Estates & Trusts Review Notes
1. What is the backstop/backdrop of estates & trusts law?
The right to transfer, Hodel v. Irving. The right to transfer provides a unified theory of
how all American estates and trusts law is applied. The goal is to facilitate testator intent.
Simpson v. Calivas - Nonparty to a contract has no remedy for breach, except for 3rd party
beneficiaries. Where a client contracts with an attorney to draft a will and the client identifies to
whom he wishes his estate to pass, that identified beneficiary may enforce the terms of the
contract as a third-party beneficiary.
Under the Uniform Probate Code, a witness can be substituted with a notary.
Probate Process – wills, court supervised process
Nonprobate – contractual, revocable trusts, pensions, banks, brokerage fund accounts, deed
designation, joint tenancy with right of survivorship
Pure will substitutes change during life
Impure – significant lifetime consequences including with a joint bank account which can
be drained whenever or joint property which can be severed and taken whenever
If you die intestate, closest relatives take first. Ie wife then children
Ohio Revised Code ORC 2105.06
If no spouse, children; if no children, spouse
If both, and all children are mutual, surviving spouse takes all
1 child of decedent and not child of surviving spouse: 1st $20k to SS, ½ remaining, and rest to
children.
Multiple children, some but not all are children of surviving: SS takes first $60k and 1/3
remaining, remainder divided up amongst children
If multiple children, none of surviving: SS takes $20k + 1/3 remainder and children take
remainder /3
If no spouse and no children to parents, if no parents to siblings, if no siblings to descendants, if
no descendants to grandparents, if no grandparents to next of kin.
Using the table of consanguinity:
Parentelic test: follow line until living relative found
Degree of Relation (Ohio) look to closes living relative
Count 1, 1 2 lower # takes first. If no degrees left, to stepchildren. If none, to state.
English Per Stirpes
Equal division at first generation. Anyone dead, share drops to next generation in equal
share
Modern Per Stirpes (Ohio)
Equal division at first generation with 1 living taker
Estates & Trusts Review Notes
Per Capita at Each Generation
Equal division at first generation with at least one living taker. If anyone in that
generation is dead, shares don’t drop down. Instead, they are thrown into the hotchpot.
Hotchpot = blending of property for purposes of equal division
Add shares and divide for next generation. Equally near, equally dear. Every person of
same relation = same share.
Does not include in-laws or those without descendants, ancestors.
Relative to wills can use any of the three or a custom under intestacy or a will.
Majority and Ohio = modern per stirpes (if silent)
Professional Responsibility
Must know the family well, mistakes = complaints
Duty Critical
1. Rule of Privity – standing to sue exists if there is privity of contract. Originally only for
testators but now for beneficiaries.
Exceptions in Ohio: Privity with testator, fraud / bad faith
2. Conflict of Interest – It is normal/ethical, with a waiver of conflict of interest, to represent both
spouses. Add a waiver of confidentiality, not just a simple waiver of conflict of interest.
Full disclosure to both spouses. No secrets. If there is a conflict of interest, the attorney
must drop both clients.
Who is a child?
Adoptive – Transplant Theory of Adoption – out of old family, can no longer take. Into new
family, can take.
One exception in Ohio: If the child is adopted by stepparent so long as right of biological
parent is not terminated during life, can take from both.
Non-Marital/Illegitimate Child
Can take from mom. Can also take from father too if paternity is established before his
death
Posthumous Children – conceived (science) – case law/balancing tests. Massachusetts law. In
Ohio, the 300-day rule after death applies.
Declare Heirs – one can declare heirs in probate court with two witnesses. This is irrevocable for
one year. Adoptions are irrevocable, unless re-adopted or lost custody.
There is no adult adoption in Ohio, but there is designated heirship whereby someone can be
designated as an heir and receive just like a child.
Gratuitous Transfer – cannot force acceptance, 9 months to disclaim.
Involuntary Bar to Succession: Slayer Rule: If you intentionally kill another, you cannot inherit
from them. Criminally convicted, or civilly by a preponderance of evidence, cannot inherit.
Does not bar children or descendants of slayer. Slayer treated as if predeceasing the decedent.
