Wills And Turst

Front 1

Section 220 - Simultaneous Death

Back 1

If the title of property depends on priority of death and it cannot be determined by clear and convincing evidence that one survived the other, the property of each will be divided as if that person survived the other.

Front 2

Sect. 6401 - Intestate Share of Surviving Spouse or Domestic Partner

Back 2

1/2 of T's CP
All of SP if T leaves behind no issue, parents, bros, siss, issues of bros or siss.
Half of SP if T a) leaves one child or the issues of one child b) no issues but leaves parent(s) or their issues or issues of each of them.
One third of SP if T a) leaves 2 children b) one child and issue of one or more children or c) issue of two or more deceased children

Front 3

Sect. 6402 - Intestate Share Not Going to Surviving Spouse or Domestic Partner

Back 3

a) issue
b) parent
c) issue of parent
d) grandparent(s) or issue of grandparents
e) issue of predeceased spouse
f) next of kin
g) parents of predeceased spouse or their issues
h) state

Front 4

Sect. 223 - Joint Tenancy

Back 4

a) property shared s.t. the one will inherit the share from the dead tenant
b) if it cannot be est by clear and convincing evidence that one survived the other, the property of each (1/2 share of the same property) will be distributed as if that person survived the other.

Front 5

Sect. 103 - Simultaneous Death of Spouses

Back 5

If it cannot be established by clear and convincing evidence that one survived the other:
One half of the community property shall be administered as if one spouse survived and as if that half belonged to that spouse.
The other half of the community property shall be administered as if the other spouse survived and that half belonged to that spouse.

Front 6

Sect. 224 - Life Insurance

Back 6

If it cannot be determined by clear and convincing evidence that the insured survived the beneficiary, then the property shall be distributed as if the insured outlived the beneficiary, except:
if the two are H and W --> distribute according to Sect. 103.

Front 7

Sect. 6110 - Req'ts for Formal Will

Back 7

a) writing
b) signed by T, in T's name by someone else in the T's presence and by the T's direction
c) witnessed being signed by at least 2 persons each whom
1) being present at the same time, witnessed either the signing of the will or the T's acknowledgment of the signature or of the will and
2) understand that the instrument they sign is the T's will

Front 8

"in the presence of" for purposes of witnessing a will signature

Back 8

1. line of sight test – T does not actually have to see the witnesses sign but must be able to see them were the T were to look.
2. conscious presence test – W’s are in the presence of the T if the T, through sight, hearing, or general consciousness of events, comprehends that the witness is in the act of signing.

Front 9

Another witness req't developed through case law

Back 9

No postmortem subscription to cure witnessing problem - Witness must sign before T's death

Front 10

Section 6112 - Witnesses

Back 10

a) general competence is all that's req'd
b) unless 2 other disinterested W's, an Interested W creates a presumption that W procured the devise by undue influence. Presumption affects the BOP
c) if presumption not overcome, gift will be purged to the extent that it exceeds W's intestate share.

Front 11

Is the will still valid if a formality is not complied with? 2 tests.

Back 11

Substantial Compliance -Clear and convincing evidence that the purpose of certain formalities - evidentiary, cautionary, protective, channeling fxns - has been accomplished, the formalities themselves can be relaxed even if not met.
A further inquiry: does the noncomplying document express the decedent’s testamentary intent, and does its form suff’tly approximate the Wills Act formally to enable the court to conclude that it serves the purposes of the wills act

Dispensing Power - • Clear and convincing evidence that the T intended this instrument to be his will, the court is empowered to dispense w any and all formalities.

o Courts that have dispensing power, there has been a heiarchy of formalities.

Front 12

Specific formality and likelihood of dispensing:

Back 12

1. Witnessing - more likely to be dispensed of.
2. Signing - is sometimes dispensed of but with the idea of how certain are we that this is the intent of the T.
o Mix signature cases easily handled by dispensing power. But signing the wrong will is not substantially complying w the signing req’t
o Unsigned – presumption that the will is a draft and not probatable

3. writing req't - never dispense.

Front 13

Attestation Clause and Presumption?

Back 13

Attestation clause is W’s recitation of what occurred – “I saw the T sign and I signed in his presence” == prima facia case that the will formalities were req’d IF the attestation clause covers all statutory req’ts

Front 14

Policy reasons for formalities?

Back 14

1. Certain that the document reflects the uncoerced intent of the T.
2. Channeling function by consistent formalities
3. Ceremony - seriousness of the transaction.

Front 15

Animus testandi analysis - Sect. 6115

Back 15

For any will to be a will, it must have animus testandi -- person must have intended the doc to be his will, i.e. a disposition of property at his death.
Presumption that the doc is a will if it states - “this is the last will and testament of….” Must do this analysis when looking at informal letters, etc..
Extrinsic Evidence is admissible to determine whether a document constitutes a will
Can apply dispensing power rule if formalities not complied w and that is the reason to question whether the doc is a will.
if the proponent of the document establishes by clear and convincing evidence that the decedent intended the document to be the decedent’s will – he intended this to be his will.
**Cannot be disposed of.

Front 16

Sect. 6111 Req’ts of a Holographic Will

Back 16

1. signature and the material provisions in the handwriting of the T.
2. if no date:
a) doubt as to whether anther will is subsequent and controlling in light of inconsistent provisions, holographic will provision will be invalid unless it can be proven its date of execution was later.
b) if it can be est that T lacked capacity during any time which the holographic will could've been procured, then invalid unless date can be proven when not incapacitated.
2. stmt of T's intent can be in handwriting or typed writing.

Front 17

Holographic General Analysis:

Back 17

1. Suff’t signature?
a. Most states allow the holograph to be signed anywhere – the end or the beginning, but if not signed at the end there may be doubt as to whether the T intended his name to be a signature.
b. compare: I, [signed Henrietta Fegley], declare this instrument my will” was not otherwise signed.
2. Whether the entirety, or if not, how much, of the holograph must be in the T’s handwriting?

