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130 Cards in this Set
- Front
- Back
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What is the effect of a written revocable trust created on or after September 1, 2005 in a situation of divorce?
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Any provision benefitting a spouse of the settlor of the trust is generally revoked by operation of law if the settlor and such spouse divorce after the trust is created.
(Unless otherwise provided by court order, marital agreement, or the express terms of the trust). |
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How long after the death of a decedent must a person 'survive' the decedent to be considered a survivor?
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120 hours
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What happens to community property when both spouses die within 120 hours of each other?
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One-half of the community property is treated as if the husband died first, and one-half is treated as if the wife died first.
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What does the Surviving Spouse retain of community property when the other dies?
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Her half share of community property.
If there are children, they take the other 1/2, if none, then surviving spouse takes the full amount. |
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What does the Surviving Spouse retain of separate property when the other dies and there are surviving descendents?
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1/3 of separate PERSONAL property, and a life estate in 1/3 of separate REAL property.
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What does the Surviving Spouse retain of separate property when the other dies and there are NO surviving descendents?
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All of the decedent's separate personal property and at least HALF of the decedent's separate real property.
Unless decedent was not survived by any parents, brothers or sisters, or their descendants, all of the decedent’s separate real property is distributed to the SS. |
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How much is inherited by half-blood collaterals at the death of their siblings?
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Half as much as full-blood collaterals (full sisters and brothers) but only if any full-blood collateral or descendants of full blood collaterals exist.
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What is the effect on the estate distribution to a recipient of an inter vivos gift?
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If the value of the recipient's share of the estate, based on the value of the estate with the gift added back into the 'hotchpot', is less than the value of the gift, she receives the difference.
If the value of the gift is greater than the share, she receives nothing, but may retain the gift. |
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What conditions must exist for an inter vivos gift to be considered an 'advancement' subject to special rules of intestate transfer?
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Decedent declared gift an advancement in a contemporaneous writing;
Heir acknowledged in writing that gift was an advancement; OR Either's writing indicates the gift is to be taken into account in computing the division of the estate. |
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What happens if the recipient of an advancement does NOT survive the decedent?
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Property advanced is not taken into account in computing the division and distribution of the decedent’s intestate estate, UNLESS the decedent's contemporaneous writing provides otherwise.
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What is required for all Texas wills?
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Testator's 'Testamentary' intent.
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Must the testator's signature be at the bottom of the will?
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Not in Texas. No. The will is still valid.
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What is the two step method of proving a will?
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A 'Self-proving' affidavit is executed in addition to the will.
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What is the NEW one-step method of proving a will?
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Requires inclusion in the will of certain language and adherence to an execution ceremony conforming to recent legislation.
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Must a will be dated?
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No, but it is good practice to do so.
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What are the Testamentary Capacity requirements a testator must hold?
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18 years old, married, or in the armed forces
AND Of sound mind at the time of execution of the will |
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Is there a simultaneous witness signature or attestation requirement for a will to be valid?
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Not for a two-step will, but it is good practice to do so.
Must be in each other's presence for a one-step will to be self-proving. |
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What is the rule about a bequest to an interested witness?
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It is void, UNLESS it is:
• Established by testimony of a disinterested witness; • Corroborated by disinterested and credible persons (lawyer, paralegal); OR • If its value does not exceed the share he would have been entitled to under intestate distribution. |
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When will type-written surplusage negate the validity of a holographic will?
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When the type-written language is necessary to complete the will.
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What must an affidavit that makes a will self-proving include?
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Document is T’s will; that T was 18 years of age when T executed it (or that T met the age-substitute requirements); that T was of sound mind; and that T has not revoked the will.
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What is the effect of either the Testator or the witnesses (or both) failed to sign the will but did sign the self-proving affidavit?
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Affidavit will be treated as though they were on the will itself.
But the will is not self-proved. |
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What is a codicil?
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A writing that AMENDS a previously executed will.
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What is required for a codicil to effectively re-publish a will that it modifies?
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It must be consistent with the Testator's consent (will is treated as being executed as of the date of the codicil).
