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WILLS, TRUSTS & ESTATES OUTLINE WILLS

WEALTH TRANSFER UPON DEATH: THE FUNDAMENTALS


I. The Economics Of Inheritance
Justifications for passing wealth at death Society based on private property this is least objectionable way to deal with property at owners death Incentive for recipients to do certain things (take care of parents, grandparents, so they will get) Allows for the taking care of dependents (rather than State having to) Encourages productivity and control (work hard so children can have better life) Encourages earnings and savings (b/c you know it will pass to children, so no wasting) Arguments against passing wealth at death Transfer of fortunes perpetuates wide disparities in the distribution of wealth, concentrates inherited economic power in the hands of a few, and denies equality of opportunity to the poor. Danger - inherited wealth becoming the basis of enduring privilege

Tends to reward chance of fortunate birth, rather than merit or productivity Accumulation of wealth, rather than consuming it (which is better for society)

II. Freedom of Testation: Limited


a) Rest. (3d) Prop. Donative Transfers 10.1. The controlling consideration in determining the meaning of a donative document is the donors intention, which is given effect to the maximum extent allowed by law. i) Rationale: freedom of disposition property owners have the nearly unrestricted right to dispose of their property as they please. ii) Effect: donors intention not only determines the meaning, but also the effect of a donative document B) THE RIGHT TO DISPOSE OF PROPERTY BY WILL IS CONFERRED AND REGULATED BY STATUTE. i) Wescott v. Robbins (1946) (1) Facts: Soldier sent letter to bank saying he wanted to open an account to deposit money, and made it in trust so only he could withdraw. Also said if he died, he wanted grandpa to be beneficiary. Letter to grandpa he planned on using money for business when he got back from war. Letters typewritten and signed only by soldier. (2) Holding: The right to dispose of property by will is conferred and regulated by statute; the letters did not conform to what statute prescribed as to constitute a valid disposition of the property. Proper form is for will to be signed, witnessed, notarized, or holographic otherwise, could be fraud. Not a trust b/c no trust property created never set it up.

c) THE DEAD HAND LIMIT: RESTRICTIONS ON INHERITANCE PERMITTED IF NOT ILLEGAL, AND IN ACCORDANCE WITH PUBLIC POLICY. i) Rest. (2d) of Prop. Donative Transfers 6.2: (1) Restraint on marriage must be reasonable and must not interfere with marriage (i.e., last name provisions, encourage divorce) (2) Restraints may not promote destruction of property. ii) Shapira v. Union National Bank (1974) (1) Facts: Will disposes property to son only if he marries a Jewish girls whose both parents are Jewish within 7 yrs of testators death; otherwise goes to state of Israel. (2) Holding: will provision held valid & enforceable must honor testators intent within the limits of law and public policy. (a) Constitutionality - right to marry, protected by 14th amendment, being violated? No. No restriction on marriage here; Court only asked to enforce the restriction on the inheritance. (i) Note: Cannot restrict ability to get married. (b) Public policy violated? (i) violated b/c free choice of religious practice? No. Son wont be in contempt for failing to marry a Jewish girl. Just wont get $. (ii) Violated b/c would encourage marriage just for $, then divorce? No. possibility too remote, & assumption that sons motive for marriage is proper. 1. Note: Cannot condition bequest on getting a divorce. (c) Unreasonableness pressure to marry in 7 yrs w/o opportunity for mature reflection & jeopardizes college education? No. 7 yrs reasonable time for exhaustive reflection & fulfillment of condition w/o constraint or oppression.

II.

Transfer And Decedents Estate


a) Probate v. Nonprobate i) Probate - property that passes under the decedent's will or by intestacy (1) Distribution of probate assets under a will or intestacy may require a court proceeding involving probate of a will or a finding of intestacy followed by appointment of a personal representative to settle the probate estate. ii) Nonprobate - property passing under an instrument other than a will (1) Nonprobate property includes the following: (a) Joint Tenancy property - decedent's interests vanishes at death; survivor has the whole. (b) Life Insurance - proceeds on decedent's life paid to beneficiary named in policy. (c) Contracts with payable-on-death provisions - Contract can be with employer, bank, etc., to distribute property to name beneficiary upon death (ex: pension plans) (d) Interests in Trust - trustee holds the property for the benefit of the named beneficiaries, then distributed per terms of trust. (2) No court proceedings distribution determined by the nonprobate document b) Terminology i) "go through probate" - to have the estate administered through probate courts ii) Proper to use the word "will" to refer to an instrument disposing of both real and personal property iii) A person dying testate devises real property to devisees; bequeaths personal property to legatees. "I give" effectively does the job in all circumstances iv) Real property descends to heirs; personal property is distributed to next-of-kin. c) Administration of Probate Estate 2 / 43

i) Personal Representative appointment of personal rep necessary to oversee winding of decedents affairs. Appointed by, under control of, and accountable to probate court. (1) Executor - If the will names the person who is to execute the will & administer probate estate, the personal rep is called an executor (2) Administrator - if will doesnt name the personal rep, then called administrator (a) Selected from a statutory list of persons given preference (usually heirs or creditors) (b) Administrator must give bond ii) Four functions of probate: (1) Collection of assets (2) Notifying and paying creditors (3) Paying estate taxes (4) Title clearing & distribution of the assets iii) Jurisdiction: Primary or domiciliary jurisdiction - jurisdiction where decedent domiciled at time of death. If real property in another jurisdiction, then ancillary administration in the jurisdiction is required. iv) Probating will in common form (1) Ex parte proceeding in which no notice or process issued to any person. Execution of will proved by oath of executor or other witnesses is required. Will admitted to probate at once, letters of testamentary granted, and executor began administration of the estate. If no one raised objection, then fine. Otherwise, one might compel in solemn form (2) Maj of states dont permit ex part proceedings, but require prior notice to interested parties before appointment of a personal rep or probate of a will. v) Probating will in solemn form (1) Notice to interested parties given by citation, due execution of will proved by testimony of attesting witnesses, and administration of estate involved more court participation vi) UPC (Uniform Probate Code) - adopted in many states, so representative if statutes regulating probate procedures. Provides for both ex parte probate (informal probate) and notice probate (formal probate) (1) Informal Probate requirements (a) w/o giving notice, rep petitions for appt (b) Petitions contains info on decedent & names/addresses of spouse, children, other heirs; if will, also info on devisees (c) If petition is for probate of a will - original will must be with the petition (d) Executor swears that to best of knowledge, will validly executed (no proof by witnesses req) (e) Registrar will probate, w/o further proof if will has req signatures and contains attestation clause showing reqs of execution were met (f) Within 30 days after appointment, personal rep has duty of mailing notice to every interested party, including apparently disinherited heirs (2) Formal Probate - is a judicial determination after notice to interested parties. An interested party can demand formal probate. These are final judgments if not appealed. (3) Statute of limitations to probate is 3 years after date of death. If not within 3 yrs, presumption of intestacy is conclusive. vii) Time for contest - depends on statute; if statute of limitations expires, probate court no longer has jurisdiction to revoke probate, and probate of the will is final. (1) statutes require creditors to file claims within specified period, otherwise barred (nonclaim statutes). viii) Closing the Estate - Judicial approval of personal rep's actions required to relieve rep of liability. Rep not discharged from fiduciary duties until the court grants discharge. 3 / 43

ix) Universal Succession (Louisiana & Europe) - the heirs or the residuary devisees succeed to the title of all the decedent's property; there is no personal rep appointed by a court. The heirs assume all decedent's obligations and liabilities

Will validity generally requires: Testamentary Capacity Testamentary Intent Due Execution

CAPACITY
Testamentary Intent requires testamentary capacity. Testamentary capacity requires mental capacity.

Mental Capacity
a) The Test of Mental Capacity To be competent to make a will, the testator must be an adult (18+ yrs) and must be of sound mind. i) Four Part Test for determining of sound mind: (1) The testator must be capable of knowing and understanding in a general way: (a) the nature and extent of his property, know in a general sense what you own; not necessary to know the specifics about your property (b) the natural objects of his bounty, a sense of who should take (c) the disposition that he is making of that property; and you have to know what exactly youre doing with the will (d) must also be capable of relating these elements to one another and forming an orderly desire regarding the disposition of the property. Have a clear understanding of what youre engaging in when you create a will ii) Note: The test is one of capability, not of actual knowledge. If test was of actual knowledge, a reasonable mistake about whether one of your children was alive would make you mentally incompetent since you wouldnt know the natural objects of your bounty (family). B) TESTAMENTARY INCAPACITY CANNOT BE ESTABLISHED BY ISOLATED ACTS. i) In re Estate of Wright (1) Facts: Will devised to his friend one of this properties, his daughter another, and his interest in the 3rd to his granddaughter. He left his grandson & others $1 each. Will duly executed, with notary & witnesses signing. Will contested b/c of mental capacity. Many witnesses testified that he was of unsound mind, including those present at the signing of the will, and gave many examples of his weird behavior. (2) Holding: not enough evidence of unsound mind (a) The legal presumption is always in favor of sanity, especially after attestation by subscribing witnesses, for it is the duty of the subscribing witnesses to be satisfied of the testator's sanity before they subscribe the instrument. The notary & witnesses has subscribed to the will, but later testified that he was of unsound mind at that time. Not 4 / 43

enough evidence offered to overcome presumption of sanity that was created when they subscribed. (b) Testamentary capacity cannot be destroyed by showing a few isolated acts, foibles, idiosyncrasies, moral or mental irregularities or departures from the normal unless they directly bear upon and have influenced the testamentary act. The only evidence was testimony that he was a drunk, kept to himself, lived alone and in a messy place, and did weird things (like pinning garbage to bushes & showing the neighbor his "roses"). These acts had no bearing on his ability to create the will. He knew the objects of his bounty, the property he owned, etc. c) Why Require Mental Capacity? Possible Justifications: i) A will should be given effect only if it represents the testator's true intent ii) A mentally incompetent man or woman is not defined as a "person." iii) The law requires mental capacity to protect the decedent's family. iv) To a large extent the public acceptance of law rests upon a belief that legal institutions, including inheritance, are legitimate, and legitimacy cannot exist unless decisions are reasoned. v) Assures a sane person that the disposition the person desires will be carried out even if the person later becomes insane and makes another will. vi) May protect society at large from irrational acts. (but doesnt protect society from a sane person acting irrationally) vii) May protect a senile or incompetent testator from exploitation by cunning persons. D) MENTAL CAPACITY CAN BE DEFECTIVE DUE TO AN INSANE DELUSION i) A person may have sufficient mental capacity generally to execute a will but may be suffering from an insane delusion so as to cause a particular provision in a will (or the whole will) to fail for lack of testamentary capacity (depending on how much of the will was caused by the insane delusion). (1) An insane delusion which impairs testamentary capacity is one to which the testator adheres against all evidence and reason to the contrary. ii) In re Strittmater (1) Facts: Will gave everything to the National Woman's party (NWP); decedent had worked as volunteer for NWP for long time, it was her whole life. Doctor testified that she had schizophrenia. She never married, and lived with her parents until they died. She was devoted to her parents when they were alive, but after they died, she wrote nasty things about her parents, especially her father. She hated men, wished they would all be killed and looked forward for the day when women could bear children without men. However, her dealings with people such as male lawyer & male banker were entirely reasonable and normal. (2) Holding: found that the evidence showed "incontrovertibly her morbid aversion to men," and "feminism to a neurotic extreme." Therefore, her mental state of paranoia about how evil men were led her to leave her estate to the NWP. (a) Note: Court makes assumptions. Assumes b/c she hates all men, then she is insane. But even if she was insane, does that mean she cannot dispose of her property the way she wants to? e) A WILL IS INVALID IF THE INSANE DELUSION CAUSED OR AFFECTED, OR MIGHT HAVE CAUSED OR AFFECTED, THE DISPOSITION OF THE PROPERTY. i) In re Honigman (1) Facts: Will leaves wife only a life use of her min statutory share, plus $2500, while giving other members of his family a lot more. Wife objected to probate b/c he was not of sound mind when will made. Wife said he was obsessed with the incorrect belief that his wife was cheating on him. 5 / 43

(2) Holding: Court denied probate. It doesnt matter if there existed other reasons why he might have disposed of his property in a specific way - the will is bad if the insane delusion did or might have affected the disposition. (a) Insane delusion vs. Mistake - An insane delusion is a belief not susceptible to correction by presenting the testator with evidence indicating the falsity of the belief. A mistake is susceptible to correction if the testator is told the truth. As a general rule, courts do not reform or invalidate wills because of mistake (although this rule is changing).

NOTE: CONSTRUCTIVE TRUST (IN CASES OF FRAUD, DURESS OR UNDUE INFLUENCE)


Constructive trust is a remedy; alternative to a will contest. Where the probate court cannot do justice by refusing probate, the will may be probated and then a court with equity powers can impose a constructive trust on one or more of the beneficiaries to remedy the unjust enrichment caused by fraud, duress or undue influence (unjust enrichment if devisee permitted to keep property that otherwise they would not have taken but for the wrongful acts). This type of post-probate procedure is much riskier than contesting the probate of the will before the property is distributed, since by the time a judgment is obtained, the may have disposed of the property or not have assets to satisfy the value of the property.

