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111 Cards in this Set
- Front
- Back
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What is the rule of lapse?
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If the beneficiary does not survive the T, beneficiary's gift lapses or fails. Thus, unless a contrary intent is expressed in the will, the gift falls into the residue, if there is one.
If it is already part of the residue, then it goes to other co-residuary devisees. Otherwise, it goes by intestacy. |
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What are the requirements for revocation of a will by a physical act?
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1. The will must be burned, destroyed, obliterated (erased), cancelled (crossed out), or torn
2. T must have the simultaneous intent to revoke. 3. the act must be done (1) by T or (2) by someone in T's presence AND at his direction |
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what is a discretionary trust?
How to identify? |
one that states, "trustee has full, sole, and absolute discretion in determining when to pay the beneficiary and how much to pay the beneficiary."
It will so state the definition. |
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When can a private express trust be created and what are the titles?
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creation at death OR during the settlor's lifetime (transfer in trust, declaration in trust).
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Can a class gift be a beneficiary of a private express trust?
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yes, but if it is too be big, it cannot be administered.
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Do the W's have to sign in the will in the presence of T?
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No.
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What is the duty to earmark?
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trustee must label trust property as such. (registering stock to "john c, as trustee of ABC trust)
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what happens if a private express trust has a purpose that is illegal at creation?
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court will excise illicit condition, if possible.
If impossible, then court can: 1. invalidate the trust at its inception OR 2. allow the trustee to keep the property for himself |
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When can a private express trust be created and what are the titles?
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creation at death OR during the settlor's lifetime (transfer in trust, declaration in trust).
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what happens if the trustee breaches the duty to earmark?
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-common law: trustee is held personally liable if there is a loss, regardless of whether trustee's failure to earmark caused the loss.
-modern approach: trustee is held personally liable only if the loss was caused by a failure to earmark. |
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What are the rules concerning creation of a private express trust by a transfer in trust? What is it?
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1. Transfer in trust: 3rd person is the trustee
-for real property, must execute and deliver deed transferring title to trustee -for a trust of personal property, there must be delivery to the trustee of the trust property at the time settlor manifests the intent to create the trust |
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what if trustee breaches duty to segregate?
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trustee can be removed and be held liable for the loss.
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For a private express trust, what is the rule for property?
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The corpus of a private express trust can be any presently existing interest in property that can be transferred.
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what is the trustee's duty to invest?
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1. State list
2. common law prudent person test: as a reasonably prudent person investing his own property, trying to maximize outcome while preserving corpus; if has greater skill -> higher standard -each indiv. invest. is scrutinized 3. uniform prduent investor act: performance is measured in context of ENTIRE portfolio |
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What happens if a private express trust has a purpose that becomes illegal after the creation?
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a resulting trust is decreed.
The resulting trustee has only one obligation: to transfer the property back to the settlor if alive. If not alive, to his estate (residuary devisee, if any, otherwise to settlor's heirs at law). |
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can a beneficiary ever transfer his interest, his right to future payments, notwithstanding a discretionary trust provision?
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Say:
"on one hand, no. beneficiary cannot voluntarily transfer his right to future payments b/c may not get any future payments. On the other hand, if in fact there was an assignment, then the assignee steps into the shoes of the beneficiary. If the trustee has notice of the assignment and does pay, then the trustee must pay the assignee or be held personally liable." |
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Can creditors ever attach the beneficiary's right to future payments, notwithstanding the the discretionary trust provisions?
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Say:
"On one hand, creditors cannot attach the beneficiary's right to future payments because there is nothing to attach. The beneficiary could not force payments and neither can creditors. On the other hand, if the trustee has NOTICE of the debt and the creditor's judgment against the beneficiary, and the trustee does decide to pay, he must pay the creditors or be held personally liable." |
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Can a trust fail for lack of trustee? when would this happen?
Who holds legal title if a trustee is not appointed? |
No, a court will not allow a private express trust to fail for lack of a trustee and will appoint one.