Estates & Trusts Review Notes
How wills are executed:
1. Writing – on any surface
2. Signature – any mark made with intention to adopt will as one’s own. Not yet including digital
3. Attestation – witness by 2 18+ disinterested witnesses
Secondary/side formalities:
1. Subscription: testator and witnesses must sign at bottom/end of will
2. Conscious presence: witnesses must be there to hear even if can’t see (no
zoom)
Old School Rule: Wills must be executed perfectly. The slightest mistake renders a will wholly
invalid / strict compliance or totally invalid
Today, after In re Snide ad hoc exceptions are made for common mistakes. Prof. John Langham
of Yale argues for harmless error and substantial compliance
Must prove, by clear & convincing evidence, that the four functions of the will were satisfied:
1. Ritual/cautionary – legally binding
2. Evidentiary – evidence of intent & right to transfer
3. Protective – free from fraud/duress/undue influence
4. Channeling – through court supervised process of wills
If all four functions are met, but not all formalities, substantial compliance will allow the will to
be admitted to probate
Harmless error – If shown, by clear and convincing evidence that this will was intended to be
testator’s last and final will, then it is their will.
Dispensing Power – both require clear and convincing evidence.
Harmless Error Exceptions in Ohio
1. Testator wrote or caused the writing to be created
2. Testator signed, but no subscription
3. 2 Witnesses were consciously present but did not sign
Not all wills require witnessing, however.
Holographic wills (not in Ohio) are a type of handwritten will, signed by testator in his
handwriting, but not witnessed. Under the 1969, UPC, they are valid if the material
signature and provisions are in the testator’s own hand. This includes the dispositive
provisions. Non-dispositive provisions can be written by the trustee.
In 1922, this changed to material portions and signature allowing comparison for
handwritten vs typed wills, but the majority are handwritten.
To break a will, there must either be a recovation by subsequent writing (with a separate writing,
signature, and attestation by two witnesses), a physical act (tearing up/ripping/obliterating the
pages) or by a complete cancellation of the words of the will. Cannot just tear up one page or one
paragraph, must tear up the entire will. In Ohio, no physical act will suffice, one must have a
subsequent writing.
Estates & Trusts Review Notes
Doctrine of Integration
Any document present and intended to be within the will is within, however because this
can be difficult to prove, one should number the pages, or fasten, or staple them in some way so
the court knows what should be integrated.
Doctrine of Repudiation by Codicil
Re-executed by last amendment validly executed to it. Later will controls vis a vis an
earlier will. Will 2 wins. If you amend will 1 in year 3, year 1 controls as amended
Doctrine of Incorporation by Reference
Any page or any document, signed or not into will so long as sufficient evidence of intent
to incpororate exists. Identify document intended to include and show document existed at time
of will execution (cannot incorporate document by future reference).
Clark v. Greenhalsh – will executed in year 1 w document in year 2 amended in year 3. Ill
executed in year 3 now includes document from year 2 in year 3 (repudiation by codicil)
Doctrine of Ademption – cannot give away what you don’t own
Doctrine of Extinction – Identity theory, gone and beneficiary takes nothing
Newer Intent Theory – did testator attempt to ademe? Did someone else give away?
Court can give equivalent value.
Ohio follows a modified intent theory – applies unless given away by specific type of
fiduciary: guardian, power of attorney, durable power of attorney
If one gives away, intent theory applies. If another gives away, identity theory applies
Adepmtion by Satisfaction – Advancement on inheritance
Advancements: Intestacy
Ademption: Testacy
Both reduce if a lifetime gift from parent to child
Parent must say in contemporaneous writing “advancement” satisfaction presumed unless
stated otherwise. Reduce inheritance by amount of lifetime gift.
Advancement calculate into hotchpot
Satisfaction – subtract from amount less $ gift
Abatement – Leave higher value than net worth
Creditors take first then beneficiaries.
Abate 1) Residuary, 2) General 3) Together Specific & demonstrative
Unless will provides different order, default rule (death tax default too)
Capacity
Burden of Proof: Will Contestant
Must know what you have and must be able to say where you want it to go
In re Estate of Breeden – drugged up suicide, wrote will, allowed.
Eccentricities do not rob you of capacity.
Estates & Trusts Review Notes
Undue Influence
Step 1. Burden of proof is on the contestant, can shift to the proponent (undue influence)
Confidential Relationship: caregiver, attorney-client, nurse-patient, power of attorney,
mixed family
Suspicious circumstances: large, unnatural bequeaths, secret will, will made in haste,
drastic change in estate plan, drastic change in relationship of testator after meeting
accused undue influencer.
