries of transactions involving more than 25% of trust assets and wait for objections prior to executing the transaction LITIGATE on behalf of the trust when necessary EXERCISE degree of care, skill and prudence which would be exercised by a reasonably prudent person in managing his/her own property avoid DELEGATION of duties involving judgment, discretion or power of appointment (proper administration) COMPLY with terms & duties under trust detailed ACCOUNTING, including earmarking and segregating trust assets separately from personal assets refrain from BORROWING funds from the trust (duty of loyalty) |
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Trusts - Trustee's Defenses for Breach of Duty
A trustee can KIL a suit against him for breach of duty. |
KNOWING
INSTRUMENT LACHES |
KNOWING consent (or waiver) to breach of trustee's duties by beneficiary (implicitly applied to beneficiaries who benefited from wrongful act)
INSTRUMENT contains exculpatory or "hold harmless" provisions. These are enforceable ONLY if breach was merely negligent and trustee lacked bad faith. LACHES or statute of limitations - failure by beneficiary to timely assert claims |
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Trusts - When a "Charging Order" to
Invade a Spendthrift, Support or Discretionary is Permitted Certain ANTICS let creditors invade the principal of protective trusts. |
ALIMONY
NECESSITIES TAXES INTENTIONAL hindrance of creditor CHILD SUPPORT SELF-SETTLED trust assets |
ALIMONY obligations due a former spouse
NECESSITIES - debts incurred for food, shelter, medical expenses, etc. TAXES - income necessary to satisfy beneficiary's tax responsibility can usually be attached INTENTIONAL hindrance, delay or defrauding of creditor's claims by transfering assets into a trust CHILD support owed to minor children SELF-settled asset protection trusts where settlor is also the beneficiary (minority rule: permitted if irrevocable and not created to defraud creditors) |
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Trusts - Future Interests - Allowed Restraints on Alienation
U F See fighters are good at restraining aliens. |
USE restrictions
right of FIRST refusal "wait and SEE" |
USE restrictions (with reversionary interest) - "To A but if not used for church purposes, the land shall revert to me."
right of FIRST REFUSAL - allows holder to match a third party's offer (if accepted) to buy the property within a reasonable time "wait and SEE" doctrine - imposed by statute where operation of trust continues until last possible relevant time under the RAP (or 90 years) to see if the trust will survive. |
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Trusts - Ways a Trust can be Terminated
When a trust wants to be terminated, it yells "Pour some ACID on ME!!!" |
PETITION to court
ACCOMPLISHED purpose CONSOLIDATION of trusts INCOME interest terminates DONOR termination MERGER of title EXPIRATION of trust term |
PETITION to court by beneficiary, spendthrift provision or settlor (if beneficiary is in agreement)
purpose ACCOMPLISHED, illegal or impossible (such as if the sole beneficiary dies without heirs) CONSOLIDATION by the court where multiple trusts have same purpose, trustees, settlors and beneficiaries INCOME interest terminates - corpus is distributed to remainder beneficiaries if all income beneficiaries die (doctrine of acceleration) unilateral DONOR termination permitted if this right is specified in the instrument. This right is called a "grantor trust," so assets are included in grantor's estate for tax purposes. MERGER of legal and equitable title when beneficiary and trustee are the same person EXPIRATION of term specified in the trust instrument |
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Wills - Elements of a Valid Will
I CAST a valid will into the stream of probate court. |
INTENT to devise contents upon death at time of execution
CAPACITY to understand the property, people involved and the effect of executing the instrument. ATTESTED to by two competent, non-interested witnesses SIGNED by testator or person directed who is within "line-of-sight" TESTAMENTARY age of legal capacity |
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Wills - Eight Frequently Tested
Problematic "Takers" Under the Will An executor looks to the LIAR DOCS to decide who takes under the will. |
LATER spouse
IRREVOCABLE living trusts ADOPTED children REFUSAL by beneficiary subsequent DIVORCE OMITTED surviving children beneficiaries included in CLASS SATISFACTION by inter vivos transfer |
LATER spouse not named in existing valid will usually takes all jointly-owned property and the greater of $50k or 1/2 of the separate property under UPC intestacy succession rules
IRREVOCABLE living trusts where the beneficiary is kin (lineal descendants of testator's grandparent) are covered by antilapse statute, but not devises where survivorship is required--all other lapsed devises are added to the residue of the estate. ADOPTED, half-blood, acknowledged and paternity suit children are treated as natural issues for inheritance purposes under the UPC and most states (exception: children take by right of representation if intestacy rules apply) a named beneficiary may REFUSE or disclaim to accept a devise under the will; property is added to residue subsequent DIVORCE causes all provisions favoring ex-spouse to be revoked unless stated otherwise in the will or if listed as beneficiary of insurance policy or ERISA benefit OMITTED surviving children usually qualify for a forced share as if decedent died intestate (unless disinheritance can be proved) CLASS beneficiaries must be sufficiently identifiable; courts refer to statute, testator's intent and applicable rules of construction to determine when class closes SATISFACTION of testamentary devise cannot be made by including inter vivos transfers of gifts given to beneficiary unless that intent stated in writing (i.e., executor can't deduct $20k gift to beneficiary received while testator was living from a $50k will devise) |