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When is a will revoked by operation of law?
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Divorce, or survival by one or more pretermitted children.
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May a will be partially revoked by physical act?
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NO. Only the whole will can be cancelled UNLESS the revocation is by the Testator's handwritten mark to a holographic will.
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To what extent can a will be revoked by a subsequent writing?
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Partial or whole revocations can take place (usually by codicil or declaration of revocation) if there is a subsequent writing executed with all of the formalities of a valid will.
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How are inconsistencies between a codicil and a will resolved?
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In favor of the codicil, such that inconsistent provisions of the will are revoked.
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What is the presumption of revocation of a will?
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A will last seen in the possession of the TESTATOR (no one else) but not found at her death is presumed to have been validly revoked.
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What must be proven by a proponent of a lost will who is seeking to enforce it?
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• The cause of the will's non-production (to court's satisfaction after reasonable diligence), AND
• The contents of the will (credible witness testimony) |
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What is the Texas 'No Revival Rule' regarding wills?
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Once dead, always dead.
A revocation of a subsequent will does not revive a previous will that the subsequent will once revoked. |
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What is the exception to the 'No Revival Rule' regarding codicils?
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If a codicil to a will is revoked, the will is effective as originally written, and any OTHER codicils to that will remain valid.
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What is the doctrine of Dependent Relative Revocation?
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A second best option to effect the intent of the Testator when the Testator made a revocation under a mistaken assumption of the law.
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What is abatement with respect to wills?
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The reduction of testamentary gifts necessary to pay the expenses and claims of creditors of the estate, or to fund other testamentary gifts.
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What is the scheme of abatement reductions?
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• Property subject to intestacy
• Residuary personal estate property • Real property of the residuary • General bequests of personal property • General devise of real property • Specific bequests of personal property • Specific bequests of real property |
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Who always has the right to determine whether an estate debt will remain attached to secured estate property?
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The creditor by default will remain secured in the collateral property and the devisee takes subject to the debt (unless otherwise specified in the bequest).
Creditor can otherwise elect to be treated as a MATURE SECURED CLAIM and have debt paid in the course of the administration. |
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What is Ademption?
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Property specifically devised or bequeathed that is not in the estate as of Testator’s death is said to 'adeem,' meaning that the devise or bequest becomes inoperative, such that the intended beneficiary takes nothing.
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What is the Texas Anti-Lapse Statute hold?
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If a devisee is a descendant of one of the Testator's parents, and the devisee fails to survive the Testator (or is treated as not surviving the Testator under the 120-hour rule), the gift to the devisee does not lapse if children of the devisee survive the Testator by 120 hours; those descendants take the gift in place of the named devisee.
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When will the Texas Anti-Lapse Statute NOT apply?
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If there is any devise that is conditioned such as 'To X if X survives me.'
If X does not survive, the gift lapses. |
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What is required for a document to be incorporated by reference in a will?
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• Document must be in existence when the will is executed
• Will must manifest intent to incorporate the document • Will must clearly identify the document |
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When is it impossible to incorporate a type-written will by reference?
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If the will attempting to incorporate the type-written will is holographic.
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What must be done to allow the integration of other documents into the execution of a will?
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Testator and the witnesses should initial each numbered page of the will, and
Pages of should be in the same style and size of font and stapled together. |
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What is the 'Plain Meaning' Rule with respect to resolving ambiguity in wills?
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A plain meaning in a will cannot be altered by the introduction of extrinsic evidence that another meaning was intended.
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What are the voluntary and involuntary bars to succession?
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• Homicide
• Disclaimer (by beneficiary) • Forfeiture of Inheritance Rights by Parental Abandonment or Child Abuse • Void Gifts to Attorney Drafting Will (unless testator is decedent's spouse) |
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Why would someone disclaim a testamentary gift?
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• To save federal transfer taxes that would result had the disclaimant accepted the property and later disposed of it
• To avoid transfer of property to beneficiary's creditors |
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Are partial disclaimers of testamentary gifts valid?
