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56 Cards in this Set
- Front
- Back
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Req'ts of a duly executed W (7 req'ts)
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#1 Testator (T) must be 18 years old
#2 Signed by the T or by someone at the T’s direction and in her presence #3 T’s signature must be signed at the end thereof #4 T must sign the W or acknowledge her earlier signature in the presence of each witness #5 T must publish the W; publication requires the T to communicate to the W that they are witnessing a W (and not some other legal document), by declaring the document to be her “Last W and Testament” #6 There must be at least 2 attesting witnesses #7 The execution ceremony must be completed in 30 days which starts to run when the 1st witness signs, not when the T signs |
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A valid disclaimer must be (4 req’ts)
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#1 In writing, signed & acknowledged (before a notary public)
#2 Accompanied by a SEPARATE affidavit stating that no consideration was received for disclaiming (UNLESS the Surr Ct authorizes receipt of consideration for the disclaimer) #3 Irrevocable #4 Filed w/ the Surr Ct w/in 9 mos after the date of death |
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Proving a will
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W proponent has the burden of proving due execution
- 1 witness testify - Prove signature of both T and 1 witness - If W is not self-proved, both attesting witnesses must testify as to the facts necessary to show due execution |
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Attestation Clause
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It appears below T’s signature line and above the witnesses’ signature lines, and recites all the elements of due execution
- It is prima facie evidence of the facts presented - NOT a substitute for live testimony: An Attestation Clause is merely corroborative of the witnesses’ testimony; a W proponent must still call the witnesses to testify or prove their signatures |
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Self-proving Affidavits
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Attached to the back of the W, and is a mechanism proscribed by the legislature which recognizes that the validity of most W is not contested
- Witnesses sign a SWORN statement in the presence of an attorney that recites all the statements they would make if called to testify in Ct → essentially that the 7 point test is met - Substitutes for live testimony - W is admissible to probate on the strength of the sworn recitals in the Affidavit UNLESS an interested party objects, in which case the formal rules of proof of due execution apply |
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Interested Witness Statute
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The validity of the W is not affected if a W beneficiary is also an attesting witness BUT the bequest to the W is void UNLESS
- Supernumerary rule - The “whichever is least” rule applies if witness would be an intestate distributee |
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Will Revocation
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#1 By subsequent testamentary instruments executed w/ appropriate formalities
#2 By physical act; need INTENT to revoke (e.g., burning, tearing, canceling, obliterating, mutilating, ANYTHING done to a signature) |
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Changes on the face of the will after it has been executed
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Only 2 ways a T can make changes in her W are
- Write a new W which revokes the 1st W - Make a codicil to the 1st W which only changes some parts of the W Bar exam twists - Words added to a W after it is signed and witnessed are disregarded - Partial revocation by physical revocation is NOT RECOGNIZED in NY |
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Foreign Wills Act
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W is admissible to probate in NY if it was validly executed under:
- The law of the state where the W was EXECUTED, regardless of T’s domicile @ that time - NY LAW; OR - The law of the state where T was DOMICILED, either when the W was executed or @ death |
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No revival of revoked wills
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If T executes a W that is revoked by a later W containing a revocation clause, the 1st W CANNOT be “revived” by T merely revoking the later W; 1st W can be revived in 1 of 2 ways
- Re-execution: Signed again by the T, 2 witnesses (7 point test) - Doctrine of “republication by codicil”: T validly executes a codicil to the 1st W, either specifically referencing it or making changes |
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"Lost Wills" statute
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The “Lost Will” proponent must prove that
- “Lost” or later W was duly executed: 7-point test, AND - “Lost” or later W was not “revoked”: Thus, the “Lost Will” proponent must - Overcome the resumption of revocation that arises from the W’s non-production, OR - Prove that the revocation should be disregarded under DRR, AND - W’s provisions were: “clearly and distinctly proven by each of at least 2 credible witnesses, or by a copy/draft of the W proved to be true and complete” |