Front 18

Suff't to be in the handwriting of the T?

Back 18

i. Photocopied holographic disposing provisions (photocopy of T’s handwriting) + original signature and original writing voiding his old will
**if both disposing provisions and signature is a photocopy -- this would be a lost wills analysis.

Front 19

*§ 6105 Conditional Will

Back 19

A will, the validity of which is made conditional by its own terms, shall be admitted to probate or rejected, or denied effect after admission to probate, in conformity w the condition.

Front 20

How do you decide what documents comprise ‘the” will or “a” will

Back 20

1) Integration
a) By physically connecting a multi-page will.
2) Multiple Wills: If every potential instrument is validly executed either formally or as a holograph, admit all, and give gifts in reverse chronological order by instrument.
i) If Codicil disposes of everything, the other valid will that has nothing to give is still probatable and is not considered revoked unless the codicil says that the prior will is revoked. If it makes a contrary disposition, then it revokes the gifts in the prior instruments but does not revoke the actual will.
ii) Undated holograph is presumed to be dated prior than the formal will
(1) If you cannot tell by the contents of the HW or extrinsic evidence to put them in order, the HW will be considered to be executed prior to the formal will
3) Incorporation by Reference - Giving testamentary effect to an instrument not following testamentary requirements
4) 4) CPC § 6130 UPC 2510 are similar
i) When can testamentary effect be given to an instrument not executed w testamentary formalities, including not admissible as a holograph either (otherwise would be in the multiple wills section)

Front 21

Permissible appointees to make the POA general?

Back 21

yourself
creditors
estate
estate's creditors

Front 22

How is donee w general presently exercisable appointment power property treated for tax purposes?

Back 22

He is taxed on the property as the owner of the property

Front 23

What is a specific/special POA?

Back 23

Any POA that does not incl any of the following:
yourself
creditors
estate
estate's creditors

Front 24

Requisites of Incorporation by Reference

Back 24

(1) extrinsic paper must be in existence at the time the will makes reference to it (in existence at execution)
(2) Another writing, does not incl verbal intentions.
(i) Will be arguing was it in existence bc someone could switch out the papers.
(b) This would not allow post-will changes bc paper would not in existence at the time the will is made
(3) Paper will be part of the Will, later codicil can still modify the paper incorporated into the will.
(i) will must identify the paper by a suff’tly certain description, and extrinsic evidence is admissible to aid to such identification;
a. Usu by location
(ii) must appear the T intended to incorporate the paper for the purpose of carrying out his testamentary desires.
a. Intent to give it this effect is in the will.
Balance btwn the T’s intent and formalities

Front 25

republication by codicils

Back 25

Later codicil that will just say it republishes and certain will and make reference to that will.

• A codicil republishes or reinstates a previous will as modified, if at all, by the codicil as of the date of the codicil

Front 26

POA RAP Analysis

Back 26

1. Valid POA under RAP?
General/Present POA -- Valid if it CAN be exercised during RAP period
Special/General testamentary - INVALID if it can be exercised beyond RAP period
2. Valid Appointment re RAP?
3. Valid Default re RAP?

Front 27

Can a Writing Directing Disposition of Tangible Personal Property referred to in Will?

Back 27

YES if under $25K in value

Front 28

If will cannot be found -- what are the doctrines implicated?

Back 28

Lost Wills and Presumption of Revocation?
• If all we have is that we cannot find it – lost wills situation; but if we know it was in the T’s possession and cannot be found then it will be presumed revoked

Front 29

*§ 6120 Revocation by Subsequent Will or Physical Act

Back 29

• A will or any part thereof is revoked by any of the following:
• - can revoke whole will or just a part of the will…
• (a) A subsequent will (following formalities, incl codicil) which revokes the prior will or part expressly or by inconsistency.
• Can say that it’s revoked or just make an inconsistent statement
• Req’s a writing executed w testamentary formalities
• (b) Being burned, torn, canceled, obliterated, or destroyed, w the intent (aminus revocandi) and for the purpose of revoking it, be either 1) the T or 2) another person in the T’s presene and by the T’s direction
• By one of these physical acts
i. Other states hold that the physical act revokes the whole will
• List is exhaustive.
• How completely does the act need to be preformed?
• Burning – don’t need to burn it up; burned around the edges is ok – act of exposing it to fire is the act of aminus revocandi.
• Cancellation – like a stamp – drawing lines through it. Whatever gift you mark through will be cancelled, so can cancel a part of the will. Some unclarity whether person intended to cancel the part or not.
i. Handwriting – and signature saying I cancel this gift will operate as a holographic codicil
• Obliteration – attempt to make the will unreadable. E.g. pour water onto the ink of the will.
i. If this happens accidentally, the probatability of the instrument is different from the fact that it cannot be read. It can still be probated if the probate court is convinced that the formalities are met or the other doctrines allowing the will to be probated
• Destroyed – more of a catch all.
• Questionable whether T destroys w intent to revoke if T mistakenly believes the will was already revoked when he throws away the will.

Remember that at photocopy w original signature is probatable under CA = duplicate original

Front 30

6123 Dependent Relative Revocation Analysis

Back 30

DRR is applicable where - intended to provide relief from a mistake when you revoke one instrument believing you will die testate under another instrument and you are wrong
- this is a cure for mistake doctrine

Will #1 and then Will #2 has an express revocation of Will #1, then Will #2 is revoked
o in this situation the result here is intestacy
o BUT – if this was not the intent of the testator, the intent was to die under Will #3 then there is dependent relevant revocation
 the intended but ineffective Will #3 – and it is somehow failed
 then the application of dependent relative revocation (DRR) is to undue the revocation of will #2 and revive it
• so Will #2 revives never reviving Will #1
o If Will #2 is more like #3 then like intestacy, then Will #2 is alive b/c you consider that they would prefer that to intestacy
 if the will was revoked w/ the plan of executing a similar one then compare #2 and #3 to see if they are similar or if intestacy is similar
 this is b/c you would not have revoked if you thought it would put you into intestacy

more like "revocation revoked"

Front 31

*§ 21700 – Contract to Make Will, Devise, or Other Instrument

Remedies for breach of that K?

