Wills & Trusts

Front 1

CAPACITY (lowest capacity recognized in law)

At the time of execution testator must satisfy 4 elements—

Back 1

a. Age: testator must be at least 18 years of age;
b. Awareness of Extent of Property: testator must be able to under the extent of her property;
c.Knowledge of Objects of Her Bounty: testator must know the natural objects of her bounty (family and those affected by the will)
d.Understand what She is Doing: testator must know the nature of the act (she must know that she is executing a will)

Front 2

Consequences of no capacity:

Back 2

the entire will is invalid; property will pass by intestate succession.

a. Exception: If testator had a valid prior will that was purportedly revoked by a second will (the one for which testator did not have capacity) then the first instrument will be probated.

Front 3

INSANE DELUSION (narrower than capacity – e.g., believing one’s spouse is unfaithful)

Back 3

At the time of execution the testator must satisfy four elements—
a.T had a false belief;
b. that false belief was a product of a sick mind;
c. there is no evidence to support the belief, not even a scintilla of evidence;
d. delusion must have affected testator’s will.

Front 4

Consequences of finding an insane delusion:

Back 4

only that part of the will that was affected by the delusion is invalid. As to that part, it will go to the residuary devisee, or if none, or if the residue itself was infected by the delusion, by intestate succession.

Front 5

FRAUD
5 Elements

Back 5

a. There must be a representation;
b. of material fact;
c. known to be false by the wrongdoer;
d. for the purpose of inducing action or inaction; and
e. in fact induces the action or inaction desired.

Front 6

Fraud in the execution (T does not intend the document to be his will)

Back 6

a. T’s signature is forged or T is given a document to sign that he believes is non-testamentary in nature but in fact is testamentary.
b. Consequence: entire will is invalidated

Front 7

Fraud in the inducement (T intends the document to be his will)

Back 7

a. Wrongdoer’s representations affect the contents of T’s will.

b. Consequence: only those parts affected by the fraud are invalid.

Front 8

Fraud in preventing testator from revoking the will

Back 8

a. T is induced not to revoke his current will
b. Consequence: court will not probate the will & and may create a constructive trust.

Front 9

UNDUE INFLUENCE (T’s free agency was subjugated)

3 Ways to Establish

Back 9

a. Prima Facie Case
b. Presumption
c. Statutory

Front 10

UNDUE INFLUENCE -

Prima Facie Case (4 elements)—

Back 10

a. Susceptibility: T has a weakness such that he is able to have his free will subjugated;
i. may be anything, e.g., psychological, financial, physical
b. Opportunity: wrongdoer had access to T;
c. Active Participation (aka wrongdoer has a “disposition” to exert influence): it is the wrongful act that gets the gift.
d. Unnatural Result: the wrongdoer is getting a devise, and this person ordinarily would not be expected to take a devise.

Consequence: only that part affected by undue influence is invalid.

Front 11

UNDUE INFLUENCE -
Presumption (3 elements)—

Back 11

A confidential relationship exists between T and the wrongdoer;

CA recognizes C/L relationships
1.attorney-client;
2. doctor-patient;
3. guardian-ward;
4. clergyman-penitent;
5. trustee-beneficiary.

Add’l, in CA, a confidential relationship arises whenever one person reposes trust in another (e.g., between two close friends)


Active Participation (aka wrongdoer has a “disposition” to exert influence): it is the wrongful act that gets the gift.

Unnatural Result: the wrongdoer is getting a devise, and this person ordinarily would not be expected to take a devise.

Consequence: only that part affected by undue influence is invalid.

Front 12

UNDUE INFLUENCE -
Statutory Undue Influence

Back 12

CA law generally invalidates a donative transfer (a transfer by will or trust) from a transferor (T or settler) to:
i. A person who drafted the instrument (will or trust);
ii. A person who is somehow connected to the drafter;
iii. A person who is in a fiduciary relationship with the transferor and who transcribes the instrument or causes it to be transcribed; or
iv. A “care custodian” of a “dependent adult” who is the transferor.

Exceptions: when these rules don’t apply:
i. The transferor is related to, married to . . . the drafter;
ii. The instrument is reviewed by an independent attorney who counsels the transferor; or
iii. The court determines, upon clear and convincing evidence, that the transfer was not the product of wrongdoing.

Consequence: transferee does not take the gift

Front 13

MISTAKE IN CONTENT

Back 13

1. The wrong beneficiary is named or the wrong gift is made.
2. Relief granted? Depends on whether the mistake was an omission or addition.
a. If omission (words are accidentally left out)  no remedy is given; courts do not want to rewrite wills.

NOTE: However, you may be able to seek potential relief under DRR; see infra.

b. If addition (words are accidentally added)  remedy may be given by striking out the additional words; the court is not rewriting the will, it is merely excising a part of it.

Front 14

MISTAKE IN EXECUTION

Back 14

1. The testator signs the wrong document.

2. This occurs in one of two situations—
a. First situation: T mistakenly signs his will believing it is a non-testamentary instrument

Consequence: the will is not probated because testator did not intend the document to be a will.

b. Second situation: reciprocal wills or mutual wills; a reciprocal will or mutual will is when you have 2 Ts, each with his or her own will and each leaves everything to each other.

Consequences: the court may reform the will in this unique situation of reciprocal wills, especially if the Ts are husband and wife or domestic partners. This is a form of equitable relief.

Front 15

MISTAKE IN INDUCEMENT

Back 15

1. A particular gift is made or not made on the basis of T’s erroneous beliefs.

2. Consequence: no relief is given (to maintain the integrity of the statute of wills)
a.UNLESS both the mistake and what T would have done but for the mistake appear on the face of the will.

Front 16

MISTAKE IN DESCRIPTION (AMBIGUITY)

Back 16

1. No one or no particular thing fits the description; or two or more persons or things fit the description.
2. Consequences: modernly, in CA, by statute:
a. Parol Evidence is Allowed: parol evidence for any type of ambiguity – latent or patent – may be introduced to determine what testator’s intent was.

Front 17

MISTAKE IN THE VALIDITY OF A SUBSEQUENT TESTAMENTARY INSTRUMENT (DRR)  heavily tested

Back 17

Dependent Relative Revocation (DRR): allows a court to disregard a revocation caused by mistake

1. Requirements:
a. Revocation: T revokes her will, or a portion thereof,
b. Mistaken Belief: Because she mistakenly believes
c.Substantial Identical Will Exists: that a substantially identical will or codicil effectuates her intent,

2. Effect:
a. Then, by operation of law, the revocation of the first will be deemed conditional, dependent, and relative to the second effectuating testator’s intent..
b.If the second does not effectuate testator’s intent, the first (by pure legal fiction) is considered never revoked.

3.Note: If Will #1 is revoked by physical act by being destroyed, Will #1 can still be probated under CA’s lost will provisions:
a.A lost will or accidentally destroyed will can be probated if at least one witness testifies as to the terms of the will; witness can be attorney who drafted the will.

Front 18

MISTAKE INVOLVING CHILDREN (Pretermission)

Back 18

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

Effect: a pretermitted child takes an intestate share of the estate.

Corollary: a child born or adopted before all testamentary instruments are executed and not provided for in any instrument is not pretermitted. That child takes nothing (unless testator erroneously thought the child was dead or not in existence).

Front 19

COMPONENTS OF THE WILL
Integration (refers to which papers make up the will)

2 elements—

Back 19

1. Intent: T must have intended for the papers in question to be part of the will; and
a.Intent may be proven in 2 different ways: by a physical connection (stapled together), or internal-sense connection.

2.Presence: the papers must have been actually present at the time of execution.

Front 20

COMPONENTS OF THE WILL
- Incorporation by Reference (separate documents may be incorporated into the will by reference)
4 elements—

Back 20

1. Document or writing;
2. Document or writing must have existed when the will was executed;
3. Document must be clearly IDed in the will; and
4. T must have intended to incorporate the document into the will (usually implied by the court if the first 3 elements are met).

Note: the document that is being incorporated does not have to be valid for what it purports to stand for (you can incorporate by reference an invalid K or invalid will).

Front 21

Facts of Independent Significance

Back 21

“Blanks” in a will can be filled in by referring to acts/documents (parol evidence) executed during the testator’s life for non-testamentary motives.

One Test: Should ask, “even w/o the will, would this fact have existed?” If yes  you have a fact of independent significance.

Front 22

Pour-over Wills

Bequeathing estate assets to an inter-vivos trust (can occur in three ways):

Back 22

1. Incorporation by reference: (we have a trust instrument in existence when the will was executed).
2. Independent Significance: (even w/o the will, we would still have an inter-vivos trust).
3. Uniform Testamentary Additions to Trusts Act (UTATA):
a. So long as you have a valid trust, which was in existence before the will was executed, or at the time of execution, the pour-over provision is valid by statute.

Front 23

Codicil

Back 23

A testamentary instrument modifying an earlier will and must be executed with the same formalities as a will.