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Anti-lapse statute
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If a beneficiary dies during T
s life time, the gift does not lapse but VESTS in the deceased beneficiary’s issue IF - Predeceased beneficiary was T’s issue/brother/sister, AND - Predeceased beneficiary leaves issues who survive the T (Disclaimer = treat as death!) |
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Class gifts
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Absent a contrary provision in the W, if a W makes a gift to a group of persons described as a generic class (e.g., kids, siblings, etc.) AND some members of the class predecease T, the class members who survive T take in equal shares
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Lapse in residuary gift – “surviving residuary beneficiaries” rule
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Absent a contrary provision in the W, if T’s residuary estate is
- Devised to ≥2 persons - The gift to one of them fails/lapses for any reason, AND - The anti-lapse statute does not apply THEN the other residuary beneficiaries take the entire residuary estate in proportion to their interests |
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Simultaneous death
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- Uniform Simultaneous Death Act (USDA): If two person die under circumstances where there is insufficient evidence to prove that they died other than simultaneously, the property of each is distributed as though distributor survived the other
- USDA & jointly-held property: Jointly-held property passes as though each co-owner survived the other |
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T "unmarries"
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If the Ct renders a FINAL DECREE OF DIVORCE/ANNULMENT/SEPARATION after the execution of a W, all gifts and fiduciary appointments in favor of the former spouse are revoked by OPERATION OF LAW (read the W as if the spouse PREDECEASED the T), EXCEPT
- All gifts and fiduciary appointments in favor of the ISSUE of the former spouse are NOT revoked by operation of law - Appointment of former spouse as GUARDIAN of the couple’s kids is NOT affected - If the couple reconcile and remarry, ALL provisions in favor of the former spouse are restored |
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Pre-termitted kids
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T’s kid is born/adopted after the W is executed who are
- Not provided for by any settlement, AND - Neither provided for nor mentioned in the W If the T had ONE OR MORE KIDS when the W was executed AND - No provision is made for any kids, the pretermitted kid inherits nothing - W made gifts to the other kids, the pretermitted kid shares in the amount to the other kids as if a class gift was made - It appears that T’s intention was only to make a limited provision to the kids living @ the time the W was executed, the pretermitted kid takes his intestate share If the T had NO KIDS when the W was executed – then the after-born kid takes his intestate share |
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Negative bequests
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When a W does not make a complete distribution of the estate (resulting in partial intestacy), words of disinheritance in the W are
- CL (MAJ): Ineffective w/ respect to property passing by intestacy - NY: Given full effect, even in partial intestacy (but disinherited party's issue may take part of the residuary estate via the anti-lapse statute) |
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Satisfaction of legacy (under W)
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NO satisfaction of legacy unless proven by
- Contemporaneous writing made @ the time of the gift, AND - Signed by the donor/donee |
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Advancements (under intestacy)
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NO advancements unless proven by
- Contemporaneous writing made @ the time of the gift, AND - Signed by the donor/donee |
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Incorporation by reference
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Not recognize in NY, everything must be DULY EXECUTED (but “pour-over” trust valid)
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Classification of gifts
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1. Specific gift: Gift of tangible property
2. Demonstrative legacy: A general amount, but T designates a special source FROM which the amount is to be paid 3. General legacy: A general amount 4. Residuary property: The rest, residue and remainder of an estate 5. Intestate property: Where partial intestacy results and W has no residuary clause |
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Abatement
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Reduction of legacies: If there are more claims against the estate than there are assets to cover all gifts made under W, the gifts under a W may ABATE
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Ademption
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Failure of SPECIFIC gift