Back 31

• In effect for all K’s made after 2000
• (a) Must do one of the following:
o 1. provisions of the will itself or other instrument stating the material provisions of the K.
o 2. An expressed reference in a will or other instrument to a K and extrinsic evidence providing the terms of the contract
o 3. a writing signed by the decedent evidencing the K.
o 4. clear and convincing evidence of an agreement btwn the decedent and the claimant or a promise by the decedent to the claimant that is enforceable in equity
 No writing req’d but c&c evidence to balance
o 5. clear and convincing evidence of an agreement btwn decedent and another person for the person for the benefit of the claimant or a promise by the decedent to another person for he benefit of the claimant that is enforceable in equity
 Unwritten third pty beneficiary of the will
• (b) The execution of a joint will or mutual wills does not create a presumption of a K not to revoke the will or wills
o No presumption of K when joint/mutual will is changed after one person dies  not a K not to revoke
• (c) A K to make a will or devise or other instrument, or not to revoke a will or devise or other instruement, or to die intestate, if made prior to the effective date of this section, sall be construed under the law applicable to the K prior to the effective date of this section.
• Can have an unjust enrichment situation
• A makes the will and dies T under it but never performs the serves. Does he still get the gift under the will? Yes.
o She’s waiving the oral contract for not performing if she does not change the terms of the will
• Different than a conditional gift in a will.
• E.g. B performed and A leaves the will to B but it is ineffective
o A dies intestate
o B can sue for payment against the estate in civil action if a K can be proven
o But can you turn the ineffective will or an invalid gift – do we find this ok? Perhaps the difference is the mutuality of the K – the consideration.

Front 32

Lucid interval doctrine

Back 32

Applies when T is suffering from a mental illness which ebbs and flows in terms of effect on T’s mental competence
• GR: Presumed that T was not mentally fit when the will was executed.
• Burden on the person who wants to uphold the will that the person had a lucid interval.
• If will is undated, burden on the person to prove was entered into when the person had capacity.

Front 33

Insane Delusion Analysis

Back 33

•1. False belief
o If actually true and believe it for only delusional reasons is not a delusion!
•2. Resistant to contrary evidence
• Can you explain this element
o What counts as contrary evidence?
o Not supported by the best evidence is a different standard
o Don’t have to be the most reasonable person
o Not clear he has delusion even if his belief is not based on the best evidence.
o Adjust believes according to the evidence that you encounter. Belief is responsive to the evidence, adjusting over time
 Delusion – no matter how much evidence you encounter contrary to your belief and your belief stays the same
 Doesn’t have to be best evidence. What was his evidence? Wife always answers the phone, wife rec’d an anniversary card only addressed to her.
•3. Affects the disposition
o Another reason why he might change his mind?
 She has lots of money and he gifted his siblings the money, who actually need the money.
o If this is the reason, where is the causal link?

**Also look at § 6100.5

Front 34

* § 6100 – Who May Make a Will

Back 34

a) A person 18 yrs or older who is of sound mind to make a will
b) A conservator may make a will for the conservatee if the conservator has been so authorized by a court order pursuant to § 2580.

Front 35

Undue Influence

Back 35

1. Type of relationship that raises the presumption of undue influence? beyond her bounty….???

• Contestant has to demonstrate that the T was susceptible to the undue influencer
o Susceptability and opportunity easier to show if confidential relationship btwn the testator and the third party.
  raises a presumption of undue influence that must be overcome.
o Third pty gets the bulk of the estate
o Especially vulnerable T  raises a presumption of undue influence that must be overcome.
• Opportunity to exert that undue influence
• Person had a motive to do it
• Causation -- Disposition resulted from the undue influence
o Pre-existing will in favor of the undue influencer – but what if undue influence was to keep person from changing their mind – probate court cannot see this…
o But maybe if it raises to the level that the person prevented the T from revoking their will. Anything less than this will be extremely hard to prove
o Disposition is what everyone things is more or less appropriate, very difficult to prove disposition of undue influence bc seems like a natural consequence

Front 36

Atty-beneficiary drafter

Back 36

Bequest to atty-drafter beneficiary that are not related to the T by marriage… are purged unless you get an certificate of independent review
o 21350(a) – list of ppl that are all purged
o 21351 – tells us how to bring their gift back
 21351(d) – how and who can over come presumption of undue influence and bring the gift back
 Remedy: 353 – means to have you predecease the testator

Front 37

§ 21350 – Disqualified Transferees (not mandatory to memorize but what is the general gist)

Back 37

Deals w the relationship of a person with the drafter and who is disqualified as a transferee based on their relationship w the drafter

Front 38

Fraud

Back 38

Elements
1. Misrepresentation
a. Must be false; if true, then not fraud.
2. T makes gifts different as he would have but for the misrepresentation
3. Intent to deceive the T
4. Purpose of influencing the testamentary disposition.
• Not easy to prove.
• Cure for fraud – no way to reach fraud if person is NOT a beneficiary.
• Remedy is a constructive trust if striking the gift will give the person a better disposition so better to let the will go through and put the gift in a constructive trust.
• Fraud v. Mistake
o Fraud is cureable and mistake is not GENERALLY
 UNLESS ground of the mistake and the alternative disposition are in the will. Only if the mistake is on the face of the will….

Front 39

Duress

Back 39

When undue influence becomes overly coercive, it becomes duress
“A donative transfer is procured by duress if the wrongdoer threatened to perform or did perform a wrongful act that coerced the donor into making a donative transfer that the doner would not otherwise have made.”

