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108 Cards in this Set
- Front
- Back
- 3rd side (hint)
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SELF PROVED WILL
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Self-proved will = self-proving affidavit reciting facts of due execution acknowledged by testator and sworn to by witnesses before a NOTARY PUBLIC.
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PROOF OF WILLS IN PROBATE
NEED FOR ATTESTING W’S |
If will is SELF-PROVED – No need to call attesting W’s. Sworn statement is accepted as if it was ORE TENUS (oral testimony.
IF WILL IS NOT SELF-PROVED- All you need is the testimony of ONE DISINTERESTED W (don't need 2) |
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CHALLENGE TO A WILL BY INTERESTED PARTIES
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TWO WAYS:
(1) MAY APPEAL CIRCUIT COURT WITHIN 6 MONTHS (2) FILE A BILL IN EQUITY TO ESTABLISH OR IMPEACH THE WILL WITHIN ONE YEAR |
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PROOF OF WILLS IN PROBATE
HOLOGRAPHIC WILL |
HOLOGRAPHIC WILL IS PROVED BY TESTIMONY OF TWO DISINTERESTED PERSONS THAT THE WILL IS:
WHOLLY IN THE TESTATOR'S HANDWRITING |
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PROOF OF WILLS IN PROBATE
OUT OF STATE T WHERE PROPERTY IN VA |
Must file ANCILLARY PROBATE = certified copies of:
(1) the will (2) the order admitting it to probate Filed in the county where the land is. |
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VA ANTI-LAPSE STATUTE
(Ben. dies during T's lifetime) APPLICATION AND RULES |
APPLICATION:
**Applies only to predeceasing beneficiaries that are RELATIVES of the decedent AND SURVIVES the decedent by at least 120 hours (unless something else stated in will) RULES: #1 ONLY PREDECEASED BEN'S DESCENDANTS TAKE: STATUTE (Not the predeceased ben's will) DETERMINES WHO WILL TAKE (thus even if predeceased ben leaves everything to wife (but has a son) son will take) #2 - IF PREDECEASED BEN HAS NO DESCENDANTS - Lapsed gift FALLS INTO T'S RESIDUARY ESTATE |
Where a beneficiary predeceases the testator the gift is said to "lapse" unless saved by the anti-lapse statute
So remember: Only Relatives, 120 Hour rule Applies, Only goes to descendants despite pre-deceased's will |
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VA ANTI-LAPSE STATUTE
THE SURVIVING RESIDUARY BENEFICIARIES RULE |
If T leaves residuary of his estate to two or more people WHO ARE NOT RELATED to T, and one or more of them pre-decease T, THE REMAINING ONE GET THE RESIDUARY ESTATE IN PROPORTION TO THEIR INTERESTS IN THE RESIDUE.
BUT VA ANTI-LAPSE STATUTE WILL APPLY TO GIVE GIFT TO THE DESCENDANTS OF A PREDECEASED RESIDUARY BENEFICIARY IF IT WAS A RELATIVE |
Example: T dies leaving residuary of his estate to X (neighbor), Y (lawyer) and S (Son). S dies leaving S2 (T's grandson). Anti-lapse statute WOULD APPLY AS TO S's share, allowing S2 to take. BUT if X dies instead of S, S and Y would both split X's share, X's descendants would get nothing.
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CLASS GIFTS RULE
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In a gift by will to a class of persons (brothers, children, etc) if a member of the class predeceases the testator, the CLASS MEMBERS WHO SURVIVE THE TESTATOR TAKE (absent contrary provision in will)
NOTE HOWEVER - THAT ANTI-LAPSE STATUTE APPLIES IF RELATIONSHIP IS THERE!!! |
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RULE OF ADMINISTRATIVE CONVENIENCE - WHEN CLASS DETERMINED
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Rule of administrative convenience says that the CLASS CLOSES WHENEVER ONE MEMBER OF THE CLASS IS ENTITLED TO DISTRIBUTION
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NOTE - rule that only surviving class members take applies only to situations in which class members predecease the TESTATOR. If they have a remainder interest in someone other than the testator, they still take.
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LIMITATIONS ON THE RULE ADMINISTRATIVE CONVENIENCE
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GESTATION PRINCIPLE:
IF child in womb when T dies/class closes - Child takes. However, this was limited again over concer re: assisted conception, so child must be born WITHIN 10 MONTHS AFTER PARENT'S DEATH to take. |
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DIFFERENCE BETWEEN "CHILDREN" AND "ISSUE" OR "DESCENDANTS"
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Issue/Descendants would INCLUDE GRANDCHILDREN.
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CHANGES IN FAMILY AFTER WILL IS EXECUTED:
TESTATOR MARRIES AFTER WILL IS EXECUTED (the pretermitted spouse rule) |
IF T marries after the will is executed - PRETERMITTED SPOUSE RULE holds that the spouse get INTESTATE SHARE
UNLESS It appears FROM THE WILL (no extrinsic evidence) that the omission was intentional. Note - if it appears from the will that omission was intentional, remember that spouse can still get the other protections (Residence, Exempt pers. prop, family allowance, homestead) |
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CHANGES IN FAMILY AFTER WILL IS EXECUTED
TESTATOR IS DIVORCED AFTER WILL IS EXECUTED |
GENERAL RULE:
DIVORCE or ANNULMENT CUTS OFF the former spouse - revokes all GIFTS and FIDUCIARY APPOINTMENTS in favor of that spouse. Will is read is if spouse predeceased the testator. Divorce rule also applies to: Life insurance policies, individual retirement accounts, POD bank accounts etc. Divorce rule DOES NOT apply to ERISA pension plans. |
Remember, anti-lapse statute DOES NOT APPLY TO SPOUSES - THEY ARE NOT RELATIVES!