A trustee may refuse to serve or there may be no trustee named. The settlor's estate holds title if a trustee has not yet been appointed. |
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Who must be the beneficiary of a private express trust?
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the beneficiary of a private express trust can be any ascertainable person or group of people. "Person" includes legal person.
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can unincorporated associations be the beneficiary of a private express trust?
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common law: no.
Modern law: yes. |
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What are the rules concerning creation of a private express trust at settlor's death
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Creation at death: If the trust is created to take effect at the settlor's death, must comply with the Statute of Wills; so the settlor is really a testator.
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What is the duty of care for trustees??
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Trustee must act as a reasonably prudent person dealing with his own affairs.
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What are the trustee duties owed to beneficiaries?
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1. duty of loyalty
2. duty to invest 3. duty to earmark 4. duty to segregate 5. duty not to delegate 6. duty to account |
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What is the requirement for the manifestation of trust intent for a private express trust?
What can the words not be? |
Must be PRESENT manifestation of trust intent made by the settlor.
The words cannot be precatory, they must be mandatory. |
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What happens if a private express trust has a purpose that becomes illegal after the creation?
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a resulting trust is decreed.
The resulting trustee has only one obligation: to transfer the property back to the settlor if alive. If not alive, to his estate (residuary devisee, if any, otherwise to settlor's heirs at law). |
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Lost or destroyed wills
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there is a presumption that the T revoked it.
Can be admitted if the following can be proven: (1) valid execution (2) the cause of nonproduction (i.e. proof that the will was not revoked); and (3) the contents of the will (usually proved by the testimony of at least 2 witnesses, or by production of a carbon copy of the will) |
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When is a will admitted into probate?
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if it is in compliance with the formalities of execution with
1. OR law 2. the law in which the will was executed 3. the law of the place of T's domicile at the time of execution. |
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For support trusts, can creditors attach beneficiary's right to future payments?
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Generally no. But can if they are a preferred creditor (same as for spendthrift trust).
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What is the difference b/w an advancement and a satisfaction?
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An advancement deals with an intestacy situation (concerns heir-apparents)
A satisfaction deals with a testacy situation |
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What is presence for the purpose of W signing a will before T's?
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Sight presence: W sees T sign
Conscious presence: T signs or acknowledges w/in the W's hearing AND W's know what is being done |
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What happens if a trustee breaches a duty to invest?
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trustee must make good the loss.
if the trustee makes 2 investments that breach the duty, one makeing and the other losing, the trustee is surchard for the loss. No netting! |
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What are the rules concerning creation of a private express trust by a declaration in trust? What is it?
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2. Declaration in trust: settlor herself is the trustee.
-for real property, must be some writing to satisfy the SoF indicating that settlor also is the trustee -for personal property, b/c settlor is trustee, there is no issue of delivery, so just have to show present intent |
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What is the official name for mistake in the validity of a subsequent testamentary instrument?
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Dependent Relative Revocation
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What does Dependent Relative Revocation allow a court to do?
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DRR allows a court to disregard a revocation caused by mistake
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What is the rule for Dependent Relative Revocation (when can it be used and what is the result)?
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1. testator revokes her will, or a portion thereof
2. in the MISTAKEN belief that a SUBSTANTIALLY IDENTICAL will or codicil effectuates her intent 3. then, by operation of law, 4. the revocation of the first will is deemed conditional, dependent, and relative to the second effectuating T's intent 5. result: if the 2nd will does not effectuate T's intent, the 1st was never revoked. |
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What are the 2 situations when dependent relative revocation pops up?
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1. Will #1 is revoked by physical act.
2. Will #1 is revoked by a subsequent instrument |
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What are the elements of a valid attested will?
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1. will must be in writing
2. will must be signed by one of the following people: a. T (nicknames, "X" okay) b. a 3rd person, in T's presence and at his direction (when T incapacitated) c. by a conservator pursuant to a court order 3. signing by T, 3rd person, or conservator must be done in the presence of 2 W's, both present at the same time 4. W's understand that the instrument they sign is T's will |
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Do the W's have to sign in the will in the presence of T?