Front 40

Situations where transferee will be treated as predeceasing the testator

Back 40

Slayers
Elder abusers
Undue influencers – fraud, duress
Interested witness that cannot rebut the presumption and is not a testate heir
Unrelated drafting atty
Simultaneous decedents
Non permitted / prohibited transferee’s – e.g. pet
Interested drafter

Front 41

*§ 21110 - Anti-Lapse

Back 41

*§ 21110 - Anti-Lapse
a) Subject to subdivision (b), if a transferee is dead when the instrument is executed, or fails or is treated as failing to survive the transferor or until a future time req’d by the instrument, the issue of the deceased transferee take in the transferee’s place in the manner provided in § 240. A “transferee under a class gift” shall be a transferee for the purpose of this subdivision unless the transferee’s death occurred before the execution of the instrument and that fact was known to the transferor when the instrument was executed.
b) Issue does not take in transferee’s place if the instrument expresses a contrary intention or substitute disposition.
c) “transferee” means a person who is kindred of the transferor or kindred of a surviving, deceased, or former spouse of the transferor.

Predeceased spouse is not a “transferee"

If an actual survivorship condition exists, then anti-lapse will not apply.

Front 43

Order of transferring gift when anti-lapse applies

Back 43

Order when to apply anti-lapse:
• 1. alternative beneficiary - if the gift is conditional, no anti-lapse application: i.e. (the gift is to A, but if A predeceases me, then to B)
• 2. anti-lapse
• 3. residuary
• 4. by intestacy
• -- can will around this rule; this is back up plan

Front 44

Order of transferring gift when anti-lapse does not apply

Back 44

• What happens if the gift lapses and not covered by anti-lapse? Order of priority:
o 0. Lapse gifts first, then apply creditors/abatement
o 1. what the will says – back up/alternate beneficiary
o 2. Lapsed gifts fall into residual clause
o 3. By intestacy
f) Transfer itself is a residuary gift that has lapsed, property is transferred to the decedent’s estate – intestate
a. Rule: there is no residuary of a residuary
g) If a residuary gift or a future interest is transferred to 2 or more persons and the share of a transferee fails for any reason, and no alternative disposition is provided, the share passes to the other transferees in proportion to their other interest in the residuary gift or future interest

Front 45

Analysis for determining class gift

Back 45

• Class Gifts: Include right of survivorship
o Determined by transferor intent: to multiple individuals or class gift
o If intent can’t be determined, factors to consider:
 Description of beneficiaries:
• If to group collectivelyclass gift
• If to Bs individuallyagainst class gift
 Description of gift:
• Gift in aggregateclass gift
• Gift in separate sharesagainst class gift
 Common characteristic:
• If share a common characteristic, argues in favor of CG
 Overall testamentary scheme:

Front 46

rule of convenience

Back 46

Rule of convenience closes a class when the first member of the class has a right to demand distribution

Diff't rule for transferee under a class gift for anti-lapse purposes

Front 47

*§ 21610 – Share of Omitted Spouse

Back 47

*§ 21610 – Share of Omitted Spouse
Except as provided in *§ 21611, later married spouse after execution of the testamentary instruments gets
• ½ of community and quasi-community property that belongs to the decedent
• Share of separate property = in value to what the spouse would have rec’d if the decedent had died w/o having executed a testamentary instrument, but in no event is the share to be more than ½ the value of the separate property in the estate.

Front 48

*§ 21611 – When Omitted Spouse Does Not Rec’v Share

Back 48

*§ 21611 – When Omitted Spouse Does Not Rec’v Share
Spouse shall not rec’v share if the following is established:
• 1. The decedents failure to provide was intentional and that intention appears from the testamentary instruments
o E.g. “subsequent marriage should not change this disposition.”
• 2. spouse provided for by decedent by a transfer outside the estate passing by the decedent’s testamentary instruments and the intention that the transfer be in lieu of a provision in said instruments is shown by statements of the decedent or from the amt of the transfer or by other evidence.
• 3. spouse made a valid agreement waiving the right to share in the decedent’s estate.

Front 49

*§ 21612 – Property to Satisfy Omitted Spouse’s Share (mini abatement statute)

Back 49

*§ 21612 – Property to Satisfy Omitted Spouse’s Share (mini abatement statute)
(a) except as provided in subdivision (b), in satisfying a share provided by this chapter (total up everything identified in the will and not identified in the will – determine the amt the spouse gets - this amt will be btwn ½-1/3):
1) The share will first be taken from the decedent’s estate not disposed of by the will or trust, if any.
2) If not suff’t, taken from all beneficiaries in proportion in the value that they may respectively rec’v
i. Everyone feels the pain.

Front 50

When can and cannot extrinsic evidence be used?

Back 50

1. determine whether an instrument is a will.
What it can and cannot be used for –
• EE can be used to clarify what the testator meant by the words in the will….
• “my cousin Mary” – not the cousin and not really named Mary
• If not susceptible to 2 meanings on the face of the will, no extrinsic evidence can be admitted.

Front 51

*§ 6570 Share of Omitted Child

Back 51

*§ 6570 Share of Omitted Child
Except as provided in § 6571, if a T fails to provide a will for a child of the testator born or adopted after the execution of the will, the omitted child shall rec’v a share in the estate = in value to that which the child would have rec’d if the testator died intestate.

Front 52

*§ 6571 When Omitted child does not rec’v share

Back 52

*§ 6571 When Omitted child does not rec’v share
Will not rec’v share if any of the following is established?
1. failure to provide for the child in the will was intentional and that intention appears from the will.
2. at the time of execution of the will, the T had one or more children and devised substantially all the estate to the other parent of the omitted child.
3. T provided for the child by transfer outside the will and the intention that the transfer be in lieu of a testamentary provision is shown by statements of the T or from the amt of the transfer or by other evidence.

