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60 Cards in this Set

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Formal requirements for Execution of a Will
(i) written by Testator (T) (18/older)
(ii) 2 attesting witnesses
(iii) T's signature w/in each of the witness' presence
(iv) witness' signature w/in T's presence
same as nat'l
What if a portion of the will follows the T's signature?
(UPC/majority)
If present at execution, everything above signature is valid, below invalid

If added after execution, will valid, addition invalid (KY & Nat'l)
(KY)
If present at execution, entire will is INVALID
What is a handwritten will called? How much must be written by T to be valid?
Holographic Will: in T's writing w/ T's signature

(UPC) Only material provisions needed, such as identity of property/beneficiaries

Most states: invalid
(KY) Valid only if entire will in T's handwriting
What are the majority/minority/KY positions on witness presence?
(majority)
Conscious Presence: conscious of each other and what they are doing

(minority)
Scope of Vision: if they were to look when signing they can see each other sign
(KY)
Scope of Vision: if they were to look when signing they can see each other sign
T is domiciled in Blue State but owns real estate in Red State. On vacation in Purple State, T executes a will meeting Blue State's legal requirements but not Red State's. T dies after changing domicile to Red State. Is will valid for purposes of disposition in or the Red State real estate?
(UPC/Majority)
Does it comply with the law of:
Place of Execution (Purple)
OR Domicile at Death (Red)
OR Domicile at Execution (Blue)
OR Place of Probate (Red)?

If yes to ANY, then Full Faith and Credit given
Are gifts to witness of wills within the will valid?
(UPC/modern trend) Valid
(KY)
(i) Gift invalid unless 1 other disinterested witness
OR (ii) If witness-beneficiary an heir w/o will, then takes lesser of amount given or intestate share
What is the best practice for proving a will?
Self-proved wills are presumptively valid, may be admitted to probate w/o testimony of either witness.

At time will is signed by T and witnesses (or later in T's lifetime), T and witness sign:
self-proving affidavit
under oath
before notary public
What is revocation by physical act?
(UPC/majority)
(i) intent to revoke
(ii) physical act

(UPC: anywhere on will)
(Majority: over some language)
(KY)
"cutting, tearing, burning, obliterating, canceling, or destroying"
over some language of the will
What is the presumption of revocation?
Will was last in T's possession
AND found mutilated or not found at all
How do we handle a lost/destroyed will?
(i) valid execution
(ii) cause of non-production
(iii) contents
all proven by clear & convincing evidence
How do we interpret codicils?

How do we treat later wills?
A codicil is a later testamentary instrument that alters a previously executed will

If codicil makes no reference to will, the two are read together if possible

If codicil makes reference to will, the later document controls

Later wills w/o residuary clauses are treated as codicils

Later wills w/ residuary clauses revoke prior will by inconsistancy
How does divorce impact a will?
All provisions to spouse auto revoked (but revived if T remarries ex-spouse)
What doctrine saves an otherwise revoked will?
Dependent Relative Revocation allows the court to disregard a revocation in equity

if but for a mistake of law/fact, T would not have revoked the will

(for example, T crosses out "$2,000 gift to Nellie" and writes in "$5,000;" court may disregard revocation rather than deprive bequest to Nellie)
May a 1st will revoked by a 2nd will be revived?
(UPC/minority) Yes, if
(i) 1st still exists
(ii) T wants revival
(iii) 2nd revoked by physical act
(KY) No
May a will devise property "as designated in a memo, that I plan to write, that will be found attached to this will?"
Yes, by Doctrine of Incorporation by Reference, if:

(i) Writing was in existence at time will was executed
(ii) Will manifested an intent to incorporate the document
(iii) will describes writing sufficient to permit ID

If tangible personal property (other than money) may be written AFTER will executed and altered at any time
(KY) limits Incorporation by reference to strict requirements, even for tangible property
Will devises an auto to Neil. 3 months after execution, T trades Hummer for Prius. What effect?
Doctrine of Independent Significance: acts having independent lifetime significance may impact the will

Neil takes the Prius
What happens if a beneficiary dies before T? What does the law do to prevent lapse?

What if it describes a class of beneficiaries, such as "children?"
Normally, gifts lapse, passing to residuary estate. Anti-lapse saves gift for issue of beneficiary.

UPC anti-lapse: applies when predeceasing beneficiary is T's grandparent or grandparent's/lineal descendent who leaves issue

Class gift rule: only surviving members take
KY anti-lapse: Broad

applies to any predeceasing beneficiary who leaves surviving issue
What are the five kinds of gifts?