Undue Influence
f) Burden of Proof i) Proponent of a will has burden of proving its validity (showing due execution). The person contesting the will then has the burden of proving undue influence directly or by proving facts that give rise to a presumption of undue influence. The burden then shifts back to proponent to negate undue influence. g) PRESUMPTION OF UNDUE INFLUENCE WHEN (varying approaches) I) CONFIDENTIAL RELATIONSHIP + INFLUENCER PROCURED WILL ii) CONFIDENTIAL RELATIONSHIP + SUSPICIOUS CIRCUMSTANCES (1) Rest. (3rd): 8.3. Confidential relationship + suspicious circumstances = Undue Influence. (a) Factors indicating suspicious circumstances: the extent to which the donor was in a weakened condition, physically, mentally, or both, and therefore susceptible to undue influence; the extent to which the alleged wrongdoer participated in the preparation or procurement of the will or will substitute; whether the donor received independent advice from an attorney or from other competent and disinterested advisors in preparing the will or will substitute; whether the will or will substitute was prepared in secrecy or in haste; whether the donor's attitude toward others had changed by reason of his or her relationship with the alleged wrongdoer; 6 / 43

whether there is a decided discrepancy between a new and previous wills r will substitutes of the donor; whether there was a continuity of purpose running through former wills or will substitutes indicating a settled intent in the disposition of his or her property; and whether the disposition of the property is such that a reasonable person would regard it as unnatural, unjust, or unfair, for example, whether the disposition abruptly and without apparent reason disinherited a faithful and deserving family member. (2) In re Will of Moses (a) Facts: Moses married 3 times; all 3 husbands died; no children. She then had intimate relationship with Holland (an atty) 15 years younger than her. 3 yrs before death, she made a will devising almost all her property to Holland. Will drafted by another atty who had no connection to Holland. Older sis attacked the will on ground of undue influence. Holland argued she had independent counsel to draft will, who was entirely devoted to her interests. (b) Holding: No meaningful independent advice or counsel. Atty knew she was giving substantial property to Holland rather than her sister, and did not pursue the issue with Moses. Atty didnt care who she gave prop to, whatever she wanted. Court said it was clear that he did no more than write down what she told him, and therefore Moses did not really have independent advice or counsel. (c) Dissent: Moses was a good businesswoman with strong personality she knew what she wanted; she had no relationship with sis. Attacks court by saying their decision is b/c she was having a relationship with a much younger man. III) CONFIDENTIAL RELATIONSHIP + INFLUENCER RECD BULK OF THE ESTATE + DECEDENTS INTELLECT WAS
WEAKENED

(1) Estate of Lakatosh (a) Facts: 5 yrs prior to her death, Roger befriended testator who was in her 70s, lived alone, & was rarely visited by her sister. Roger lived close & visited her at least daily; he assisted her around the house & drove her around, suggesting that she came to depend on him. A few mos. after they met, she gave Roger power of atty (POA), & executed a new will which gave almost everything to him. Atty who drafted the will was Roger's cousin. Using the power of atty, Roger unlawfully converted assets from testators estate for others benefit. 2 yrs later POA revoked. (b) Holding: Court finds there was undue influence. Confidential relationship - established by Rose's dependency on Roger and the power of attorney. Roger received the bulk of the estate Rose's intellect was weakened she was an elderly woman; helpless & unable to prevent the consumption of her assets by Roger. Dirty home, living in bad environment generally. (2) In re Kaufmann's Will (1964) Decedent very rich; gets away from family & has an 11-yr intimate relationship with another man. Basically, they were like a married couple & decedent treated him like that including financially. He leaves almost everything to his partner. Family doesnt like the homosexual relationship & objects on grounds of undue influence. Court agreed, finding that there was a confidential relationship (partner had POA), plus the disposition was an unnatural, insidious influence operating on the weak-willed, trusting, inexperienced decedent & his natural warm family attachments had been weakened by false accusations against him by his partner. Note: this is prob only b/c of the homosexual relationship that people werent comfortable with, more than anything else. 7 / 43

h) ELEMENTS OF UNDUE INFLUENCE: (modern view) i) SUSCEPTIBILITY - That the testator was susceptible to undue influence, ii) MOTIVE - That the influencer had the disposition or motive to exercise undue influence, iii) OPPORTUNITY - That the influencer had the opportunity to exercise undue influence, and iv) CAUSATION - That the disposition is the result of the influence. v) SUBSTITUTION Substitute the will of another for that of the testator (1) Sometimes this 5th element is also necessary to prove undue influence, even if prior 4 proven. (2) Libber v. Weslow (a) Facts: Decedent executed a will at 81; she was of sound mind and in excellent health. Frank (her son; an atty), drafted the will per her instruction. Will gave to Frank & his sister; but expressly disinherited 3 grandchildren from deceased son (Julian). Decedent dies 22 days after executing the will. Frank wrote the will and hated Julian; he lived next door to mom & had key to her home. Decedent didnt read/discuss will before signing. Frank got a lot more than if grandkids had also taken. Will also explained reasons why grandkids disinherited bad relationship. Witnesses testified that decedent often expressed her intent to disinherit them. (b) Holding: Will not invalidated on ground of undue influence. The test of undue influence is whether such control was exercised over the mind of the testator as to overcome his free agency and free will and to substitute the will of another so as to cause the testator to do what she would not otherwise have done but for such control. Although there was a confidential relationship (Frank is atty), the opportunity (always around), and motive (he rec'd a larger share), there was no proof that Frank substituted his mind and will for that of his mother. A lot of evidence suggested she wanted this. i) No-Contest Clauses - provides that a beneficiary who contests the will shall take nothing, or a token amount, in lieu of the provisions made for the beneficiary in the will. i) Designed to discourage will contests (so no unmeritorious litigation, family quarrels, defamation of testator). But, it may also inhibit lawsuits proving forgery, fraud, undue influence basically nullifying safeguards. ii) Majority - enforce no-contest clauses unless there is probable cause for the contest. iii) Minority - enforce unless the contestant alleges forgery or subsequent revocation by a later will or codicil, or the beneficiary is contesting a provision benefitting the drafter of the will or any witness thereto. j) Bequests to Attorneys i) Undue Influence - many courts hold that a presumption of undue influence arises when an attorney-drafter receives a legacy, except when the attorney is related to the testator. The presumption can be rebutted only by clear and convincing evidence provided by the attorney. k) Effect of a finding of undue influence i) If part of a will is the product of undue influence, those portions of the will that are the product of such influence may be stricken and the remainder of the will allowed to stand, if the invalid portions of the will can be separated without defeating the testator's intent or destroying the testamentary scheme.

Fraud
l) ELEMENTS OF FRAUD (in the testamentary context) I) DECEPTION AND RELIANCE ON IT BY THE TESTATOR II) MISREPRESENTATION OR FALSE STATEMENT III) INTENT BY DECEIVER TO DECEIVE iv) PURPOSE OF INFLUENCING THE TESTAMENTARY DISPOSITION (in deceivers favor) 8 / 43

m) TYPES OF FRAUD (in the testamentary setting) i) FRAUD IN THE INDUCEMENT occurs when a person misrepresents facts, causing testator to execute a will, to include a particular provision in the wrongdoers favor, or to refrain from executing or revoking a will. (1) Examples: (a) H induces O not to execute a will in favor of A by promising O that H will convey the property to A. At the time H makes the promise, H has no intent to convey the property to A. (However, if H did in fact intend to carry out promise, but later changed his mind, no fraud.) (b) Husband asks wife for will so he can destroy it. She holds up an envelope, pretends it contains the will & burns it. After he dies, se probates the will that hadnt been destroyed, which left her everything. Husband induced to believe there was a revocation, which is what he wanted. Heirs here would be entitled to a constructive trust. (c) Testatrix executes will leaving everything to Jean. Two days before she dies, Carol tells testatrix Jean is dead (Carol knows Jean is actually still alive), and in response, testatrix, who relies on this, executes a 2nd will, giving Carol everything instead. (However, if Carol did not know Jean was beneficiary, then there might not be a purpose to change the disposition.) Note: Jean could get a constructive trust here. (2) Puckett v. Krida (1994) nurses hired to provide care for testator (who was in weakened condition). Nurses got under will; family didnt. Niece alleged fraud in the inducement. Court held there was a confidential relationship b/c of status as nurses, & one nurse had POA. They encouraged testators false beliefs that family using her & her money. Evidence of fraud testator only started believing this after nurses started caring for her, and niece kept meticulous records of how she handled testators money (so the beliefs were clearly false). ii) FRAUD IN THE EXECUTION occurs when a person misrepresents the character or contents of the instrument signed by the testator, which does not in fact carry out the testators intent. (1) Example: O, who has poor vision, asks her heir apparent, H, to bring her the document prepared for her as a will so that she can sign it. H brings O a document that is not O's intended will, knowing it is not the document O wants. O signs it, believing it to be her will. n) Effect of a finding of fraud - A provision in a will procured by fraud is invalid, but the remaining portion stands unless the fraud goes to the entire will or the portions invalidated by fraud are inseparable from the rest of the will. (Diff from mental capacity where the whole will is void, b/c there cant be capacity for some parts and not others.)

Duress
o) When undue influence becomes overtly coercive, it becomes duress. p) Rest (3d) Prop 8.3(c): A donative transfer is procured by duress if the wrongdoer threatened to perform or did perform a wrongful act that coerced the donor into making a donative transfer that the donor would not otherwise have made. Q) REMEDY OF CONSTRUCTIVE TRUST IS AVAILABLE WHERE FRAUD PREVENTS TESTATOR FROM REVOKING OLD WILL. i) Latham v. Father Divine (1949) (1) Facts: Testator (white) died leaving a will that gave most of her estate to Father Divine (black) (). was a charismatic religious leader, although some thought he was a fraud, and his church a cult. Will probated & prop distributed. Then testators cousins (s) sued asking for a constructive trust on that prop b/c of s fraud & duress. Alleged that testator wanted to revoke the will she made & make another giving most to s, that testator had another will drawn up but s prevented its execution via false representation, undue influence, and physical force, and that shortly before her death when testator again said she 9 / 43

wanted to execute a new will, s & others conspired to and did kill her, by means of an operation performed on her, w/o knowledge or consent of family. (2) Holding: Court s entitled to a constructive trust. (a) This is a fraud in the execution; specifically, a fraudulent nonrevocation. But for the fraud of , the existing will would have been revoked and the new will executed. In this situation, the so-called nonrevoked will is probated, and the relatives must bring a lawsuit seeking the equitable remedy of constructive trust. (b) Note: suggested that court rulings here were motivated, at least in part, by racial prejudice against Father Divine & a belief that his church (called a "cult" the by court) was not quite a legitimate religious group.

Tortious Interference With Expectancy


r) Rest. (2d) Torts includes intentional interference with an expected inheritance or gift as a valid cause of action. i) Key Points to Note: (1) Not recognized widely (2) Not a challenge to the probate of a will (3) Tort damages (compensatory and punitive) available s) Marshall v. Marshall - 86 yr old testator married 24 yr old Anna Nicole Smith 3 yrs after they first met at a strip club, where Smith was a dancer. Testator died 18 mos after they were married. Smith spent heavily, so despite all the money he gave her she needed more. Testators relatives blocked access to his money, and she ended up in bankruptcy. Smith sued for tortious interference with an expectancy, & court imposed punitive damages on son who restricted her access to the money. i) Test for tortious interference: (1) A plaintiff must prove: (a) the existence of an expectancy (b) a reasonable certainty that the expectancy would have been realized but for the interference (c) intentional interference with that expectancy (d) tortious conduct involved with the interference; and (e) damages

EXECUTION AND FORMALITIES


Attested Wills
A)

INTRODUCTION i) The Function of Formalities: (1) Ritual Function - Impress upon testator the significance of what is happening (2) Evidentiary function - reliability - shows there wasn't fraud/coercion (there are witnesses); signature in specific location (3) Channeling Function - the benefit of having requirements is piece of mind to testatrix to know that if you follow requirements, then you know your will is going to be valid & in effect (4) Protective Function more difficult for testator to be taken advantage o ii) Comparison of Statutory Formalities for Formal Wills 10 / 43

Statute of Frauds (1677) (land) Writing Signature Attestation & subscription by three witnesses
B)

Wills Act (1837) Writing Subscription (signature must be at the foot or end of will) Attestation & signature by two witnesses

Uniform Probate Code (1990) Writing Signature Attestation & signature by two witnesses

THE REQUIREMENT OF DUE EXECUTION i) Execution of a Will, Generally (1) The most basic formalities for an attested will are: (a) In writing, (b) signature by the testator; and (c) attestation by witnesses. ii) LINE OF SIGHT VS. CONSCIOUS PRESENCE TEST FOR WITNESS ACKNOWLEDGMENT/ATTESTATION (1) CONSCIOUS PRESENCE TEST - presence is found through site of hearing or general consequence of events that the witness comprehends that testator is in the act of signing. (a) UPC 2-502. Execution: Wills. A will must be: i. in writing, ii. signed by the testator or in the testator's name by some other individual in the testator's conscious presence and by the testator's direction; and iii. signed by at least two individuals, each of whom signed within a reasonable time after he witnessed either the signing of the will as described in paragraph (2) or the testator's acknowledgment of that signature or acknowledgment of the will. (2) LINE OF SIGHT You must be capable of seeing the witness in the act of signing (do not have to actually see, just could have seen if you looked up) (a) In Re Groffman (1969) i. Summary: Testator signs will. Witness #1 comes into room & signs in testators presence, then leaves. Then Witness #2 comes into room & also signs in testators presence. Held will not properly executed, b/c the law relevant here provides that the signature shall be made or acknowledged in the presence of 2 or more witnesses present at the same time, and such witnesses shall attest & shall subscribe the will in the presence of the testator. (b) Stevens v. Casdorph i. Summary: Will executed at bank; decedent signs in presence of bank employee (notary). Employee takes will for 2 witnesses to sign, at separate times; each did not see the other nor the testator sign. Will improperly executed. Statute requires that signature shall be made or the will acknowledged by him in the presence of at least two competent witnesses, present at the same time; and such witnesses shall subscribe the will in the presence of the testator, and of each other." No one saw anyone sign; no communication btwn any of them either. 1. Note if the conscious presence test was used here instead of the line of sight test, the execution would have been valid b/c everyone in bank knew what was going on (small town, etc.), and it was within a reasonable time (UPC approach). 2. Also, argument of substantial compliance was made here, but the court was unwilling to vary from the strict requirements of the law. (3) HYPO: A typewritten will has in the testators handwriting, below the testators signature and above the witness signatures, the line: I give Karen my diamond ring. Will entitled to probate? Depends when the sentence was added. 11 / 43