- If T makes a specific gift of property, and the property cannot be found or is no longer owned by T at the time of her death, the gift fails, EXCEPT 3 statutory exclusions allow $ recovery for specific gifts - Insurance proceeds for lost, damaged or destroyed property: Beneficiary takes the insurance proceeds to the extent they are PAID AFTER DEATH - Proceeds received under an executory K: Beneficiary gets sale proceeds which are PAID AFTER DEATH - Proceeds from a GUARDIAN OR CONSERVATOR’S sale of specifically bequeathed property: Beneficiary entitled to receive $/property into which the proceeds from the sale or transfer can be traced - A demonstrative legacy (a general gift from a specific source) will turn into a general legacy if there is no cash available from the designated source |
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Specific gifts of encumbered property
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Liens on specifically devised property are NOT exonerated, UNLESS the W directs SPECIFIC exoneration
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Bequests of shares of stock and other securities
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- Gifts of shares of stock in publicly-traded Cos are: General gifts and they don’t adeem
- EXCEPTION: Gifts of shares of stock in publicly-traded Cos are SPECIFIC GIFTS if the testator bequeaths “my … stock” - Gifts of shares of stock in closely-held Cos are: Specific gifts and they DO adeem if they don’t exist - Gifts of shares of stock where a stock split occurs are: Specific bequest for the purpose of the split ONLY (general for ademption purposes) |
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Elective share
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Greater of $50K OR 1/3 of ES estate
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ES estate
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Net probate estate/intestate estate
+ T-Subs (FULL VALUE) (e.g. TT) + T-Subs w/ surviving spouse (½ in) + T-Subs w/ 3dP (Consideration furnished: Before marriage (½), after marriage (all)) |
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ES amount
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1/3 of ES estate
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Net ES
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ES amount
– Amount SS receives under W or via intestacy – T-Subs w/ SS (½ out) (If SS is not fully “satisfied,” all other beneficiaries contribute pro rata) |
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T-Subs (LEG UP)
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** Toten trusts: Including bank accounts in T’s name in trust for another and payable on death securities
** Survivorship estates: Including JT, TbE, joint bank accounts, and survivor bank accounts (if created on/after 9.1.1966) ** Lifetime transfers w/ strings attached Employee pension, profit-sharing, and deferred compensation plans (if T is designated the beneficiary of the plan on/after 9.1.1992 and after his marriage) * Gifts made w/in one year of death (>$13K (annual gift tax exclusion); AND “Gifts causa mortis”) U.S. gov’t bonds and other P.O.D. (“pay on death”) arrangements * PoA: Property over which T held a PRESENTLY EXERCISABLE GENERAL PoA (® of thumb: Generally, if T still has an interest in the property, it’s probably a T-Sub (exception being gifts w/in one year of death); thus, almost all non-probate transfers are testamentary substitutes) |
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Non-T-Subs (LOGPIT)
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**Life insurance: Whether payable to the surviving spouse or a 3d party
One-half (1/2) of a qualified pension and profit-sharing benefits (if T named a beneficiary before 9.1.1992 and di not change the beneficiary thereafter) Gifts <$13K made w/in one year of death *Pre-marriage irrevocable transfers *Irrevocable transfers made >1 yr before death: Transfers where T did not retain the power to revoke, invade, consume or dispose of the principal, or name new beneficiaries Transfers (irrevocable) made during the marriage, where T retains a LE (if irrevocably transferred before 9.1.1992) (® of thumb: Generally, if T does NOT have an interest, it is not a T-Sub) |
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Calculating the ES estate
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Full amount of a T-Sub is included, EXCEPT
- Survivorship estates involving T and a 3d party: Consideration furnished - Survivorship estates involving T and the SS: ½ is a T-Sub - Survivorship estates created BEFORE marriage involving T and a 3d party: ½ consideration furnished |
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Classification of PoA
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General PoA: A donee can appoint to herself, her creditors, or her estate, as if the donee owned it herself
Special PoA (“limited PoA”): Donee cannot appoint to herself (e.g., “to the issue of my brother”) Presently exercisable PoA: Donee can exercise it right now, in her lifetime (maybe in a trust instrument) Testamentary PoA: Donee can appoint ONLY by W |
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Power of Appointment
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An authority created in (or reserved by) a donee enabling the donee to designate, w/in limits prescribed by the donor, the persons who shall take the donor’s property and the manner in which they take it
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Testamentary capacity
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T must have sufficient capacity to