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No.
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Do the T's or W's have to sign an attested will any specific on the page?
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No.
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Can a W sign a will after T dies?
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previously split:
- in ESTATE OF EUGENE, even when a W sign after T's death, will is valid under doctrine of "substantial compliance" - in CROOK V. CONTRERAS, a post-mortem attestation by a W is invalid. |
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What is presence for the purpose of W signing a will before T's?
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Sight presence: W sees T sign
Conscious presence: T signs or acknowledges w/in the W's hearing AND W's know what is being done |
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When is a witness to a will an "interested witness?"
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When a W is a beneficiary under the will.
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What is the consequence of finding a W of a will interested?
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1. will is not invalid.
2. unless there are 2 other disinterested W's, a presumption arises that the W/beneficiary secured the gift by wrongdoing 3. if W/Beneficiary cannot rebut presumption, he takes no more than would under intestacy 4. EXCEPTION: presumption of wrongdoing is inapplicable if W/beneficiary takes only in a fiduciary capacity (as a trustee) |
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What are the elements of a holographic will?
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1. material provisions (gifts made and benecificiaries named) are in T's own handwriting
2. T sign the will (same signing rules as attested wills) |
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What are the requirements for revocation of a will by a physical act?
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1. The will must be burned, destroyed, obliterated (erased), cancelled (crossed out), or torn
2. T must have the simultaneous intent to revoke. 3. the act must be done (1) by T or (2) by someone in T's presence AND at his direction |
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What are the ways in which T can revoke a will?
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Express revocation: will #2 states "I hearby revoke all previous wills"
Implied revocation: will #2 revokes will #1 if will #2 TOTALLY DISPENSES of T's estate |
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Where T executes will #1 and then will #2, revoking will #1, what can T do in order to revive will #1?
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1. revoke will #2 by a physical act, while manifesting an intent to revive will #1.
- oral statements are admissible. - the revival must be explicit 2. revoke will #2 by subsequent instrument, where the subsequent instrument appears from the terms that T wanted will #1 to be revived. |
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What is an "omitted child" in wills?
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a child born or adopted after the execution of all testamentary instruments and that child is not provided for in any testamentary instrument.
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What are "testamentary instruments" for the purposes of omitted child and other?
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1. a will
2. a codicil 3. a revocable intervivos trust created by decedent during decedent's lifetime |
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What happens when there's an omitted child?
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1. an omitted child receives an intestate share of assets decedent owned at death PLUS assets held in any intervivos trust
2. all other gifts are abated or reduced (revocation by operation of law) EXCEPTION 1: T's failure to provide for child was intentional and intent appears from the instrument EXCEPTION 2: at time of execution of testamentary instrument (TI), T had 1+ children and devised substantially all of his estate to parent of omitted child EXCEPTION 3: T provided for child by transfer outide of TI w/the intent that the transfer be in lieu of any provision |
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When does ademption by extinction occur?
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common law: when a specific gift fails b/c T did not own the property at the time of T's death
Modern: Intent determines if gift is general or specific, and a 2nd time in determing whether T intended gift to fail. |
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What is per capita with representation?
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make our distribution at the first level someone is LIVING and
(1) give shares to all living people at that generation and (2) to deceased members of that generation who leave issue |
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What is the distribution method if a will or trust calls for "per stirpes" or "by right of representation" or by "representation"? What is it called?
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"Strict per stirpes"
make distribution at first generation of first level, EVEN if everyone is dead, so long as they left issue |
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What is the rule of lapse?
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If the beneficiary does not survive the T, beneficiary's gift lapses or fails. Thus, unless a contrary intent is expressed in the will, the gift falls into the residue, if there is one.
If it is already part of the residue, then it goes to other co-residuary devisees. Otherwise, it goes by intestacy. |
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What do anti-lapse statutes do?
What distribution scheme is followed for applicable devisees? |
Most states have anti-lapse rule that allows surviving residuary beneficiaries to divide the share in proportion to their interests in teh residue.