(a) If line added after testators signature, will is valid but sentence is not b/c its not a duly executed codicil. (b) If line added before the testators signature: i. Some courts would strike the entire will b/c the signature has to be at the end of the will (despite the fact that it was written before testator actually signed). ii. Others would probate the will and just strike the language, especially if the line related to a disposition. iii. Some jur might give effect to the language if it was not related to a disposition (but only named an executor, etc.). C) COMPETENCY OF WITNESSES i) THE QUINTESSENTIAL FUNCTION OF A SUBSCRIBING WITNESS IS TO PROTECT THE TESTATOR FROM FRAUD OR UNDUE INFLUENCE AT THE MOMENT OF EXECUTION. THEREFORE, WITNESSES MUST BE DISINTERESTED SO THAT THE TESTATORS BEST INTERESTS ARE LOOKED AFTER. THIS FUNCTION IS PERFORMED WHEN THE WILL IS EXECUTED (NOT AFTER). (1) Estate of Parsons (a) Facts: 2 of the 3 witnesses signing the will at execution were named as beneficiaries under the will (statute requires 2 witnesses to sign). After decedent died & will was admitted to probate, one of the witnesses filed a disclaimer (waiving right to get under the will). Will contested on grounds that it was not duly executed b/c there was only 1 disinterested witness the other 2 got under the will. (b) Holding: Court held not a validly executed will b/c the statute requires 2 disinterested subscribing witnesses. The fact that one witness filed a disclaimer after death doesnt mean anything, b/c the quintessential function of a subscribing witness is performed at the time of execution to ensure there is no fraud or undue influence at the moment of execution. If witnesses subscribing at execution are not disinterested, then testators interests are not protected at time of execution. (2) Purging Statutes - used to purge an attesting witness of any benefit he or she received under the attested will unless the required # of disinterested witnesses also attested to the will. This is to prevent interested parties from testifying about the will, since they might not testify truthfully. Purging statutes are also used to protect the testator from fraud/undue influence at the moment when he executes a will, by ensuring that at least 2 people without any financial motive to defraud the testator are present. (a) At least 2 types of purging statutes in existence today: i. First kind of statute (like the CA statute in Parsons) takes from the witness only those benefits that he would have received under the will that exceed the benefits that would have been received if the will had never been executed. ii. Second kind of statute requires that any devise to the attesting is voided, such that nothing is taken under the will (regardless of whether intestacy laws would have provided the witness something). iii. UPC 2-505 (which some states follow) has done away with purging statutes such that "a will or provision thereof is not invalid because the will is signed by an interested witness." This is because witnessing the will is only about you saying the testator signed the will; so who cares if they get under the will or not? D) EXECUTING AND SAFEGUARDING WILLS i) Selection of witnesses (1) Must be disinterested - shouldnt be anyone that benefits under the will (2) Get 3 witnesses (maj jur require 2, so 3 just in case theres a problem with one) (3) If possibility of will contest/challenge, want witness who is credible & has known testator a long time 12 / 43

ii) Present at Execution - Everyone should be present at time of execution (all witnesses, the lawyer, testator & notary, no one else should be there). Door closed; no one enters or leaves until ceremony done. iii) Testator Recognition of Will & Signature (1) Ask testator: Is this your will? Have testator recognize will; make sure that it is the will testator wants to execute, and that testator understands it. (2) Witnesses should be positioned so that they can see testator sign. Witnesses dont need to know contents of the will. (3) Testator signs on bottom of last page, with all pages firmly affixed together. Good idea to also initial & date on each page. The will should also specify how many pages it consists of. iv) Witness Attestation (1) In General, the Attestation Clause should say that: (a) Three Witnesses i. Present at the same time ii. Heard the testatrix declare the document to be her will iii. And observed the testatrix sign her will in their presence (b) And that, then and only then: i. Each witness did 1. in the presence of each other and the testator and 2. at the request of the testator ii. Sign the will as witnesses. v) Self-Proving Affidavit typed at end of the will and signed by testator & witnesses, before a notary, swearing that the will has been duly executed (notary then signs & attaches seal). (1) Purpose: so that after testator's death, witnesses dont need to testify to the execution of will, b/c already done with the self-proving affidavit. This becomes important if witnesses have died or if they moved far away. Although the will is still valid w/o affidavit, it makes it easier to probate. (2) Self-Proving Affidavit vs. Attestation attestation serves as evidence that the testator executed the document; the affidavit says that all the other formalities were done (duly executed). Attestation clause Self-proving affidavits prima facie evidence that the testator voluntarily Sworn statements by eyewitnesses that the will signed the will in the presence of the witnesses has been duly executed permits probate of a will when a witness forgets Performs all functions of the attestation clause, the circumstances of the will's execution or dies plus has the further effect of permitting probate before the testator without requiring the appearance of either witness the attestant expresses the present intent to act as the affiant swears that the will has already been a witness witnessed (3) Two types of Self-Proving Affidavits (UPC 2-504 authorizes both types): (a) One Step (Combined attestation/affidavit) the affidavit is part of the will, and both affidavit (signed by witnesses, testator & notary) & attestation (signed by witnesses) are one document, so everyone only signs once, and is attached within the will and conclude the will. (b) Two Step affidavit is attached but not technically part of the will (2 separate docs). The will is duly executed, as is the attestation clause (with witnesses signatures) that follows the testators signature. Attached to the executed and attested will, is the self-proving 13 / 43

affidavit (signed by the testator, the witnesses, and a notary), which is signed after testator signs the will, and after witnesses sign attestation clause. vi) Duplicates: Testator should not execute more than one copy too many ambiguities might arise as to why this was done vii) After execution (1) Executed will should be placed somewhere safe; let people know where it is (2) Keeping with atty looks like solicitation (b/c client must come back to see atty again & this implies a continuation of the transaction). E) MISTAKE i) STRICT COMPLIANCE: TO BE VALIDLY EXECUTED, A WILL MUST COMPLY STRICTLY WITH THE REQUIREMENTS SET BY STATUTE. (1) In re Pavlinko's Estate (a) Summary: Husband & wife sign each others wills by mistake. Will practically identical left property to each other, and to other family members. Court refuses probate of will. Statute requires that every will shall be in writing and shall be signed by the testator at the end thereof. Court refuses to vary from the strict requirements of the law, explaining that once a court starts to ignore, alter, rewrite, or make exceptions to clear, plain and unmistakable provisions of the [statute] in order to accomplish equity and justice in that particular case, the [statute] will become meaningless, and the door will be opened wide to countless fraudulent claims which the [statute] successfully bars. ii) CURATIVE DOCTRINES: SUBSTANTIAL COMPLIANCE & HARMLESS ERROR/DISPENSING POWER (1) EVEN IF STATUTORY REQUIREMENTS ARE NOT MET, A COURT MAY STILL FIND A WILL VALID, IF CLEAR & CONVINCING EVIDENCE IS SHOWN OF TESTATORS INTENT, OR THROUGH RELIABLE EVIDENCE OF A VALID TESTAMENTARY SCHEME. (a) The rule is designed to cure the inequity caused by strict adherence to formalities. Since the primary purpose of the formalities is to ensure that the document reflects the uncoerced intent of the testator, compliance is not important because of their inherent value, but because of the purposes they serve. Rigid insistence on literal compliance often frustrates these purposes, so some courts have allowed probate of technically defective wills. (b) Harmless Error i. UPC 2-503. Harmless Error 1. Although a document or [codicil] was not executed in compliance with [statute], the document or writing is treated as if it had been executed in compliance with that section if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute a. the decedent's will, b. a partial or complete revocation of the will, c. an addition to or alteration of the will, or d. a partial or complete revival of his [or her] formerly revoked portion of the will. ii. Rest. (3d) Prop. 3.3. - A harmless error in executing a will may be excused if the proponent establishes by clear and convincing evidence that the decedent adopted the document as his or her will. iii. Note called the dispensing power, The justification is that the purpose of the statute is to protect against fraud. But if evident theres no fraud, then its ok. (c) In re Snide 14 / 43

Facts: Husband and wife sign each others wills by mistake; wills were identical except for the differences in names of the donors and beneficiaries on the wills. Court admitted will to probate. Court explained that testamentary intent does not attach to the specific document signed so long as the testator intended to execute the will. Here, the two wills were practically identical. This clearly evinced a valid testamentary scheme. Also, no evidence of fraud. 1. Note: This case is an exception - most courts wont fix this. (d) In re Will of Ranney i. Facts: The will was 4 pages & 5th page was a self-proving affidavit. At the execution, the testator signed the 4th page, but the witnesses only signed the 5th page - the self-proving affidavit. The testator and witnesses all thought they were signing and attesting the will. Will then notarized and all 5 pgs stapled together. The affidavit stated that each witness signed the will as witnesses in the presence of the testator (but this didnt happen b/c actual will not signed). ii. Holding: Will admitted to probate, although it did not adhere to the statutory formalities. Court explained that the statutory requirements serve an evidentiary function (giving court evidence of terms of will & testamentary intent), a ritual function (shows the seriousness of event), and prevents fraud & undue influence. The signatures on the self-proving affidavits satisfy these requirements. If the witnesses, with the intent to attest, sign a self-proving affidavit, but do not sign the will or attestation clause, clear and convincing evidence of their intent should be adduced to establish compliance with the statute. (e) In re Estate of Hall i. Summary: Will #1 executed. 14 yrs later, testator & wife want to execute a Joint Will. Joint Will executed, but without required attesting witnesses present. Wife tears up Will #1 at testators direction. Court allowed probate of Joint Will. Although formal requirements are lacking, there was clear & convincing evidence that the testator intended to void Will #1 by destroying it and signing the Joint Will. By signing the Joint Will, testator intended to validate it. (f) Note: Diff btwn testamentary intent (intent that it be a will) vs. dispositive intent (intent that he wanted her to get).

i.

Holographic Wills
F)

A TESTAMENTARY DISPOSITION NEED NOT BE SET OUT IN A FORMAL DOCUMENT; A LETTER CAN ALSO BE A VALID HOLOGRAPHIC WILL, AS CAN A VARIETY OF OTHER DOCUMENTS. i) Kimmel's Estate (1) Facts: Testator mailed a letter to 2 of his children. The letter was written in Kimmel's handwriting, signed at the end "Father," dated Dec 12, 1921, and contained the following: "I have some very valuable papers I want you to keep fore me so if enny thing happens all [of my property] goes to [my sons] Kepp this letter lock it up it may help you out." Kimmel died the same day he sent the letter. (2) Holding: The Court probated the letter as a holographic will. Court focused on the issue of testamentary intent (to create a will). (a) Here, the words, "if enny thing happens," strongly support the idea of testamentary intent. (b) Also, he signed it "Father." When taken in context of the letter, "Father" was intended as a completed signature. ii) Note on Conditional Wills If x happens, I want Y to get everything.

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(1) Most courts will presume the condition does not mean that the will is to be probated only if the stated event happens but is merely a statement of the inducement for execution of the will. g) GENERALLY, A HOLOGRAPHIC WILL: i) MUST BE IN THE TESTATORS HANDWRITING, (1) EXTENT WRITTEN IN THE TESTATOR'S OWN HANDWRITING: (a) First Generation Statutes - Required that holographs be entirely, written, signed, and dated in the handwriting of the testator. Mere Surplusage (Estate of Mulkins) if there is no intent to incorporate the printed material, courts will treat the printed portion as mere surplusage, ignore it, & probate only the handwritten portions. This is b/c the surplusage doesnt change/affect the disposition that is handwritten. The test is if the holograph can be understood without the printed provisions. ii. With these statutes, courts have strictly enforced the requirement that holograph is completely in testators handwriting. Examples of holographs struck down: 1. Where only 1 or 2 printed words 2. Where testator stamped the named of his home twice within the text 3. Where testator took handwritten will to local banker, who added some markings with the consent of the testator; not all in testators handwriting (b) Second Generation Statutes (1969 UPC) - Signature & material provisions of the holograph must be in the testator's handwriting. Completely ignore printed language. i. When language that indicates testamentary intent is printed rather than written by testator: 1. Some courts hold that a will cannot be admitted to probate if the printed words are essential to establish testamentary intent (and are therefore material provisions). a. Estate of Johnson - testator wrote his will on a stationer's form, filling in certain blanks in his own handwriting and then signing it. The handwritten portion, on its own, did not make sense, and did not show testamentary intent. 2. Other courts hold that handwritten provisions may draw testamentary context from both the handwritten and printed language. No need to ignore the preprinted words when the testator clearly did not. a. Estate of Muder - will handwritten on printed will form, signed and notarized but with only one witness. No issue as to the testator's intent. A testator who uses a preprinted form, and in his own handwriting fills in the blanks by designating his beneficiaries and apportioning his estate among then and signs it, has created a valid holographic will. (c) Third Generation Statutes (1990 UPC) - A will is valid as a holographic will, whether or not witnessed, if the signature and material portions of the document are in the testator's handwriting. Also, the UPC explicitly allows extrinsic evidence to be used to establish testamentary intent (allowed in for context). II) INCLUDE THE TESTATORS SIGNATURE, (1) In almost all states permitting holographs, a holograph may be signed at the end, at the beginning, or anywhere on the will, but if not signed at the end there may be doubt about whether the decedent intended his name to be a signature. iii) BE DATED , AND (1) some jurisdictions require this also be in testators handwriting 16 / 43 i.

iv)

MUST ESTABLISH TESTAMENTARY INTENT.

(1) In re Estate of Kuralt (a) Facts: Testator, married, had a longtime affair with another woman. He was her primary source of financial support. In 1989 he drafted a holographic will bequeathing Montana property to lover. In 1994, he executed a formal will giving to wife & kids, which included no mention of the Montana property. In 1997, he gave lover money & sold part of Montana prop to her. He planned to make another such transaction, but he got sick before he could do so. In hospital, he wrote a letter to lover indicating his intent to give her the rest of the Montana property, but died before he could arrange it. (b) Holding: Court allows the letter in as a codicil; the evidence clearly establishes this was his testamentary intent. He intended to transfer Montana prop to lover. Evidence to support this: (1) long term relationship, (2) he was her main financial support for her & her family, (3) previously transferred part of the property to her for no real consideration, (4) sent lover letter indicating he wanted her to have the property. h) Note: Only of states recognize holographic wills. i) NY only recognizes in 2 situations: (1) mariners at sea, and (2) soldiers in armed combat. ii) States that dont recognize holographic wills: (1) of those states will recognize a holographic if it was created in a jurisdiction that does recognize it. (2) If state has adopted UCC 2-503, may still recognize a handwritten will through the dispensing power (but not as a holograph).

