Ca Bar Exam - Wills & Trusts

Front 1

Will Opening Shot

Back 1

A will is a testamentary instrument which devises one's assets and property to beneficiaries upon death. In order for a will to be valid, it must have testamentary intent, capacity by the testator and follow CA Probate rules of construction formalities. The formalities of a will require upon death that the will be in writing, with testamentary intent, signed by testator and witnessed by two disinterested parties.

Front 2

Intent - Capacity

Back 2

At time of execution, testator must have:

1) 18yo

2) be able to understand the extent of her prop

3) know the natural objects of her bounty

4) Know the nature of her act

**entire will is invalid**

Front 3

Intent - Insane Delusion

Back 3

1) testator had a false belief;

2) that belief was a product of a sick mind;

3) there is no evidence to support the belief

4) delusion must have affected testators will

**Only the part of the will that was effected is invalid, it will go to residuary devisee**

Front 4

Intent - Fraud

Back 4

1) Representation;

2) Of a material fact;

3) known to be false by the wrongdoer;

4) for the purpose of inducing action/inaction; AND

5) Does induce action/inaction

Fraud can be in the execution, inducement of a gift, or preventing testator from revoking.

Front 5

Intent - Undue Influence - Prima Facie

(always discuss all three types)

Back 5

1) Testator has a weakness such that she is susceptible;

2) the wrongdoer has access to the testator;

3) It is the wrongful act that gets the gift;

4) An unnatural gift.

**Only the part of the will that is affected by undue influence is invalid**

Front 6

Intent - Undue Influence - Presumption

Back 6

1) A confidential relationship between testator and wrongdoer;

2) the wrongful act gets the gift; AND

3) An unnatural gift

Front 7

Intent - Undue Influence - Statutory UI CA

Back 7

CA invalidates a donative transfer from testator to:

1) Person who drafted the instrument;

2) Person who is related to, married to, or cohabitates w/, or is an employee of the drafter;

3) A person who is in a fiduciary relationship w/ the testator and who transcribes the testamentary intstrument.

**these rules do not apply if the testator is related to , married or cohabitates with the drafter**

Front 8

Mistake

Back 8

Mistake in:

1) Content: wrong bene or wrong gift

**no relief if words accidentially left out

2) Execution: Testator signs wrong document

**If no intent, no will

3) Inducement: Gift made by erroneous belief

**No relief

4) Description: Ambiguity in description

**Parol evidence allowed

Front 9

Mistake - DRR

Back 9

1) If testator revokes her will, or a portion;

2) In the mistaken belief that a substantially identical will or codicil effectuates her inent;

3) then, by operation of law;

4) the revocation of the first will be deemed a condition, dependant, and relative to teh second effectuating the testators intent

5) if the second does not effectuate testators intent, the first was never revoked.

Front 10

Mistake - Pretermission

Back 10

A child is pretermitted if born or adopted after all testamentary instruments are executed and not provided for in any testamentary instrument.

1) Child takes intestate share

If child born before all testamentary instruments are executed and is not provided for is not pretermitted unless the only reason the child was not provided for was because the child was thought to be dead or non existent

Front 11

Components of the will - integration

Back 11

Refers to which papers make up the will

1) Intent: testator must have intended for the papers in questino to be part of the will;

2) Presense: the paper must have been actually/physically present at time of execution.

Front 12

Components of the will - Incorporation by reference

Back 12

Allows a non integrated writing to become part of the wil if:

1) The document existed at execution

2) the document is clearly identified in will

3) Testator intended to incorporate

Front 13

Components of the will - Facts of Ind. Significance

Back 13

Who a beneficiary is, or what gift is given may be given meaning by facts of significance ind. from the will.

**Allows the court to fill the gaps**

Front 14

Pour Over Wills

Back 14

Testators estate is devised to the trustee of an inter vivos trust that may be admitted into probate.

Pour over provisions effecutated by

1) incorp by reference

2) ind. significance

Front 15

Attested Will

Back 15

The will:

1) Must be in writing

2) Signed by testator, or legally authorized person

3) Signing done in presence of two witnesses

4) Witness must sign will (does not have to be in presence of testator)

Front 16

Attested Will - Interested WItnesses

Back 16

If the witnesses are bene's it is invalid unless there are two other disinterested witnesses.

**There is a rebuttable presumption**

Front 17

Holographic WIll

Back 17

1) Must be signed by the testator

2) The material provisions must be in testators handwriting

**Extrinsic evidence admissible to show intent

**Series of letters can be a will

**If no date, another, inconsistent will takes precedence

Front 18

Codicil

Back 18

A testamentary instrument executed in compliance w/ the CA provate code which modifies, amends or revokes a will.