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Yes one may disclaim property in whole or in part.
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What is the time allowed for disclaiming a testamentary gift?
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Written memorandum must be filed not later than NINE MONTHS after the death of the decedent in Probate Court.
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What are the grounds on which a will can be challenged?
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(1) lack of capacity;
(2) undue Influence or duress; (3) fraud; and (4) failure to comply with execution formalities. |
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What happens if a Testator suffers from an insane delusion?
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Any part of the will caused by the insane delusion fails.
(Insane delusion = state of facts that NO RATIONAL PERSON would believe) |
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What are the elements of Undue Influence / Duress on a Testator?
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(1) Existence and exertion of influence (opportunity to influence is not enough);
(2) Influence overpowers Testator’s mind; and (3) Influence must cause Testator to execute a will (or provision) that would not have been otherwise executed. |
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What is required to show fraud as a grounds for challenging a will?
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Misrepresentation must be made with both the INTENT to deceive and the PURPOSE OF INFLUENCING the testamentary disposition.
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What is the general statute of limitations for contesting the validity of a will?
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TWO years from the date of its admission to probate.
But an interested person may contest to cancel a will for FORGERY or FRAUD within two years of discovery, AND Incapacitated persons (minors) have two years after removal of their disabilities. |
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What is the statute of limitations for challenging the CONSTRUCTION of a will?
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Four years from the date the actual controversy occurred.
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Who bears the burden of proof on the issue of testamentary capacity before the will is offered for probate?
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The proponent of the will.
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Who bears the burden of proof on a will once it has been admitted for probate upon proof of due execution??
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The contestants bear the burden of proving the absence of testamentary capacity.
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Who has standing to contest a will?
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Any interested person.
• Financial interest in the will • Was a devisee • Anyone interested in the welfare of an incapacitated person |
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What is a 'No-Contest' clause?
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A devisee forfeits any amount to which he is entitled under a will should he contest the will.
Exception: If there is JUST CAUSE AND the action was brought in GOOD FAITH. |
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What are the two ramifications of the Texas Homestead Exemption on beneficiaries of an estate?
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• Right of occupancy by the surviving spouse and minor children
AND • Right of an heir or devisee to receive title free of many creditor's claims |
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What is a homestead for purposes of estate administration in Texas?
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Property that the decedent used as his home, or as his home and as a place to exercise a calling or business.
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Who ALWAYS gets a right to occupy the decedent's homestead for life?
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The decedent's surviving spouse, followed by any of the decedent's minor children (and their guardian) who survive the surviving spouse, but only for the term of their minority.
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What claims of creditors will still attach to the homestead?
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Liens against that property specifically (mortgage, purchase money liens, tax liens, refinancing, reverse mortgages, etc.).
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What is the maximum size of an urban homestead?
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Ten acres which may be in one or more contiguous lots, together with any improvements.
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What is the maximum size of a rural homestead?
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200 acres for a family or 100 acres in the case of a single adult, which acres may be in one or more parcels, together with improvements
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What makes a homestead urban?
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Property is located within the limits of a municipality and served by police protection, paid or volunteer fire protection, and three municipal services (i.e., electric, gas, sewer, water, and storm sewer).
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What is available to beneficiaries if the decedent did not have a homestead?
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An allowance in lieu of homestead may be awarded by a court, up to $15,000
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What is the family allowance?
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Discretionary amount fixed by the court to support the SS, as well as the minor children and the adult incapacitated children of the decedent.
Support is based on family needs/standard of living and allowed for ONE year. |
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What is generally considered exempt property?
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Household furnishings and other items designated by statute worth up to $60,000.
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What is a pretermitted child?
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Children born after the execution of a Testator's will.
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What does the pretermitted child receive if the pretermitted child is mentioned in the will, provided for in the will, or otherwise provided for by Testator?
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Nothing, Pretermitted child is already provided for. This INCLUDES non-probate transfers such as life insurance, etc.\
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What does the pretermitted child receive if the Testator had no children when the will was executed?