- deceased beneficiary's descendants take. |
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Does anti-lapse statute apply to class gifts? to revocable trusts?
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Yes!
Yes! |
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What issues to discuss with private express trusts?
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definition
property of the trust, or corpus the beneficiary the trustee manifestation of intent creation legal purpose |
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What is the definition of a private express trust?
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(1) a fiduciary relationship with respect to PROPERTY
(2) whereby one person, the TRUSTEE, holds legal title to the property (3) for the benefit of another, the BENEFICIARY, and (4) which arises out of a MANIFESTATION OF INTENT (5) to CREATE it for (6) a LEGAL PURPOSE |
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For a private express trust, what is the rule for property?
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The corpus of a private express trust can be any presently existing interest in property that can be transferred.
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Who must be the beneficiary of a private express trust?
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the beneficiary of a private express trust can be any ascertainable person or group of people. "Person" includes legal person.
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Can a class gift be a beneficiary of a private express trust?
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yes, but if it is too be big, it cannot be administered.
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Can a trust fail for lack of trustee? when would this happen?
Who holds legal title if a trustee is not appointed? |
No, a court will not allow a private express trust to fail for lack of a trustee and will appoint one.
A trustee may refuse to serve or there may be no trustee named. The settlor's estate holds title if a trustee has not yet been appointed. |
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What is the requirement for the manifestation of trust intent for a private express trust?
What can the words not be? |
Must be PRESENT manifestation of trust intent made by the settlor.
The words cannot be precatory, they must be mandatory. |
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What are the rules concerning creation of a private express trust at settlor's death
|
Creation at death: If the trust is created to take effect at the settlor's death, must comply with the Statute of Wills; so the settlor is really a testator.
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When can a private express trust be created and what are the titles?
|
creation at death OR during the settlor's lifetime (transfer in trust, declaration in trust).
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What are the rules concerning creation of a private express trust by a transfer in trust? What is it?
|
1. Transfer in trust: 3rd person is the trustee
-for real property, must execute and deliver deed transferring title to trustee -for a trust of personal property, there must be delivery to the trustee of the trust property at the time settlor manifests the intent to create the trust |
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What are the rules concerning creation of a private express trust by a declaration in trust? What is it?
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2. Declaration in trust: settlor herself is the trustee.
-for real property, must be some writing to satisfy the SoF indicating that settlor also is the trustee -for personal property, b/c settlor is trustee, there is no issue of delivery, so just have to show present intent |
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what happens if a private express trust has a purpose that is illegal at creation?
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court will excise illicit condition, if possible.
If impossible, then court can: 1. invalidate the trust at its inception OR 2. allow the trustee to keep the property for himself |
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What happens if a private express trust has a purpose that becomes illegal after the creation?
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a resulting trust is decreed.
The resulting trustee has only one obligation: to transfer the property back to the settlor if alive. If not alive, to his estate (residuary devisee, if any, otherwise to settlor's heirs at law). |
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what is a discretionary trust?
How to identify? |
one that states, "trustee has full, sole, and absolute discretion in determining when to pay the beneficiary and how much to pay the beneficiary."
It will so state the definition. |
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can a beneficiary ever transfer his interest, his right to future payments, notwithstanding a discretionary trust provision?
|
Say:
"on one hand, no. beneficiary cannot voluntarily transfer his right to future payments b/c may not get any future payments. On the other hand, if in fact there was an assignment, then the assignee steps into the shoes of the beneficiary. If the trustee has notice of the assignment and does pay, then the trustee must pay the assignee or be held personally liable." |
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For a private express trust, what is the rule for property?
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The corpus of a private express trust can be any presently existing interest in property that can be transferred.
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Who must be the beneficiary of a private express trust?
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the beneficiary of a private express trust can be any ascertainable person or group of people. "Person" includes legal person.
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Can corporations be the beneficiary of a private express trust?
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yes
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can unincorporated associations be the beneficiary of a private express trust?