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EFFECT OF DIVORCE RULE ON TENANCY BY ENTIRETY
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TRANSFORMED INTO TENANCY IN COMMON, EACH SPOUSE (DEAD ONE AND LIVING ONE) GET 1/2 - SEVERS RIGHT OF SURVIVORSHIP
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CHANGES IN FAMILY AFTER WILL IS EXECUTED
TESTATOR HAS CHILD AFTER WILL IS EXECUTED (pretermitted child) Application, Rule, Exceptions |
Application -
VA pretermitted heir statute applies ONLY to children born or adopted AFTER THE WILL'S EXECUTION. Rule: Child born after will's execution is considered a pretermitted child and read into the will. LIMITATION: If T had OTHER CHILDREN WHEN THE WILL WAS EXECUTED, pretermitted child takes: THE LESSOR OF: (1) intestate share, or (ii) value of bequests to other children. (unless will expressly contemplates after-born kids. (If T had TWO KIDS before will and will provides gifts for both kids, pretermitted (3rd) child would have option of taking the LARGER of those two gifts if less than intestate share. |
Ex. of pretermitted heir problem
G in 1990 will leaves everything to husband H if he survives her, then to sister. 1992 G and H adopt C. 1994 G and H divorce. G dies in 1996. C is pretermitted child - gets entire estate. |
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REVOCATION OF WILLS
What Constitutes a VALID REVOCATION? |
THREE WAYS TO REVOKE A WILL:
(1) By a subsequent TESTAMENTARY INSTRUMENT EXECUTED W/ PROPER FORMALITIES (including a holographic instrument), OR (2) BY PHYSICAL ACT THAT "TOUCHES THE WRITING" (e.g., tearing, burning, writing X over signature, etc) (3) BY PHYSICAL ACT OF ANOTHER PERSON (proxy) IF: (1) undertaken at testator's request AND (2) done in testator's presence (so calling and asking him to do it won't work). |
Remember that because a holographic will can revoke a valid typewritten will, T who writes on bottom of "I've changed my mind, this will is void" in his own handwriting and SIGNS it affects a valid revocation.
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PRESUMPTIONS REGARDING REVOCATION OF WILLS
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(1) Where will last seen in T's possession or control and not found after death - PRESUMPTION THAT T DESTROYED WILL BY PHYSICAL ACT
(2) Where a will last seen in T's possession or control is found mutilated after T's death - PRESUMPTION IS THAT T DID THE MUTILATING |
NOTE -
(1) NEITHER PRESUMPTION APPLIES IF T HAD NO ACCESS TO THE WILL OR WILL WAS LAST SEEN IN HANDS OF SOMEONE ADVERSELY AFFECTED BY CONTENTS. (2) EVIDENCE IS ADMISSIBLE TO REBUT THE PRESUMPTION OF REVOCATION (ie, T's desk was 'tidied up" by someone who was adversely affected by will) |
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REVOCATION OF A WILL
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Will is an ambulatory document, it has no legal effect during a testator's life, and is effective only at death - however - a later will, validly executed, can revoke an earlier will of the testator.
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REVIVAL OF REVOKED WILLS:
DEPENDENT RELATIVE REVOCATION |
DRR allows a revocation to be disregarded when premised/conditioned/dependent upon A MISTAKE OF LAW OR FACT AS TO THE VALIDITY OF ANOTHER DISPOSITION.
SEE EXAMPLE ON SIDE 3 NOTE - however, that the two+ wills have to be dependent...the point is to accord as closely as possible to testator's intent - so if the only will that could be revived gave to someone entirely different then the will that T wanted to revive - would not apply DRR |
T executes Will 1, leaving estate to S. T then executes will 2, w/ revocation clause, devising estate in trust to S for life, then to J. But did not destroy early will. T changes mind again, destroyed 2nd will with intention of revoking it and reviving the first will.
DRR states that the 2nd WILL will be revived (despite the fact that it was destroyed) - BECAUSE THERE IS EVIDENCE THAT THE TESTATOR DID NOT WANT TO DIE INTESTATE, YET REVIVAL OF THE FIRST WILL IS IMPOSSIBLE UNDER VA LAW - THUS THE 2ND WILL IS THE BEST OPTION |
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PROOF OF LOST WILLS TEST
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(NOTE - APPLIES IN DRR SITUATIONS WHERE T HAS DESTROYED A WILL SEEKING TO REVIVE AN EARLIER WILL)
(1) Will was duly executed. (2) Cause of will's non-production must be proved (must overcome presumption of revocation) (3) contents of will must be proved BY CLEAR AND CONVINCING ev. |
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MORE THAN ONE "LAST WILL"
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(This happens where T does not include a revocation clause in later will)
RULES: (1) Try to read two docs together (2) 2nd Will (to extend possible) is treated as CODICIL to the first will, and revokes the first will only to the extent of inconsistent provisions. (3) If 2nd will is wholly inconsistent w/ 1st will, first will is REVOKED BY IMPLICATION |
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CHANGES ON THE FACE OF THE WILL AFTER IT IS SIGNED AND WITNESSED
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If T crosses out one line in will (and initials/dates next to it) it is a VALID PARTIAL REVOCATION BY PHYSICAL ACT
If T simply writes in a different $ or NAME, with nothing more, NOT VALID - words were not there when will was validly executed. HOWEVER, if T adds all words to the BOTTOM OF THE WILL AND SIGNS IT - this is a VALID HOLOGRAPHIC CODICIL Remember interplay of DRR - If T crosses out and amount and writes in another one (same ben) BEN GETS FIRST AMOUNT THROUGH DRR. DRR would not apply if T crossed out a name and added a different one. |
NOTE DIFFERENCE IN HOLOGRAPHIC WILLS - HERE T CAN MAKE ALL SORTS OF CHANGES THAT WILL BE VALID PROVIDED THE EVIDENTIARY TEST FOR HOLO WILLS IS MET.
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SPECIFIC BEQUEST
Definition |
A one of a kind gift to a particular ben.