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That portion of the Testator's separate AND community estate that he would have been entitled to under intestacy (but only owns the portion not devised or bequeathed to the other parent of the pretermitted child).
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What does the pretermitted child receive if the Testator had other children when the will was executed and provision is made for the other children?
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Pretermitted child receives an equal share of the same pot from which the other children receive.
BUT GIFTS to non-children may NOT be reached to determine the size of the pot. |
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What does the pretermitted child receive if the Testator had other children when the will was executed and no provision is made for the other children?
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That portion of the Testator's separate AND community estate that he would have been entitled to under intestacy (but only owns the portion not devised or bequeathed to the other parent of the pretermitted child).
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What does the pretermitted child receive when the Testator's surviving spouse is NOT the other parent of the pretermitted child?
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Half of what would go to the surviving spouse.
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What is the purpose of the Probate Process?
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Facilitate the passage of clear title to the decedent’s devisees or heirs (no transfer of title unless probate occurs);
Pay the claims of decedent’s creditors; and Distribute assets to the devisees or heirs. |
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When can Probate be avoided?
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If the decedent’s assets consist of UNTITLED property, AND
Creditors can be paid by a family member surviving the decedent |
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What is the exception to the rule that a will must be admitted to probate within FOUR years of the decedent's death?
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IF the person can prove that he was not at fault in failing to present the will for probate.
Letters Testamentary will not be issued, but the will may be admitted to probate as a MUNIMENT OF TITLE. |
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What is a muniment of title?
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Allows for the transfer of title in testamentary property that was never subject to a normal probate process.
Texas courts are fairly lenient in admitting a will to probate as a muniment of title beyond the statute of limitations when an excuse for delayed application is shown. |
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What courts have original jurisdiction in probate proceedings?
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Probate Court or County Court at law, but in a county that has neither, a Constitutional County Court.
But if a matter is contested, the Constitutional County judge will request an ASSIGNMENT of a statutory probate court judge OR transfer the contested matter to a district court that will hear it as if it was originally filed in the district court. |
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What is the proper venue for a probate proceeding?
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If the Decedent is a Texas resident - the county of residence.
If not, the county where the principal estate was at the time of death OR the county where the decedent died If decedent died outside of Texas, that where kin resides, or where principal estate was situated. |
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What is the order of persons who can serve as the estate's 'Personal Representative'?
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• Executor named in the will
• Surviving Spouse • Principal Devisee or Legatee • Any Devisee or Legatee • Next of Kin of the Decedent (nearest first) • Creditor of the Decedent • Any person of good character residing in the county who applies • Any person not disqualified under the Texas Probate Code |
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How much time must Letters of Testamentary be granted to the executor or personal representative?
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Twenty days
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When will a court Grant Letters of Administration?
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WHEN IT IS NECESSARY:
• Two or more debts exist against the estate, • Estate needs to be partitioned among the distributees, • To receive or recover funds or other property due the estate, OR • Court determines that another reason justifies administration. |
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When will the court grant Letters of Administration rather than Letters Testamentary?
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• Person dies without a will
• No executor is named in the will • Executor is dead • Executor doesn't accept role within 20 days of probate • Executor doesn't present will for probate within 30 days of death |
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When is a Personal Representative deemed 'qualified'?
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When she has taken an oath, AND
When she has filed a bond (required unless the will states no bond is necessary or the PR is a corporate fiduciary) |
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When can an interested person petition the court to require the Personal Representative to post a bond?
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If the court finds that the executor has been mismanaging the estate so as to harm creditors or devisees.
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What is the commission the Personal Representative is entitled to receive?
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5% on cash received as well as on amounts they pay out. BUT ONLY IF THEY MANAGE THE ESTATE PRUDENTLY.
OR the Testator may set the compensation in the will. |
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How long does a Personal Representative have to send notices to beneficiaries?
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60 days
Notice must identify the beneficiary and decedent; inform the beneficiary that he is named in the will and that it was admitted to probate; provide the PR’s contact information; and provide a copy of the will or a summary of the beneficiary’s gifts thereunder. |
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What notice must be made by the Personal Representative to Creditors within one month after receiving Letters Testamentary/Administration?