Front 53

*§ 6572 Unknown Child or Child Believed Dead

Back 53

*§ 6572 Unknown Child or Child Believed Dead
If at the time of execution of the will the T fails to provide in the will for a living child solely bc the T believes the child to be dead or is unaware of the birth of the child, the child shall rec’v a share in the estate equal in value to that which the child would have rec’d if the T had died intestate.
• Omitted child has burden to prove T believed him dead

Front 54

*§ 6573 Property to Satisfy Omitted Child’s Share

Back 54

*§ 6573 Property to Satisfy Omitted Child’s Share
(1) Share shall first be taken from the T’s estate not disposed of by the will, if any.
(2) Everyone contributes a share to make up what the child is going to get – will be taken from all devisees in proportion to the value they may respectively rec’ under the will.
• Add up total value of the state and find out what the child is going to get. Don’t take the money where you find it – cannot write a check out of the liquid residuum.

Front 55

Trust Elements

Back 55

1. intent to create a trust
2. trust property
3. beneficiary

Front 56

Precatory Trusts

Back 56

Words in a trust or will used by the T that express a wish or a desire that the property is disposed of in a particular manner does not create a mandatory obligation to dispose of the property in such a way.
E.g. of “precatory language” is wish, hope, or recommend that property devised should be disposed of by the devisee in some particular manner.

Front 57

Honorary trust

Back 57

CL – failed for pets, other honorary gifts (ok at CL??)
Rule -- When person stopped acting appropriately trust would fail and go to intestate heirs or residuary clause. It’s more of a “I hope you take care of my grave for X years”
• A trust to honor the “trustee”
o Attempts to leave property for the erection of a monument or care of grave

Analysis:
1. is there a proper beneficiary? animals not recognized at CL
2. is there a RAP problem? (animal cannot be a measuring life bc not a "person")

Front 58

Secret Trust

Back 58

A trust that is created when a will purports to make an absolute gift, but there is an undisclosed (“secret”) agreement btwn the testator and the donee that the latter will hold the property in trust for another.
o Donee is intended as trustee
o Donor needs to express his/her intent to the donee and donee must promise to honor the trust; otherwise, no secret trust
•Protects the beneficiary and not the donor
•Remedy – constructive trust to the Beneficiary

Front 59

Semi-secret trust

Back 59

Trustee identified, beneficiary NOT id’d
will states that the gift is in trust and the donee holds only as trustee, but does not reveal the terms (or at least the beneficiaries) of turst, which are presumably known only to the trustee.
• Not going to allow evidence of who he intended to benefit – don’t save a trust that way
• Treated as a failed – going to pass to the residuary or the intestate heirs

Front 60

Rule: "intent" for creating a trust

Back 60

No specific words are needed – sole question is whether the grantor manifested an intent to create a trust relationship. A trust relationship is where the transfer of property is made w the intent to vest the beneficial ownership into a third person, separate from management.

•Where grantor conveys property to a grantee to hold “for the use and benefit” of another, this is suff’t manifestation of an intention to create a trust

Front 61

When does SOL for trust claims start to run?

Back 61

When the accounting is approved by the court.

Front 62

Remedy for spending money that is not in furtherance of the trust purpose, if there is one?

Back 62

The trustee will be liable for all expenditures not related to that purpose.

Front 63

Inter vivos gift theory v. Trust theory?

Back 63

To be a trust, must have intent to hold property in trust; courts are not going to turn failed intervivos gifts into trusts absent the intent to create a trust.
Interevivos gift fails if the donor did not deliver the gift -- can deliver through actual delivery, constructive (gives you access to the gift), and symbolic delivery (stands for the gift like a writing).

Front 64

Trust Property Rules

Back 64

Mere promise to give periodic gifts in the future is not the creation of a trust.
Generally, where there is no trust res at the time of a declaration of trust, there is no trust. The settlor must manifest anew his intent to create a trust when the res comes into being.
a. However, present promise of future profits when coupled with other factors may be an adequate property interest which could fund a trust:
b. FACTORS=
i. Present ownership of the means of producing the profits creates a present interest in the profits to be produced (e.g. owned the license that is to generate the future profits; gambling does not suffice)
ii. Once future profits earned, if treat the profits as though they are subject to the trust, there is a valid trust b/c intent to put them in trust and now actually put them in trust, so funds the trust. (Just temporal thing.)
iii. No fraudulent intent: when settlor is also the trustee, evidence of intent needed to establish a trust goes up and the same with funding issues b/c settlor could lie about transferring the property

Front 65

Rule for Beneficiaries of Trust

Back 65

A trust must have specific beneficiaries. Where the beneficiary of a noncharitable trust cannot adequately be determined, the trust fails. "Friends" is too vague.

Front 66

Charitable Trust Analysis

Back 66

1. Is there a charitable purpose?
Relevant charitable trust must be for elief of poverty and not just generally for the public good.
• Court finds it incl’s education
o Relieve poverty
o Advancing religion
o Health
o Municipal purposes
o Catch all – other purposes that accomplishment of which is beneficial to the community

2. Beneficiaries – must not be too specifically identified otherwise will be a private purpose. Need sufficiently broad enough beneficiary such that it is not a private trust
o It’s not how many ppl but the way they are benefited – scholarship for one person is a charitable gift.

Front 67

What are you supposed to do when the purpose for the charitable trust is frustrated?