Front 24

Codicil - Republication

Back 24

a codicil republishes a will so that the will is deemed to be re-executed at the time of the codicil.
1. this affects incorporation by reference/pour-over wills if a document/trust instrument was not in existence the first time the will was drafted (but is when there is republication by the codicil);

2. this also affects pretermission (either because republication makes marriage/birth precede republication or because the codicil itself is executed after the relevant marriage/birth).

Front 25

Codicil - Revocation

Back 25

1. T executes Will -> T executes Codicil ->T revokes Codicil -> Rebuttable presumption that T only intended to revoke the codicil.

2.T executes Will -> T executes Codicil -> T revokes Will -> Rebuttable presumption that T intended to revoke both the will and codicil.

Front 26

EXECUTION OF WILLS
Attested Wills
Elements—

Back 26

1. Writing (oral wills are not recognized in CA);
2. Signed by Testator;
a. or another person in his presence and at his direction, or by a conservator
3. Testator Signs, Acknowledges Signature, or Acknowledges Will in the Joint Presence of Two Witnesses;
4. Witnesses Understand Document is Testator’s Will; and
a. that the instrument being witnessed is the testator’s will.
5. Witnesses Sign Wil.
a. Need not sign in the presence of testator or each other
b. But each witness must sign before testator dies.
c. Signature does not have to be at the end of the will.

Front 27

Interested Witness Presumption

Back 27

1. An interested witness (who is a B under the will) is presumed of wrongdoing unless two other disinterested witnesses are also present.
a. Presumption can be rebutted  if not, she is limited to what she would get by intestacy.
2. Presumption does not exist if the witness is taking only in a fiduciary capacity (as trustee).

Front 28

Holographic Wills

Elements—holographic wills are permitted only if:

Back 28

1. Signed by Testator;
2. Material Provisions Must be in Testator’s Handwriting;
a. gifts made, beneficiaries’ names
3. Testamentary Intent (not required, but helpful)
a. Not necessary but becomes an issue in determining whether papers left behind are simply papers or a holographic will.
4. Date (not required, but helpful…for inconsistent wills & capacity)

Front 29

Conditional Wills

Back 29

A will whose validity is made conditional on its own terms; it can either be attested or holographic.

Front 30

Choice of Law

Back 30

i. A will is admitted into probate in CA if the will complies with the formalities of execution of---
1. CA law;
2. The law of the place where the will was executed; or
3. The law of the place where T was domiciled at the time of execution.

Front 31

Revocation by Physical Act (Partial Revocation Allowed)

3 Elements

Back 31

1. Act: will must be burned, torn, cancelled (lined out or crossed out), destroyed, or obliterated (erased).

2. By T: or someone in T’s presence and at his direction

3. Intent: T must have simultaneous intent to revoke when he acts.

Front 32

Revocation- Cancellation & DRR

Back 32

a. T properly executes a typed (attested) will that states, “I leave $1000 to Mary.” She later crosses out $1000 and interlineates “$1500” just above $1000. Outcome?
i. No holographic will (material terms are not in T’s handwriting) -> so it appears Mary gets nothing.
1. But wait, we might be able to use DRR so that $1000 to Mary was never revoked.
2. However, if the interlineation had been less than $1000 -> DRR can’t be used.

Front 33

Interlineation of a Holograph

Back 33

Constitutes both a revocation of an altered provision and a valid new disposition; the prior signature is adopted when the interlineation is made.

Front 34

Cancellation to Increase a Gift is Prohibited

Back 34

Will states, “I leave my farm for X and Y.” Testator cancels out Y’s name ->

X takes ½ of farm, not the whole farm.

Front 35

Duplicate Wills

Back 35

If you have two duplicate original wills (both signed) & T or someone acting at T’s direction revokes by physical act one of the originals -> the other original is deemed revoked, as a matter of law.

Front 36

Mutilated Wills

Back 36

If a will is found mutilated at T’s death & when last seen was in tact -> rebuttable that T mutilated the will w/ the intent to revoke it.

Front 37

Revocation by Subsequent Written Instrument -

Express Revocation

Back 37

1. a will may be expressly revoked by a later will or codicil (w/ all the required formalities).

2. an attested will may be revoked by a holographic will and vice versa.

Front 38

Revocation by Subsequent Written Instrument -

Implied Revocation

Back 38

to the extent that the second will makes an inconsistent disposition of property, the terms of the prior will are necessarily superseded or nullified.

Front 39

Revival

Two situations

Back 39

a. Revocation by physical act
i. T executes Will #1 -> T executes Will #2 (which revokes Will #1) -> T revokes Will #2 by physical act. Is Will #1 automatically revived?
In California, NO (it is revived only if T manifests an intent to revive Will #1. Oral statements are admissible on this issue.

b. Revocation by subsequent instrument
i. T executes Will #1  T executes Will #2 (which revokes Will #1) -> T revokes Will #2 by codicil. Is Will #1 automatically revived?

NO (it is not revived unless it appears from the terms of the codicil that T wanted Will #1 revived).

Front 40

Omitted Child

Back 40

A child born or adopted after all testamentary instruments are executed and not provided for in any testamentary instrument receives his intestate share (a share of decedent’s estate that he would have received if decedent had died intestate) subject to three exceptions.

3 Exceptions
a. Intentional: Child was left out intentionally and that intention appears on the face of instrument;
b. Sufficient Outside Transfer: the decedent provided for child by transfer outside the testamentary instrument with the intention that the transfer is to be in lieu of any testamentary provision.
c. One Parent Receives All Support: At time of execution, the decedent had one or more children and devised substantially all of his estate to the other parent of the omitted child.

Front 41

Omitted Spouse/Domestic Partner

Back 41

T marries or enters into a domestic partnership after executing all testamentary instruments and those instruments do not provide for his new spouse/domestic partner. At T’s death, omitted spouse/domestic partner gets her intestate share of decedent’s estate subject to 3 exceptions.

3 Exceptions
a. Intentional: Child was left out intentionally and that intention appears on the face of instrument;
b. Sufficient Outside Transfer: the decedent provided for child by transfer outside the testamentary instrument with the intention that the transfer is to be in lieu of any testamentary provision.
c. Waiver: valid agreement waiving the right to share in T’s estate.

3 elements for valid waiver
1. waiver must in writing, signed by the waiving spouse before or during marriage;
2. full disclosure by decedent of decedent’s finances; and
3. independent legal counsel.

no enforcement if unconscionable.

Front 42

Final Dissolution of Marriage or Domestic Partnership

4 rules re: testamentary gifts

Back 42

a. Revocation of any devise to the spouse/domestic partner (if there is an annulment or final dissolution);

b. Legal separation does not count;

c. The devise is reinstated if the will is unchanged, and the testator remarries the former spouse (or reestablishes another domestic partnership w/ former domestic partner).

These rules do not apply if the will expressly states otherwise.

Front 43

Revocation by Change in Property Holdings (Ademption, Satisfaction, and Advancement)

4 Classification of Gifts

Back 43

1. Specific Devise – a particular object distinct from all other objects, “my 3-carat diamond.”

2. General Devise – a gift of general economic benefit, payable out of the general assets of the estate.

3. Demonstrative Devise – general legacy payable first from particular property and then out of the estate if that property is insufficient.

4. Residuary Devise – all other property not expressly disposed of in the will.

Front 44

Ademption:

Back 44

1. only applies to specific gifts

2. Common Law Test: specific gift fails because T did not own the property at T’s death (intent used to determine whether gift was specific or general).

3. CA Test: intent is used to determine whether gift was specific or general AND whether T intended that the gift would fail.

a. Securities changing form (because of mergers, stock splits, etc.)
i. T devises 100 shares of ABC stock to B; later there is a merger so that 100 shares of ABC become 1000 shares of XYZ stock. B gets 1000 shares of XYZ

b. Conservator sells off assets

If all else fails -> try to classify gift as general or try to trace.

Front 45

Satisfaction

Back 45

A general or demonstrative gift is satisfied if—

a. T transfers the property to the beneficiary, subsequent to execution of the testamentary instrument,

b. With the intention of satisfying the gift.

In CA, there satisfaction requires that T’s intent be expressed in a contemporaneous writing signed either by T or the donee.

Whatever satisfaction is given to B (who later predeceases T) is treated as received by B’s issue who later take under the anti-lapse statute.

Front 46

Advancement

Back 46

An advancement is like satisfaction except it deals with an intestacy situation.

For an inter-vivos gift to be an advancement toward an heir’s intestate share, it must be stated to be such in writing.

If heir-apparent predeceases the intestate -> the issue is NOT treated as receiving an advancement (unless the advancement provides otherwise).

This is the opposite of a satisfaction

Front 47

CONTRACTS RELATING TO WILLS

Contracts to Make Wills

Back 47

Contracts to make wills must in writing and can be established only by one of the following:

1. Provisions of a will or other instrument stating the material provisions of the K;

2. An express reference in a will or other instrument to a K (and extrinsic evidence proving the terms…SoF is not a bar to introducing extrinsic evidence);

3. A writing signed by decedent evidencing the K;

4. Clear and convincing evidence of an agreement or promise between the decedent and claimant; or

5. Clear and convincing evidence of an agreement or promise between the decedent and another person for claimant’s benefit.