In what order are the gifts sacrificed to satisfy administration expenses, creditors, etc if T's estate partially insolvent?
In order of sacrificed property:

(5) Intestate property (partial intestacy)
(4) Residuary bequest (I give rest/residue/remainder of my property to X)
(3) General Legacy (I give sum of $10k to D)
(2) Demonstrative legacy (I give sum of $5k, to be paid out of proceeds of sale of Google stock)
(1) Specific devise/bequest

Note that Demonstrative legacies are treated as specific devises up to the value of the asset stated, and general legacies as to the remainder of the value
KY

Intestate and Residuary sacrificed first, then pro rata from the rest
What happens if specific property no longer in estate at death?
Ademption

Majority: specific gift fails

UPC: devisee receives value, unless T expressed intention that gift fail
KY

devisee receives value, unless T expressed intention that gift fail
How are gifts of stock treated?
UPC

Includes add'l shares
(i) from stock split/dividend
(ii) issued due to merger/consolidation
(iii) issued in exchange for devised shares

"My shares" sold
KY; same, but

"My shares" treated as general legacy
Does a specific devisee of encumbered property take the property encumbered?
UPC/majority:

Must take encumbered, absent explicit intent otherwise
KY

May pay off lien from funds in residuary estate, unless explicit intent otherwise
How do courts handle ambiguities, mistakes, and blanks in the will?
Extrinsic evidence allowed to clear up latent ambiguity

But plain meanding cannot be disturbed by extrinsic evidence

Courts will not fill in blanks
If decedent survived by spouse, and decedent is intestate, how much does spouse take?
UPC

Spouse takes all, unless issue is not of spouse's, then first $100k and 1/2 remainder
KY

Half to spouse, half per stirpes to D's parent(s); if no parents then half to D's brothers/sisters/their issue; if none then all to surviving spouse
If D not survived by spouse, who takes intestate?
All to issue;
if none, to parent(s);
if none, to parents' issue
KY

half each to maternal/paternal g-parents; if none then to D's nearest kin; if none then to D's spouses' nearest kin; if none then escheat to KY
Do illegitimate children take intestate?

What about adopted children intestate?
child inherits from mother, from father if legitimated/adjudication of paternity (but even after death of father)

UPC

child doesn't inherit from natural family but from adopted family, unless of course step-parent adoption
What is the significance of 120 hours?
Person pre-deceased decedent unless he survived 120 hours (unless contrary intent in will)
What is the effect of a gift in the lifetime on the estate/probate?
UPC/majority

Advancement is a lifetime gift to descendent; applies intestate; no advancement unless declared such in a contemporaneous writing or acknowledgment by heir

Satsifaction; applies testate; none unless will provides or contemporaneous writing/acknowledgement
KY

presumes advancement
What is the homestead exemption/elective share?
Given over and above the estate;

right to live in home as long as spouse chooses

elective share (UPC) 3% per year of marriage until 50% after 15 years

in addition to intestate share, but deducted from testate share unless will provides otherwise
KY

First $15k of personal property set aside for surviving spouse or surviving children

Dower & curtesy (if spouse renounces will), 1/3 personal, 1/3 real, 1/3 life estate in property transferred before death w/o joinder of surviving spouse
What bars a party from sharing in the estate?
Felonious and intentional killing: killer treated as predeceasing decedent
KY

any felonious killing, adultery, or parent willfully abandons care and maintenance of child
Do pretermitted children or children thought dead take under a will?
Pretermitted child (born/adopted after will execution): takes intestate share, unless

(i) omission appears intentional
(ii) T had other children at execution and left substantially all of estate to parent of pretermitted child
OR
(iii) T provided for child outside will

(UPC)

Child thought dead deemed pretermitted
(KY)

no relief for child thought dead unless provision appears in will
Who has standing in a will contest?
Standing: anyone who would take more as heir if no will or as beneficiary under a prior will
What are indicators for testamentary capacity or lack thereof?
1) Did T understand the nature of act?
2) Did T know nature/character of his property?
3) Did T know the natural objects of his bounty?
4) Did T understand the disposition he wished to make?

At time of execution or shortly thereafter
How may contestants show undue influence on will?
1) Existence and exertion of influence
2) Effect to overpower the mind/will of testator
3) Will would not have been executed but for the influence

But presumption of undue influence arises upon showing that a principal beneficiary stood in a confidential relationship to testator procures execution of the will
What is insane delusion?
T adheres to delusion against all reason and evidence, despite being otherwise sane, and will is product of that delusion
What is the definition of a trust?
Creator (settlor)
delivers
legal title of assets
to trustee
for benefit of beneficiaries
w/ intent to create trust
for valid purpose
What is the trust's requirement of intent?
Title + intent

word "trust" unnecessary; but "wish and desire" mere precatory language
What is the trust's requirement of delivery?
Signature alone insufficient; must deliver subject matter of the trust

(unless settlor is trustee)
What is the trust's Res requirement?
Subject matter of trust must be certain and identifiable

but an empty trust is allowed if named direct beneficiary of life insurance, pension death benefits, or will
What is the Ascertainable Beneficiaries requirement?
Required for private (but not charitable) trusts

"Friends" = invalid
"Children/heirs" = valid

Trust w/ invalid beneficiaries cannot become a power of appointment

RAP applies
What are three will substitutes (trusts)?
(1) Revocable trusts are valid
(2) Pourover clauses (into wills) are valid if trsut ID'd in will and terms written
(3) Totten trust: bank account held in trust, revocable during life, accessible to creditors even after death, beneficiary gets money at depositor's death, trust auto revoked if beneficiary predeceases depositor
Can there be only one trustee? Only one beneficiary?
Yes, but sole trustee cannot also be sole beneficiary (cannot be both unless there are two of either)
Are oral trusts valid?
Distinctions? Exceptions?
(majority)