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• Notice to comptroller of public accounts regarding taxes, AND
• Publish in a newspaper of the county where Letters were issued a notice for creditors to make claims within the time prescribed. |
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What special notice must be given to secured creditors by the personal representative within two months after receiving letters?
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Notice of the issuance of such letters to each person known to the PR to have a claim for money against the estate of a decedent that is secured by real or personal property of the estate.
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When must an inventory of the assets be made?
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Within 90 days of the Personal Representatives qualification.
Inventory should set out the PR's appraisement of the fair market value of the estate assets, and a list of all claims against the property. |
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When can a personal representative utilize an Affidavit in Lieu of Inventory, Appraisement and List of Claims?
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Within 90 days, If there are no unpaid debts, except for secured debts, taxes, and administration expenses, at the time the inventory is due an independent executor can file with the court clerk an affidavit stating that all debts, except for secured debts, taxes, and administration expenses, are paid and that all beneficiaries have received a verified, full, and detailed inventory.
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What is independent administration of an estate?
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An executor who administers the estate with only limited court intervention: duties of care, collection, notification to beneficiaries and creditors, etc.
No need for annual accounting, but may need provide an accounting on demand after 15 months. |
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How can a an Independent Administration be created?
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• By will
• Agreement of beneficiaries • Agreement of heirs |
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How can an independent administrator be removed?
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Failure to comply with her statutory duties,
Incapacity, or Incapability of properly performing her fiduciary duties due to a material conflict of interest. |
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What is a dependent administration of an estate?
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Same as an independent administrator but required to obtain court approval before taking many actions, and is further burdened with additional administrative obligations.
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What is a temporary administration?
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If a probate judge determines that the circumstances require it can appoint a temporary administrator with limited powers.
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What are the limits on a small estate administration?
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• Value of assets can't exceed $50,000
• Not available for non-homestead real property • Only INTESTATE successions |
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When is it possible that NO administration is necessary?
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If all of the estate assets do not exceed the amounts entitled as an exempt family allowance.
Requires application requesting the court to make a family allowance and to enter an order that no administration shall be necessary. |
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When can an interested person petition the court to require a distribution of estate assets?
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Two years.
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What is the difference between independent administration and dependent administrations for presenting claims to the court?
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Dependent claims must be authenticated by affidavit.
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What must a creditor do its claim on the dependently administered estate is rejected?
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Sue on the claim in the probate court within 90 days of the rejection.
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What is the effect of a dependent executor's inaction on a creditor's claim for 30 days?
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The claim is deemed rejected.
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What is the priority of payments on estate claims?
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• Funeral Expenses < $15,000
• Estate expenses • Matured Secured Claims (including federal taxes) • Child Support • State taxes, penalties, and interest • Confinement cost (Texas Criminal Justice Dept.) • Medical assistance repayment • All other claims |
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What duties may a person perform without necessarily being seen as having accepted the role of trustee?
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Preserving trust property if, within a reasonable time after acting, the person gives notice of the rejection of the trust to the settlor (or, if deceased or incapacitated, to all beneficiaries then entitled to receive trust distributions)
Inspecting or investigating trust property for any purpose |
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What are the three ways property can be delivered to the Trustee?
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Actual - physical delivery
Constructive - means of access transferred (key to safe deposit) Symbolic - a writing is transferred |
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What is a 'Pour-Over Will'?
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Method to affect a testamentary gift that transfers estate assets to a trust governed by terms NOT in the will.
Alternative to a testamentary trust. |
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What is the traditional method of delivering property to a trustee upon the settlor's death?
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Through a testamentary trust whose terms are part of the Settlor's will.
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To whom does the Trustee of a revocable trust owe a duty?
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ONLY the settlor.
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What is required for a trustee of a trust to ENLARGE her duties?
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Consent of the court
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May creditors of a settlor reach trust assets?
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If the trust is a revocable trust.