Cause of action does not arise at time of breach (because a moment before decedent dies, he can execute a new will in compliance with the K) unless the decedent engages in fraudulent conduct on the promisee.

Front 48

Joint and Reciprocal Wills

Back 48

Types

1. Joint Will – is the will of two or more persons executed with the intent to serve as the wills of each (admitted to probate twice); the provisions do not have to be reciprocal.

2. Mutual Wills (aka Reciprocal Wills) – are separate wills that contain similar or reciprocal provisions

3. Joint and Mutual Wills – reciprocal provisions on one instrument.

Rules: the execution of a joint will or mutual will or a joint or mutual will does not create the presumption of a K to not revoke or make a will, but it may be evidence of a K (in conjunction with other factors).

Remedies:
1. Damages
2. Specific performance: plaintiff can seek to force the executor to comply with the K.
3. Constructive Trust Remedy

Front 49

RESTRICTIONS ON TESTAMENTARY DISPOSITION

Spousal/Domestic Partner Protection

Back 49

i. Testator can only dispose of ½ of CP

ii. Testator (who is the acquiring spouse) can only dispose of ½ of QCP

iii. Widow’s Election (or take under the will)

iv. Restore Certain Illusory Transfers of QCP

QCP can be transferred to 3d parties for no consideration; but if the acquiring spouse transfers such QCP and retains some interest, such a transfer is deemed illusory. Upon decedent’s death, the surviving spouse may require the transferee to restore ½ of QCP to decedent’s estate.

Front 50

Unworthy Heirs or Beneficiaries of Killers

Back 50

Those who feloniously and intentionally kill the decedent cannot take any benefits under the will or by intestacy.

Proof needed: conviction is conclusive; in all other cases, the probate court determines guilt by a preponderance of the evidence.

Consequence: killer is deemed to have predeceased the decedent and the anti-lapse statute does not apply (killer does not take and the issue of the killer do no take).

Problem of joint tenancy: there is severance of the j. tenancy so the killer does not get a right of survivorship, but the killer gets to keep his ½ interest in the property.

Problem of insurance beneficiary: if B kills the insured, B doesn’t take under the insurance K.

Front 51

INTESTACY

Share of surviving spouse

Back 51

i. Community Property and Quasi-Community Property
1. Surviving spouse/domestic partner gets 100% of CP and QCP (in the absence of a will).

ii. Separate Property

1. If decedent is survived by 1 child (or issue of a predeceased child) ->
a. 1/2 to surviving spouse
b. 1/2 to child or child’s issue

2. If decedent is survived by 2 or more children (or issue of predeceased children) ->
a. 1/3 to surviving spouse
b. 2/3 to children or their issue.

3. If decedent is survived by no issue but leaves parents or their issue ->
a. 1/2 to surviving spouse.
b. 1/2 to parents or their issue

Front 52

INTESTACY

Share if no surviving spouse

Back 52

i. Issue
ii. Parents
iii. Issue of Parents
iv. Grandparents
v. Issue of Grandparents
vi. Issue of Predeceased Spouse, etc.

Front 53

Per Capita/Representation Problem

If by intestacy

Back 53

1. Issue of the same degree take “per capita.”

2. Issue of more remote degree take “per capita w/ representation.”
a. Make first distribution at the first level someone is living and give shares to
i. all living people at that generation, and
ii. deceased members of that generation that leave issue.
iii. So if C, D, [E] -> all take 1/3 (issue of E split their 1/3 share)

Front 54

Per Capita/Representation Problem

If will/trust specifies “per stirpes” distribution

Back 54

1. “per stirpes,” “by right of representation,” or “by representation” -> requires a “strict by stirpes” distribution.

a.Make first distribution at first level (even if everyone is dead), so long as they leave issue

Front 55

Various Kinds of Issue

Back 55

i. Adopted children
1. Treated as the natural child of the adopting parents; adoption severs the relationship between child and biological parents unless spouse of natural parent adopts child.

ii. Stepchildren or foster children
1. May be treated as adopted children if certain elements are met.

iii. Equitable adoption
1. Treated as adopted children if parties hold themselves out as parent and child.

iv. Non-marital children
1. Marital status of parents is irrelevant (the key is whether a parent-child rel. exists).

v. Half-bloods
1. Half-bloods inherit the same as whole bloods.

Front 56

DISTRIBUTION OF THE ESTATE

Who Can Take?

Back 56

Posthumous Children

Child conceived during the lifetime of intestate or testator but born after death of intestate or testator.

Posthumous children are considered heirs of intestate and beneficiaries of testator’s will.

Front 57

Lapse and Anti-Lapse Statute

Back 57

Rule of Lapse – for a B to take devise -> B must survive T. If not, the gift lapses (unless a contrary intent is expressed in the will) and falls into residue or goes by intestacy.

Anti-Lapse – in CA, it applies only if the devisee who predeceased T was “kindred” (blood relative) of T or kindred of T’s spouse/domestic partner and leave issue.

The issue step into the shoes of the predeceased devisee.

Front 58

Simultaneous Death

Back 58

Under the Uniform Simultaneous Death Act (which CA adopted), if it can’t be proved by clear and convincing evidence whether B predeceased T -> it is deemed B did not survive T.

Front 59

Simultaneous Death - 5 Situations

Back 59

a. Plane Crash: T and devisee die in a plane crash -> if it can’t be established by clear and convincing evidence that devisee survived T (even for a second), it is deemed devisee predeceased T. At this point, the gift will lapse or be distributing under the anti-lapse statute.

b. Joint Tenants: A and B are joint tenants with rights of survivorship. They die in a plane crash, and it can’t be determined who died first. What happens? Joint tenancy gets severed; each estate takes ½.

c. Community Property: Same analysis as joint tenancy. Each estate takes ½.

d. Insurance: Insured and Beneficiary die simultaneously -> if you can’t prove B survived insured, B’s estate doesn’t take.

i. You first look for an alternative named beneficiary -> if none, the policy proceeds are paid to the insured’s estate (unless CP funds were used and the insured and B are spouses…then ½ the policy proceeds go to the insured’s estate and the other half to B’s estate).

e. Intestate 120-hour Rule: For any heir to take, he must survive the testator by 120 hrs. This must be proven by clear and convincing evidence.

Front 60

What Does a Beneficiary Take?

After Acquired Property

Back 60

a will passes all property T owned at death, including after-acquired property (all property acquired after the will was executed).

Front 61

What does a Beneficiary Take?

Increase During Testator’s Lifetime

Back 61

stock dividends and splits paid during T’s lifetime go to the beneficiary if the stock is owned by T at time of death.

Front 62

What does a Beneficiary Take?

Increase After Testator’s Death and During Probate

Back 62

1. re specific devises, all increases go to the beneficiary

2. as a general rule, general devisees do not receive any increase (except for interest that begins accruing one year after T’s death if such gifts are not distributed).

Front 63

Abatement

Back 63

the process by which certain gifts are decreased (to pay statutory share to omitted children/spouses).

Front 64

Order of Abatement for omitted children/spouses

Back 64

a. Abate property not passing by decedent’s will or revocable inter-vivos trust;

b. Abate from all Bs of T’s will and revocable inter-vivos trusts pro rata.

i. No distinction is made between specific, general, and residuary gifts (however, sometimes specific gifts will be exempted if abating the gift would defeat the obvious intention of T as expressed in language of the testamentary instrument).

ii. No favoring of relatives over non-relatives.

Front 65

Order of Abatement for general debts

Back 65

a. Intestate Property
b. Residuary Gifts
c. General Gifts to Non-Relatives
d. General Gifts to Relatives
e. Specific Gifts to Non-Relatives
f. Specific Gifts to Relatives

Front 66

Exoneration

Back 66

1. C/L view: if T devised a specific gift w/ an encumbrance for which T was personally liable for  the executor was required to pay off the debt before passing the property to the beneficiary

2. CA view: no exoneration; devisee takes the specific gift subject to an encumbrance (unless T’s will states that the specific gift is to be exonerated).

Front 67

WILL SUBSTITUTES

Gifts Causa Mortis

Back 67

a gift of personal property only (no real property) made in contemplation of imminent death;

Delivery is required (actual, symbolic, or constructive)

1. Actual Delivery –the corpus is transferred to donee

2. Symbolic Delivery – something representative of the corpus has been given (bank document)

3. Constructive Delivery –

a. C/L view – corpus is too big for manual delivery so the donee is given a way of access to the corpus (a key, a map, etc.)

b. Modern view – a constructive delivery will be found whenever the donor has done everything possible to effectuate a delivery.

Automatic Revocation: If donor survives, the gift is revoked by operation of law.