E.g., "I devise Blackacre to my son Dipshit II" |
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DEMONSTRATIVE LEGACY
Definition |
A GENERAL AMOUNT from a SPECIFIC SOURCE.
E.g., "$25K from sale of my Google stock to Jeff" |
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GENERAL LEGACY
Definition |
$10K to my nephew J
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RESIDUARY GIFT
Definition |
"I give the rest, residue, and remainder of my estate to Jill"
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ABATEMENT OF LEGACIES TO PAY DEBTS AND EXPENSES
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(Arises when claims against the estate are so much that when they are paid, there isn't enough to make all the gifts in the will)
GENERAL RULES: (1) FIRST PERSONAL PROPERTY, THEN REAL PROPERTY (2) LEAST SPECIFIC GIFTS TO MORE SPECIFIC GIFTS (less intent to more intent) Specific Rules: Absent contrary provision, debts/claims are paid out of personal property first in the order of (1) intestate property, (2) residuary assets, (3) general and demonstrative legacies, (4) out of specific bequests THEN if personal estate exhausted, look to real property in the same order. |
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EQUITABLE APPORTIONMENT OF ESTATE TAXES
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RULE: Absent contrary provision, estate taxes are equitably apportioned among all estate beneficiaries (pro rata) EXCEPT for gifts that qualify for (1) the marital deduction, and (2) the charitable deduction.
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ADEMPTION BY EXTINCTION
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ONLY APPLIES TO SPECIFIC GIFTS
When a will has a specific bequest (e.g., Blackacre to X) and the property is no longer owned by T at the time of his death, it is ADEEMED BY EXTINCTION - and beneficiary gets NOTHING. NOTE - VA does NOT apply the doctrine of equitable conversion to ademption by extinction cases. |
HOWEVER - NOTE THE DIFFERENCE IN THIS HYPO
T devises blackacre to B, T then enters into a K for sale of blackacre under a 5 year installment note, DEED TO BE DELIVERED WHEN K IS FULLY PERFORMED. T dies, balance on note is $65K. B TAKES WHATEVER IS DUE ON THE NOTE - (UNLESS IT IS SHOWN THAT T INTENDED TO DEFEAT THE DEVISE W/ THE SALE) |
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STATUTORY EXCEPTIONS TO ADEMPTION DOCTRINE
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(1) Specific beneficiary takes (i) any remaining specifically devised property; (ii) any CONDEMNATION AWARD for the taking of property to the extent paid AFTER testator's death; and any fire or insurance proceeds to the extent paid AFTER T's death.
(2) If will executed BEFORE T ADJUDICATED INCOMPETENT and gaurdian/conservor, and guardian sells property - specific devisee has a right to a GENERAL LEGACY EQUAL TO NET SALE PRICE/INSURANCE PROCEEDS #3 - Bequest of Securities - Beneficiary takes any additional securities of the same entity created by that entities action (stock split, etc) and any securities resulting from a takeover/merger etc. |
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** EXONERATION OF LIENS: SPECIFIC GIFT OF ENCUMBERED PROPERTY
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RULE: LIENS ON SPECIFICALLY DEVISED PROPERTY ARE NO LONGER EXONERATED FROM THE RESIDUARY ESTATE
If T devises specific gift (blackacre) to B, and that is subject to a lien, B takes the property subject to the lien. |
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REFERENCES TO ACTS AND EVENTS OUTSIDE THE WILL:
INCORPORATION BY REFERENCE |
Extrinsic doc not present when will was signed can be INCORPORATED BY REFERENCE into the will if:
(1) Writing was IN EXISTENCE when the will was executed. (2) Will shows AN INTENT TO INCORP. BY WRITING (3) Will describes writing with REASONABLE CERTAINTY, so that there can be no mistake as to the document referred to. |
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STATUTORY EXCEPTIONS TO THE INCORPORATION BY REFERENCE DOCTRINE
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(1) LEGAL LIST
A TYPEWRITTEN list of TANGIBLE PERSONAL PROPERTY ONLY (no money) may be incorporated into a will or trust if: (1) referred to in will/trust, and (2) SIGNED by T. (2) DIRECTIONS FOR DISCRETIONARY POWER Where will/trust gives fiduciary/agent power to make discretionary choices, memo detailing how that power should be interpreted can be incorporated by reference even after will is made, but: MUST BE SIGNED & NOTARIZED. |
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ACTS OF INDEPENDENT SIGNIFICANCE DOCTRINE
(aka doctrine of non-testamentary acts) |
Ex. I leave the car I own when I die to B, or, I leave the paintings in my living room at my death to C.
Car could change from a Kia to Bentley - B still takes. (Exception - title documents (eg. deeds, stock certificates, bank passbooks)) |
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MISTAKES/AMBIGUITIES IN THE WILL:
THE PLAIN MEANING RULE |
Absent suspicious circumstances, CONCLUSIVE PRESUMPTION is that word with plain meaning mean what they are supposed to.
EFFECT- TYPOS and etc BECOME PART OF THE WILL |
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MISTAKES/AMBIGUITIES IN THE WILL:
LATENT AMBIGUITIES |
Latent ambiguities are not visible on the face of the will, they are misdescriptions.
[ex. I leave $15k to my cousin Jeff Baker - when T has two cousins, on named Jeff Craig and the other Ryan Baker] EXTRINSIC EVIDENCE IS ADMISSIBLE TO CURE AMBIGUITY Ext. Evidence Admissible here includes: (1) Facts and circs evidence (ev. about T, his family, status of relationships, etc) (2) T's declarations of intent |
IF EXTRINSIC EVIDENCE CANNOT CURE THE AMBIGUITY --> THE GIFT FAILS
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MISTAKES/AMBIGUITIES IN THE WILL:
PATENT AMBIGUITIES |
Patent ambiguities are visible on the face of the document (ex. "I give X Five Dollars ($5,000)").