Front 19

Revocation - Physical Act

Back 19

1) Must be burned, torn, cancelled, destroyed or obliterated (material part of will)

2) Intent to revoke

3) Act must be done by testator or in testators presence

Front 20

Revocation - Subsequent Written Instrument

Back 20

Can be expressed or implied

**Revival may occur if testator manifests intent to revive first will

Front 21

Revocation - Operation of Law

Back 21

Omitted child unless:

1) Failure to provide was intentional

2) Testator evidenced a plan that child's other parent would provide financially

3) testator provided for the child outside of the instrument

Omitted Spouse unless:

1) Failure to provide was intentional

2) Provided for spouse with another transfer

3) Waiver

Front 22

Legacy

Back 22

Specific: A devise or gift of a particular item of prop distinct from all other objects in the testator's estate

General: A gift of a general economic benefit, payable out of the general assets of the estate.

Demostrative: Hybrid

Front 23

Revocation - Ademption (only applies to specific legacy)

Back 23

A legacy will fail if no longer owned by testator at death. However, in CA ademption depends on whether the testator intended to adeem (revoke) the gift when he disposed of the prop.

**extrinsic evidence allowed to show intent**

Front 24

Revocation - Satisfaction

Back 24

An inter vivos gift to the bene is deducted from the devise, where the testator expressed in a written document that she intended the gift to be in satisfaction of the devise.

Front 25

Contracts

Back 25

Testator can contract to make, not to make, revoke or not revoke a will, contract law controls.

Front 26

Intestate succession

Back 26

Community Prop: Surviving spouse inherits the decendents 1/2 of the CP and 1/2 of quasi CP

SP: If no issue, parents, sibling - all to surviving spouse

**If survived by one child or issue of deceased child - 1/2 to child, 1/2 to spouse

**If survived by 2 or more children or issue of deceased children, 1/3 to spouse 2/3 to children

Front 27

Per Capita

Back 27

1) issue of the same degree take "per capita", equally and in their own right

2) Issue or more remote degrees take "per capita w/ rep.

Front 28

Per Stirpes

Back 28

Make the distribution at the first generation or first level, even if everyone is dead, so long as they have life issue. The issue then steps into the shoes of their predeceased ancestor.

Front 29

Distribution - Lapse

Back 29

If the bene does not survive testator, bene's gift lapses, or fails, unless testator expresses a contrary intent in the will.

**If the devise is a class gift, only survives class members take b/c the will speaks at the time of the testators death. Deceased class members share will have deemed to lapse.

Front 30

Anti Lapse

Back 30

If bene predeceases testator and gift lapses, then under CA anti lapse statute if the deceased bene is a blood relative of the testator, testator's spouse, or domestic partner, then the issue of the predeceased bene will take bene gift.

Front 31

Simultaneous Death

Back 31

When two people die at the same time and time of death cannot be established, prop of each decedent is treated as if he predeceased the other.

Front 32

Increased Value of Prop

END OF WILLS

Back 32

During testators lifetime: Stock dividends or splits paid during testators lifetime go to the bene if still owned at death

During Probate: Bene receive increase only if specific

Front 33

Trust Definition

Back 33

A fiduciary relationship with respect to prop whereby one person holds legal title for the benefit of another and which arises out of a manifestation of intent to create if for a legal purpose.

Front 34

Creation

Back 34

1) Must use mandatory words and not precatory words (hope and desire)

**precatory + parol evidence=trust**

2) Oral trust only for personal prop

3) If trust to take effect at settlors death must conply w/ local probate rules

Front 35

Creation Inter Vivos

Back 35

Transfer in trust (3rd party trustee): For a trust of RP, S must execute and deliver a deed transferring title to the trustee. For PP, S must deliver trust prop to the trustee

Declaration in trust (S as trustee): For RP, writing to satisfy SoF which indicates S is trustee. For PP, look for present manifestation of intent.

Front 36

Intent

Back 36

Settlor must manifest intent to create a trust

Front 37

Trustee

Back 37

A trust must have a trustee but the court will appoint one if there is none. A trust will not fail if there is no trustee.

Front 38

Beneficiary

Back 38

An ascertainable person or group of people can be the bene, including a corp or association.

Front 39

Trust Res (property)

Back 39

Any presently existing interest in prop that can be transferred can be the corpus of a trust.

Front 40

Purpose

Back 40

Trust must have a valid purpose not contrary to public policy or illegal

Front 41

Charitable Trust

Back 41

1) Charitable purpose (look to effect not motive)

2) No ascertainable beneficiary

Cy pres: If S manifests a general charitable intent but that intent is no longer possible, the court may use cy pres.

**Extrinsic evidence allowed**

**If specific charitable intent=resulting trust**

Front 42

Honorary Trust (i.e., pet trust)

Back 42

A trust which has no ascertainable bene and confers no substantial benefit on society.

1) Trustee not required to carry put S goals but has the power to.

2) If trustee refuses, trust fails

Front 43

Tottent Trust

Back 43

A tenative bank acct. whereby the named bene takes whatever is left in the acct. at the death of owner of acct.