Back 67

1. Is the intent of the trust frustrated? too expensive to build, etc..?
2. Apply the cy pres doctrine -- can change “as nearly as possible” to the specific charitable purpose

Front 68

Enforcement of Charitable Trusts

Back 68

CL -Donor of a charitable gift has no standing to enforce the terms of the gift unless the donor “had expressly reserved the right to do so.”
The Attorney general enforces the rights.
Small exception -- a person who has a special interest in the enforcement of the charitable trust
case: • BC She is a court-appointed special adminisratrix of the estate to enforce the rights under this agreement w the Hospital thru specific performance of the agreement, the general rule barring beneficiaries from suing charitable corporations has no application.
• “Concurrent standing” w the atty general for the benefit of the beneficiaries

Front 69

Mandatory Trusts

Back 69

Trustee has no discretion as to who and how much is given in the trust.

Front 70

Non-Mandatory (discretionary trusts)

Back 70

Trustee has discretion as tho who and/or how much is paid out.

Front 71

Spendthrift Trusts

Back 71

• 1. Prevents someone from selling off their income stream for a bag of money
• 2. Can set up a trust to keep the creditor from getting court to make trustee pay creditor.

Front 72

Self-settled asset protection trusts

Back 72

• Cannot shield your assets from creditors by placing them in a trust for your own benefit.

Front 73

Rule for undoing a wrongful sale of property held in trust

Back 73

A court will not undo a wrongful sale of trust property if the third party purchaser is a bona fide purchaser w/o notice of the breach. If the third party did know then the sale is void and property title will rvert back to the trust/previous owner.

Front 74

Validity of Exculpatory Clause

Back 74

a drafter can make an exculpatory clause limiting the liability of the trustee to the beneficiary. Can Exculpate for mere negligence, but not intentional/willfully negligent conduct. Also cannot eliminate fiduciary duties completely.

Front 75

Settlor's creditors re trust property

Back 75

1) Irrevocable trusts and 2) not fraudulent == are not subj to creditors of the estate  the property is gone/ Settlor’s creditors cannot reach assets in a irrevocable trust
o But if you start shifting assets after the judgment then argument that it’s fraudulent transfer
o Irrevocable? Beneficiary had rights that the trustee/decedent could not invade even if she gives him permission to do so will not affect the irrevocability of the trust.

Front 76

B's creditors and B has a discretionary spendthrift trust

Back 76

Creditors are entitled to the amount allocated to the beneficiary of discretionary trust above what is needed for his support

Front 77

B's creditors of discretionary trust where the trustee does not exercise discretion to pay the B.

Back 77

• == not spendthrift but still creditors cannot get to the assets bc trustee can exercise discretion to keep the money out of the hands of the creditors; hwr, if the beneficiary is in need of the money the trustee will have to exercise the discretion which will then put the beneficiary in a position that he may have to pay the creditor.

Front 78

Creditors of a mandatory spendthrift trust

Back 78

Generally - Spendthrift interest, even if mandatory, cannot be paid to the creditors. Creditor cannot stand btwn the beneficiary and the trustee. Creditor can only go after beneficiary once the money is in his hands.

Front 79

Can spendthrift assets ever be reached?

Back 79

Mandatory income pymts:
1. Child support - YES
2. Alimony - YES

Discretionary Principle Payments:
1. Child Support - YES (but must come from mandatory interest first)
2. Alimony - NO (but yes in CA)

== CL – no child support or alimony payment exception
Modernly – statutory trend to req’ child support and alimony payments notwithstanding a discretionary trust even if I is spendthrift.

Front 80

Rules for Trust Modification

Back 80

1) May be modified or terminated if settlor and all the beneficiaries consent
2) Claflin Doctrine - applies when settlor is dead.
No term/modif. even if the B's agree if it would be contrary to a material purpose of the settlor. Also if material purpose remains to be accomplished -- cannot modify.
Under Claflin Doctrine, a spendthrift trust is always a material purpose. Never modify or terminate

Front 81

Application of Modification In re Trust of Stuchell (taken care of by state)

Back 81

If Stuchell rec'vs his lump sum money from the trust as planned, will be taken all by the state to pay for his care. B's want to modify the trust s.t. he can get pymts (or create a • Supplemental Needs Trust - Terms of the trust – can make the trust for the services that the state will not provide- then the assets can meaningful be used to increase his quality of life.)
Court says no - this is a modification solely to benefit the B and is against T's intent.

Front 82

Removal of the Trustee for breach of fiduciary duties

Back 82

1. Court is less likely to remove the trustee is it is an individual v. trust company
2.if the beneficiaries are complaining about something that the trust settler knew in advance about the trustee, the trustee will not be removed
3. cannot waive anything higher than negligence in an exculpatory clause

Front 83

Standard of Care - Prudent Investor -- for Duty of care, skill, caution

Back 83

- trustee in administering the trust is expected to exercise the skill/care/caution of a reasonably prudent person in the management of his own property
o prudent investor rule
o if you possess relevant professional skills, you have to use them
o a trustee must actually be analyzing the situation re: distributions – must diligently pay attention
o caution generally counsels conservatism in administration

Front 84

Duty to Collect and Protect:

Back 84

- there is an initial duty to secure the trust property from whoever has possession of it
- executors and trustees have an on-going duty to repair/insure/pay taxes/guard the property – this is the collect/protect/preserve aspect

Front 85

Rule regarding trustee's purchase of property in the trust of which he is a trustee

Back 85

a trustee cannot purchase from himself at a sale (and wife is part of executor) – when wife sells, the money flows into the marriage.
o treated as an example of prohibited self-dealing

Front 86

No Further Inquiry Rule and Remedy

Back 86

if it is a self-dealing transaction is est, no further inquiry is made into the issue and it is barred. Breach and remedy is applied.

Remedy -- undo the transaction? remove trustee

Front 87

Duty of Loyalty

Back 87

Trustee is to administer the trust solely for the interest of the beneficiaries. this bars self-dealing trxns.