Front 68

PROBATE TRANSFERS – BY WILL AND INTESTACY

Back 68

Probate is the process of going through the court system to see who gets what property.

Front 69

INTESTACY

Back 69

a person dies intestate if they die without a valid will. Deceased can be intestate (have no will) or partially intestate (they have a will but it doesn’t properly dispose of all their property).

Front 70

Surviving Spouse / Domestic Partner

Community Property

Back 70

Surviving spouse inherits the decedents 1/2 share of the CP.

Note: already owned 1/2, therefore surviving spouse has 100% of the CP

Front 71

Surviving Spouse / Domestic Partner

Quasi-CP

Back 71

Surviving spouse inherits the decedents 1/2 share of the QCP.

Note: already owned 1/2, therefore surviving spouse has 100% of the QCP

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Surviving Spouse / Domestic Partner

Separate Property

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surviving spouse inherits decedent's separate property as follows:
1. All Decedent’s Separate Property: if deceased had NO surviving issue, parents, siblings, or issue of deceased siblings. (No other heirs)
2. 1/2 Decedent’s Separate Property: if deceased had ONE child or issue of one dead child, OR had a parent, sibling, or their issue. (one child, or if parents)
3. 1/3 Decedent’s Separate Property: if deceased had more than one child, OR one child and issue of one or more dead child, OR just issue of two or more dead children. (more than one child or issue.)

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Remainder (The Seven-Headed Monster) – Used to divide up the property left after the spouse takes their share or if there is NO spouse we look here to divide up the entire estate under intestacy. Property will be divided in this order:

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a. Issue of the decedent (Children, Grandchildren, or great-grandchildren)

b. Decedent’s Parents (1 parent then all, 2 parents then split 50/50)

c. Decedent’s Siblings or their issue (Brother & Sisters / Niece & Nephew)

d. Grandparents or issue of grandparents (Aunts, Uncles, Cousins)

e. Issue of a predeceased spouse (Step Kids)

f. Next of kin (3rd cousins) if there are two equal collateral next-of-kin, the one through the deceased’s nearest ancestor will take.

g. Former In laws or their issue

If of Equal degree of Kinship, survivors take equally Per Capita.

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Escheat

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If no one can take, then the deceased’s intestate estate escheats to the state.

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Property Distribution for Unequal Kinship

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a. Per Capita – Count heads of those living and distribute equally

b. Per Stirpes – Start at the highest level and divide evenly among that level regardless of whether there are living relatives in that level.

c. §240 – You begin your division on a level where there are living relatives; i.e., you skip any generations without living issue. Once you find the first generation of living issue, then it is distributed like per stirpes
i. Note - A will can supersede §240

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Advancements

If a person dies intestate, property given to an heir by the decedent during their lifetime is treated as an advancement against that heir’s share if:

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1. Proof – There is a contemporaneous writing by the decedent or by the heir indicating that the property was intended to be given as an advancement

2. Value – property is valued at the FMV at the time the transferee came into possession

Note – If the value is listed in the writing it is conclusive.

3. Survive – If beneficiary does not survive the decedent, the advancement will not be counted against beneficiaries’ issues share.
a. *Note – In California, there is a presumption against advancements.

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Foster or Step Children

In order for a person to inherit through or from a foster or step-parent, they have to have:

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a. Live with that person throughout their life beginning as a child; AND
b. It is established by clear and convincing evidence that the stepparent or foster parent would have adopted but for a legal barrier

Ex: biological parent does not give consent to the adoption

A misunderstanding (thinking there was a legal barrier when there was not) is not enough; there must be an actual legal barrier.

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Admitting the Will

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A will is not self-executing. It must be submitted for probate.

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Contesting the Will

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A will may be contested up to 120 days after admission to probate by a directly interested person.

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No Contest Clauses

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No Contest Clauses will only be enforced against contests brought without probable cause. They are strictly construed. Remember to bait the hook.

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ATTESTED WILLS: an attested will is a will that was “attested to” by a witness

General Requirements

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In general, an attested will MUST be:
1. In Writing, (Oral wills are not recognized in CA)

2. Signed , AND
a. Testator – Nicknames are okay, X is okay if T is illiterate
b. A Third person in T's presence and at T's direction
c. By a Conservator pursuant to a court order

3. Witnessed by 2 witnesses during the testators lifetime, who are
a. Present at the same time, and
b. Witness either the signing or testator’s acknowledgment of signature, and
c. Be able to understand that they’re signing as witnesses to the testator’s will.

Substantial Compliance – If a will was NOT EXECUTED in compliance with the requirements above the will is invalid unless the proponent of the will can establish by clear and convincing evidence that, at the time the testator singed the will, the testator intended the will to constitute the testator’s will.

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Witnesses to A Will

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1. Requirements – Can sign anywhere in the will. W can’t sign after T dies!
2. Interested Witnesses Witness who is a beneficiary under the will
a. NOT facially invalid just because the will was signed by an interested witness.
b. Presumption – Unless there are two other disinterested witnesses, a presumption arises that the witness-beneficiary secured the gift by wrongdoing
c. Intestate Share – If witness-beneficiary cannot rebut the presumption of wrongdoing, he takes the an amount that does NOT exceed his intestate share.
i. i.e. if not related, can be completely barred.
d. Fiduciary Capacity – Presumption of wrongdoing is inapplicable if witness-beneficiary is taking only in a fiduciary capacity (as trustee for child, etc.)

Note – an interested witness cannot become disinterested within the meaning of the statute by subsequently disclaiming their interest.

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Conditional Wills – Validity is made conditional by its own terms

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1. Ex: T states "this is my will if I die in Europe during my vacation"
2. The will is to be probated only if the condition is satisfied
3. Conditional wills can be formal (attested) or holographic.

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HOLOGRAPHIC WILLS: In the testators handwriting and require no witnesses.

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Ex. Dying note on tractor fender, love letters, plaster walls, eggshells, and tattoos were all valid holographic wills and can act as codicils to a valid will.

General Requirements –
1. Signature, AND
2. Material Provisions must be in the Testators Handwriting.
a. Material provisions: (1) Gifts made, (2) Beneficiaries names
b. NO witnesses are needed.

iii. Incapacity – If the will was written during any time of incapacity, it is invalid.

iv. If there is NO Date – If there is no Date on the will and there is another will, we will assume the holographic will was earlier, and provisions are invalid to the extent they conflict with a later will.

v. Writing as a whole – In determining the testator’s intent CA will look at the document as a whole. (Even the typed portions) However, material provisions must be in writing.

vi. Form Wills – Because California will look at the whole document, form wills are ok. Form wills are best for “plain vanilla” cases.

vii. Extrinsic Evidence – California allows extrinsic evidence to determine the testators intent if it is needed to determine whether a document constitutes a will, or to determine the meaning of a will if the meaning is unclear.

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CONSTRUCTION

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a. Intent of Transferor Controls – The intent of the transferor controls. Extrinsic evidence can be brought in to establish intent.
b. Interpretation – There is a presumption that all language in a testamentary instrument has some meaning (there is no superfluous language), AND against intestacy or failure of the transfer.
c. Document understood as a whole – ALL PARTS of the testamentary document are to be construed in relation to each other to form a consistent whole.

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Integration

Refers to which papers make up the will

Two elements required

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1. Intent – T must have intended for the papers in question to be part of the will
2. Presence – Paper must be actually or physically present at the time of execution

Ex: T goes to sign will. T wants a page redone. Lawyer promises it will be typed and inserted the next day. T signs. T dies. New page will not be probated because it was not present. The old page also cannot be probated because T did not intend it to be part.

Proving integration (2 ways)
1. Establish a physical connection among all the pages (i.e. Stapled together)
2. Establish a logical connection (i.e. last word on page 1 flows into page 2)

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Incorporation by Reference– May reference an existing document in a will.

Elements

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1. A document or writing
2. In existence when the will was executed
3. Document must be Clearly identified in the will; AND
4. T must have Intended to incorporate the document into the will (imputed if 1-3 met)

Note – Document incorporated does not have to be valid (i.e. invalid deed)

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Acts of Independent Legal Significance

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Wills can dispose of property conditioned on acts of independent significance outside of and apart from the will.

Parol Evidence – the court will use parol evidence to fill in the blanks.

Ex: "I leave all my property to the people who I employ at the time of my death."

Note – The fact or act can be future or past

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Writing Disposing of Limited Tangible Personal Property

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Effective for decedents dying on or after January 1, 2007, under new California Probate Code section 6132, a writing may be admitted into probate and given testamentary effect.

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Elements under 6132

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1. Writing must be Referred to in the will, Dated, and Signed or handwritten by the T
2. Writing must Describe the items and Beneficiaries with reasonable certainty
3. Writing directs the disposition of tangible personal property (excluding cash and property used primarily in a trade or business) valued, at the time of T's death, at not more than $5,000 per item and not more than $25,000 in the aggregate.