REVOCATION
Revocation by Writing or Physical Act
a) REVOCATION BY SUBSEQUENT WRITING EXECUTED WITH TESTAMENTARY FORMALITIES I) COMMON LAW REQUIREMENTS: (1) INTENT TO REVOKE (2) A SUBSEQUENT WILL OR CODICIL, OR ANOTHER WRITING DECLARING AN INTENTION TO REVOKE, AND EXECUTED IN THE MANNER IN WHICH THE WILL WAS REQUIRED TO BE EXECUTED (see Thompson v. Royall, infra) ii) UPC 2-507(a)(1) - A will or any part thereof is revoked . . .by executing a subsequent will that revokes the previous will or part expressly or by inconsistency. iii) Revocation by Inconsistency (1) A subsequent will wholly revokes the previous will by inconsistency if the testator intends the subsequent will to replace rather than supplement the previous will. (2) A subsequent will that does not explicitly revoke the prior will but makes a complete disposition of the testators estate is presumed to replace the prior will and revoke it by inconsistency. (3) If the subsequent will does not make a complete disposition of the testators estate, it is not presumed to revoke the prior will but is viewed as a codicil. b) REVOCATION BY A PHYSICAL ACT SUCH AS DESTROYING, OBLITERATING, OR BURNING THE WILL i) COMMON LAW REQUIREMENTS: (1) INTENT TO REVOKE, (2) PERFORMANCE OF THE REVOCATORY ACT BY THE TESTATOR OR IN THE TESTATORS PRESENCE (LINE OF SIGHT) BY CUTTING, TEARING, BURNING, OBLITERATING, CANCELING, DESTROYING THE WILL, OR THE SIGNATURE. [Note: UPC only asks for conscious presence] 17 / 43

(a) Harrison v. Bird i. Facts: Decedent executed a will in 1989. Atty retained the will and the duplicate original given to decedent. In 1991, decedent called her atty and said she wanted to revoke her will. Atty then tore the will into 4 pieces and sent it to decedent along with a letter explaining what had been done, and said "As it now stands, you are without a will." When decedent died, the letter from the atty was found, but the 4 pieces of the will were not. ii. Holding: Under CL, revocation of the will must be done by testator or in the testators presence. So the act of tearing up the will did not revoke it. However, there is a presumption that the will has been revoked per the lost wills doctrine, since it cannot be found & it was last in testators possession. 1. LOST WILLS DOCTRINE - If the evidence establishes that a person had possession of her will prior to her death, but the will is not found among her personal effects after her death, a presumption arises that she destroyed the will. Additionally, if the copy of a will that is in the testators possession is destroyed, a presumption arises that the testator revoked the will and all duplicates that may exist. 2. Probate of Lost Wills a. If a will is lost, destroyed w/o consent of testator, or destroyed w/ testators consent but not in compliance with the revocation statute, it can still be admitted into probate if its contents are proved by clear & convincing evidence. b. Some jurisdictions dont like this approach, and statutes prohibit the probate of a lost or destroyed will unless the will was in existence at the testator's death (and destroyed thereafter) or was fraudulently or mistakenly destroyed during the testator's life. (3) THE PHYSICAL ACT MUST AFFECT THE WRITTEN PORTION OF THE WILL (a) Revocation by Cancellation: If written words are to be used for the purpose of revoking a will, they must be so placed on the will as to physically affect the written portion; merely writing on blank parts of the paper is not enough. Cancellation includes any act which would destroy, revoke, recall, do away with, overrule, render null and void, the instrument. i. Thompson v. Royall 1. Facts: Decedent executed a will, then 11 days later executed a codicil. 4 days after that, decedent decided will should be destroyed. On the back of the will, someone else (not decedent) wrote that the will is "null and void," and mentioned reason for not actually destroying will was to keep as reference. Decedent signed and dated this; a similar note was made on the back of the codicil. 2. Holding: a. Revocation by execution of subsequent will the notations on the back must have been a properly executed will or codicil. Since no witnesses, not an attested will. Since not completely in testators handwriting, not a holograph. So not revoked this way. b. Revocation by physical act the will was in no way destroyed. c. Revocation by cancellation No. Revocation by cancellation contemplates marks or lines across the written parts of the instrument or a physical defacement, or some mutilation of the writing itself, with the intent to revoke. Null and void written on a blank part of the will (on the back). 18 / 43

(b) BUT, UPC 2-507: "A burning, tearing, or canceling is a 'revocatory act on the will,' whether or not the burn, tear, or cancellation touched any of the words on the will." However, the words of cancellation must be written on the will itself, not on another document. c) Revocation of a photocopy of the will is not a valid revocation. i) However, if evidence of intent to revoke, court may impose a constructive trust (In Estate of Tolin). d) Partial Revocation by Physical Act i) UPC 2-507 and many states allow partial revocation by physical act. ii) In the states that dont allow partial revocation by physical act, a will cannot be revoked in part by an act of revocation; it can only be revoked by a subsequent instrument. (1) Reasons for prohibiting partial revocation by physical act: (a) Canceling a gift to one person necessarily results in someone else taking the gift, and this "new gift" - like all bequests - can be made only by an attested writing. (b) Permitting partial revocation by physical act offers opportunity for fraud. i. The person who takes the "new gift" may have been the one who made the markings. (2) If partial revocation by physical act is not recognized, the will must be admitted to probate in the form in which it was originally executed if the original language can be ascertained. iii) Example: (1) Ts will says I bequeath $1000 to my nephew, Charles Blake." T crosses out $1000 and substitutes $1500. T writes initials and date in margin. (a) If state does not permit partial revocation by physical act: i. If they dont permit partial revocations, then they will just ignore the handwritten part. Therefore, nephew gets $1000. (b) If the state permits partial revocation by physical act: i. The typewritten will $1000 is revoked. Nephew doesnt get the $1000. But he doesnt get the $1500 either b/c it's considered a new gift which has to be duly attested.

DRR: Dependent Relative Revocation and Revival


DRR: IF THE TESTATOR PURPORTS TO REVOKE HIS WILL UPON A MISTAKEN ASSUMPTION OF LAW OR FACT, THE
REVOCATION IS INEFFECTIVE IF THE TESTATOR WOULD NOT HAVE REVOKED HIS WILL HAD HE KNOWN THE TRUTH.

DRR sustains a revoked gift if a testator cancels or destroys a will with a present intention of making a new one immediately as a substitute and either the new will is not made or it fails of effect for any reason. When the gift fails, the law presumes that testator would prefer the original will over intestacy, and evidence of intent is crucial. LaCroix v. Senecal - Testator's will left part of residuary to nephew. Then, she executed a codicil, revoking the previous residuary clause, & replacing it with an identical one, except that she used nephew's given name, rather than his nickname as in the will. Problem was that the codicil was not properly executed. DRR applies here. Its clear that the only reason for the change was to clarify the name of the nephew. The testator's intent to revoke the will was conditioned upon the clarifying terms of the codicil (to make sure nephew gets, using his legal name) and not to void the existing gift. Therefore, the testator would prefer revival. If a testator revokes a later will under the mistaken belief that by doing so a prior will is reinstated, DRR applies and renders the revocation ineffective and the later will is admitted to probate. Estate of Alburn - Testator created Will #1. Then she executed Will #2 which explicitly revoked Will #1 (revocation by subsequent writing). Then she decides to destroy Will #2, intending to bring back Will #1 (mistaken belief that this would happen). DRR applies, and Will #2 is revived. A) REVIVAL i) Different Approaches: 19 / 43

(1) (English CL) Will 1 is not revoked unless Will 2 remains in effect until the testators death. So, its not necessary to revive b/c Will 1 was never revoked (only at death, & then cant be revived anyway). (2) (Maj CL) Will 2 revokes Will 1 when Will 2 is executed. If Will 2 is then revoked, Will 1 is revived if evidence this was the testators intent. (3) (Min CL) Will 2 revokes Will 1 when Will 2 is executed. Will 1 cannot be revived unless duly re-executed or republished by a later duly executed will. (4) UPC 2-509 (a) If revocation of Will 2 by physical act: If Will 2 wholly revokes Will 1, Will 1 remains revoked unless it is revived. The Will 1 is only revived if evidence shows this was the testators intent. If Will 2 partly revokes Will 1, the revoked part of Will 1 is revived unless evidence that testators did not intend this. (b) If revocation of Will 2 by subsequent writing: (Either wholly or partly) If Will 2 that revoked Will 1 is then revoked by Will 3, the Will 1 remains revoked, unless it is revived. Will 1 is only revived by the terms of Will 3. ii) Examples: (1) T gives B $100; $100 is crossed out & changed to $2000. (a) If the jurisdiction recognizes partial revocation, B would not get anything. But you might bring back the Will 1 (giving B $100) with DRR. Different Common Law approaches: 1. (Min) Will 1 is not revoked unless Will 2 remains in effect until the testator's death. Therefore, revival of Will 1 is not necessary. 2. (Maj) Will 2 revokes Will 1 at the time of Will 2's execution and Will 1 can be revived if the testator so intends. Most commonly followed. 3. (Min) Will 2 revokes Will 1 at the time of Will 2's execution but cannot be revived unless duly executed or republished.

Revocation by Operation of Law: Change in Family Circumstances


b) Divorce: i) Under CL only applies to wills, not other nonprobate transfers (life ins policies, etc.) (1) (Maj) revokes any provision in decedents will for the divorced spouse (2) (Min) revocation occurs only if accompanied by a property settlement ii) UPC applies to nonprobate transfers as well as wills (1) Revokes any provision giving to divorced spouse, plus relatives of the divorced spouse c) Marriage: i) (Maj & UPC) - If testator executes a will, and subsequently marries, the will is revoked to the extent of the spouses intestate share (spouse will get what they would have gotten under intestacy), unless evidence that indicates testator intended otherwise. d) Birth of Children: i) (Min CL) marriage followed by birth of issue revokes a will executed before marriage ii) (Maj) Pretermitted Child Statutes: If a child is born after execution of parents will, and has not been provided in the will, the child will get a share in the parents estate. So, it is a revocation of the will to the extent of the childs share.

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COMPONENTS OF A WILL
Integration of Wills
A)

ALL PAPERS PRESENT AT THE TIME OF EXECUTION, INTENDED TO BE PART OF THE WILL, ARE INTEGRATED INTO
THE WILL.

i) In re Estate of Beale Testator dictated will to his secretary; will consisted of 14 pages. Testator then took the 3 copies of the will, and had witnesses sign them. All pages had testators initials. Testator then had secretary re-type page 12 and 13 with some changes. Those pages also had testators initials. Court held that they would admit the will as it existed before the changes were made, b/c pages 12 and 13 were not present at execution. ii) Integration can bring in a document that has not been duly executed.

Republication by Codicil
A WILL IS TREATED AS IF IT WERE EXECUTED WHEN ITS MOST RECENT CODICIL WAS EXECUTED, WHETHER OR NOT THE CODICIL EXPRESSLY REPUBLISHES THE PRIOR WILL, UNLESS THE EFFECT OF SO TREATING IT WOULD BE INCONSISTENT WITH THE TESTATORS INTENT. iii) Republication applies only to a prior validly executed will, while incorporation by reference can apply to incorporate into a will language or instruments that have never been validly executed. iv) In some jurisdictions that dont recognize incorporation by reference, courts have sometimes used republication to give effect to will that are invalid for some reason other than faulty execution. (1) New York generally doesnt permit incorporation of unattested documents into a will, but a codicil can republish (thus giving testamentary effect) a will that was invalid b/c of mental capacity or undue influence, but a codicil cannot republish a instrument that was never duly executed.

II.

Incorporation by Reference
a) UPC 2-510: A WRITING IN EXISTENCE WHEN A WILL IS EXECUTED MAY BE INCORPORATED BY REFERENCE IF
THE LANGUAGE OF THE WILL MANIFESTS THIS INTENT AND DESCRIBES THE WRITING SUFFICIENTLY TO PERMIT ITS IDENTIFICATION.

i) A properly executed will may incorporate by reference into its provisions any document or paper not so executed and witnessed, if it was in existence at the time of the execution of the will and is identifiable by clear and satisfactory proof as the paper referred therein. (1) Clark v. Greenhalge testator executed will in 1977, naming her cousin as executor. The will left everything to her cousin, except for items she designated by a memo & as she otherwise wished (this was referred to in the will). Memo was written in 1972, and modified in 1976. She also had a notebook where she made such entries. One of the entries in notebook gave a valuable painting to her friend; evidence that this was entered in notebook in 1980. In 1980, testator executed 2 codicils to her will. When she died, her cousin refused to give the painting to her friend. The court held that the notebook was incorporated by reference in the terms of the will. Although the document was not in existence at the time she executed her will, the court said the codicil was a republishing of the will, giving it effect in 1980, so the notebook predates the will, and is therefore incorporated by reference. ii) UPC 2-513. A will may refer to a written statement/list to dispose of personal property that is not specifically disposed of in a will (except money). The writing must be signed by the testator and must describe the items and devisees with reasonably certainty. The writing may be written before or after execution of will, may be altered, & may have no significance apart from its effect on the dispositions made by the will. iii) Johnson v. Johnson testator typed his will not attested, not dated, not duly executed. Then at the bottom, in his own handwriting, writes to my brother I give $10 only. This will shall be 21 / 43

complete unless hereinafter altered, changed or rewritten. He signs & dates it (this would be a valid holograph). Court says this is a codicil that republishes the typewritten will, making the typewritten document a valid will. (1) Note: Prof says the law is wrong here a valid codicil only republishes a validly executed will. A codicil doesnt create a will. It might have been possible to say the handwritten portion is a holographic will which incorporates by reference the typewritten portion.