- Understand the nature of the act (i.e., she must understand that she was writing a W) - Know the nature and approximate value of her property - Know the “natural object of her bounty” (i.e., she must know her family members and loved one), AND - Understand the dispositions and gifts that she was making |
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Insane delusion
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T is generally of sound mind, but has a persistent belief in supposed facts that are against all evidence, probability, and control, which cause/affect T’s testamentary act
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Undue influence
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T has testamentary capacity but is subject to, and controlled by, a dominant influence of power - must prove:
- Existence and exertion of an influence - Effect of such influence was to OVERPOWER the mind and will of the T; AND - Product is a W or a gift in a W which would not have happened BUT FOR that influence Inference of undue influence: A W contestant can satisfy her BoP by an inference of undue influence if - A W makes a gift to one in a CONFIDENTIAL relationship, AND - Person was active in preparing the W UNLESS the inference is rebutted |
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K Wills
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Will was explicitly made K that survivor would not revoke:
- Can ONLY be established by an EXPRESS STATEMENT OF INTENT - Impose constructive trust (if there are later inconsistent provisions) - Can be revoked when both parties are alive |
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Non-contest clauses
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Clause in a W that says, “If anyone objects to my W, they will get nothing”, given FULL EFFECT in NY, EXCEPT if W contest is
- Claiming forgery or that W was revoked by a later W (not physical act), if the Surr Ct finds that there was PC for the contest - Won’t be enforced if W was filed on behalf of an infant or incompetent - A construction proceeding to construe the W’s terms - Objection to the jur’n of the Ct |
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Valid trust (8 req'ts)
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#1 Settlor (also called creator) who makes a
#2 Delivery of legal title to #3 Property (also called res, or corpus, or principal) to a #4 Trustee who holds legal title for the benefit of a #5 Beneficiary (or beneficiaries) with #6 Intent to create a trust for #7 A lawful purpose #8 In a validly executed document |
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Totten Trusts
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- A bank account in the depositor’s name “as trustee for” a named beneficiary
- Depositor makes deposits or w/draws as she wishes during the depositor’s lifetime - As such, creditors of the depositor can always reach the TT account balance EITHER BEFORE OR AFTER the depositor’s death, b/c it is a form of revocable trust revoked partially each time a w/drawal is made - Beneficiary has no beneficial interest during the depositor’s lifetime, but gets whatever is in the account when the depositor dies - No particular words are req’d to create a TT account - 4 ways to revoke a TT account - W/draw all the $ in the account - Express revocation during lifetime by depositor making a writing naming the beneficiary and the financial institution and having the revocation notarized and delivered to the bank - Revocation in a will; must comply w/ same req’ts for revocation during lifetime - Death of beneficiary also results in having the TT revoked and the $ in the account goes free and clear to the depositor - Change of beneficiary can be made by depositor BUT it must be done the same way as a revocation |
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Charitable Trusts
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1. Charitable trusts must have indefinite beneficiaries, and they must be a reasonably large group
2. Charitable trusts must be for a charitable purpose 3. Charitable trusts must be perpetual (are not subject to the RAP which indirectly limits the duration of trusts) 4. Cy pres can be used to change the trust (e.g., if the stated purpose of the charitable trust can no longer be accomplished) 5. The AG has the duty of representing the beneficiaries of charitable trusts in the state (AG is indispensable party & has standing to sue to enforce the trust’s terms) |
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Honorary trusts
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- Where no human being is the beneficiary of a private trust
- NOT TRUSTS, except for pet trusts (21 year limit) or cemetery trusts (= charitable trusts) |
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Constructive trusts
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- NOT TRUSTS
- Equitable remedy designed to disgorge unjust enrichment that result from wrongful conduct - "Trustee's" only duty is to convey the property to the person who, in equity, should have the property |
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Resulting trust
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- NOT TRUSTS
- Equitable remedy when purchaser buys property and puts the title in someone else's name, and later ask for it back claiming no gift was intended - Need CLEAR & CONVINCING evidence that grantee had EXPRESSLY/IMPLICITLY promised to reconvey to the purchaser |
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NY special (automatic) statutory spendthrift rule