Extrinsic Evidence admissible includes: (1) Facts and circs (2) T's declarations of intent (3) ANYTHING T SAID TO HIS ATTORNEY |
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ATTORNEY LIABILITY FOR NEGLIGENCE IN RE: WILLS
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IN VA - Lawyer NOT LIABLE to beneficiaries for negligence in anything regarding a will. NO PRIVITY OF CONTRACT - lawyers duty is only to the testator.
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BEQUESTS OF PERSONAL PROPERTY & THE DOCTRINE OF EJUSDEM GENERIS
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General Rule: Personal Property is a technical term and is presumed to have been used in its technical sense.
Bequests of "all my personal property" is read to include intangible property (stocks) and tangible property. EXCEPTION - DOCTRINE OF EJUSDEM GENERIS - if list of specific items is followed by words of general import, words are construed to only include items of the same import as the items listed. |
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POWER OF APPOINTMENT: VOCAB and RULES
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Donor = One who gives the power of appointment to someone else (or themselves)
Testamentary Power of Appointment - Power of appointment that can ONLY BE EXERCISED AT DEATH (ex - T gives prop in trust to D, principal going to those D appoints in will) General Testamentary Power of Appointment - Donees of general testamentary power of appointments can give the power of appointment to ANYONE (including themselves or their estate. Special Testamentary Power of Appointment: Donee is LIMITED to a certain class or person to whom she can appoint (generally descendants but not herself). |
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CONTRACTS RELATING TO WILLS
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CONTRACTUAL WILLS:
Joint wills SHOULD NOT be construed as contractual wills UNLESS there is CLEAR AND CONVINCING PROOF of a Contract or agreement: (i) IN THE WILL, (ii) FROM EXTRINSIC EVIDENCE or (iii) by CLEAR IMPLICATION from the surrounding circumstances. |
IF will is held to be contractual - TWO STEP ANALYSIS
STEP 1 - Apply the law of wills Competent testator can always write a new will, even if doing so breaches a K. Admit the new will to probate and then: STEP TWO: Since the new will amounts to a breach of the contractual will, impose a CONSTRUCTIVE TRUST in favor of beneficiary of contractual will. |
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NON PROBATE ASSETS (AKA WILL SUBSTITUTES)
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Rule: WILL SUBSTITUTES ALWAYS TRUMP THE T'S LAST W&T
Examples of Will Substitutes: (1) Property passing by right of survivorship (tenanancy by entirety, joint bank accounts, etc) (2) TOD and POD transfers, including those passing by contract (such as life insurance, retirement benefits paid to beneficiary other than T's estate, etc) (3) Property held in trust, including revocable trust, where trust terms govern. (4) Property of which the T held power of appointment. |
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ELECTIVE SHARE STATUTE -
OMITTED SPOUSE (PRETERMITTED SPOUSE) |
Spouse who marries T AFTER EXECUTION OF WILL takes INTESTATE SHARE: 1/3rd if T was survived by descendants from a prior marriage; ALL if T was survived by descendants of the surviving spouse.
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STATUTORY RIGHTS (REFh)
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Residence - ONLY if S files for elective share (or d died intestate leaving descendants from fmr marriage) - Right to occupy residence rent free until S's rights determined;
Exempt person property (up to $15K) Family Allowance: Up to $18K |
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ELECTIVE SHARE STATUTE (generally - more detail later)
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Protects S against disinheritance, assures that S takes minimum share of D's estate.
ALWAYS GOING TO BE LESS THAN INTESTATE SHARE UNLESS D's ESTATE CONTAINS LARGE NON-PROBATE(WILL SUBST.) TRANSFERS |
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RIGHT TO CONTEST
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Surviving Spouse may ALWAYS contest the will.
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AMOUNT OF ELECTIVE SHARE
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AVAILABLE ONLY IF D WAS A VA DOMICILIARY
If D survived by Descendants (which marriage doesn't matter) - 1/3RD OF THE AUGMENTED ESTATE If D not survived by descendants - 1/2 OF AUGMENTED ESTATE PLUS INTEREST (6% from date of death until date elective share is satisfied. |
NOTE - LESS THAN INTESTATE SHARE (unless D's estate had large non-probate transfers)
Intestate Share - 1/3rd if D survived by descendants not of S. ALL if no descendants or only descendants of S&D. |
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PROCEDURE FOR TAKING ELECTIVE SHARE
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(1) S must file NOTICE OF ELECTION WITHIN 6 MONTHS (i) after will is admitted to PROBATE, or (ii) if no will, after ADMINISTRATOR IS APPOINTED
(2) WHO MAKES ELECTION - If spouse incapacitated, COURT may make election on her behalf, but right of election DIES W/ SPOUSE if she dies before its made. 3. Contribution if Election Made - If election is made ALL BENs contribute PRO RATA. BUT - interests passed DIRECTLY TO SPOUSE ARE FIRST APPLIED So if H devised blackacre worth 30K to spouse, 30K is subtracted from elective share owed to her. 4. Spouse is DISQUALIFIED from elective share if she willfully deserted or abandoned D and it continued until D's death. |
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THE AUGMENTED ESTATE & NONPROBATE TRANSFERS
(generally - more specifics later) |
Included in the Augmented Estate is:
(1) the probate estate (2) Some transfers to the spouse (cuts against spouse) (3) Transfers to 3rd Parties ("STRINGY LEGS") (4) Exceptions ("JOG") REMEMBER - ALWAYS ALSO MENTION "REF" - statutory protections |
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Whats in the Augmented Estate Pt. 1 & 2 :
Probate Estate & Transfers to the Spouse |
#1 - Probate Estate (property owned and passing at death by will or intestacy
#2 Transfers to Spouse - Augmented estate includes (i) LIFETIME GIFTS from D to S, including gifts BEFORE MARRIAGE (to the extent S still owns them), and, (ii) NONPROBATE TRANSFERS TO S at D's death (joint tenancies, joint/survivor bank accounts, etc) w/ exception for tangible personal property (rings, etc) (iii) 1/2 of Value of Survivorship Estates Between Spouses (Rebuttable presumption that each spouse contributed 50% of consdiration - SO 50% of VALUE of estate considered within augmented estate. NOTE - #ii and #iii FUCKS THE SPOUSE |
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***Whats in the Augmented Estate: Pt. 3
TRANSFERS TO 3RD PARTIES: "STRINGY LEGS" |
certain lifetime gifts and non-probate transfers are considered part of augmented estate.