Note – Remember to discuss all three on Bar! Incorporation by reference, independent significance, & section 6132

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Pour-Over Wills – Part or all of T's estate is devised to the trustee of the inter-vivos trust to be administered pursuant to the terms of that trust

Three methods to validate

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1. Incorporation by Reference
2. Independent Significance – Even without the will, the inter-vivos trust would exist
3. Uniform Testamentary Additions to Trust Act (UTATA) – So long as you have a valid trust, which was in existence before the will was executed, or at the time of execution, the pour-over provision is valid by statute.

Bar Tip: discuss all three theories for a pour-over will

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CODICILS – (RAM) – Testamentary instrument executed in compliance with the CA Probate Code which Revokes, Amends or Modifies a will. (i..e Must be a valid holographic or attested will)

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a. Republication – A codicil republishes a will. This means that the it causes the will to speak from the date that the codicil is executed.

b.Revocation of Codicils
i. If T executes a will, then executes a codicil, and subsequently revokes the codicil, there is a rebuttable presumption that T intended to revoke only the codicil
ii. If T executes a will, then executes a codicil, and subsequently revokes the will, there is a rebuttable presumption that T intended to revoke the will AND the codicil

i.e. cannot have a codicil stand on its own.

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REVOCATION

Unless revoked, a will can be probated. (think about Sept. 11, Hurricane Katrina, etc.)

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If NOT revoked properly, the prior will is still valid.

*Simply saying “I revoke this will” is not enough; must take some action.

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REVOCATION

Physical Act (3 elements)

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i. Act – Will must be burned, torn, cancelled, destroyed or obliterated (i.e. crossing out)

ii. Simultaneous Intent – T must have the simultaneous intent to revoke

iii. Act must be done either by T or by someone in T's presence and at his direction

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Cancellations – crossing out or lining through

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a. Cancellation to increase a co-beneficiary’s gift – You cannot increase a co-beneficiaries gift by cancellation.
i. Ex: I leave my farm to X and Y. T subsequently crosses out Y.
ii. X still only gets ½, Other half goes to residuary or by intestacy
b.Look to DDR for cancelations that do not qualify as a holographic will.

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Interlineations

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writing between the lines – A handwritten addition to a typed will that does NOT qualify as a holographic codicil may nonetheless be a revocation

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Duplicate Wills

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If T or someone in T's presence and at his direction revokes by physical act one of the duplicate originals (Not photo copy), then the other duplicate is also revoked as a matter of law

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Mutilated Wills

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If a will is found in a mutilated condition at T's death and when last seen it was in T's possession, then there is a rebuttable presumption that T mutilated the will with the intent to revoke the will

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CHOICE OF LAW – Can be admitted to probate in CA if the will:

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a. Complies with the formalities of CA law
b. Complies with the formalities of the place executed
c.Complies with the formalities of the place of T's domicile at execution

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CONTRACTS TO MAKE / NOT MAKE A WILL – A contract to make a will, not to make a will or die intestate can be enforced IF: (4 Ways) Contract law governs.

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a. The will or other instrument states the material provisions of the contract

Ex: T's will states "In consideration of the $5k A gave me, I have promised to devise Blackacre to A and I hereby do devise"

Contract referenced in will, plus extrinsic evidence proving the terms of the contract

A writing signed by the decedent evidencing the contract

Clear and convincing evidence of an agreement (with the beneficiary or third party) for the benefit of the claimant that is enforceable in EQUITY (Estoppel)

*NOTE – Joint wills won’t create a presumption of a contract not to make or revoke a will.

Joint Will is the will of two or more people on one document

Remedies Available to Promisee
1. Damages – P can sue Decedent's estate
2. Specific Performance – P can seek to force the executor to comply with the contract
3. Constructive Trust – the court can probate the will as it is, giving the property to the devisee, and make the devisee a constructive trustee, who must transfer the property to the promisee of the contract

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ADEMPTION by EXTINCTION

No longer anything to convey because it has been destroyed, given away, sold, etc.

Classifications

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i. Specific devise – Gift of a particular item (unique) Ex: Real estate, Antique automobile

ii. General devise – Payable out of the general assets of the estate (i.e. $100)

iii. Demonstrative devise – Hybrid between a general and specific gift
1. It is a gift from a particular fund, but if that is not enough, the executor can resort to general property

Ex: "To John I leave $1k from my account at Chase." There is only $900 in the account. The balance will come from general assets

iv. Residuary devise – All other property not expressly disposed of in the will

Ex: "I leave the residue / balance of my estate to M"

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ADEMPTION by EXTINCTION

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CL – Ademption by Extinction – specific gift failed if testator did not own the property at T's death

CA – Intent is important for determining whether T intended for the gift to fail. Recipient has Right to Receive the specific gift if testator did not intend for the gift to fail.

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ADEMPTION by EXTINCTION

Securities Changing Form, Conservator Sells the Property, Eminent Domain award, Casaulty Award, or an IInstallment sale of property

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i. Securities changing form - mergers, stock splits, stock dividends, or reorganization of corporations with stock re-issue.
1. T did not change the form, another entity did, so gift still valid
2. Distinguish changing form from buying more stock.

ii.Conservator Sells the Property – If conservator is appointed and sells property with court approval, there is no ademption by extinction in CA, the beneficiary takes the net sales price
1. T did not sell the property, therefore did not intend gift to fail. i.e. foreclosure sale

iii. Eminent domain award, Casualty award, or an Installment sale of property in which T holds the deed of trust as security for the sale.
1. Paid After T’s Death – There is no ademption by extinction with respect to the eminent domain proceeds, insurance proceeds, or installment payments paid AFTER T's death
2. Paid During T’s Life – Proceeds paid during T's life - see if you can trace
a. If traceable then argue NO ademption by extinction
b. If NOT traceable then likely ademption by extinction

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ADEMPTION BY SATISFACTION

Property given by a transferor during his or her lifetime to a person is treated as a satisfaction of an at death transfer if the:

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i. Will itself provides for a deduction of the inter-vivos gift
ii. T declares in a contemporaneous writing that the gift is a satisfaction
iii. Beneficiary acknowledges in a writing (at any time) the satisfaction
iv. The property given in the satisfaction is the Same Property that is the subject of a specific gift to the beneficiary. This is an ademption by satisfaction, because the property no longer exists in T's estate

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How to value the satisfaction if not made in cash

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i. If the value of the satisfaction is expressed in a contemporaneous writing of T or the beneficiary, that value is conclusive

ii. In all other cases, the property is valued at its FMV measured at the time the transferee came into possession

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CHILD Protection (Pretermitted Children)

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Child born or adopted After ALL testamentary instruments are executed and who is not provided for in any instrument will take his Intestate Share.

i. Exceptions – A Pretermitted child will not take their intestate share if:

1. There was an explicit intent of exclusion,
2. Sufficient non-probate asset transfer, OR

3. Granting Substantially all property to parent.
a. *Implicit exception is that non-pretermitted children don’t take

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CHILD Protection (Pretermitted Children)

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Children born before – As a general rule children can be disinherited; a testator is not required to leave anything to his children.

Republication of a will by Codicil without mentioning the pretermitted child can destroy a child’s pretermitted status and can treat him as being intentionally excluded.

Note – Parents can accidentally disinherit a child by doing this.

Unknown children – if the decedent has children that they do not know about (believed to be dead or did not know were born), are deemed to be pretermitted even if they are alive at the time of execution of the will.

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Distribution of omitted Spouse / Child’s share

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FIRST from any residuary estate, if any

THEN pro rata form from ALL other devises
1. Uses values at the time of death.
2. No distinction is made between specific, general, and residuary gifts

Discretion – court’s have discretion to avoid interfering with a specific devise or gift and can exempt them if it would defeat the obvious intention of the T.

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Widow's election

Widow has 2 choices

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1. The widow may accept the gift given in T's will, read as a whole in lieu of her statutory right (taking "under the will"), OR

2.The widow can renounce ALL benefits under the will and confirm her right to 1/2 the CP and quasi-CP (taking "against the will")

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Unworthy Heirs or Beneficiaries

Abuse of Decedent –

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a person who abuses the decedent will be treated as though predeceased decedent if it is established by clear and convincing evidence:

1. Physical abuse or neglect of decedent who was an elder or dependent adult, AND

2. Acted in bad faith, AND

3. Reckless, oppressive, fraudulent or malicious behavior, AND

4. The decedent from the time of the acts until their death was substantially unable to manage his or her financial resources to resist fraud or undue influence.

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Posthumous Children

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A posthumous child is a child conceived during lifetime of the intestate or testator, but born after death. Posthumous children are deemed heirs of the intestate and beneficiaries of the testator's will.

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Disclaiming interests

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a refusal of an heir or devisee to take a property interest given to them is allowed. (usually for tax purposes or to keep creditors at bay).

Disclaimer form – the disclaimer must be in writing and signed by the disclaimant, and specifically state the interest to be disclaimed.

Note – A disclaimer is not valid to avoid tax liens, the IRS or Medicaid liens.