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common law: no.
Modern law: yes. |
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What are the rules concerning creation of a private express trust at settlor's death
|
Creation at death: If the trust is created to take effect at the settlor's death, must comply with the Statute of Wills; so the settlor is really a testator.
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When can a private express trust be created and what are the titles?
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creation at death OR during the settlor's lifetime (transfer in trust, declaration in trust).
|
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What are the rules concerning creation of a private express trust by a transfer in trust? What is it?
|
1. Transfer in trust: 3rd person is the trustee
-for real property, must execute and deliver deed transferring title to trustee -for a trust of personal property, there must be delivery to the trustee of the trust property at the time settlor manifests the intent to create the trust |
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What are the rules concerning creation of a private express trust by a declaration in trust? What is it?
|
2. Declaration in trust: settlor herself is the trustee.
-for real property, must be some writing to satisfy the SoF indicating that settlor also is the trustee -for personal property, b/c settlor is trustee, there is no issue of delivery, so just have to show present intent |
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what happens if a private express trust has a purpose that is illegal at creation?
|
court will excise illicit condition, if possible.
If impossible, then court can: 1. invalidate the trust at its inception OR 2. allow the trustee to keep the property for himself |
|
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What happens if a private express trust has a purpose that becomes illegal after the creation?
|
a resulting trust is decreed.
The resulting trustee has only one obligation: to transfer the property back to the settlor if alive. If not alive, to his estate (residuary devisee, if any, otherwise to settlor's heirs at law). |
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|
what is a discretionary trust?
How to identify? |
one that states, "trustee has full, sole, and absolute discretion in determining when to pay the beneficiary and how much to pay the beneficiary."
It will so state the definition. |
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|
can a beneficiary ever transfer his interest, his right to future payments, notwithstanding a discretionary trust provision?
|
Say:
"on one hand, no. beneficiary cannot voluntarily transfer his right to future payments b/c may not get any future payments. On the other hand, if in fact there was an assignment, then the assignee steps into the shoes of the beneficiary. If the trustee has notice of the assignment and does pay, then the trustee must pay the assignee or be held personally liable." |
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For a private express trust, what is the rule for property?
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The corpus of a private express trust can be any presently existing interest in property that can be transferred.
|
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Who must be the beneficiary of a private express trust?
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the beneficiary of a private express trust can be any ascertainable person or group of people. "Person" includes legal person.
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Can corporations be the beneficiary of a private express trust?
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yes
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can unincorporated associations be the beneficiary of a private express trust?
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common law: no.
Modern law: yes. |
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What are the rules concerning creation of a private express trust at settlor's death
|
Creation at death: If the trust is created to take effect at the settlor's death, must comply with the Statute of Wills; so the settlor is really a testator.
|
|
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Can a trust fail for lack of trustee? when would this happen?
Who holds legal title if a trustee is not appointed? |
No, a court will not allow a private express trust to fail for lack of a trustee and will appoint one.
A trustee may refuse to serve or there may be no trustee named. The settlor's estate holds title if a trustee has not yet been appointed. |
|
|
What is the requirement for the manifestation of trust intent for a private express trust?
What can the words not be? |
Must be PRESENT manifestation of trust intent made by the settlor.
The words cannot be precatory, they must be mandatory. |
|
|
When can a private express trust be created and what are the titles?
|
creation at death OR during the settlor's lifetime (transfer in trust, declaration in trust).
|
|
|
What are the rules concerning creation of a private express trust by a transfer in trust? What is it?
|
1. Transfer in trust: 3rd person is the trustee
-for real property, must execute and deliver deed transferring title to trustee -for a trust of personal property, there must be delivery to the trustee of the trust property at the time settlor manifests the intent to create the trust |
|
|
What are the rules concerning creation of a private express trust by a declaration in trust? What is it?
|
2. Declaration in trust: settlor herself is the trustee.
-for real property, must be some writing to satisfy the SoF indicating that settlor also is the trustee -for personal property, b/c settlor is trustee, there is no issue of delivery, so just have to show present intent |
|
|
what happens if a private express trust has a purpose that is illegal at creation?
|
court will excise illicit condition, if possible.