Probably also if it is a spendthrift trust where the settlor is a beneficiary. |
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How much income must be paid to income beneficiaries of a discretionary trust?
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Payments are made at the discretion of the trustee. BUT the discretion of the Trustee is NEVER absolute (must act in accordance with the purpose of the trust and in good faith) - Clear abuse of discretion standard
In a mandatory trust, ALL income must be paid. |
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How can a discretionary trust be accessed to satisfy child support obligations?
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Court may order trustee to make disbursements to satisfy child support to the extent the beneficiary of the trust is responsible, BUT ONLY from the INCOME of the trust, not the principal.
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Who besides the beneficiary can get access to a spendthrift trust?
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• Beneficial interest of the settlor
• Federal tax liens • Necessaries suppliers • Child support (but only from income if discretionary ST trust) |
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What is a 'Support Trust'?
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One that requires a trustee to make payments of income and/or principal to the beneficiary in an amount necessary for her support in accordance with an ascertainable standard (such as 'support' or 'maintenance').
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How does a beneficiary of a support trust compel a distribution?
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Upon showing need and establishing the trustee’s abuse of discretion.
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When will a delegation of a trustee's responsibility to a co-trustee relieve her from liability?
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IF the trustee communicates the delegation to the co-trustees
AND Files the delegation in the records of the trust |
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If there are co-trustee's, how are decisions made?
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By a majority vote.
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When will a term of trust concerning a trustee's liability for breach of trust be unenforceable?
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When the breach is committed:
• In bad faith • Intentionally, OR • With reckless indifference to the beneficiary's interest |
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What is the legal effect of a term in a trust that relieves the trustee of liability for a breach of trust that is inserted as a result of abuse of fiduciary or confidential relationship with the settlor?
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It is ineffective.
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When will a trustee NOT be liable for actions she joins in with co-trustees?
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If she sends written notice of her dissent to each of the other co-trustees.
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What is the trustee's duty of loyalty?
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Trustee must invest and manage the trust funds 'solely in the interest of the beneficiaries.'
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What is the 'No Further Inquiry' Rule?
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A trustee who engages in an act of self-dealing with trust property has breached his trust, even if the transaction is entirely beneficial to the beneficiaries.
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What is the restriction on the sale of assets in one trust, another trust, when both trusts are managed by the same Trustee?
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It is only allowed if the property is an obligation guaranteed by the U.S. Government and sold for its market value.
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What must a trustee show to succeed on a general exception to a breach of trust on account of self-dealing?
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• Transaction is fair to beneficiaries;
• Trustee acted in good faith; AND • EITHER settlor authorization OR beneficiary consent after full disclosure |
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What are a trustee's duties in delegating authority?
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Exercise reasonable care, skill, and caution in
(1) selecting an agent; (2) establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and (3) periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation. |
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What is the responsibility of a trustee to his predecessor?
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The Trustee must pursue claims of damage or mismanagement against predecessor trustees or executors.
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When must a Trustee make an accounting of the trust?
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Upon written demand by a beneficiary
Trustee has 90 days to fulfill the request before the beneficiary can file suit. |
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What is the effect of the Texas Legislature's repeal of the Trust Code's provision which required a trustee to reasonably inform beneficiaries about the administration of the trust and the material facts necessary for the beneficiaries to protect their interests?
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NONE - the relevant legislation states that the repeal did not alter any common law duty to keep a beneficiary informed.
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What is a Trustee's duty to multiple beneficiaries of the same trust?
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IMPARTIALITY
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What is the modern approach to impartiality of investing trust assets?
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Maximize value by investing on a TOTAL RETURN BASIS and allocating receipts between income and principal, as necessary to fulfill the duty of impartiality.
The Texas Uniform Principal and Income Act (UPIA), part of the TTC, generally adopts the modern approach to the duty of impartiality. |
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When can a trustee adjust income and principal to produce an impartial result (exercise the 'adjustment power')?
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• Trustee manages as a prudent investor;
• Some trust distributions are tied to income; AND • Trustee can't follow default rules without violating duty of impartiality |