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Lapse

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If the beneficiary is dead at the time the will is executed, the gift is void. If the Beneficiary dies after the testator executes his will but before the testator dies, the gift to the beneficiary lapses. (Fails) Unless a contrary intent is expressed in the will, the gift falls into the residue, if there is one. Otherwise, the gift passes by intestacy

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Anti-Lapse Statute

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Applies only if the devisee who predeceased the T was "kindred" of T, OR kindred of a spouse or domestic partner of T (i.e. NOT the devisee cannot be a surviving Devisee or Spouse) AND this predeceased devisee leaves issue.

1. In such a case, the issue of that predeceased devisee will step into the shoes of that predeceased devisee and take per intestacy rules.

Note – Both the rule of lapse and the anti-lapse statute apply to wills and revocable trusts

Class Gifts – also applies to class gifts such as leaving real property to "my children"

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Lien Exoneration

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i.Common Law – If T devised a specific gift subject to an encumbrance (e.g. a mortgage) for which T was personally liable, the executor was required automatically to pay off the debt before passing the property to the beneficiary

ii. CA – Subject to a contrary intention property passes without exoneration.

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Abatement

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arises when there are insufficient funds to pay debts and devises in a will.

i. Order of abatement – What goes away first. Distribute pro-rata.
1. Property not distributed in the will
2. Residuary gifts
3. General gifts to non-relative
4. General gifts to relatives
5. Specific gifts to non-relative
6. Specific gifts to relatives

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WILL SUBSTITUTES

Terms

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Life insurance policies, bank accounts, Stock transfers and deeds pass per their terms.

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Gifts in Anticipation of Death – Causa Mortis

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gifts that are given by a person when they think they are going to die are enforceable. Only Personal Property is subject of a gift causa mortis (i.e. NOT real property)

i. Delivery – Donor must make delivery of the property to donee. Delivery may be Actual, Symbolic, or Constructive

1. Actual – actual transfer of the gift

2. Symbolic – something representative that the gift is given (i.e. generally a writing)

3. Constructive – give the donee the "key" to the gift, or map, etc.

4. Modern view – delivery is found whenever donor has done everything possible to effectuate the delivery and there is no issue of fraud or mistake

Revocation – Donor may freely revoke the gift at any time.

Survives the Peril – If donor survives the peril, the gift is revoked by operation of law.

Prior Will – A gift given in anticipation of impending death is NOT affected by a prior will (unless contrary intention is clearly stated in the will).

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BARS

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Proponents of will have the burden of proving due execution. Contestants of a will have the burden of showing undue influence, lack of mental capacity, fraud, mistake, revocation.

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CAPACITY

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Capacity to make a will is the lowest recognized in law. Testators are presumed to have capacity.
i. At the time of Execution, Testator (T) must: (4)
1. Be 18 years of age

2. Understand the Extent of his property

3. Know the Natural objects of his bounty
a. (1) Spouse or domestic partner, (2) Issue, (3) Parents, (4) Those whose interests are affected by the will

4. Must know the Nature of his act
a. Must know he is executing a will
b. Does NOT have to know all the legal technicalities of the will

Consequences of NO capacity
1. Entire will is invalid
2. Property will pass by intestate succession unless T had a valid prior will that would have been revoked by the second will, then the first will be probated, because without capacity the second could not revoke the first.

Bar Tip: Must apply the 4 prong test even if these are present

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INSANE DELUSION

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Elements – Need to be met at the time of execution:

1. T had a False Belief that was a Product of a Sick Mind

2. NO evidence to support the belief (Not even a little bit)

3. Delusion must have affected T's will

Consequences
1. Only that part of the will affected by the delusion is invalid

2. The part affected will go to the residuary devisee, or if none, by intestate succession

Distinguish from Lack of Capacity
1. No capacity is very severe and goes to testator's entire essence
2. A delusion is a problem, but a narrow one and testator is otherwise perfectly normal

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FRAUD (Lie)

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Elements
1. Misrepresentation of Material Fact

2. Scienter – Known to be false by the wrongdoer when made

3. Intent – For the purpose of inducing action or inaction,

4. Actual Reliance – In fact induces the action or inaction desired,

5. Justifiable Reliance – Not a statement of opinion, AND

6. Damages

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Three types of Fraud

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1. Fraud in the Execution – Someone forges T's signature to a will OR T is given a document to sign that purportedly is non-testamentary in nature, but in fact is.

Consequence – Entire will is invalid. Property passes by intestate succession, unless a prior validly executed will

2. Fraud in the Inducement - Wrongdoers representation affects the contents of T's will

Consequence – Only part of will affected is invalid. Property passes to the residuary, if no residue, then by intestate succession, or by Constructive trust.

Constructive Trust – Remedy to prevent the fraud or unjust enrichment. Constructive trustee has one duty, to transfer the property to the intended beneficiary (as determined by the court)

3. Fraud in Preventing T from revoking the will

Consequence – Court will NOT probate the will and thus property will go to the heirs. Simultaneously, the court will decree the heir is a constructive trustee who has one duty, to transfer the property to the intended beneficiary (as determined by the court)

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UNDUE INFLUENCE – (Coercion) –when a person overcomes the will of a testator and convinces them to do something by asserting a position of power. (3 Ways to Establish)

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i. Prima facie case (SOAR)

1.Susceptibility – T has a weakness (i.e. Psychological, Financial, Physical)

2. Opportunity – wrongdoer had access to T

3. Active Participation – Wrongful Act to get the gift.
a. Use of force, Threat of force, Blackmail, Dragging elderly T to attorney

4. Unnatural Result – Wrongdoer is taking a devise and this person ordinarily would not be expected to do so

ii. Presumption (3 Elements) (CAR)
1. Confidential relationship exists b/n T and wrongdoer
2. Active participation
3. Unnatural Result

Consequences of Prima Facie case and Presumption
1. Only the part of the will affected is invalid
2. That part affected is distributed to the residuary if any, or if none then by intestate succession, or via constructive trust remedy

iv. Statutory Undue Influence – CA law generally invalidates a Donative Transfer (a transfer by will or trust) from a Transferor (testator or settlor) to:
1. A person who drafted the instrument (will or trust)
2. A person who is closely related to the drafter
3. A person who is in a fiduciary relationship with the transferor; OR
4. A "care custodian" of a "dependent adult" who is the transferor.
a. A "care custodian" may be a professional (RN, etc) or a non-professional
b. A "dependent adult" is someone older than 64 years or at least 18 years with a physical or mental disability
5. Exceptions (3 Possible)
a. The transferor is related to, married to, or cohabitates with the drafter;
b. The instrument is reviewed by an independent attorney, OR
c. The court determines, upon clear and convincing evidence, that the transfer was not the product of wrongdoing.
6. Consequences
a. The transferee does NOT take the gift, but only to the extent that the gift exceeds that person's intestate share
b. As to the portion that does not pass to the wrongdoer, it passes to the residuary devisee if any, or by intestacy, or via a constructive trust remedy

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MISTAKE

Mistake in Content – Wrong beneficiary is named or the wrong gift is made

Two types

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i. Mistake in Omission – Name left out of the will or items left out
1. Courts will NOT rewrite wills, but possible relief under DRR

ii. Mistake in Addition – Name or items accidently added (i.e. To A and B, Only meant A)
1. Court may strike the addition, because the court is not rewriting, just excising part

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Mistake in Execution – Testator signs the wrong document (two situations)

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i. T mistakenly signs his will believing it is a non-testamentary instrument
Consequence: NOT probated because T did not intend the document to be a will

ii. Reciprocal wills or mutual wills – accidentally signs one another's
Consequence: the court may reform the wills in this unique situation, especially if the Ts are husband and wife or domestic partners (equitable)

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Mistake in Inducement – A particular gift is made or not made on the basis of testator's erroneous beliefs. (Ex: believes X is dead, otherwise he would leave a gift)

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No relief is given, unless both the mistake and what T would have done but for the mistake appear on the face of the will.

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Mistake in Description (Ambiguity) – No one or nothing fits the description OR two or more persons or things fit the description.

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i. Latent ambiguity – On the face of the will there is NO problem
1. Introduce parol evidence twice. Once to establish the ambiguity and then again to determine T's intent (To cousin John, 2 cousins named John)

ii. Patent ambiguity – Apparent on the face of the will (i.e. To UCLA, AKA USC)
1. Traditionally – No remedy
2. Modernly – introduce parol evidence to determine T's intent.

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Mistake in Validity of a Subsequent Testamentary Instrument (DRR)

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Dependent Relative Revocation – If the testator purports to revoke a prior will upon a mistaken belief that the later will effectuates his intent, the revocation is ineffective if the testator would NOT have revoked the substantially similar prior will had he known the truth. (Renders revocation ineffective).

1. The court will look to the testators intent to render revocation ineffective.

Hypo – T executes Will 1, T then executes Will 2 and revokes Will 1 thinking Will 2 effectuates his intent, T is mistaken because Will 2 is invalid or fails to effectuate his intent.