Enforceable if of personalty; Statute of Frauds (SoF) applies to realty

Possible exception if grantee-trustee had confidential relationship to grantor-settlor (equity > SoF requirements)
(KY)

Oral land trust may be proven by clear & convincing evidence (if no writing)
What are secret and semi-secret trusts?
Secret trust: devise in will w/ oral promise to hold in trust

Beneficiaries may prove intent by extrinsic evidence upon clear & convincing evidence; court may impose constructive trust to avoid unjust enrichment

Semi-secret trust: devise in will mentions trust w/ oral agreement as to beneficiaries
How are charitable trusts special? (4 ways)
1) Exception to RAP (can last forever)
2) Enforceable Charitable purpose requirement (does society as a whole benefit?)
3) Must be reasonably large number of unidentified beneficiaries
4) Cy pres may allow reformation if original purpose may not longer be accomplished
What are beneficiary's remedies if trustee fails to distribute income?
1) May file suit for order to distribute income
2) If does not comply, may sue to remove trustee
Creditors v. Trust

Who prevails?
Creditors cannot touch the corpus (owned by trustee) but may get income

If trust is a spendthrift trust, creditors generally cannot even reach income. Exceptions:
1) claims for necessities
2) alimony and child support obligations
3) State/Fed tax claims
"income in support . . . sole discretion of trustee . . ." What effect of such language?
Discretionary support trust exists

Beneficiary has very limited right to income, basically only when in need

Trustee's standard: honesty, good faith, proper motives in exercising discretion
What does the Duty of Loyalty mean to the trustee?
No self-dealing (key)
1) no selling trust assets to self
2) no borrowing trust funds
3) no selling asset from one trust to another
4) no transactions re: trust resulting in personal gain
Besides Duty of Loyalty, what is the standard for trustee management?
Prudent Investor Rule;
elements:
1) keep trust productive
2) balance risk & return
3) diversify
4) no commingling
5) limit delegation to dec'ns allowed by statute
What is a trustee's duty between multiple beneficiaries?
Duty of Impartiality: may not favor one beneficiary over another (unless terms allow)
What are the implied powers of a trustee? What power have most statutes added?
Implied Powers

1) to sell
2) improve
3) lease (but not borrow)

Statutes add power 4) to borrow

Trustees may invest in common trust funds
What is a trustee's liability? (3 types)

(Detailed)
1) Breach: beneficiary may
(i) ratify transaction and waive breach
(ii) surcharge: sue for resulting loss
(iii) trace: recover property for trust

2) Tort: 3rd parties may sue trust or trustee (latter not personally liable unless fault is personal)

3) Contract: 3rd parties proceed against trustee in rep capacity; only personally if trustee failed to reveal rep capacity or identify the trust; trust can sue trustee for indemnification, and vice versa, in latter case
How may a trustee be personally liable?
Delegation to agent situations:

(i) improper delegation
(ii) failure to take proper steps to remedy improper actions by agent
(iii) failed to use reasonable care in agent selection
What are the (4) basic principles of Trust Accounting
1) Income beneficiaries get income but remaindermen entitled to trust corpus
2) Income = interest, rents, cash dividends from stock; Principal = sale of assets, royalties for mineral removal, stock splits, and stock dividends
3) Expenditures:
ordinary = repairs, interest, taxes; charged to income
extraordinary = capital improvements, taxes on sales, other non-recurring; charged to principal
Trustee fee = divided to income/principal
4) Trustee may adjust if necessary to comply w/ duty of impartiality
Trust Termination; what requirements?
Beneficiaries may if
(i) unanimous consent
and (ii) no further purpose served
and (iii) no minor/unborn beneficiaries

Spendthrift trusts also require settlor's consent to terminate

Settlor may alone terminate if:
(i) he has expressly reserved such rights
(ii) he complies w/ all provisions of the trust re: revocation's form
Who does what in a power of appointment? (5 possible parties)
Donee creates power; donee exercises it

Objects of power: those for whom favor of power may be exercised

Appointee: those in whose favor it is exercised

Takes in default: those who will receive property if power not exercised
What are the different types of power of appointment? (4 possible kinds of powers)
(1) General powers may be used in favor of donee, donee's estate, or creditors;
but (2) Special powers may not
(3) Testamentary powers are only exercisable by will; (4) Presently exercisable powers exercisable during life
Must trusts be in writing?
Most states do not require a writing for a trust of personal property; but the SoF requires it for real property.
Is a promise to create a trust in the future enforceable? On what conditions?
If supported by valid consideration, a valid trust will arise in the future, even if the res property has not yet been acquired
What is the effect of a valid disclaimer by a beneficiary of the trust?
Same as wills, the effect is as if beneficiary has predeceased settlor and remainder interest is accelerated if appropriate.