If impossible, then court can: 1. invalidate the trust at its inception OR 2. allow the trustee to keep the property for himself |
|
|
What happens if a private express trust has a purpose that becomes illegal after the creation?
|
a resulting trust is decreed.
The resulting trustee has only one obligation: to transfer the property back to the settlor if alive. If not alive, to his estate (residuary devisee, if any, otherwise to settlor's heirs at law). |
|
|
what is a discretionary trust?
How to identify? |
one that states, "trustee has full, sole, and absolute discretion in determining when to pay the beneficiary and how much to pay the beneficiary."
It will so state the definition. |
|
|
can a beneficiary ever transfer his interest, his right to future payments, notwithstanding a discretionary trust provision?
|
Say:
"on one hand, no. beneficiary cannot voluntarily transfer his right to future payments b/c may not get any future payments. On the other hand, if in fact there was an assignment, then the assignee steps into the shoes of the beneficiary. If the trustee has notice of the assignment and does pay, then the trustee must pay the assignee or be held personally liable." |
|
|
Can creditors ever attach the beneficiary's right to future payments, notwithstanding the the discretionary the discretionary trust provisions?
|
Say:
"On one hand, creditors cannot attach the beneficiary's right to future payments because there is nothing to attach. The beneficiary could not force payments and neither can creditors. On the other hand, if the trustee has NOTICE of the debt and the creditor's judgment against the beneficiary, and the trustee does decide to pay, he must pay the creditors or be helf personally liable." |
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what is a support trust?
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the trustee is required to use only so much of the income or principle as is necessary for the beneficiary's health, support, maintenance, or education.
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For support trusts, can creditors attach beneficiary's right to future payments?
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Generally no. But can if they are a preferred creditor (same as for spendthrift trust).
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Who are preferred creditors?
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-gov.'t creditors
-those who provide necessities of life to the beneficiary -child for child support -spouse for spousal support -an ex-spouse for alimony |
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What are the trustee duties owed to beneficiaries?
|
1. duty of loyalty
2. duty to invest 3. duty to earmark 4. duty to segregate 5. duty not to delegate 6. duty to account 7. duty of care |
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What is trustee's the duty of loyalty?
What is the corallary? |
the trustee must administer the trust for the benefit of the beneficiaries with no other consideration in mind.
corollary: no self-dealing |
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what is the trustee's duty to invest?
|
1. State list
2. common law prudent person test: as a reasonably prudent person investing his own property, trying to maximize outcome while preserving corpus; if has greater skill -> higher standard -each indiv. invest. is scrutinized 3. uniform prduent investor act: performance is measured in context of ENTIRE portfolio |
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|
What happens if a trustee breaches a duty to invest?
|
trustee must make good the loss.
if the trustee makes 2 investments that breach the duty, one makeing and the other losing, the trustee is surchard for the loss. No netting! |
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What is the duty to earmark?
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trustee must label trust property as such. (registering stock to "john c, as trustee of ABC trust)
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what happens if the trustee breaches the duty to earmark?
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-common law: trustee is held personally liable if there is a loss, regardless of whether trustee's failure to earmark caused the loss.
-modern approach: trustee is held personally liable only if the loss was caused by a failure to earmark. |
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what if trustee breaches duty to segregate?
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trustee can be removed and be held liable for the loss.
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What must trustee do under duty not to delegate?
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Can rely on professional advisors, but can't delegate.
common law: cannot delegate the duty to invest in a prof. money mgr. modern: can delegate this duty |
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what must trustee do under duty to account?
What if breached? |
account?
What if breached? trustee must, on a regular basis, give the beneficiaries a statement of the income and expenses of the trust. If breached, benef. can file an action for an accounting. |
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What is the duty of care for trustees??
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Trustee must act as a reasonably prudent person dealing with his own affairs.
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