Note – generally the wills must be very similar, so that we know that T would prefer Will 1 to be probated instead of intestacy

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Private Express Trust

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“A fiduciary relationship with respect to property whereby one person, the trustee, holds legal title for the benefit of another, the beneficiary, who holds an equitable interest, which arises out of a manifestation of intent to create a trust for a legal purpose.”

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Settlor Intent

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There must be a present manifestation of intent made by the settlor to convey property for the use and benefit of someone else. (i.e. No magic words required)

Precatory words – by themselves, are not sufficient to create a trust (i.e. wish, hopes)

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Property of the Trust

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any presently existing interest in property that can be transferred can be the corpus of a trust (debt is a liability not property)

Illusory interests cannot be the property of a trust (i.e. Future Profits / Expectancy)

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Beneficiary

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Any ascertainable person or group of people can be a beneficiary of a private express trust (Corporations ok)

Unincorporated associations – CL (No) ML (Yes)

Class gifts are valid – but watch out for a class gift that is too big or vague

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Trustee

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A trust must have a trustee, but court will NOT allow trust to fail solely because there was no trustee or the trustee refuses to serve. The court will simply appoint a trustee.

i. Until trustee is appointed – settlor will hold legal title
ii. Trustee Cannot be the sole Beneficiary – There trustee owes fiduciary duties to someone other than themselves; therefore, the trustee cannot be the sole beneficiary.

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SOF

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Trusts of personal property don’t have to be in writing and can be evidenced by clear and convincing evidence. However, a trust for real property must be in writing to satisfy the SOF.

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Legal Purpose for a Trust

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Trust may be established for ANY legal purpose that is NOT against public policy

i. Illegality at creation – The court will try to excise the bad from the good. If not possible to excise illicit condition and sever good from bad the court has 2 options (will do whatever achieves best result):
1. Invalidate the trust at its inception – settlor remains owner of property
2. Allow trustee to keep property for himself – as punishment to settlor, because he has unclean hands.

ii. Illegality after creation – due to change in law – resulting trust is decreed back to the settlor or the settlor’s estate.

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Testamentary Trust

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Trust created to take effect at settlor’s death

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Inter Vivos Trust

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Trust created to take effect during his lifetime

1. If Trust of Real Property – Settlor must execute and deliver a deed transferring title to trustee.
2. If Trust of Personal Property – Must be delivery (symbolic / actual / constructive) to trustee of the trust property at the time settlor manifests the intent to create the trust

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Secret Trust

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Fact of the trust is secret. Trust is enforceable by constructive trust.

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Semi-Secret Trust

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Trustee named but beneficiaries are secret. These trusts are unenforceable and property is returned to settlor via a resulting trust.

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Revocable Trust

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Settlor retains the right to amend or revoke during his lifetime.

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Charitable Trusts

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Trust for a charitable purpose that benefits a large number of unidentifiable beneficiaries.

a. Charitable Purposes – Must serve a public benefit (i.e. medicine, education, science, research)

b. Creation – same way as a private express trust

c. Beneficiary – Beneficiary must be of a large number of unidentifiable. An individual may receive incidental benefit but the focus is on society.

If beneficiary is a small group of people (help my poor relatives) – 2 views

1. It is a private express trust because only a few people are getting benefit

2. It is a charitable trust because when poverty is eliminated society benefits

RAP – CL RAP doesn’t apply to charitable trusts – can endure for ever

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Cy pre Doctrine

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(“as close as possible”) – This resolves the issue of the charitable purpose becoming impossible, impractical, or illegal. The court will modify the trust if it has a general charitable purpose (save extinct birds vs. save the dodo bird), that is now become illegal, impractical, impossible. The court will find a purpose that can be carried out and is as close as possible to the trustor’s purpose.

i.Only the court can invoke Cy Pre – Not the trustee on his own.

ii. If court finds that the settlor had a specific intent – the property goes back to settlor

1. To determine general or specific – we introduce both intrinsic evidence (trust instrument) and extrinsic evidence to ascertain the settlor’s intent

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Honorary trusts

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Not a valid trust because they lack human beneficiaries, but trustee can carry out settlor’s wishes to care for animals or maintain his grave. (simply a goal of Settlor)

i. Trustee is NOT required to carry out the settlor’s goal, but has power to do so

ii. If trustee refuses to carry out the settlor’s wishes the trust fails

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Totten Trust

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Bank account for the benefit of a third party.

i. Passes per the terms of the bank account.
ii. Basically just a will substitute – no fiduciary duty between depositor / trustee and beneficiary
iii. Can become a private express trust if depositor tells beneficiary that they have created “this trust for you” or something to that effect.

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SPENDTHRIFT TRUSTS

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Generally a beneficiary of private express trust (PET) can voluntarily alienate his interest in property, and creditors can involuntarily alienate a beneficiary’s interest in property.

a. Spendthrift Trust (Provision) – Beneficiary can NOT transfer his right to future payments of income or principal and creditors can NOT attach the beneficiary’s right to future payment of income or principal.

Purpose – The purpose of a spendthrift trust is to protect the beneficiary from his own improvidence.

Creditor Only Restraint – A restraint only denying creditors the right to reach the beneficiary’s interest is invalid.

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SPENDTHRIFT TRUSTS

3 Testable Issues

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1. Voluntary alienation – Beneficiary cannot voluntarily alienate. This would defeat the purpose of the spendthrift provision.

2. Involuntary Alienation – (Creditors) – Generally creditors have no right to attach the beneficiary’s right to future payments. They take only if the trustee exercises his discretion to pay.
a. Preferred Creditors Exception – Preferred Creditors can attach the beneficiary’s right to future payments. The beneficiary’s creditors have the same rights as the beneficiary. (i.e. IRS, provider of necessities, child support, spousal support, alimony, tort judgment creditors)

i. Mandatory Trust – Trustee lacks discretion. Must pay per the terms of the contract. Creditors can attach and force future payments.
ii. Discretionary Trusts – Trustee is given sole and absolute discretion in determining how much to pay beneficiary, if anything, and when to pay beneficiary, if ever. Creditors only take if the trustee exercises his discretion to pay and cannot force payment.
b. Surplus Exception – Any creditor has the right to attach to surplus measured by beneficiary’s station in life.
i. Support Trust – Trustee is required to use only so much of the income or principal as is necessary for the beneficiaries health, support, maintenance, or education.
c. Self Settled Exception – creating spendthrift in yourself to protect yourself from creditors. The trust is valid but the spendthrift provision is NOT recognized.

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Resulting Trusts

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A resulting trust is implied in fact trust based upon the presumed intent of parties when a trust fails.

Returned to Settlor – When resulting trust is decreed by the court, the resulting trustee will transfer the property to settlor if the settlor is alive, and if he is not, then to the settlor’s estate.

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Resulting Trusts

Arises in 7 Situations

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1. When a private express trust ends by its own terms and there is no provision for what happens to the corpus thereafter.

2. When private express trust fails, because there is no beneficiary or becomes illegal.
3. When charitable trust ends because of impossibility/impracticability and cy pres can’t be used.

4. When there is an excess corpus in a private express trust

5. When we have a “purchase money resulting trust” (i.e. A pays consideration to B to have title to property transferred to C.)

6. Semi-secret trusts – arises when the will makes a gift to a person to hold as trustee, but does not name the beneficiary

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Constructive Trusts

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Not really a trust but a remedy to prevent fraud or unjust enrichment

Rule – When court decrees a constructive trust the trustee (i.e. wrongdoer) must transfer the property to the intended beneficiary as determined by the court.

i.e. disgorge wrongdoer

Arises in 4 situations
1. When trustee of a trust makes a profit because of self dealing
2. There is fraud in the inducement or undue influence (Wills or Trusts)
3. Secret trusts – will on its face makes a gift outright to A, but gift is given on basis of an oral promise to use property for benefit of B
4. Oral real estate trust – secret trust for real property. SOF is a defense unless:
a. Fiduciary relationship exists between Settlor and trustee
b.There was detrimental reliance by the intended beneficiary

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Trustee powers

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Trustee has all enumerated powers and all implied powers that are helpful and appropriate to carry out the trust purpose.

i.e. power to sell trust property, power to incur expenses, power to lease, and the power to borrow.

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Trustee's Fiduciary Duties

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Trustee’s duties owed to beneficiary’s

Duty of Loyalty – Trustee owes a fiduciary duty to administer the trust solely in the interest of the beneficiaries, having no other consideration in mind. A breach can be personal liability for trustees.

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Trustee Self Dealing

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Trustee cannot buy or sell trust assets for the trustee or the trustee’s spouse.

A trustee must also not borrow trust funds.
a. No further inquiry rule – Trustees good faith and reasonableness of the transaction are irrelevant.

Consequences
i. Ratify the Transaction – Waive the breach if there is a gain.
ii. Surcharge the Trustee – If there is a loss the trustee is personally liable
iii. Trace and Recover Property – If trustee makes personal profit you can get a constructive trust unless there is a BFP without notice.