III.

Acts of Independent Significance


a) A will may dispose of a property by reference to acts or events that have significance separate and apart from the effect of their disposition made in the will. This is true even though the phrasing of the will leaves it in the testators power to alter the beneficiaries or the property by a non-testamentary act. i) Examples: (1) Ts will devises the automobile I own at my death to B. At time will is executed, T owns a Toyota worth $4,000. T then buys a Cadillac worth $40,000, then dies. B gets the Cadillac. While Ts act in buying the Cadillac had the practical effect of increasing the gift to B, it is unlikely that this is what motivated the purchase; more likely that T bought Cadillac b/c T wanted a Cadillac. ii) UPC 2-512. Events of Independent Significance (1) A will may dispose of property by reference to acts and events that have significance apart from their effect upon the dispositions made by the will, whether they occur before or after the execution or the will or before or after the testators death. The execution or revocation of another individuals will is such an event.

CONSTRUCTION OF WILLS
I. Mistake or Ambiguous Language
a) Traditional: The Plain Meaning Rule i) THE PLAIN MEANING OF A WILL CANNOT BE DISTURBED BY EXTRINSIC EVIDENCE THAT ANOTHER MEANING WAS INTENDED. ONLY WHEN THERE IS AMBIGUITY CAN EXTRINSIC EVIDENCE BE ADMITTED. (1) If there is ambiguity, the burden lies on the contestant of the will to prove by a preponderance of the evidence that the T meant otherwise. (2) The court will not reform a mistaken term in the will to reflect the testators intent. (a) Mahoney v. Grainger testator went to atty to draft will and told him she wanted to give to her 25 cousins, for all to share. Atty drafted will to say to her heirs at law. Her only legal heir was her aunt, though, so the cousins couldnt take. Court held it will not bring in extrinsic evidence that testator meant her cousins. The will document is clear & there is no ambiguity with what heirs at law means, so court will not look at extrinsic evidence. (b) In Estate of Smith testator left to Perry Manor Inc. Perry Manor was a nursing home at the time of execution. Perry Manor, Inc. then sold the nursing home to another corp.; nursing home still called Perry Manor. The bequest went to the corp., although testator intended it go to the nursing home. Court says since theres no ambiguity on the face of the will, extrinsic evidence to show testators intent excluded. (3) Patent Ambiguity vs. Latent Ambiguity (a) Patent ambiguity an ambiguity that appears on the face of the will. Increasingly, extrinsic evidence is allowed to aid in interpreting a patent ambiguity, although some jurisdiction still wont allow extrinsic evidence in. 22 / 43

Ex: will leaves a specific portion of estate to A, then leaves entire estate to B. (b) Latent ambiguity an ambiguity that does not appear on the face of the will but manifests itself when the terms of the will are carried out. Oral declarations of intent to scrivener of will admitted in most jurisdictions (scrivener exception). 2 types of latent ambiguity: 1. Equivocation - When a will clearly describes a person or thing, but two or more people exactly fit that description. Extrinsic evidence of direct expressions of testators intent allowed b/c it does not add anything to the will, it just made the terms more specific. 2. When no person or thing exactly fits the description, but two or more people or things partially fit the description.(more common) (4) Personal use exception If extrinsic evidence shows that testator always referred to a person in an idiosyncratic manner, the evidence is admissible to show that the testator meant someone other than the person with the legal name of the legatee. (a) Moseley v. Goodman Testator always referred Trimble as Mrs. Moseley, b/c her husband worked at Moseleys cigar store. Court allowed the extrinsic evidence to mean Trimble, not the actual Mrs. Moseley the wife of the stores owner. b) Leaning Towards Reform: Admitting Extrinsic Evidence to Correct Mistakes W/O Reforming i) A COURT HAS NO POWER TO CORRECT OR REFORM A WILL OR CHANGE ANY OF THE LANGUAGE THEREIN BY SUBSTITUTING OR ADDING WORDS, BUT MAY DISREGARD OBVIOUSLY MISTAKEN REFERENCES WHEN NECESSARY. (1) Arnheiter v. Arnheiter will referred to the testators interest in 304 Harrison Avenue, but testator did not have any interest in 304, but actually 317 Harrison Avenue. Court will not reform (fix) the mistake on the will. Instead, though, Court scratched out the 304, and so it said my interest in Harrison Avenue, which was sufficient to identify the property. (2) Estate of Gibbs Will leaves property to Robert J. Krause, but the person testator intended to leave to was Robert W. Krause. Although court said you cannot reform a will and that there was no ambiguity in the will, it still corrected the mistake, explaining that small things like this are susceptible to mistake, so just disregard the middle initial, and the intended beneficiary is clear (the J guy was a stranger). c) Openly Reforming Wills for Mistake I) IF A SCRIVENER'S ERROR HAS MISLED THE TESTATOR INTO EXECUTING A WILL ON THE BELIEF THAT IT WILL BE VALID, EXTRINSIC EVIDENCE OF THAT ERROR IS ADMISSIBLE TO ESTABLISH THE INTENT OF THE TESTATOR. (1) Erickson v. Erickson Testator executed will 2 days before getting married. By law, the will is revoked once married, unless there's a contingency clause in the will. The will specifically mentioned that his property would go to the wife he was about to marry. The atty who wrote the will knew the state law, but didnt provide a provision in the will addressing it. Court held that a scriveners error that has misled the testator into executing a will on the belief that it will
be valid is similar to relying on a fraudulent statement, so extrinsic evidence of that error is admissible.

ii) Rest. 3d Prop.: 12.1. Reforming Donative Documents to Correct Mistakes (1) An unambiguous donative document may be reformed to conform the test to the donors intent if it can be established by clear and convincing evidence (1) that a mistake of fact or law, whether in expression or inducement, affected specific terms of the document; and (2) what the donors intent was. iii) Some courts have held a validly executed will to be invalid b/c of extrinsic evidence that testator did not intent to execute the will. (1) Fleming v. Morrison testator formally executed a will leaving property to a girl in his will with the intention to trick her into sleeping with him. Court said b/c the lawyer knew the will 23 / 43

was drafted only for that reason and that testator did not intend to actually give her anything, court held will invalid.

II.

Lapse: Death of Beneficiary Before Death of Testator


a) Introduction i) TO TAKE UNDER A WILL, THE DEVISEE MUST SURVIVE THE TESTATOR. IF A DEVISEE DOESNT SURVIVE THE TESTATOR, THE DEVISE LAPSES (FAILS). (1) Voided gifts are treated the same as lapsed gifts (a) Lapse death of beneficiary before testator (b) Void - invalid gift (to dog) or if beneficiary dead at time of execution ii) There are all default rules that apply if the will does not provide what happens when a devisee predeceases the testator. b) Analysis i) DETERMINE WHAT TYPE OF GIFT IT IS. (1) Specific - A specific thing (my house, my car, my 100 shares of GM stock, all the money in my bank account) (2) General - Usually money ($1,000, a car, 100 shares of GM stock) (3) Demonstrative Hybrid; general gift satisfied from a particular fund or source of property. (I give $1,000 to D to be paid from the sale of my house on Cherry Lane.) (4) Residue the rest of the property that has not been distributed (5) Class Gift disposition to beneficiaries described as a group label, not by specific names; membership in class may fluctuate to my children, etc. (a) Generally, naming an individual in a bequest prevents the gift from becoming a class gift. (b) Dawson v. Yucus Will leaves property as follows: to nephew Wilson, to nephew Burtle; there is also a residuary clause. Burtle dies before testator. If class gift, all goes to Wilson (other class members); if not, then to residuary. Court says this is not a class gift b/c she specifically stated the names of the nephews that would get. So share goes to residuary. II) COMMON LAW (1) If gift is specific, general or demonstrative goes to residue or if no residue, to intestacy (2) If gift is residue lapsed part to intestacy (no residue of residue rule) (a) Estate of Russell Testator left everything to a close friend Chester and her dog Roxy. Left jewelry to niece Georgia. Court says testator intended to leave entire estate to Chester & Roxy in equal shares, but the gift to Roxy is void b/c a dog cant take, so it lapses. Roxys share then goes to intestacy (not to Chester, the other residuary). Niece is only heir, so she gets. (3) If class gift to surviving members of the class (not intestacy) III) ANTI-LAPSE STATUTES (1) First, determine whether anti-lapse statue applies: (a) There must be a protected relationship with the testator Maj devisee is a descendant of testator 1. Some also permit testator's siblings, other relatives, or relative of spouse (but not spouse) 9 states no requirement for protected relationship UPC grandparents & lineal descendants of grandparents 1. 1990 UPC also includes stepchildren (b) There is a substitute taker 24 / 43

Maj lineal descendants (surviving issue of deceased devisee) 3 states allow any heir (Iowa, Maryland, New Hampshire) UPC issue of devisee who survive testator by 120 hours (c) There are no express words of survivorship that preclude use of anti-lapse statute Allen v. Talley - Testator wrote her will "to my living brothers and sisters." At time she executed the will, she had 5 siblings. At time of death, all siblings had predeceased her except one brother. The other siblings left surviving children. So if anti-lapse applied, the siblings issue would get too; otherwise only brother gets. Courts says the language living are words of survivorship, so no anti-lapse. Only living brother gets. (2) If anti-lapse applies: (a) If gift is specific, general or demonstrative to substitute taker or intestacy (b) If gift is residue lapsed part to substitute taker or intestacy (not other residuary) (c) If class gift to substitute taker or other class members CL (min jur) Anti-lapse (maj jur) UPC Specific or general bequest to residuary or intestacy If devisee is descendant, then to substitute taker (issue) or intestacy If devisee is grandparent or lineal descendant of grandparent, then to substitute taker (issue) Residue No residue of residuary to intestacy lapsed part Lapsed part to substitute taker or intestacy (not other residuary) Lapsed part to substitute taker or other residuary takers Class Gift To the surviving class members To substitute taker or other class members To substitute taker or other class members

III.

Changes in Property After Execution


a) Types of Devises: i) Specific Devise disposition of specific piece of testators property (my diamond ring) ii) General Devise when testator intends to confer a general benefit and not confer a specific asset (money, a diamond ring) iii) Demonstrative Devise general devise, payable from a specific source. iv) Residuary Devise whatever is left over b) Ademption i) What happens if a will includes a specific devise, but that specific item is not in the testators estate at death (testator sold it or gave it away). (1) ADEMPTION BY EXTINCTION - Only applies to specific devises. There are two approaches identity and intent. (a) Identity Theory (maj) if the specific gift is not in the decedents estate, the gift is extinguished. 1969 UPC 2-609 identity theory, but with 5 exceptions for beneficiary to still get if specific property not in testators estate: 1. the remaining balance on purchase price of specific property sold 2. unpaid amount of condemnation award 3. unpaid insurance proceeds after destruction 4. property owned by testator as a result of foreclosing on a mortgage 5. sale price of specifically devised property by conservator 25 / 43

Wasserman v. Cohen decedent created a trust, to be funded by a specific piece of property. She never conveyed her interest in the property to the trust, and later sold that property. Court says since its a specific devise, the gift is adeemed b/c it no longer exists in the decedents estate. (b) Intent theory if the specific gift is not in the decedents estate, the beneficiary may still be able to get the cash value of the specific item, if he can show this is what testator wanted 1990 UPC 2-609: lean towards intent theory. Devisee gets: 1. the specifically devised property 2. the amount generated (paid or unpaid) by its sale or destruction 3. the property owned by the testator acquired as a replacement; or 4. if devisee recovers nothing under the above factors, the value of the specifically devised property unless evidence indicates the testator intended ademption. a. Note also: Under this provision, where property was sold or destroyed by a conservator, the devisee has a right to a general pecuniary devise equal to the net sale price of the specified gift. (2) ADEMPTION BY SATISFACTION Generally applies to general devises, but might also apply to demonstrative and residuary gifts. (a) If the testator makes an intervivos transfer to the devisee after executing the will, there is a rebuttable presumption that the gift is in satisfaction of the gift made by the will. Ex: Ts will gives $50,000 to A. After executing will, T gives A $30,000. Presumption that this gift was in partial satisfaction of wills bequest, so A gets $20,000 at Ts death. (b) Under UPC 2-609, no presumption. Requires evidence of intention of testator to adeem by satisfaction. c) Exoneration i) When a will makes a specific devise of property that is subject to a mortgage, it is presumed that the testator wanted to debt to be paid out from the residuary estate. (1) This is subject to language in the will indicating otherwise. (2) UPC - you get the property it with the mortgage d) Abatement i) When the estate has insufficient assets to pay debts as well as all devises; some devises must be abated (reduced). (1) Order of abatement: (a) Intestate (b) Residuary (c) General (d) Specific/demonstrative divided pro rata (2) This is default only only applies unless will indicates otherwise (3) However, if the testamentary plan would be defeated by the usual order of abatement, the order of abatement may change to give effect to testators intent. (a) Ex: testator gives sum of money to charity and residue to son. If there arent enough assets in the estate, the son may take nothing, and this is probably not what the testator intended. e) Addition/Accretion i) What happens when assets increase in value or generate income? (1) Cash dividends - goes to residuary (2) Stock dividends 26 / 43

(a) Old view - residuary takes b/c what was given has changed, it's not the same thing. (b) Modern view - to beneficiary b/c it's a change in form, not substance. (3) Stock splits (a) Old view - approach depends on how stock splits viewed in jurisdiction If viewed as specific gift (change in form, not substance) - not adeemed, beneficiary gets If viewed as general gift - adeemed, residuary gets (b) Modern view - not adeemed; for the most part, beneficiary takes, unless evidence of intent otherwise

INTESTATE AND FORCED SHARES


I. Introduction
a) Most people die without a will b/c they: (1) never wrote a will, (2) wrote a will that does not completely dispose of their estate, (3) wrote an invalid will, and/or (4) wrote a valid will with invalid portions. In this case, intestacy laws govern how decedents property is to be distributed. b) Terminology: i) Direct bloodline Issue (descending line); Children (first generation of issue) ii) Collateral bloodline relative who is descended from a common descendant of the decedent. c) General Principles of Intestacy Law i) Rigid scheme testators intent irrelevant ii) Preference for descendants over ancestors iii) Applies only to probate property (other than property that passes by will, joint ownership, insurance policies, etc.) iv) Every jurisdiction has a statute of descent. Provides: (1) Who is eligible to take (2) The order in which people take (3) The allocation of shares among takers (4) Whether remote collateral relatives take all v) Law of the state where decedent was domiciled at death governs the disposition of personal property; law of
state where real property was located governs real property.