(1) Strings attached lifetime transfers - Trasnfers in which D retains power (Right to income, revoke, consume, invade, etc - e.g. revocable trusts/totten trusts) (2) Life insurance paid to 3rd party by D's death (3) Employee death benefits - (but not VA retirement benefits or Social Security) (4) Gifts in excess of $10K within the FIVE PRECEEDING YEARS that. (5) Survivorship estates - joint and survivor bank accounts and joint tenancies. |
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*Whats (NOT) in the Augmented Estate: Pt. 4 ("JOG")
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Joinder -
Transfers made w/ S's joinder or written consent. Old Transfers - Irrevocable transfers to 3rd parties BEFORE JANUARY 1991 Gifts TO D from someone other than S (separate property if acquired by gift/will/inheritance from not-S IF D segregated and maintained prop separate and apart from his other assets. |
Rational for the "G" - mom should be able to devise gifts to her daughter without subjecting the donated assets to the elective share of her son-in-law.
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WILL CONTESTS:
WHO MAY CONTEST |
INTERESTED PARTIES ONLY -
Parties with ECONOMIC INTEREST that would be ADVERSELY AFFECTED by the will's probate. So close personal friend not named in any of the wills at issue has no standing. |
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WILL CONTESTS:
LACK OF TESTAMENTARY CAPACITY --> BURDEN OF PROOF, TEST |
(1) BOP - Burden of proof is on WILL PROPONENTS to show that testator had CAPACITY (PREPONDERANCE)
(2) TEST: Did T have sufficient capacity to: (i) Understand the nature of the act he was doing (ie, he was writing a will) (ii) Know the nature, character, and approximate value of his property. (iii) Know the natural objects of his bounty? (iv) Able to INTERRELATE the above three. |
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WILL CONTESTS
LACK OF TESTAMENTARY CAPACITY --> WHEN MEASURED, AND DIFFERENCE BETWEEN TEST. CAPACITY AND LEGAL INCAPACITY |
Testamentary capacity is MEASURED AT OR VERY NEAR TO THE TIME THE WILL WAS EXECUTED (the "magic moment")
Evidence dating farther away from time of execution will lose relevance. Testamentary capacity is DIFFERENT from adjudication of legal incapacity - can be legally incapable of contracting/managing your affairs and STILL HAVE TESTAMENTARY CAPACITY - because inquiry concerned w/ only one point in time. BUT - evidence of legal adjudication of incapacity is admissible, but not as prima facie evidence of testamentary incapacity. |
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UNDUE INFLUENCE -
BOP AND GENERAL TEST |
BOP - burden of proof is on the CONTESTANTS who must show (by CLEAR AND CONVINCING):
(1) Existence and exertion of the influence (2) Effect was to "OVERPOWER THE MIND AND WILL OF THE TESTATOR" (3) PRODUCT is a will (OR gift therein) that WOULD NOT HAVE BEEN EXECUTED BUT FOR THE INFLUENCE Evidence is almost always circumstantial - but these three things ALONE will not meet the test: (i) Mere opportunity to exert influence, (ii) Mere susceptibility to influence, (iii) Mere fact of unnatural disposition (ie, everything given to one child over others) - SO MUST SHOW MORE THAN THIS |
Look to whether the "FREE AGENCY OF TESTATOR WAS DESTROYED AND A WILL PRODUCED THAT EXPRESSED THE INTENT, NOT OF THE TESTATOR, BUT OF THE ONE EXERTING THE INFLUENCE.
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UNDUE INFLUENCE -
SPECIAL RULES FOR FIDUCIARIES |
A PRESUMPTION of undue influence exists where:
(1) Testator was susceptible in mind and body, and (2) the will was procured by one in a CONFIDENTIAL OR FIDUCIARY RELATIONSHIP with T, and (3) T HAD PREVIOUSLY EXPRESSED A *CONTRARY* INTENT IN DISPOSING OF HIS PROPERTY |
Note - VA DOES NOT recognize a cause of action for tortious interference with an expectancy
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NO CONTEST CLAUSES
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No Contest Clause = "Any Ben who contests this will or any part thereof shall forfeit any interest given herein"
Majority rule - Enforceable unless contest made w/ PROBABLE CAUSE AND GOOD FAITH VA RULE - LIKELY STRICT ENFORCEMENT (ie, no probable cause requirement) - but argue both ways (dicta in one case indicated preference for strict enforcement) |
NOTE - TO GET AROUND THIS YOU CAN TRY TO ARGUE THAT YOU ARE MERELY QUESTIONING THE WILL'S *CONSTRUCTION* - ie, im not challenging the will, I just want to know what interests are created in it.
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UNIFORM TRUST CODE
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VA has adopted the Uniform Trust Code (UTC) in 2006 - but it applies to all trusts created on, BEFORE, or after that date.
UTC Does NOT apply to resulting or constructive trusts (only express trusts) |
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REQUIREMENTS FOR CREATION OF A TRUST: SETTLOR
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SETTLOR must have legal capacity (18 or older, capacity to convey title to trustee)
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REQUIREMENTS FOR CREATION OF A TRUST: DELIVERY
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DELIVERY REQ DOES NOT APPLY IF:
Self-declaration of trust (I declare myself trustee) or testamentary trust. DELIVERY REQ DOES APPLY TO: Inter vivos trust that names third party trustee. MERE INTENTION to create one of these trusts is not sufficient - must be DELIVERY AND INTENT TO CONVEY LEGAL TITLE |
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REQUIREMENTS FOR CREATION OF A TRUST: TRUST PROPERTY
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LEGAL TITLE to a SPECIFIC INTEREST in property must be conveyed to the trustee.