Front 88

Prohibited Self-Dealing Transactions

Back 88

- you can’t buy or sell trust assets to "yourself," even at FMV or above; this incl's sales to trustee's spouse or to company that trustee owns an interest (disqualified transferees)
- can’t buy or sell the assets between 2 diff trusts of which you are the trustee of both
o even if this is a perfect FMV swap
o may be setting up a diff trust for each child
o so may need to give the trustee the ability to swap assets between the trusts
- you cannot borrow or loan trust funds on any terms regardless of interest or security put up
- can’t use trust assets to secure a personal loan for the trustee
- cannot personally gain beyond your trustee compensation through your position as the trustee
o this can come up when you are the discretionary trustee, and beneficiary’s may want to bargain with you/pay you to distribute more income out
o self-employment can also be prohibited self-dealing
 ex. can the lawyer trustee of the trust be a lawyer for the trust and charge for your legal fees – this is impermissible self-dealing
 this can be drafted in “the trustee may bill at standard rate for legal services”

Front 89

Modern Rule: Prudent Investor Standard

Back 89

Uniform Prudent Investor Act (1994)
• A trustee shall manage assets as a prudent investor would considering the purposes, terms, distribution req’s, and other circumstances of the trust.
• Among those circumstances incls:
o General economic conditions
o Possible effect of inflation, deflation
o Tax consequences
o Role that ea investment plays w/in the overall trust portfolio
o Expected total return from income and appreciation of capital
o Other resources of the beneficiaries
o Needs for liquidity, regular income, and preservation or appreciation of capital
o An asset’s special relationship or value to the purposes of the trust or to one or more of the beneficiaries
• Sahall take reasonable steps to verify facts relevant to the investment
• Did away with categories of imprudence like the old rule (from above).

Front 90

Asset is a Stock - allocation of principle and income

Back 90

• Cash dividends to income
• Stock dividends to principle

Front 91

Wasting assets – allocation btwn principle and income

Back 91

assets whose value is frontloaded by its nature and decreases over time – e.g. patents

• If trust directs retention of the assets, then all the receipts are allocated to income – keep patents until expire, then allocate revenue from them to income
• Otherwise, have to allocate some of the revenues into principle.
•No duty to preserve or protect wasting assets
•Or investment management may advise that you sell the asset – kind of like the duty to diversity.

Front 92

Unproductive Property– allocation btwn principle and income

Back 92

vacant lots, a prudent investor would want to sell them.
• Moment when duty to sell is triggered – duty of prudence issueo if the prudent investor rule creates a duty to sell those assets, a portion of the sale price must be allocated to the income, calculated as if taken the sale price, invested it and then calculated income
so the sale price is calculated as if it were income off of sale price invested at an earlier time
want to push trustees to sell at the right time
this is looking backwards, if there was a duty to sell 3 yrs ago, then would have recv’d x dollars which would have put off y dollars
this is necessary b/c otherwise the income beneficiaries are robbed by under-productive assets
o so there is huge litigation about when you were supposed to sell
o so what income gets depends on what should have received had the trustee behaved properly
-if the trustee could have sold off for 40k at beginning which would have thrown off 5k in income
 then later sold for 20k – and income beneficiaries recv’d 10k
so the future beneficiaries are not punished
• the trustee is punished

Front 93

Property – allocation btwn principle and income

Back 93

• Ordinary expenses – income
• Extraordinary and capital - principle

Front 94

Trustee compensation – allocation btwn principle and income

Back 94

determined by a % of principle (amt) but does not mean it is paid out of principle – fractional shares of income and principle.

Front 95

Allocation of Legal fees to P and I

Back 95

– fees assoc w setting up trust – principle (comes off the top)
• Legal fees incurred after trust already set up – allocated in accordance w the vale of the present and future trust shares

Front 96

Remedies for Fiduciary Breaches

Back 96

• Pre-breach – compel to act / enjoin brach
• Post-breach – denial of compensation, removal, surcharge – measure, “Trust Pursuit”/Tracing, Set aside the T/A

Front 97

Degree of skill, care, and caution req'd under duty of prudence

Back 97

• Skill – if you possess professional skills, you must use them. You have no duty to acquire them.
• Care – duty of inquiry
• Caution – counsels conservatism – in some situations you would want to create the activated sense of care that someone would do for some else’s property

Front 98

Situation we saw Duty to Inquire/Prudence

Remedies

Back 98

1. Paid out to little to B bc failed to inquire into financial need of the B
2. Know value of trust assets - did he sell at a below market price?
3. Paid out too much bc did not inquire into whether the conditions of trust were met
4. formal analysis into the estate and investment plan consistent w T's primary objectives
5. Did not investigate into the consequence of holding all one stock

Remedies
responsible for the amts under or over paid.
If below market price -- difference btwn sale price and FMV (date of sale damages)

Front 99

Damages for Duty to Retain

Back 99

You get value of litigation damages (appreciation value)

Front 100

Failure to sell stock -- remedy

Back 100

Value of stck on the date it should have been sold -- the proceeds from actual sale + interest

Front 101

Generally, imprudence gets you what remedy?

Back 101

value of lost capital + interest

Front 102

Duty to exercise discretion to pay in a discretionary trust

Back 102

Court is not going to make the trustee exercise his discretion when the B is not in need of the money (or when the trustee is complying with the trust's purpose) just to pay B's creditors.

Front 103

Duty of Impartiality and Remedy

Back 103

1. Discriminating btwn future and present beneficiaries
2. discriminating btwn P and I beneficiaries

Remedy - trustee is liable for all losses to the trust + interest.

e.g. impartiality lead to wrongfully retaining the asset -- must pay for the difference in sale price and the price when it should've been sold + interest.

Front 104

Rule for Duty to Inform

Back 104

must tell everything to the beneficiary re the trust that would be necessary to know if things are being managed appropriately

Front 105

Duty to Make investment decisions

Back 105

cannot delegate the investment power - a trustee lacking investment experience must seek out advice but may exercise his own judgment
A prudent trustee would participate to some degree in investment decisions/wouldn't entirely turn over to a professional

Front 106

Sect. 240 Distribution to Issues

Back 106

go to the first generation will living issues and distribute as many shares as there are to the living members of that generation and deceased members of that generation leaving issue then living. Each living issue shall rec'v a share and the share of ea deceased member of that generation who have issue then living being divided in the same manner among his or her then living issue.