II.

The Basic Scheme


a) Who is eligible to take? i) Those who are not specifically disinherited (the negative will I dont want A to take) (1) CL did not recognize negative will, unless they offered another scheme for distribution; so disinherited could take under intestacy. (2) UPC recognizes negative wills; gives effect to testators intent, even w/o alternative scheme ii) Those who survive the decedent (or issues) (1) Survive by how much? (a) First approach - Uniform Simultaneous Death Act (USDA) if there is no sufficient evidence of the order of deaths, the beneficiary is presumed to have died before the donor. The problem of simultaneous death: 1. Janus v. Tarasewicz husband & wife die almost at the same time. Life insurance proceeds go to wife if she survives husband, or else to husbands mom. If they died simultaneously, proceeds go to husbands mom; if husband died before wife, 27 / 43

proceeds go to wifes dad by intestacy. Medical evidence shown to prove she lived a little bit longer than him, so wifes dad gets. (b) (USDA 1991 amendment/UPC) clear and convincing evidence that the beneficiary survived the donor by 120 hours (5 days) 1. Note: If Janus applied this standard, husbands mom would have gotten. b) Shares of Surviving Spouse most intestacy statutes protect the spouse i) Under Common Law, surviving spouse gets: (1) The common distribution scheme: (a) 100% if no parents and no issues of decedent some states: presume spouse will provide for children, so give all to surviving spouse (b) 1/2 if one surviving child (c) 1/3 if one or more surviving children (children get remaining 2/3) (d) 1/2 if no issue but parents or siblings only concerned with parents if there are no issue; if issue, then dont look at parents at all (e) Note: spouse's share may vary depending on decedent's estate size, and/or existence of mutual/non-mutual children ii) Under UPC 2-102, surviving spouse gets: (1) 100% if no surviving descendant or parent of decedent or all surviving descendants are also descendants of surviving spouse & no other descendant of surviving spouse that survive decedent [note: parents dont matter; only mutual children] (2) $200k + of remaining intestate estate if no surviving descendant, but theres a surviving parent (3) $150k + of remaining intestate estate if all surviving descendants are also descendants of surviving spouse & surviving spouse has other descendants (not decedents) that survive decedent [note: mutual children and one (+) step-child] (4) $100k + of remaining intestate estate if decedent has surviving descendants that are not surviving spouses descendants c) Shares of Descendants i) In all jurisdictions, after the spouses share is set aside, issue/descendents take the remainder of the property to the exclusion of everyone else. ii) Three basic systems to distributing shares to descendants: (1) Strict per stirpes treats each line of descendants equally (a) Dividing: (1) divide first line of descendents (even if all dead) then (2) divide according to the first line (2) Modern per stirpes (per capita with representation) (a) Dividing: Start with first line of living takers, then same as strict per stirpes (b) So, if equally distant from testator, then equal distribution. Not fair under strict per stirpes that some have more children than others, and so those who have more siblings take less. (c) Most jurisdictions follow this. (3) Per capita at each generation (a) Dividing: Start with the first line where there is a live taker the live taker gets share as divided among all in that same line Then lump together all dead on same line as that first live taker, take that share, and divide equally among lower (next) line (b) Only a few jurisdictions adopt this. b/c there is still problems that takers equally distant from testator taking diff shares exists under the modern per stirpes, this tries to fix this problem. 28 / 43

A
D=1/2

Note: survivors are underlined

Strict per stirpes: B D E C F


E=1/3

F=1/3

Modern per stirpes D=1/3 E=1/3 F=1/3

B E F

C G

Note: survivors are underlined Strict per stirpes: D=1/3 E=1/3 F=1/6 G=1/6

Modern per stirpes


D=1/3 D=1/3 E=1/3 E=1/3

F=1/6 F=1/6

G=1/6 G=1/6

Per Capita

d) Shares of Ancestors and Collaterals i) When survived by a descendant, ancestors and collaterals do not take. If there are no descendants & no surviving spouse takes next? (1) First Line Ancestors (in ascending order parents, siblings, nephews/nieces) (2) Second Line Collateral (if no first line takers) (a) Two approaches: Parentelic System - estate passes to grandparents and their descendants, and if no grandparents then to great grandparents and their descendants, and so on Degree of Kinship - estate passes to closest of kin counting degrees of kinship (count steps on table of consanguinity). ii) UPC (1) For descendants distribute by representations (a) If no descendents to parents equally If no parents & no issue - goes to descendents of parents (siblings) 1. If nothing there - but you find descendents on each grandparents side a. 1/2 to maternal grandparents, 1/2 paternal grandparents. i. If only one maternal grandparent, and 2 paternal grandparents - still split equally on each side

III.

Transfers to Children
A)

ADOPTION i) Adopted Children Different Approaches (1) Retention of full inheritance rights with adopted child (a) Some jur: Stranger-to-Adoption Rule cannot inherit through adoptive parents since the relatives did not adopt (2) Elimination of all ties with adopted child (a) Hall v. Vallandingham Earl and Liz marry and had four children. Earl dies; Liz marries Jim who adopts the four children. 25 years later, Earls brother Will dies intestate, childless and single. Court said children cannot take through intestacy from Will. Because an adopted 29 / 43

child has no right to inherit from the estate of a natural parent who dies intestate, it follows that the same child may not inherit through the natural parents by way of representation. Under UPC, children could have taken. (3) Adopted child inherit from natural parents but not from natural parents kin (4) Natural parents prohibited from inheriting from adopted child while adopted child inherits from them (5) (UPC) Adopted child cannot inherit from natural parent except where other natural parent marries and the stepparent adopts the child. ii) Adult Adoption (1) Most states treat just like regular adoption; typically done to avoid will contest. (a) But, adoption of an adult for the purpose of bringing that person under the provisions of a preexisting testamentary instrument, when he clearly was not intended to be so covered, should not be permitted. Minary v. Citizens Fidelity mom left will that paid to income to husband & sons, then to be distributed to surviving heirs. Son adopted his wife so she could inherit. Court said no, thats not whats meant when they usually give the same legal effect to adopted children; this is a subterfuge that thwarts the intent of the testator. iii) Virtual (Equitable) Adoption (1) Requirements (a) Must be an agreement between natural parents and adoptive parents to adopt a child ONeal v. Wilkes Hattie born out of wedlock; her mom died, her dad did not recognize her as his child at all. She was shuffled around to several people maternal aunt, then Louise, then Page (biological fathers sister) and she finally ended up with the Cooks. The Cooks raised her as their own daughter, but never formally adopted her. When Cooks died, Hattie wanted to inherit. Court said that Page did not have legal custody of Hattie, she could not transfer custody to the Cooks. (b) The natural parents must fully perform (turn over child) to adoptive parents (c) The child fully performs by moving in with the adoptive parents (d) The adoptive parents die intestate. b) POSTHUMOUS CHILDREN - Usually where child is conceived before, but born after, her fathers death. They are treated as being a child from the time of conception. c) NON-MARITAL CHILDREN i) In all states, child can inherit from the mother. ii) Majority of states permit inheritance of father where there is: (1) Evidence of a subsequent marriage (2) Acceptance by the father (3) By adjudication during the life of the father or (4) By clear and convincing evidence after death. d) ADVANCEMENTS (similar to ademption by satisfaction) i) UPC 2-109 Transfers to heirs during the decedents life are advancements only if there is proof this was intended (by a writing indicating this) ii) Common Law any lifetime gift to a child is presumed an advancement iii) If gift is treated as advancement then how do you calculate shares at death? (1) T has 3 surviving children, no spouse. Estate at time of death is valued at $500k. While T was alive, child A received $100k. (a) Regular distribution advancement deducted from the inheritance. $500k divided by 3 - $167k is what it would be without advancement. The $100k is deducted from this, so A gets $67k. (b) Hotchpot distribution A gives back advancement first, then calculated 30 / 43

$500k + $100k (advancement) = $600k estate created The $600k divided by 3 = $200k each Then deduct advancement $100k A would get $100k under hotchpot. (2) Sometimes its not worth it to take part in hotchpot. For example, if estate at death worth $125k, and A recd $100k during lifetime: (a) No hotchpot $125k/3 = $41k. Nothing extra, A already took. But A has the $100k. (b) Hotchpot $125k + $100k = $225k / 3 = $75k (instead of $100k under reg distribution) E) GUARDIANSHIP AND CONSERVATORSHIP OF MINORS i) If minors parent die and do not appoint a guardian in the will, the court will appoint one for them. (1) Guardianship terminates when the child becomes of age; dies; or is adopted. ii) If designated by will, courts look with deep suspicion. Must have sufficient recording requirements. iii) Property Management Options (1) Guardianship of Property wards until child is of age; no investment powers (2) Conservatorship gives guardian trustee powers with the authority to control investment (a) Appointment and supervision by the court is required (3) Custodianship person given property to hold for benefit of minor. Essentially the money is given to the custodian for benefit of child. (4) Trusts testator can tailor bequest with the most amount of flexibility F) BARS TO SUCCESSION/DISCLAIMING i) Involuntary - Homicide (1) Three approaches: (a) Legal title still passes to slayer Person who committed crime already penalized (criminal prosecution) - why should slayer be penalized again? (b) Legal title does not pass to slayer Should not be able to benefit from wrongful conduct. Some jurisdictions will even bar next of kin (heir of slayer) (c) Legal title passes to slayer but holds as a constructive trust for heirs or next of kin of decedent In re Estate of Mahoney Wife killed husband and then wanted his inheritance. Court ruled that she held the inheritance in constructive trust for heirs or next of kin. Issue turns on whether slaying was intentional or unintentional. Involuntary manslaughter would not provide constructive trust because there is no intent. Standard of proof conviction is sufficient. (2) UPC: Slayer also barred from nonprobate transfers killer cannot profit from his wrong. (a) Killer is treated as having disclaimed the property, and disclaimant is treated as having predeceased the decedent. Some jurisdictions permit the next of kin to take, others do not. ii) Voluntary Disclaimer when person in line to take inheritance declines (1) CL cannot disclaim; if heir refuses to accept, law treats it as passing through disclaimer then to next intestate successor (2) Modern trend/UPC allow disclaimer; disclaimer treated as if he died before decedent (3) Why disclaim an inheritance? (a) Tax purposes (b) Property too encumbered (c) Avoid creditors But, when the creditor is the IRS - Cannot disclaim 31 / 43

1. Drye v. U.S. testator dies, leaves property to son, Ron. Ron tries to disclaim, so his
daughter would get the money and not his creditors (IRS). Court said the IRS can reach the disclaimed assets because Ron ultimately had control of the property.

IV.

Rights of Surviving Spouse, Omitted Spouse and Family Members


SPOUSAL PROTECTION SYSTEMS i) Separate property husband and wife own separately all property each acquires (1) Dower & Curtesy (a) Dower entitled widow to a life estate in 1/3 of husbands interest in qualifying land Advantage right to dower superior to creditors; Disadvantage wife cannot pass it on; since maj property today is not land, no adequate protection of spouse Mostly abolished 2 states dower only; 2 others dower w/elective share (more than just land; fee simple 1/3) (b) Curtesy husband has a support interest in wifes land (only 2 states) (2) Support vs. Partnership theory (a) Support must support purely b/c you got married (b) Partnership not entitled to support just b/c got married, but b/c built life together (3) Rights of the Surviving Spouse to Support (a) Social Security support theory - surviving spouse entitled to social security benefits; doesnt matter who wage earner was. Cannot transfer social security benefits to someone else - can only be to surviving spouse. If previous marriage, & both spouses survive, must share between both. (b) Private Pension Plans Support theory - ERISA dictates surviving spouse entitled to benefits under plans, no matter who the wage earner was. Divorce alone does not revoke beneficiary designation irrespective of what state law says. Husband still collects unless wife changes the named beneficiary. ERISA preempts state law. If wife remarries - Husband #2 takes, no matter if named beneficiary is husband #1. The current husband at death takes. If divorce Husband #1, then changed beneficiary to sister - Divorced husband gets nothing, sister takes. But then if wife remarries, husband #2 gets. (c) Homestead Surviving spouse & children have an interest in the home. Right to protect from predators; right to occupy home during lifetime. Note: you dont need this right if house owned jointly b/c spouse gets it anyway. (d) Personal Property Set-Aside Certain personal property set aside for surviving spouse of a certain amount. (e) Family Allowance Sometimes probate takes several years, until estate is probated, property given to family as maintenance. ii) Community property husband and wife own all acquisitions from earnings after marriage in equal undivided shares B) SPOUSAL ELECTIVE SHARE i) Almost all separate property states give surviving spouse an elective (forced) share. (1) There is huge variation in the statutes. Also statutes are generally inflexible it doesnt matter why you married or if you came into marriage with money. (2) The court may elect for the surviving spouse to take against the will and take her intestate share instead, if it finds that it is necessary to provide adequate support for the surviving spouse. (a) In re Estate of Cross Will leaves everything to testators son, & nothing to surviving spouse. Wife suffers from Alzheimers and lives in a nursing home paid for by Medicaid. 32 / 43
A)

ii) iii)

iv)

v) vi)