SUBJECT MATTER OF THE TRUST MUST BE *CERTAIN AND IDENTIFIABLE* - IF THERE IS NO TRUST PROPERTY THERE IS NO TRUST |
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SPECIAL RULE: PROMISE TO HOLD PROPERTY (TO BE ACQUIRED IN THE FUTURE) IN TRUST
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If SUPPORTED BY CONSIDERATION, the trust automatically attaches when the property is received.
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REQUIREMENTS FOR CREATION OF A TRUST: TRUSTEE
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Trustee must have legal capacity to deal with the property (over 18, capacity to contract and execute deeds)
Nonresident invdividuals CAN serve as testimentary trustee; but not nonresident banks. |
ACCEPTANCE OF TRUST BY TRUSTEE -
Acceptance ='s (1) Trustees signature, (2) conduct (beginning to perform duties) |
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REQUIREMENTS FOR CREATION OF A TRUST: LACK OF A TRUSTEE
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NO TRUST FAILS FOR LACK OF A TRUSTEE - court will appoint one if none named.
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REQUIREMENTS FOR CREATION OF A TRUST: BENEFICIARIES
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RULE: MUST BE DEFINITE AND ASCERTAINABLE (if not a charitable trust) AND
Interests must vest, if at all, w/in the RAP period. |
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RULE AGAINST PERPETUITIES
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No future interest is good unless it must vest, if it all, no later than 21 years after some life in being at the creation of the interest [measuring life]
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VA RAP DISTINCTIONS
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(1) ***"VA HAS ADOPTED THE UNIFORM STATUTORY RULE AGAINST PERPETUITIES WHICH ADOPTS A 90 YEAR "WAIT AND SEE" APPROACH - IN WHICH AN INTERESTS THAT ACTUALLY VESTS OR TERMINATES WITH 90 YEARS AFTER THE ***INTERESTS***
(2) SETTLOR MAY EXPRESSLY PROVIDE THAT THE RAP DOES NOT APPLY TO PERSONAL PROPERTY HELD IN A TRUST IF THE WILL OR TRUST SO SPECIFIES |
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REQUIREMENTS FOR CREATION OF A TRUST: INTENT TO CREATE A TRUST (PRECATORY LANGUAGE)
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PRECATORY LANGUAGE does not create a trust (wish, hope, request, etc)
HOWEVER - INTENT CAN BE FOUND EVEN IF WORDS "TRUST" and "TRUSTEE" are absent. |
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REQUIREMENTS FOR CREATION OF A TRUST: LAWFUL PURPOSE/PUBLIC POLICY RESTRICTIONS
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(1) Trust cannot be for unlawful purpose, or have unlawful condition
(2) Trust cannot have conditions that violate public policy - PARTIAL restraints on marriage are ok, but must be reasonable, pushing for divorce by trust not ok. |
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REQUIREMENTS FOR CREATION OF A TRUST: DOES SOF APPLY TO BAR ORAL TRUSTS?
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NO: IN VA ORAL TRUSTS OF REAL PROPERTY ARE VALID IF PROVED BY CLEAR AND CONVINCING EVIDENCE
Note Uniform Trust Code supersedes requirements of SOF |
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REVOCABLE TRUSTS - JULY 1 2006
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ON OR AFTER JULY 1, 2006 -
ALL inter vivos trusts are REVOCABLE unless SETTLOR EXPRESSLY MAKES THEM IRREVOCABLE AND UNAMENDABLE - BUT - PRIOR TO THAT DATE - ALL TRUSTS ARE IRREVOCABLE AND UNAMENDABLE UNLESS SETTLOR EXPRESSLY RESERVES POWER TO REVOKE/AMEND |
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WHEN CAN A CONSERVATOR/GUARDIAN/AGENT UNDER DURABLE POWER OF ATTORNEY REVOKE OR AMEND A REVOCABLE TRUST ON BEHALF OF INCAPACITATED SETTLOR?
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IF:
(1) Expressly authorized by the trust, OR (2) authorized by the court for good cause shown. |
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POUROVER WILL (will substitute)
(NOTE DIFFERENCE IN VA FROM WHAT WE LEARNED IN DE) |
POUROVER WILL -
A will that makes a gift to an existing trust. Allows decedent to add testamentary assets to a trust he created during life. NOTE - BY STATUTE (1) VALID IF TRUST CREATED BEFORE/WHILE/OR AFTER WILL EXECUTED (2) VALID EVEN IF TRUST IS UNFUNDED DURING SETTLOR'S LIFETIME (3) SELF-DECLARATIONS OF TRUST ARE OK (SETTLOR NAMES HIMSELF AS TRUSTEE) |
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CONTESTING THE VALIDITY OF A REVOCABLE TRUST
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Action contesting the validity of a revocable trust must be:
(1) BROUGHT WITHIN THE EARLIER OF: (i) TWO YEARS after settlor's DEATH or (ii) 6 MONTHS AFTER TRUSTEE SENDS THE PERSON A COPY OF THE TRUST INSTRUMENT/TRUSTEE'S NAME AND ADDRESS, AND A NOTICE OF THE TIME ALLOWED TO CONTEST. BOP is CLEAR AND CONVINCING |
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DURABLE POWER OF ATTORNEY/SPRINGING DURABLE POWER OF ATTORNEY
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DURABLE POWER OF ATTORNEY authorizes another person to act behalf of the principal.
a SPRINGING DURABLE POWER OF ATTORNEY does the same thing but designates the situation in which the power will take effect. |
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CHARITABLE TRUSTS: 4 DISTINCTIVE RULES
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(1) Not subject to RAP
(2) Must be a charitable purpose (3) Must be in favor of a reasonably large number of UNIDENTIFIABLE members of the public at large. (4) CY PRES doctrine applies ("as near as possible") VA ATTY GENERAL is in charge of supervising/enforcing charitable trusts. |
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TRUSTS FOR ANIMALS/PROPERTY
July 1, 2006 (UTC) |
AFTER JULY 1 2006
Animal Trusts - Valid but terminate after animal dies Property Trusts - Valid for 21 years BEFORE JULY 21 NOT ENFORCEABLE (trustee must owe duties to a person) - however, called HONORARY TRUST and is kinda ok only in the sense that if the trustee chose to perform she would be allowed to do so. |
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CONSTRUCTIVE/RESULTING TRUSTS: Generally
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Constructive trust is NOT a trust - its an equitable remedy designed to disgorge UNJUST ENRICHMENT resulting from WRONGFUL CONDUCT.