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- Protects all income interests in trusts w/ spendthrift protection even if the trust instrument does not contain a spendthrift clause (BUT this just applies to income from trust, and not the principal, tho can EXPRESSLY provide spendthrift protection to remainder beneficiary)
- 5 EXCEPTIONS -- Creditors who furnish necessities -- Child support and alimony -- Federal tax liens -- Excess income beyond that needed for support and education - The 10% levy provided by CPLR § 5205(e) |
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Modification of trust
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- Find out the primary intent of the settlor regarding trust purposes
- Look @ specific directions in the trust instrument to determine whether, b/c of changes in circumstances, those specific instructions in the trust would now frustrate the primary intent of the trust; IF SO, then those directions can be changed by the Ct - Ct can authorize the invasion of the principal if the income is not enough to carry out the settlor’s purpose of the trust |
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Trust termination by settlor
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- Trusts are irrevokable and unamendable unless the power to revoke and amend is expressly reserved in the trust instrument
- EXCEPTION: Settlor can terminate an irrevocable trust if all beneficiaries in being consent; this is often impossible b/c no one can give consent for any beneficiary who is a minor or who is incompetent - Beneficiaries must be born alive to count here; for purposes of trust termination a kid in gestation is not regarded as a person - If a trust gives property to heirs or next of kin that interest is not considered a beneficial interest and thus no consent need be obtained from them (as they cannot be ascertained until the descedent’s death) |
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Trustee powers
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CAN
- Sell any real or personal property - Mortgage property - Lease property - Make ordinary repairs - Contest, compromise or settle claims - Do almost anything to manage the corpus of the trust CANNOT - Engage in self-dealing - Borrow money on behalf of the trust - Continue a business w/o a Ct order |
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Self-dealing by the trustee
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5 prohibition on self-dealing
- Trustee CANNOT buy/sell trust assets to herself - Trustee CANNOT borrow trust funds - Trustee cannot lend $ to the trust - Trustee cannot profit from serving as trustee (except for appropriate trust fees) - Corporate trustee cannot buy its own stock as a trust investment 2 affirmative duties on self-dealing - Duty to segregate trust assets from personal assets - Duty to earmark trust assets by titling them in trustee’s name |
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Remedies for breach of fiduciary responsibilities
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- Beneficiary can sue to remove the trustee
- Beneficiary can ratify the transaction and waive the breach - Beneficiary can sue for any loss |
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Exculpatory clause for fiduciary duties
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- CANNOT be used to shield trustee(s) from liability for breach of a fiduciary duty in a testamentary trust b/c relieving an executor/testamentary trustee from liability for negligence is void as against public policy
- BUT exculpatory clauses CAN BE used in a lifetime/IV trust |
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Personal liability of trustee in K
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How trustee signed K is key to determining liability
- If trustee signed only on behalf of the trust, no personal liability - If trustee signed personally, and merely mentioned trust, then trustee has personal liability Even if there is personal liability the trustee will be reimbursed by the trust if 2 things are satisfied - The K was w/in the powers of the trustee - Trustee was acting in the course of proper administration of the trust |
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Personal liability of trustee in tort
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- Trustee is personally liability for all torts by the trustee or trustee’s employees
- Trustee can get reimbursement from the trust for any tort claims if 2 req’ts are met -- Trustee must have been acting w/in trustee’s powers -- Trustee was not personally at fault |
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Trustee’s investment power
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- Trustee can pursue what UPIA cals the modern portfolio theory of investment, where the trustee creates a custom-tailored investment strategy for this particular trust
-- Trustee must consider the role each investment plays w/in the overall trust portfolio -- Trustee must consider the expected total return from income and capital gain - Trustee does not have to justify the prudence of each investment looked @ by itself; can balance off risky speculative investments against safe, conservative investments - Specific things to remember -- Prudence is not measured by hindsight – look @ the decision to invest when made, not later (trustee does not have to have a crystal ball) -- Trustee can exercise adjustment power and allocate capital gains to income |