Court did what she would have done if she had been competent to make a decision, finding this was necessary to provide for her financial support. (3) To qualify as a surviving spouse, you must be legally married; life partner, etc. doesnt count. (a) In re Estate of Cooper testator left everything to his homosexual lover except for a valuable piece of real estate. Lover wanted to elect against the decedents will. Court said no, the term surviving spouse does not include lie partners for purposes of the elective share statute. (4) Not immune to creditors (unlike dower). Traditional statutes provide the surviving spouse with an election: (1) The spouse can take under the decedents will; or (2) The spouse can renounce the will and take a fractional share of the decedents estate. Underlying Policy: (1) Justification: the surviving spouse contributed to the decedents acquisition of wealth and deserves to have a portion of it; also to provide spouse with adequate support. (2) Support vs. Partnership theory (3) Support right to support b/c need of support, so if wife dies shortly after husband, w/o having gotten share, wifes heirs not entitled, b/c she no longer needs it (4) Partnership wifes share is her share and she would be able to pass on to her heirs Contrast with Intestate Share: (1) Intestate deals with when there's no will (a) You're entitled to half if there are mutual children; if parent & no children, etc. (b) Only getting probate assets but, some jur start to include nonprobate assets b/c testator would transfer assets to nonprobate so they dont leave to surviving spouse intentionally. UPC (1990) approach gives the surviving spouse a sliding-scale percentage of the elective share amount, based on the duration of the marriage (>1yr=3%, >15yrs=50%) HYPO: H & W married for 50 yrs. Agreed that H is wage-earner, W is homemaker. H attempts to disinherit W in will (1) In intestacy, W would get . But no intestacy b/c theres a will in place. (2) W entitled to an elective share 1/3. (a) 1990 Sliding scale B/c its a 50 yr marriage, W entitled to more (b) In community property jur W would get

C)

PROPERTY SUBJECT TO ELECTIVE SHARE i) Nonprobate Transfers (1) Assets held in an inter vivos trust are not part of the estate for purposes of the surviving spouses elective share, as they are nonprobate assets. (a) Sullivan v. Burkin During his lifetime, husband created a trust under which he transferred real estate to himself as sole trustee; then to go to his sons. When he died, he left a will intentionally disinheriting his estranged wife. Wife wanted to invoke her elective share, but court said the inter vivos trust is not considered part of the elective share. Prof says: not really equitable, but court doesnt want to go against precedent. In divorce, the transfer would be counted as marital prop & wife could still take. Doesnt make sense that entitled to it at divorce, but not at death. (2) Trusts created from assets acquired outside of marriage not eligible for the elective share. (a) Bongaards v. Millen mom created trust for benefit of her daughter. Daughter had a limited power of appointed. Daughter then doesnt leave trust to her husband, but to her sister. Husband wants his forced elective share. Court says not an asset for elective share purposes asset not created during marriage. (3) Three different tests to determine when nonprobate transfers are subject to elective share: 33 / 43

(a) Illusory Transfer - court looks at whether it's a good faith transfer or divestment, or made solely to disinherit spouse (b) Intent to Defraud - court looks at the state of mind of the person making an inter vivos transfer - whether transferor intended to defraud surviving spouse (c) Donative intent - looks at whether the transferor intended to make a present gift (4) Statutory Schemes (a) NY specifically lists which nonprobate transfers subject to the elective share (b) Delaware property subject to elective shares is all property includible in the decedents gross estate under fed estate tax (c) 1969 UPC surviving spouse entitled to 1/3 of augmented estate, which includes the probate estate and certain nonprobate & inter vivos transfers made without consideration during the marriage. (d) 1990 UPC more like community property system all up all property of both spouses and slit it according to a percentage based on length of marriage.

TRUSTS
I. Introduction
a) A trust is a device whereby a trustee manages property as a fiduciary for one or more beneficiaries. i) The Parties to a Trust must have these for trust to be valid (1) Settlor (Grantor) - the person who raised the trust - puts assets in the trust (2) Trustee holds legal title to the property in trust; the person who has the fiduciary obligations; can usually sell trust property and replace it with more desirable property. (3) Beneficiary holds equitable title to the trust; benefits from the trust (entitled to trust income) (a) Rights of Beneficiaries - Can go after trustee for breach of duty; Beneficiaries have access, when there's a breach, to the trust raised. ii) No real statutory formalities requirements for creation of a trust (1) A trust is often evidenced by a written document (although not always) (2) Can be created by an oral declaration except for real property - statute of frauds iii) Fiduciary Duty central to a trust. So, you can create a trust where you name yourself as trustee, and also as beneficiary. But, you need to also have another beneficiary - b/c there needs to be a fiduciary relationship to be able to hold someone liable for breach of the fiduciary duty. iv) Inter vivos trust created during life; testamentary trust given after death, usually by will b) Three General Rules: i) If the trustee is also the beneficiary, you need another beneficiary due to fiduciary duty requirements. ii) A trust will not fail for want of a trustee (1) If settlor doesnt name a trustee or if the trustee named waives or doesnt want to do it - Court can always appoint someone as trustee who can fulfill the role (a) Note: personal trustee exception - If settlor gives some inclination that this is the person that he wants to be the trustee, and that person cant/wont do it then court would find that the trust fails. iii) If grantor/trustee as with a declaration of trust, you do not need formal transfer/delivery of the property (1) This is b/c trustee/grantor same person. So not necessary. 34 / 43

(2) Note: NY exception - Still need to go through the formal procedure

II.

Creation of a Trust
a) Introduction i) Four Considerations for Trust Validity (1) Whether there was intent to create a trust by the settlor. (2) Whether there was trust property (trust raised) (3) Whether there are (valid) trust beneficiaries (4) Whether the trust instrument was in writing, if [writing is] required. b) Intent to Create a Trust i) No particular words are necessary to create a trust look at language to see if there was evidence indicating that settlor wanted the person to whom property is being transferred to be for the benefit of someone else. (1) Factors to Consider leanings towards creation of a trust: (a) The person wished to create duties (b) The express goal would be best implemented by finding a trust (c) The person wished to create a legal obligation Precatory Language nonbinding/nonenforceable language I hope, I recommend Equitable Charge - If a testator devises property to a person subject to the payment of a certain sum of money to a third person, the testator creates an equitable charge. 1. Equitable Charge creates a security interest in the transferred property 2. No fiduciary duties - the relationship is more in the nature of a debtor and secured creditor. (2) The language shall be maintained and shall not be sold is strong indication of intent to create a trust (a) Lux v. Lux will said "shall be maintained for the benefit of said grandchildren and shall not be sold until the youngest of said grandchildren reaches" 21 yrs. Issue is it outright gift or a trust court ays the language indicates intent to create a trust. (3) The words in trust not necessary to create a trust so long as the transfer was made with the intent to vest ownership in a third party. (a) Jimenez v. Lee Father was given money from grandma as a gift to his children; dad took money and invested in stock. Gifts never given using the words to be held in trust. Court says a trust was created & dad had a fiduciary duty as trustee. So although dad says he used money to pay for various things for daughter, court says as a trustee, your fiduciary duty includes the duty to do the accounting. Daughter not entitled to entire proceeds from stock dad used with trust money need to take out what was used for her education. ii) Trust vs. Gift (1) To make an outright gift of personal property, as compared to a gift in trust, the donor must deliver the property to the donee, and the donee must accept the gift. So if you die before you give a gift, it does not have to be given, but if it were made in trust, then it must be devised. (a) Delivery need not be physical Constructive delivery something that gives you access to the gift (keys) Symbolic delivery symbolic of the gift (a picture of the gift) (b) The mere intent to give property to someone else is not enough to create a trust when the property has not changed hands; there must be a clear intent to impose the duties of a trustee on the donor. 35 / 43

The Hebrew University Association v. Nye woman went to school in Israel & said she was going to give the school some books (announced at a banquet), but died before she could give them away. Court will not save a gift that fails of delivery by imposing a trust where no facts indicate a trust was intended. For the oral declaration to have created a trust, there must have been obvious intent that widow was imposing on herself the enforceable duties of a trustee. However, court said this was a valid inter vivos gift, b/c symbolic delivery was made when she announced she was giving it to them, as actual delivery would have been impractical. c) Necessity of Trust Property i) To create a trust there must a formal declaration of trust and a separate allocation of trust property. (1) Unthank v. Rippstein Decedent had promised to pay $200 per month as long as lived. After his death, tried to get estate to pay it, as a trust. Court says there no trust property. Decedent failed to separate a portion of the estate to serve as the trust res (property). (2) Trust v. Debts (a) Trust is a particular carved out property to which trustee must handle in a specific way to satisfy fiduciary duty. Beneficiary receives the increase or decrease of the trust property. (b) Debt is an obligation to pay. Only receives amount owed. (3) What happens to trust res if the trust fails for some reason? (a) To settlor - reversionary interest - an outright transfer (b) Resulting trust - some courts will impose this for successor; trustees appointed (instead of reversion) - goes back to grantor's heirs in trust (c) Purchase money trust ii) What can be trust property: (a) Generally, any recognized "property interest" - Cash/check/money order/debt/obligations/real property (b) Future profits can be used as trust property if there is a legal right to receive the future profits and a real expectation to receive them. Brainard v. Commissioner 1927 oral declaration of trust; 1928, traded stock & made money. says the profits he made were in trust, so IRS cant touch. Court just thinks this is shady. They find no trust raised b/c in 1927 when he made the oral declaration of trust, the property didnt exist. Note: its not that future profits cant be put in trust, this case is just problematic very suspicious trying to get out of taxes. Speelman v. Pascal writer and owner of license of My Fair Lady gives as a gift to his secretary 5% of the future profits. Since he owned the rights to receive future property & there is a real expectation of it, then ok to use future profits as trust raised. iii) Pour Over Will: Exception to requirement that there must be trust raised - funding trust from assets distributed by the will. Although trust not raised inter vivos, it will be once settlor dies, by will distribution. d) Necessity of Trust Beneficiaries i) Beneficiary must be ascertainable doesnt have to be named, but you have to be able to figure it out (1) A bequest to an indefinite person or group is invalid. (a) Clark v. Campbell testamentary trust; will said assets to go to decedents friends, whoever are determined to be his friends. The rest goes to residuaries. Friends are not ascertainable, unlike relatives which the law can figure out. (2) Pet Beneficiaries An animal cannot be a beneficiary b/c it cannot hold the trustee accountable. (a) Exception: Honorary Trusts 36 / 43

In re Searight's Estate testamentary trust created to be paid to Florence at a specific rate to care for decedents dog. Court creates an honorary trust. Florence put in charge of the dog. But no fiduciary duty here, so if Florence no longer wants to take care of the dog, the $1000 goes to the resulting trust - reverts back to settlor's estate (for settlor's heirs). e) Necessity of a Written Instrument i) In general, a trust does not need to be in writing requirement unless it is 1) a testamentary trust (will requirement) or, 2) are a trust involving real property (statute of frauds).
(1) Oral Inter Vivos Trust of Land (a) Some jurisdictions will use a constructive trust to validate an oral trust of land if the trustee is in a confidential relationship with the transferor

Hieble v. Hieble mom thought cancer would come back & she was near death. She makes an oral trust of property. She transfers the property jointly to her daughter & son. She also says if she survives, to give it back to her. She survives, but son refuses to transfer it back to her. Court says its not a valid trust; b/c must be in writing. Instead, court imposes a constructive trust b/c there is a confidential, fiduciary relationship. It's her son, she is ill, weak, son reassures her of his loyalty. (2) Oral Trust for Disposition at Death (a) Olliffe v. Wells will gave residuary estate to Reverand Wells to distribute as he saw fit to carry out her wishes as expressed or shall be expressed to him (orally). Types of trusts court identifies here: 1. Secret trust beneficiary appears to have recd property for his own use, but decedent & beneficiary have previously orally agreed that it be held in trust for some secret purpose. Court will allow extrinsic evidence that sheds like on what was meant. 2. Semi-secret trust will appears to create a trust with the beneficiary under will as trustee but purpose of trust not identified. Court will not allow extrinsic evidence. Court says this is a semi-secret trust and wont allow EE. Instead there is a resulting trust, where property goes back to estate for the benefit of the settlor's estate. This is because there's no possibility of unjust enrichment - it would just go back to the heirs.

III.