NOTE - HELPFUL WHERE SLAYER STATUTE DOES NOT APPLY (ie, manslaughter instead of murder) |
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CONSTRUCTIVE/RESULTING TRUSTS: APPLICATION
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First - apply the general law:
Then - apply equity - was there (1) Wrongful conduct and (2) unjust enrichment? |
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PURCHASE MONEY RESULTING TRUST
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HYPO: A pays purchase price for land, but causes title to be taken in B's name (For whatever reason). B then refuses to give money back, A sues contending that he didn't want to give a gift to B, just put title in his name for some other reason.
RESULT: If A&B NOT RELATED - Presumption of PURCHASE MONEY RESULTING TRUST, A can sue to get land back (overcome by C&C) IF A&B RELATED: Presumption of GIFT |
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SPENDTHRIFT TRUSTS AND CREDITOR'S CLAIMS
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VA ENFORCES SPENDTHRIFT CLAUSES - Meaning that creditors can't reach what is protected by a valid spendthrift trust
REQ'S: (1) TRUST OR ANY PART OF IT MUST NOT BE REVOCABLE - Creditors can reach this because you "can't isolate yourself from your own creditors." - In other words INTERESTS IRREVOCABLY TRANSFERRED TO THIRD PARTIES CANNOT BE REACHED BY CREDITORS (2) LANGUAGE - TRUST DOES NOT NEED TO HAVE FULL SPENDTHRIFT CLAUSE, STATING THAT IT IS INTENDED TO BE A "SPENDTHRIFT TRUST" IS OK (Virginia Trust Code) |
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WHEN CREDITORS CAN REACH SPENDTHRIFT TRUSTS
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ANY INTEREST IN THE TRUST (or the whole thing) RETAINED BY THE SETTLOR (ie revocable trust) is REACHABLE BY CREDITORS.
IN ADDITION: (1) Beneficiary's income AFTER IT HAS BEEN DISTRIBUTED is reachable by BENEFICIARY's creditors (but not settlors) (2) CHILD SUPPORT OBLIGATIONS (3) LAWYER WHO HAS PROVIDED LEGAL SERVICES FOR PROTECTION OF BEN'S INTEREST (4) CLAIMS OF US GOV'T , COMMONWEALTH ETC (taxes) (5) claims of state agency for reimbursement of public assistance |
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DISCRETIONARY TRUSTS
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(Remember - if settlor set this up, its assets are reachable to the MAXIMUM amount the trustee can give to settlor)
Trusts in which the TRUSTEE has discretion over certain/all aspects of the trust. NOTE - WHETHER BEN HAS CAUSE OF ACTION DEPENDS ON THE PURPOSE OF THE DISCRETIONARY TRUST. |
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SELF-DEALING
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TRUSTEES CANNOT -
(1) Buy or sell trust assets to himself. (2) Borrow trust funds (3) Loan funds to the trust (4) Profit from serving as trustee (except for valid compensation) by taking advantage of confidential info, bonuses, etc (5) Corp. trustee cannot buy its own stock as a trust investment. |
REMEDY - RETURN AND A SURCHARGE
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SOL FOR ACTIONS AGAINST A TRUSTEE
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IF TRUSTEE GIVES VALID ACCOUNTING THAT DISCLOSES FACTS AMOUNTING TO A POSSIBLE BREACH OF TRUST AND INFORMS BEN. ABOUT TIME LIMIT FOR BRINGING AN ACTION -
ONE YEAR IN ALL OTHER CASES - 5 YEARS |
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VIRGINIA TRUST CODE AND DEFAULT TERMS
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All provisions of the VTC are default rules that apply absent any contrary provision by the settlor EXCEPT:
(1) Illegal purposes/public policy limit (2) Duty of Good faith (3) Exculpation of intentional/reckless/bad faith breach of trust (4) statute of limitations (5) LIMIT COURT POWER to have jurisdiction, modify, remove trustee, etc. |
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DUTIES OF A TRUSTEE***
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1. DUTY TO ACT PRUDENTLY
2. DUTY OF IMPARTIALITY 3. DUTY TO CONTROL AND PROTECT TRUST PROPERTY 4. DUTY TO COLLECT TRUST PROPERTY AND ENFORCE AND DEFEND CLAIMS 5. DUTY TO SEGREGATE TRUST PROPERTY (by separating from trustees pers. prop and taking title in trustee's name) 6. DUTY TO KEEP ADEQUATE RECORDS 7. DUTY TO KEEP BENEFICIARIES REASONABLY INFORMED 8. DUTY TO FURNISH COPY OF TRUST INSTRUMENT UPON REQUEST FROM A B 9. DUTY TO FURNISH ANNUAL REPORTS 10. (AFTER JUL. 1 2006) 60 DAY NOTICE PROVISION - w/in 60 days after accepting trusteeship - must notify bens of (1) existence, (2) settlor(s) (3) right to request copy (4) right to annual report, (5) trustees contact info (name/addy/tel) |
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POWERS OF A TRUSTEE
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GENERAL RULE: "Virginia's Uniform Trust Code gives the trustee the power to do anything a fee simple owner would be able to do, EXCEPT:
May not IMPRUDENTLY INVEST May not SELF DEAL. |
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TRUSTEE'S INVESTMENTS: MODERN LAW V. OLD LAW
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OLD LAW -
Each individual investment must be prudent, not too speculative, etc UNIFORM PRUDENT INVESTOR ACT (NEW LAW) Modern portfolio theory governs TRUSTEE MUST ESTABLISH A CUSTOM-TAILORED INVESTMENT STRATEGY FOR EACH TRUST, TAKING INTO ACCOUNT FACTORS SUCH AS: gen. economic conditions tax consequences ROLE EACH INVESTMENT PLAYS W/IN OVERALL STRATEGY EXPECTED TOTAL RETURN need for liquidity etc. |
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DUTY TO INVEST PRUDENTLY: When measured
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CAN NEVER BE MEASURED IN HINDSIGHT - measured at time investments made.