Front 107

Categories of POAs

Back 107

a) Present v Postponed v Testamentary

b) Collateral v Ingross
Collateral -- no other interest in the property
In gross - another interest in the property besides the POA and it is unaffected by the POA

c) Non-Exclusive v Exclusive
Non - must appt to all permissible appointees
Exclusive - can appoint to some permissible appointees

d) general v. specific...

Front 108

When is a general power of appointment not treated as general?

Back 108

1. When the donee has the power to use the property to fulfill a legal obligation of support
2. When the power is shared and whose interest is adverse
* A + B exercise in favor of one or the other

Front 109

POA and K

Back 109

cannot enforce a K for specific performance to or to not exercise a POA. But may be liable for unjust enrichment is KSN was given

Front 110

general theory behind general test/specific POA

Back 110

In theory, until the POA is exercised, the property is still owned by the donor. This POA is treated as relating back to the instrument and time that created the power such that the appointee is thought of as taking from the donor of the power, not the donee.

Front 111

General theory behind generally presently exercisable POA

Back 111

These POAs are given to the donee eve if the donee never appoints in his favor. Timing of the first gift is when the power is created; a later gift is given when it is exercised.

Front 112

Complete RAP analysis for General Testamentary or Specific POA

Back 112

1. Is the POA valid?
Rule - is invalid if the power can be exercised past the perpetuities period counted from creation of power (if created in a will this is when the donor dies). PP is is all lives in being + 21 years. If person is not alive at creation, that person cannot be a measuring life.
If the POA is invalid, gift is stricken from the will and goes to the residuary clause if there is one or to the heirs of O.
2. Is the appointment made valid?
Rule: Exercise of appointment is valid if relation back validates it
- take out the original language conveyance words which created the POA and put in the appointment A has made
-evaluate from a RAP at the moment the power was created
If invalid - goes to the default appointment if there is one, otherwise to the grantor.
3. Is the default valid?
If it is valid - goes to the takers
If it is invalid - goes to the grantor

Front 113

Complete RAP analysis for general presently exercisable POA

Back 113

1. is the POA valid?
Rule: valid if it is possible for it to be exercised w/in the perpetuities time.
invalid - stricken from the will/gift fails.
2. Is the appointment valid?
If appointment can vest w/in perpetuities period, it is valid
If not valid, does capture apply? if yes - donee's estate; if no - goes to grantor
3a. Did the donee fail to appoint? If so, does capture doctrine apply? an implied appointment to the donee's estate if the donee manifested an intent to assume control over the property for all purposes.
3b. default valid?
if the default vests w/in perpetuities period, it is valid.

Front 114

analysis for creation of POA

Back 114

donor must manifest an intent to create a POA either expressly or by implication

Front 115

Life Estate or Fee w POA?

Back 115

When devise is one of general terms, expressing neither fee or life estate, and there is a subsequent limitation over what remains after the first taker's death (ie POA), if the first take is also given an unlimited restricted power of absolute disposal, expressed or implied, the bequest to the first taker is a fee. The attempted, subsequent limitation on the fee is void.

Front 116

Release of POA analysis

Back 116

A release of power may be released w respect to the whole or any part of the appointive property and may be released in such a manner to reduce or limit the permissible appointees. Must be clear intent of the party to release the power.

Front 117

Residuary clause that does not make reference to a POA

Back 117

under majority rule, the residuary clause is not an exercise of the appointment for either general or specific POAs.

Front 118

Fraud on a Special Power

Back 118

An appointment in favor of a person who is not an object of the power is invalid. An appointment to an object for the purpose of circumventing the limitation on the power is a "fraud on the power" and is void to the extent it is motivated by such a purpose.
Intend to benefit a nonpermissible appointee is all you need.
remedy - goes into a default of power situation

Front 119

def of a will

Back 119

an instrument or declaration by which one directs the disposition of one's property after death.

Front 120

Taking Analysis

Back 120

- Takings must be for a public purpose and must be compensated

Front 121

Adoption questions to be answered

Back 121

1. Rights of child to inherit from adopting parent
2. Rights of child to inherit from natural parent
3. Natural parent/natural relative's right to inherit from adopted away child. (marriage or not of natural parents)

Front 122

When a will is made the law is one thing, then when the person dies the law has changed. Which rule governs?

Back 122

the present law in effect at the time of succession will be applied

Front 123

Adult Adoption valid to create an heir?

Back 123

Depends -- if the adoption was after the will created and its purpose was to create an heir then NO.

If the adoption was before the will and the testator knew about the adoption then YES bc could have created will to disinherit person.

Front 124

Advancements for Intestate Succession

Back 124

Qualify for an advancement? See statute.
*if the transferee rec'ving the advancement wants to take part in the remaining division of the estate, the person has to allow the amt to be credited to the estate, property distributed accordingly, then the share of the advancement deducted out. the transferee will only do this if the advancement is less than his/her intestate share.
*Advancement does not count against the issue of the children of the person rec'ving the advancement.

Front 125

Which is the Survivor by 120 hour rule applicable? - intestate succession or wills context

Back 125

intestate succession

Front 126

Effect of Disclaimer

Back 126

Treat the person who is disclaiming as if s/he predeceased the decedent

Front 127

Choice of Law for Enforcing Wills

Back 127

- Choice of law principle is so great in favor of testacy

Will be valid if valid in state of execution or where the person is domiciled at death.

Front 128

When does the no contest clause have effect?

Back 128

if a challenge will trigger the clause the clause is enforced only if the contest fails