Front 44

Spendthrift Trust

Back 44

A trust which prevent the bene from transferring his right to future payments of income or principal and creditors cannot attach the bene's right to future payments

**Cant create a spendthrift trust to insulate oneself from creditors**

Front 45

Spendthrift - Voluntary Alienation

Back 45

Generally, the bene cannot ever voluntarily transfer his rights to future payments:

1) Sometimes a court will recognize the assignment on the ground that the bene merely has given the trustee a direction or order to pay the bene's agent or rep.

2) Prior to payment the bene would have the right to revoke the order or direction

Front 46

Spendthrift Trust - Involuntary Alienation

Back 46

Generally, creditors cannot attach bene's right to future payment

1) Preferred creditors can attach bene's right to future payments ( gov. creditors, those who provide necessities of life)

2) In some juris. any creditor has right to attach surplus as measured by the bene's station in life.

Front 47

Support Trust

Back 47

A trust which allows the trustee to pay only so much income or principal as necessary for the bene's health, support, maintenance or ed.

**Bene cannot voluntarily transfer right to future payments**

**Only preferred creditors can attach future payments**

Front 48

Discretionary Trust

Back 48

A trust which gives the trustee sole and absolute discretion in determining how much to pay the bene and when to pay the bene, if ever.

**If assigned, assignee steps into shoes of bene

**Creditors cant attach but if trustee has notice of debt he must pay creditor**

Front 49

Resulting Trust

Back 49

An implied in fact trust based upon the presumed intent of the parties. Arises when

1) PET ends by its own terms and there is no provision for res.

2)PET fails b/c there is no bene

3) Charitabel trust ends due to impossibility

4) PET fails due to illegality

5) Excess res in PET

6) PMRT

Front 50

Constructive Trust

Back 50

An equitable remedy to prevent fraud or unjust enrichment. Arises when:

1) Trustee of PET or charitable trust makes a profit b/c of self dealing

2) Fraud or undue influence

3) There is a secret trust

Front 51

Trustee Powers

Back 51

In addition to powers expressed in trust, state law, or by the court, trustee may:

1) Sell trust prop, incur expenses, lease, borrow money, as necessary for purpose of trust.

2) Trustee may not encumber trust prop

3) May sue 3rd parties who damage trust prop

4) Joint trustees need unanimous agreement

Front 52

Trustee Duties - Loyalty and Due Care

Back 52

Duty of Loyalty

The trustee must administer the trust for the benefit of the bene's, having no other consideration in mind. No self dealing. Must turn over ill gotten profits to bene

Duty of Due Care

Trustee must act as a reasonably prudent person dealing w/ his own affairs

Front 53

Trustee Duties - Duty to Invest

Back 53

State Lists

in absence of directions, trustee must follow a list of good investments: Gov't bonds, fed insured certs of deposit, 1st DOT, stocks (maybe)

Common law prudent person

Requires trustee to act as a reasonably prudent person would in his own prop. Each investment is scrutinized. Good investments same as list.

Uniform Prudent Investor Act

Performance is measured by the entire portfolio.

Front 54

Trustee Duties - Duty to Separate and Earmark

Back 54

Earmark

Trustee must label trust prop as trust prop.

Liable only if loss resulted from failure to earmark

Separate

Trustee cannot commingle his own funds w/ trust funds. If breached, can be removed and held liable for any loss.

Front 55

Trustee Duties - Duty not to delegate

Back 55

Trustee can rely on prof. advisors in reaching a decision, but cannot delegate decision making to the advisors. i.e., money manager

Front 56

Trutee Duties - Duty to Account

Back 56

Trustee must give bene a statement of trust income and expenses on a regular basis.

Front 57

Trustee Duties - Remedy for breach

Back 57

1) damages

2) constructive trust

3) tracing and equitable lien on prop

4) ratify the transaction if good to the bene

5) Remove trustee

Front 58

Liability of trustee to 3rd party - contract

Back 58

If 3rd party knows that the trustee is entering in to the k in her rep capacity, the trustee must be sued in her rep capacity, and personal assets are not at stake

Front 59

Liability of trustee to 3rd party - torts

Back 59

Only personally liable if the trustee is personally at fault, otherwise sued in rep. capacity

Front 60

Modification by Settlor

Back 60

Settlor can modify the trust if the settlor expressly reserves the power to modify the trust

Front 61

Modification by court

Back 61

1) Court can modify charitable trust

2) Court can modify pursuant to its deviation power to change the administrative or mgmnt provisions of the trust if:

**Unforeseen circ. on the part of the settlor

**Necessity

Front 62

Termination of Irrevocable Trust

Back 62

1) Settlor and all bene's agree to terminate

2) All bene's agree to terminate and all material purposes have been accomplished

3) By operation of law

**If PET of RP and trustee has only passive duties, the trust terminates under the statute of uses and the bene gets legal title by operation of law.