Types of Trusts
a) Introduction - Types of Trusts i) Revocable trust - settlor retains a lot of power ii) Irrevocable trust - gives trustee all the power; you can have more than 1 trustee iii) Dynastic trust - leaving for all descendents only - keep money in the family - you can't will it to someone else iv) Charitable trust - put stuff in trust for a charitable purpose (which is defined by statute) v) Discretionary trust - set up trust giving certain discretionary powers to trustee. b) REVOCABLE TRUSTS (aka Will Substitute) way to distribute property at death, other than by will i) How a Revocable Inter Vivos Trust typically works: (1) Settlor and trustee are usually different (2) Settlor executes a deed of trust retaining the power to revoke or amend with right to income for life (3) On settlor's death, trust assets distributed or held in further trust ii) The retention of the power by the trustee to revoke & to have a life interest in it does not make a trust invalid just because there is no will. 37 / 43

(1) Note: Since it's not much different from owning it outright, CL didnt recognize revocable trust. CL says it's like a will, but without abiding by requirements of a will. All jur except TN recognize revocable trusts. (2) Farkas v. Williams Settlor is also trustee. During life, settlor retains all benefits, but then transfers to beneficiary at death (much like a will). The court here distinguishes it from a will, though, by saying that it is a trust b/c the beneficiary must get something now an interest. He still had the same rights as a beneficiary, even though in reality he could not exercise those rights, b/c settlor can just revoke. But its enough. iii) Where the settlor reserves a power to revoke a trust in a particular manner, he can only revoke it in that manner (diff from revocation of wills). (1) In re Estate and Trust of Pilafas - Decedent created both will and trust. Both could not be located upon death. Court said will revoked per the lost will doctrine. But cannot revoke the trust in just any old way. Beneficiaries interests cannot be taken from them unless in accordance with trust provisions; trust required written notice to beneficiaries, which was not given. iv) Impact on Creditors (1) State Street Bank & Trust Co. v. Resier - Wilfred created trusts using stocks. Took out unsecured loan. Estate doesnt have enough to pay back creditors - they want to reach the trust. If you retain control over inter vivos trust while you're alive, the creditors should be able to reach it to pay your debts. If you can live off the trust, why can't you pay off your debts from it? c) POUR OVER WILLS set up trust and trust property comes from will devise (so dont need trust raised for this). Same result by creating a testamentary trust. Most jurisdictions allow pour over will. i) Two approaches: (1) Incorporation by reference - Requires that the trust instrument be in existence at the time the will is executed. (a) If the trust instrument is in existence at the time the will is executed, and the will incorporates the trust instrument by reference, it creates the trust (b) If trust amended after will is executed: Give effect to the trust as it was at the time of will execution. But if court finds it inconsistent with intent of testator, the trust doesnt come in at all, no pour over will, and estate passes through intestacy. (2) Independent significance - Requires that some property is transferred to it during life (a) What is required is that at time of the reference there has to be trust raised - prior to testator's death. This is what gives it independent significance. (b) Diff from incorp by reference b/c the trust can be created or amended after the will is executed. ii) Clymer v. Mayo - Clara names her husband James as the primary beneficiary to her life insurance policy, pension plan and will. She then creates a trust to be funded from those sources, and her husband was named beneficiary of the trust. They get divorced. Clara changes beneficiary on pension plan, but doesnt change husband as beneficiary of the trust. (1) Trust is valid b/c it's to be funded not only by pour over will, but also by the insurance policy proceeds. (2) Husbands interest was revoked as a result of the divorce. Generally when people get divorced they don't like each other, and wouldnt want the ex-spouse to get under the will. So under law of wills, the ex-spouse can no longer get although will still names them. So the pour over will that gives assets to the trust is void b/c it's benefiting the ex-spouse, so husband can't get. d) RIGHTS OF BENEFICIARIES/CREDITORS TO DISTRIBUTIONS FROM THE TRUST 38 / 43

i) Mandatory Trust -- The trustee has no discretion to choose either the persons who will receive the income or the amount to be distributed (1) Beneficiaries have right to alienate can sell it, satisfy debts (2) Therefore, creditors may also reach the trust assets ii) Discretionary Trust -- Trustee has discretion over payment of either the income or the principle or both. Beneficiary cannot get until trustee gives it (so creditors cant get either, until trustee gives to beneficiary). Trustee determines to whom, and how much he pays and does NOT have to pay all of it (1) Duties of Trustee (a) Duty to inquire into financial status of beneficiary - If beneficiary is ambiguous about financial report, trustee must clear it up (b) Duty to act reasonably (unless it is sole and absolute discretion, explicitly stated) (c) Fiduciary Duty Marsman v. Nasca discretionary/support trust. Beneficiary goes to trustee and says that he is running low on funds and trustee said to put it in writing and he will consider it. Beneficiary never did and lived in a state of poverty. Trustee never inquired into his financial situation, never gives more money. Court says when trustee failed to check up on beneficiary and denied more payouts, this was a breach of the fiduciary duty. (2) Purely Discretionary v. Discretionary with a support standard (a) Purely discretionary - trustee has discretion over income or interest Creditor of the beneficiary cannot reach the trust assets, since beneficiary doesnt have a recognizable interest. Trustee doesnt have to make a payment. (b) Discretionary trust with support standard (Support Trusts) requires trustee to make payments of income to the beneficiary in an amount necessary for education or support of beneficiary Support Trust i. A support trust directs the trustee to pay only so much of the income or principal as is necessary for the beneficiarys support or education ii. Support trust is a form of discretionary trust, but not a TRUE discretionary trust because amount necessary is not in trustees judgment it is an objective standard 1. I.e Anyone, can figure out how much to give as opposed to saying enough to make X comfortable. iii. General View is that bfs cannot alienate support trusts so creditors cannot reach bfs interest iv. Exception (who can reach bfs interest): 1. Suppliers of necessities a. Always in the UTC and Restatement b. Does not apply for purely discretionary trusts for the UTC 2. Children and spouse my enforce claim for child support and alimony against bfs interest in a support trust. a. Under UTC, court can direct trustee to pay amount. b. Does not apply for purely discretionary trusts for the UTC b. Spendthrift Trusts i. A spendthrift trust precludes the beneficiary from: 1. VOLUNTARILY alienating interest (beneficiary cant transfer) 2. INVOLUNTARILY alienating interest (creditors cant seize) (THIS IS HUGE) 39 / 43

ii. Spendthrift clauses are a restraint on both voluntary and involuntary alienation. 1. But for public policy reasons, if you only restrain one and not both, then you can only restrain voluntary alienation. a. Ex: Dad makes trust for son and wants son to be responsible b. Thus, he restrains voluntary transfers (he cannot alienate his property) c. BUT, he lets involuntary transfers (creditors can attach to trust property) iii. Scheffel v. Krueger -- P sued D for abusing her son and she gets a 500K judgment. He has a trust and P wants to attach trust to judgment. Court found that the language created a spend thrift trust. Court found that P could not take or attach trust asset. What was the legal authority the court used. There are only two exceptions: One is if the bf is the settlor and the trust is not a special need trust established for a person with disabilities and second, for fraud. None of these exist. Even though they had a judgment they could not collect on the trust. Settlor can put a restraint of alenination iv. Shelley v. Shelley What types of trust was this? Mandatory trust with discretionary clause. It was also a spendthrift clause. BF was married and divorced. He was supposed to pay child support and alimony which he did not do. Children and wives wanted a claim to trust funds. Trust established for bf was subject to claims by their children and former wives. Children and wives can take on income but not on corpus because it was discretionary. Can the children take under the discretionary part? Not as creditors but as bf in case of emergency. Because Grant abandoned them the court concluded there was an emergency v. Rule: Children and wives have a claim on income from spendthrift trusts (but not corpus?) vi. Rule: Tort credtors cannot reach spend thrift provision vii. Pension plans may not be assigned or alienated iii) Mandatory v. Discretionary (makes the diff on whether creditors can reach beneficiaries of the trust) (1) Support Trusts - mandatory trust payout, so creditors can attach (creditors can also attach if its a revocable trust made to settlor/beneficiary) (2) Discretionary Trusts combines an explicit statement of discretion with a stated support standard; whether creditors can reach assets depends. (a) Trustee has discretion over the distribution over income or interest, and sometimes even to who are the beneficiaries. iv) Charitable Trusts (1) To qualify as a charitable trust, the trust must have a charitable purpose, rather than merely being benevolent. Charitable purposes include: (1) relief of poverty, (2) advancement of education, (3) advancement of religion, (4) promotion of health, (5) govt or municipal purposes, and (6) other purposes that are beneficial to community. Shenandoah (2) Cy Pres: If the settlors exact charitable purpose cannot be carried out, the ct may direct the application of the trust property to another charitable purpose that approximates the settlors intention. In re Neher (a) 1stStep: If there a charitable Purpose? (b) 2nd Step: Whether the trust was for a general charitable purpose or a specific charitable purpose. If general, trust can be modified; if specific, cannot be modified. (c) 3rd Step: Is it impracticable to give effect to what she wanted?

IV.

Modification and Termination


a) Irrevocable Trust (usually testamentary) - If settlor & all BFs consent may be modified or terminated. Trustee cannot object b/c he has no beneficial interest. If settlor is dead trust cannot 40 / 43

b) c)

d)

e)

be terminated/modified before time fixed for termination, even if all BFs agree, if termination/modification is contrary to material purpose of settlor (Claflin Doctrine) Revocable Trust can be modified/terminated if settlor consents. Modification i) CL Approach: The Claflin Doctrine Cannot terminate/modify terms of the trust prior to natural expiration even though all BFs agree, if it is contrary to settlors intent. Can only modify for administrative purposes not related to dispositional aspect. (Stutchell mentally handicapped) (1) Exception (NY) Poor surviving spouse & Trust protectors ii) UTC 412: Ct can modify both admin & dispositional terms or terminate, if changed circumstances not anticipated by settlor, & to further the purpose of the trust (settlors probable intention). Modify admin terms if impracticable or wasteful or impair trust (settlors intent irrelevant for admin). Termination Generally, a trust cannot be terminated if spendthrift trust, if delays receipt of principle until certain age, if a discretionary trust, or support trust. This is b/c these types of provisions are considered (presumptively) the material purpose of settlor.Trust may not be terminated early even if all BFs agree, unless all material purposes of trust are achieved. (Brown) Trustee Removal - Removal of trustee if a remedy for breach of trust, not modification of trust terms. i) Traditional Approach: Cts are authorized to remove a trustee who is dishonest or if serious breach of trust. Cannot remove if not a serious breach or if a simple disagreement with BF. If settlor chose trustee even harder to remove, and never if basis for removal was aware to settlor when he named the trustee, unless trustee entirely unfit to serve. ii) UTC Approach: can remove if (1) serious breach of trust, (2) lack of cooperation among cotrustees impairs admin of trust, (3) trustee is unfit, unwilling, or persistently fails to administer trust effectively & ct determines removal in best interest of BFs, or (4) substantial change in circumstances or all BFs request removal, & ct finds in best interest & not contrary to material purpose of trust, & other trustee available.

V.

Future Interests and Limits of Trust Duration


a) Types of Future Interests i) Reversion interest that the grantor retains when he gives away less than what he has (gives away life estate in entire prop, grantor has the rest of the interest the fee simple when life estate ends). (1) Rule: if you have a contingent remainder, followed by another contingent remainder, then O always has a reversionary interest. ii) Remainders future interest in transferee that will become possessory, if at all, when all prior interests expire. Need not be certain, but only possible that FI will become possessory. iii) Indefeasibly Vested remainder (1) given to a presently ascertained person, and (2) not subject to a condition precedent (other than end of previous estate) iv) Contingent remainder (1) not given to a presently ascertained person, or (2) is subject to a condition precedent. To A for life, then to B if B survives A. (1) Rule: Contingent remainders usually follow life estates/other contingent remainders. v) Remainder vested subject to divestment (1) given to an ascertained person, and (2) subject to a condition subsequent. To A for life, then to B, if B survives A. Rule: an executory interest more than likely follows a vested remainder subject to divestment (1) Vested Remainder Subject to Open (1) not subject to condition precedent, but (2) class has some ascertainable members, but subject to open to let in more class members. To As children, A is living and has 3 children. 3 ascertainable children; A can have more. (2) Executory interest cuts off preceding estate 41 / 43

(a) Shifting executory interest if an event happens, transfers from one transferee to another transferee (A for life, then to B, but if B doesn't survive A, to C). (b) Springing Executory Interest - if an event happens, transfers from transferor to transferee (O conveys land to A when A marries B). Rule: Executory interest usually never follow life estates/contingent remainders but do often follow vested remainders subject to complete divestment. b) Class Closing Rules (when does class close so that property can be distributed) i) When Feeder Dies (so no more children) ii) Rule of Convenience class closes when a member of the class is entitled to take; the relevant time is when member is entitled to demand payment, not when interest vests (1) Immediate Gifts: (a) T bequeaths $10k "to the children of B who reach 21." B has children alive, but no child is 21 at T's death. Class closes when the first of Bs children reaches 21. At that point no more members can join (after born children cannot take). (b) T bequeaths $10k "to the children of B, to be paid to them in equal shares as they respectively reach 21." Condition subsequent so more like vesting. Class closes when all children reach 21; if one child dies before reaching 21, the class closes when they would have turned 21. (2) Postponed Gifts (a) Class will not close until the life tenant dies. If jur applies rule of convenience, must wait until one member is entitled to possession. (b) T bequeaths $10k "to A for life, then to the children of my daughter B." B survives A. Class def wont close until A dies. If at As death, B has a child alive, class will close. If there was a child of B's that was born, but died before T, then anti-lapse statute applies class closes then too. If a child of B was born after T's death, but died before A died. Then class still closes at A's death. c) Trust Duration and the Rule Against Perpetuities i) A gift violates RAP if it is not certain to vest or fail within 21 years after the death of some life in being. ii) RAP Analysis: (1) What are the interests? (2) Which interests are subject to RAP? (a) RULE: RAP only applies to contingent remainders, executory interests and vested remainders subject to open. (3) When does the clock for RAP start running? (a) Generally, the perpetuities period begins when the instrument takes effect. Will testators death Deed/Irrevocable Trust settlors death Inter vivos revocable trust when power to revoke terminates (usually settlors death) (4) What are the lives in being? (a) Measuring/Validating Life - the life in being can be any person that affects the interest. Life in being must be a person alive at the creation of the interest when the perpetuities period starts to run (includes gestation period). (5) Do the interests that are subject to RAP vest within any of those lives? (a) Note: after-born scenario red flag! No matter how improbable, an interest that might not vest or fail within 21 yrs is void Fertile octogenarian anyone alive is capable of bearing children 42 / 43

Posthumous conception Precocious toddler issue: when does law presume a child can bear children? Unborn widow law presumes that life in being can marry someone who was not yet born at creation of interest. 1. Dickerson v. Union National Bank will creates trust to continue until A, B, & Bs widow (not otherwise identified) died, then to A & Bs heirs. Violates RAP. Bs widow is unascertainable, so cannot be life in being. B is life in being. Unborn widow scenario Bs widow can die more than 21 years after B, only after which will the gift finally vest. Slothful Executor executor does not probate estate for many years after testators death FOR CLASS GIFTS - two additional questions: (6) When does the class close? (a) Physically close & rule of convenience (7) Is the condition precedent satisfied? (a) T bequeaths property in "for A for life, then for A's children for life, then for A's grandchildren." A is measuring life. A's children - we will know within 21 yrs of A's death who A's children are. A's grandchildren - violates RAP - we won't necessarily know if vests/fails within 21 yrs of A's death. Class close - will close physiologically when all of A's children die. So possibility that it won't close within 21 yrs of life in being (A's life) (after-born problem).

43 / 43