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Trustee - Conflict of Interest

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Not acting in the best interest of the beneficiaries.

Ex. Selling property to buyer to increase the value of trustees own property.

Consequences

i. Ratify the Transaction – Waive the breach if there is a gain.
ii. Surcharge the Trustee – If there is a loss the trustee is personally liable

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Trustee Duty to Invest

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split of authority – 3 rules of the duty to invest – discuss all 3

1. State Statutory Lists – some states have lists which trustee must follow in the absence of directions in the trust.

Trustee cannot blindly follow the list to avoid liability he must exercise reasonable care, skill, and caution in investing.

Ex. First mortgages, government securities.
b. No speculating – Never invest in new business or 2nd deeds of trust in real property.

2. Common Law Prudent Person Test – requires trustee to act as reasonably prudent person investing his own property, trying to maximize corpus while preserving corpus.
a. Each individual investment is scrutinized
b. Good investments – state list, blue chip stoks, mutual funds might be ok
c. No speculating – Never invest in new business or 2nd deeds of trust in real property.

3. Uniform Prudent Investor Act – trustee must invest as a “prudent investor”
a. Each individual investment is NOT scrutinized, instead performance is measured in the context of the entire trust portfolio.
b. May invest in ANY type of investment as long as it is reasonably prudent and prudence is determined at the time of the trustee’s decision.

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GENERAL rules regarding Trustee's duty to invest

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a. Diversify – Always have duty to diversify

b. Delegation – May delegate investment and managements decisions but must act prudently in (1) selecting the agent, (2) establishing the scope and terms of the delegation, and (3) periodically reviewing the agents actions.

c. Breach of Duty to Invest – Trustee must make good on loss
i. If breach results in profit – beneficiaries may affirm the transaction

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Trustee's Duty to Earmark

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trustee must label trust property as trust property
1. CL – trustee is personally liable.
2. ML– trustee is only personally liable if loss was caused by failure to earmark (i.e. own money is attached by creditors including non earmarked trust property)

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Trustee's Duty Not to Commingle

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trustee may NOT Comingle personal funds with trust funds

Remedy – remove trustee and if loss the trustees property will incur the loss.

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Trustee's Duty to Account

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Requires trustee on a regular basis to give beneficiaries a statement of income and expenses of the trust.

Beneficiaries can file an action for accounting

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Trustee's Duty of Care

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Trustee must act with the skill, care and judgment as a reasonably prudent person dealing with his own affairs.

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Trustee's Duty Not to Delegate

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Trustee may only delegate acts that would be unreasonable to require her to perform personally.

She may never delegate the entire administration of the trust.

CL – trustee cannot delegate decision making authority to advisors

ML – May delegate investment and managements decisions but must act prudently in (1) selecting the agent, (2) establishing the scope and terms of the delegation, and (3) periodically reviewing the agents actions.

Remedy – If trustee improperly limits her control, she becomes a guarantor.

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Duty to keep Trust Property Productive

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Trustee must keep trust property productive.

Remedies of beneficiaries for breach of duty or duties
1. Damages
2. Constructive trust
3.Tracing and Equitable Lien / Constructive Trust on property
4.Ratify the transaction (if good for beneficiary) or
5. Remove the trustee

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Liability of Trustee to 3rd persons (liability in contract and tort)

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Liability in Contract

CL – trustee is sued in his personal capacity and trustee can get indemnification from trust assets if trustee acted within his powers.

ML – Unless otherwise provided for in the contract, a trustee is NOT personally liable for contracts entered into in a fiduciary capacity unless the trustee did not disclose that they are entering into a contract in a fiduciary capacity.

Liability in Tort – A trustee is personally liable for all torts committed in the course of the trust administration, including torts committed by the trustee’s agents. There is indemnification, only if the trustee is NOT personally at fault

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Modification by Settlor

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Settlor can modify trust if Settlor expressly reserves the power to modify the trust, or if the Settlor has the power to revoke.

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Modification of Trust by the Court

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Can be modified by court regarding charitable trusts and cy pres power

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Termination or Modification of Revocable Trusts

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i. Majority – To retain power to revoke, settlor must expressly reserve power in the trust

ii. Minority – Settlor has power to revoke unless trust is expressly made irrevocable

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Termination or Modification of Irrevocable Trusts

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i. Settlor AND ALL beneficiaries agree to terminate (Including contingent remainders)

ii. All beneficiaries agree to terminate or modify and it would NOT be contrary to a material purpose of the settlor.

iii. Changed Circumstances – The court may modify or terminate a trust (upon petition by the trustee or beneficiary) if (1) unforeseen changed circumstances mean continuation in the same manner would (2) defeat a material purpose of the trust.

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INCOME and PRINCIPAL – (Uniform Principal and Income Act)

Adjustment Power of Trustee

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Trustee can disregard above stated rules regarding allocation if a different allocation is necessary to administer trust fairly.

Income Pays
1. Half trustee compensation and persons providing investment advice
2. All other ordinary expenses in connection with management, administration or preservation of the trust (minor repairs, taxes, interest)

Principal Pays
1. Half of trustee compensation;
2. All expenses that affect primarily principal (Major repairs / Improvements)

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Life Tenants Gets and Pays For

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i. Life Tenant Gets – Cash Dividends, Interest Income, Net Business Income

ii. Life Tenant’s Pays for – Interest on Loan indebtedness, Taxes, Minor Repairs

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Remaindermen Gets and Pays For

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i. Remaindermen Gets – Stock Dividends / Splits, Net proceeds on Sale of Trust Asset

ii. Remaindermen Pays for – Principal on Loan, Major Repairs or Improvements

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QUESTIONS TO ASK FOR BAR

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1. Is there non-probate property?

2. Is there a valid will?
a. Was the will validly attested or is it a valid holographic will?
b. Does the testator have capacity?
c. Is the will invalid due to duress, mistake, etc.?
d. Are there parts that need to be integrated?
e. Have portions been revoked
f. Is there a codicil?
g. Is there a family protection question?
h. Is there a question of abatement or ademption?

3. Is there a trust?
a. Is the trust valid (e.g., creation, property, beneficiaries)?
b. Is there a trust modification question?
c. Are there spendthrift limitations?

4. Are there any future interests created?
a. Is there a perpetuities question?

5. Is there a trustee fiduciary duty concern?

6. Has there been a lapse?

7. Are there construction questions?

8. Is there intestacy?
a. How is the estate distributed?

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DEFENSES TO A WILL? (“U MF!”)

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 UNDUE INFLUENCE: 3 WAYS TO ESTABLISH (“DO US”/ disposition/opportunity/unnatural result/susceptible T) OR (rebuttable presumptions: when confidential or fiduciary duty/active participation/undue benefit) OR (statutory CA: know situations and exceptions)

 MISTAKE (“C DICES”) (content/description/inducement/children/execution/subsequent will or codicil)

 FRAUD (“PRICE”) (prevention/revoke failure/inducement/constructive trust/execution)

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HAS THE WILL BEEN REVOKED, REPUBLISHED, OR REVISED AND DOES DRR APPLY? (“4 R’s”)

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 REVOCATION (“ARSe SOAP”) (By Physical Act; By Subsequent Instrument; By Operation of Law-Post Will Spouse/Child/Divorce; By Ademption-Extinction; By Satisfaction-Will; By Advancement-No will; By Restriction- Homicide/Elder Abuse)

 REVIVAL (Revocation of later will does not by itself revive prior will)

 REPUBLICATION

 DRR (Prior will must be substantially identical and consistent with T’s intent)

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IF THERE IS NO WILL OR A WILL IS INVALID IN WHOLE OR IN PART, APPLY INTESTATE SUCCESSION RULES

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 COMMUNITY PROPERTY STATE (Surviving spouse gets remaining half of CP/QCP; SP: Surviving spouse get ½ if issue, or parents or brothers/ 1/3 if more than 1 issue/ once surviving spouse has part, remainder goes to issue, then to D’s parents, then to D’s siblings)

 PER CAPITA REPRESENTATION (make first distribution at level where someone is alivel)

 PER STIRPES REPRESENTATION (make first distribution at 1st generation even if everyone is dead and give to issue)

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IS THERE A VALID WILL? (“FICkle”)

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 CAPACITY (must be 18 and “DINE”)

“DINE”=
(1) Natural Disposition (understand act they are doing)
(2) No Insane Delusion
(3) Natural Bounty
(4) Understand Extent of Estate

 INTENT (Question of Fact/Conditional Will)

 FORMALITIES:
Formal Will (Writing/Signa of T in presence of 2 competent witnesses present at same time/ Conscious Presence test/ Interested Witness Test) If witness req not met then must have clear and convincing evidence that T intended on doc to have testamentary effect

Holographic Will (writing/material terms handwritten/signed anywhere/no date required but proponent must show last in time & T not incapacitated)