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Wills - Will Challenges
Grounds To Contest a Dependable, Constructive UMPIRE decides whether a will can be contested. |
DEPENDANT relative revocation may apply if subsequent will or codicil is invalid AND prior valid will is substantially identical & consistent with testator's intent
CONSTRUCTIVE trust may be necessarily imposed to prevent unjust enrichment or injustice to omitted beneficiary (wrongdoer serves as trustee, ha ha ha) indicia of UNDUE influence (only a CAD ROBS a rich testator) MISTAKE in the execution (wrong document signed with no intent to make a will--will invalid, parol evidence inadmissible) fraudulent PREVENTION of a will being written fraud in the INDUCEMENT failure to REVOKE fraud in the EXECUTION |
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Wills - Undue Influence
Factors to Consider only a CAD ROBS a rich testator. |
CONFIDENTIAL (or fiduciary) relationship exists
ACTIVE participation in will preparation or execution DISPOSITION to exercise undue influence unnatural RESULT OPPORTUNITY to exercise undue influence undue BENEFIT to alleged wrongdoer SUSCEPTIBLE testator |
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Wills - Classification of Legacies and Devises
Acrostic Some Grantors Die Really Intestate |
Some - Specific devise or bequest
Grantors - General legacy Die - Demonstrative legacy Really - Residuary gift Intestate - Intestate property |
SPECIFIC devise or bequest - particular items specified in the will
GENERAL legacy - a sum of money to be paid out of any assets of the estate DEMONSTRATIVE legacy - a sum of money to be paid from a particular account or upon sale of a particular asset RESIDUARY gift - everything else not mentioned under a will with a residuary clause, distributed to the primary beneficiaries INTESTATE property - where there is no will, a lapse, disclaimer, no residuary clause, or the only will was successfully challenged (NOTE: most states disfavor intestacy--the court will interpret parol evidence to save any document that exists and adequately expresses the decedent's intent) |
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Wills - Ways to Revoke the provisions of a Will
DIVORCE will AMBUSH beneficiaries. |
DIVORCE
post-will ISSUE VARIANCE OBLITERATION slayer RESTRICTION CY PRES EXPRESS revocation ADEMPTION post-will MARRIAGE BEQUEST advancement UNIFORM Simultaneous Death Act SIGNATURE defaced HOLOGRAPHIC codicil |
DIVORCE / annulment (property passes as if the former spouse predeceased testator)
post-will ISSUE (revoked as to that child) VARIANCE of provisions that increases a non-residuary gift or changes a beneficiary OBLITERATION by cancellation or physical act (burning or tearing) by RESTRICTION under slayer statute CY PRES modification of testator's bequest by the court to continue charitable purpose when impossible, impractical or wasteful to carry out as stated in the will EXPRESS revocation by subsequent properly executed instrument (including holographic will) ADEMPTION of property devised but not owned at death post-will MARRIAGE (as to surviving spouse's intestate share) BEQUEST advancement paid to beneficiary inter vivos (if gift exceeds intestate share, heir gets nothing) UNIFORM Simultaneous Death Act SIGNATURE of testator intentionally defaced HOLOGRAPHIC codicil modifying a holographic will |
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Wills - Surviving Spouse's Right to Elective Share
A surviving spouse won't get the SHAFT Provided she takes her elective share. |
SOCIAL SECURITY
HOMESTEAD ALLOWANCE FRACTIONAL TANGIBLE PRIVATE PENSION PLANS |
SOCIAL SECURITY
HOMESTEAD laws secure the family home free of claims of creditors family ALLOWANCE awarded by probate court (statutory authorized maintenance and support during administration of will) FRACTIONAL share of decedent's estate (3% per year of marriage up to 50% under UPC; some states flat 1/3) TANGIBLE personal property set-aside as enumerated by statute PRIVATE PENSION PLANS paid as joint and survivor annuity to worker and spouse |
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Wills - Ways for Surviving Spouse to Maximize Elective Share
United Artists changed the SCRIPT. Now the surviving spouse gets a bigger elective share. |
US Savings Bonds
APPOINTMENT to self SHAREHOLDER agreements gifts CAUSA mortis RETIREMENT benefits INTER VIVOS gifts w/in 1 yr POST-MARRIAGE jointly held property TOTTEN trust assets |
UNITED STATES savings bonds (jointly held)
APPOINTMENT (to self) of trust res over which decedent had a general Power of Appointment (to give to anybody) SHAREHOLDER agreements entered into after the marriage restricting sale or testamentary disposition of testator's jointly held common stock revoking gifts CAUSA mortis not made in contemplation of death submit claims for decedent's RETIREMENT benefits INTER-VIVOS gifts, even to charity, if made within 1 year of testator's death for more than $10k POST-marriage jointly held property (real or personal) and bank accounts to the extent that spouse furnished consideration collect assets in TOTTEN trust accounts (payable-on-death) |
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Wills - Slayer Statute Exceptions
A killer may still take if he acted without SIN. |
perfect SELF-DEFENSE
INSANITY NEGLIGENT homicide |
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