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TRUSTEE'S ADJUSTMENT POWER (UNDER UPIA)
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Where trust set up to pay income/dividends TRUSTEE HAS POWER OF ADJUSTMENT WHICH ALLOWS HIM TO ALLOCATE SOME CAPITAL GAINS TOWARDS THE INCOME PAYMENTS
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TRUSTEE'S POWER TO DELEGATE/LIABILITY FOR ACTS OF THE AGENT
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Trustee has power to delegate trust powers and duties. NOT LIABLE FOR ACTIONS TAKEN BY AGENT IF TRUSTEE EXERCISED: REASONABLE CARE IN:
(1) SELECTING AGENT (2) ESTABLISHING THE TERMS OF THE DELEGATION (3) PERIODICALLY REVIEWING THE AGENT'S ACTIONS |
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ALLOCATION OF RECEIPTS - THE 10% RULE
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RECEIPTS (things that produce income for a short time) ARE ALLOCATED ACCORDING TO THE 10% RULE -
10% TO INCOME, 90% TO PRINCIPAL |
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TOTAL RETURN UNITRUST
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Comes up where remainderman and income ben. disagree on how trust should be invested (income ben wants more conservative, obv).
TOTAL RETURN UNITRUST = income ben gets a FIXED % of trust value (rather than income payments). TRUSTEE MUST GET GIVE NOTICE TO ALL BENS - BUT DOES NOT NEED COURT APPROVAL |
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TRUST EXPENSES: Trustees compensation
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Trustee entitled to REASONABLE COMPENSATION (commissions, expenses for accounting, judicial proceedings)
50% from Principal 50% from Income |
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TRUST EXPENSES: Ordinary Expenses
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CHARGED AGAINST INCOME
Expenses that come up every year (prop taxes, insurance, repairs, mortgage interest, etc). |
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TRUST EXPENSES: CAPITAL EXPENSES
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CHARGES AGAINST PRINCIPAL
Ex. Capital improvements, environmental expenses, mortgage PRINCIPAL |
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TRUSTEE'S LIABILITY FOR TORTS
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Trustee is not personally liable for torts committed in the course of administering the trust unless he was PERSONALLY AT FAULT
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TRUSTEE'S LIABILITY FOR CONTRACTS
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Trustee is NOT personally liable for contracts entered into on behalf of trust UNLESS HIS FIDUCIARY CAPACITY WAS NOT DISCLOSED IN THE K (ie, other party didn't know he was acting as trustee)
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CO-TRUSTIES
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If more than 2 trustees - majority rules on decisions
Each trustee has an affirmative duty to prevent a breach of trust bu a co-trustee: HOW (after trying to talk) (1) Do not participate in the transaction (2) Express dissent in writing |
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MODIFICATION AND EARLY TERMINATION OF TRUSTS: DURING SETTLOR'S LIFETIME
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If ALL BENEFICIARIES AND SETTLOR CONSENT - COURT can order modification/termination of a trust EVEN IF the modification/termination of the trust is INCONSISTENT WITH ITS MATERIAL PURPOSE.
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MODIFICATION AND EARLY TERMINATION OF TRUSTS: AFTER SETTLOR'S DEATH
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If ALL BENEFICIARIES CONSENT trust can be modified IF NOT INCONSISTENT W/ A MATERIAL TRUST PURPOSE and TERMINATED if court finds that continuance of trust is NOT NECESSARY TO ACHIEVE ANY MATERIAL TRUST PURPOSE.
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MODIFICATION/TERMINATION W/O ALL BENEFICIARIES CONSENT - THREE WAYS
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(1) UNANTICIPATED CIRCUMSTANCES -
On petition from a trustee/ben a court may modify trust b/c of CIRCUMSTANCES NOT ANTICIPATED BY SETTLOR and MOD/TERM WILL FURTHER PURPOSES OF THE TRUST 2) MODIFICATION TO ACHIEVE SETTLOR'S TAX OBJECTIVES 3) No trust purpose remains to be achieved or trust purpose became contrary to public policy. |
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UNECONOMIC TRUST
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If trust property worth LESS THAN $100K trustee may terminate WITHOUT COURT APPROVAL if trustee concludes that value is insufficient to justify admin costs. BUT
Trustee must first give notice to QUALIFIED BENS (permissible distributees of trust income/princ, or would be if trust was terminated) |
If trust more than $100K but uneconomic - court approval required.
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DIVISION/COMBINATION OF TRUSTS
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If result does not adversely affect achievement of trust purposes -
Court approval not required - notice to all bens necessary. |
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REFORMATION TO CORRECT MISTAKES
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Court may reform the terms of a trust if it is proved by CLEAR AND CONVINCING EVIDENCE that both the SETTLOR'S INTENT and the TRUST TERMS were affected by a mistake of fact or law.
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RESULTING TRUST
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Resulting trust arises when:
(1) an express trust fails in whole or part (2) a settlor make an incomplete disposition of the trust property and there is excess corposue; or (3) a purchaser pays the purchase price of the property and causes title to be taken in another name. |
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