Ohio only requires CI to shift burden, disprove 1, if not shifted, prove all 4
Step 2. Prove or Disprove elements of undue influence
1. Susceptible testator? Under care, Alzheimer’s etc
2. Opportunity to influence? Can I talk to?
3. Attempted or actual exertion of undue influence? (hardest to prove-indirect evidence)
4. Effect on the will
Fraud in the Execution – Deliberate misrepresentation about the contents of the will being signed
Fraud in the Inducement – Any deliberate misrepresentation to induce testator to leave to
someone other than those who they would normally leave to
Duress – Undue influence on steroids with force or threat of force
Tortious Interference with an Expectancy – thru no fault of your own
The ability to bring probate suits is exhausted
Must show expectancy
Interference – affirmative misconduct, fraud, duress, undue influence
Causation
Damages
Mistake
Plain Meaning Rule: Follow the plain unambiguous meaning of the words of the will
Ambiguities can be resolved
Patent: Clear from face of will (conflicting case law in Ohio)
Latent: Clear with reference to extrinsic evidence
1. Equivocation – 2 persons/things fit perfectly
2. No person/thing perfectly fits, but multiple partially fit
If the beneficiary dies before the testator or bequest lapses/fails, in general, specific,
demonstrative, general bequests lapse or fail and fall under the residue of the estate. When
residuary fails/collapses, it depends on the no residue-of-a-residue rule
No Residue of a Residue Rule
States that follow: fall into intestacy
Ohio abolished, falls back into residue if possible. If there is another residuary
beneficiary eligible to take. If no others, then failed residue falls into intestacy following
default rules of lapse.
Estates & Trusts Review Notes
Anti-Lapse Statute:
1. Beneficiary pre-deceases testator
2. Beneficiary had sufficiently close relation to testator – relative at all
(Ohio grandparents and their descendants, and stepchildren)
3. Beneficiary has descendants (substitute in place)
4. Will does not override anti-lapse statute (merely a default rule)
Beneficiary must die before a testator (dead don’t take)
In Ohio, words of survivorship are sufficient to override anti-lapse statute. “If he survives me.”
If property changes, division must change. Stock split, dividend hike.
Trusts are relationships not entities. They cannot sue or be sued. Instead one must sue the trustee
or be sued by the trustee
The relationship between the grantor/settlor/creator of trust/one who endows it with trust
property.
Managed by a trustee who holds all legal title and has all power over it that an unmarried feesimple absolute owner would for the benefit of the beneficiaries who hold equitable title over
said property.
Enforced vis-à-vis fiduciary obligations where beneficiary can sue for breach of fiduciary duty
Fiduciary Duties
Loyalty
Prudence
Impartiality
Undivided loyalty to the beneficiaries
Sole benefit rule: manage for sole benefit of the beneficiaries.
Self-dealing of any kind is an automatic breach and is prohibited unless waived
by beneficiary or grantor.
No Further Inquiry Rule: Once self-dealing is established, no further
inquiryautomatic breach.
Conflict of Interest: Hartman v. Hardle, In re Gleeson’s Will
Dealing directly with oneself: In Re Rothko executor & purchaser
Fiduciary obligation is the same for executors/administrators/trustees
Can breach if aware others have conflict
Duty of Prudence – objective standard of care. Act as a reasonably prudent person would.
Estates & Trusts Review Notes
Duty of Prudent Investment: balance risk & return Consider portfolio as a whole, avoid
uncompensated risk at all cost. Diversification away from industry and firm risk. Failure to
diversify is a per se breach.
Duty to Administer Trust according to the law and its trust instrument. Cappy Case: Trustee did
not follow by incorrectly distributing principal for Mr. Cappy.
Duty of Impartiality – follow intent of grantor in treating beneficiary
Trust Creation
Intent – property held by one for benefit of another
Trust Property – must have at least a peppercorn
Ascertainable Beneficiaries
Not required as a writing, writing only required for testamentary or real property, can be
oral. Can be created by deed or declaration.
Deed transferred by grantordelivery
Delivery: physical (actually give), constructive (means), symbolic (memo or model)
Delivery is not required for trust by declaration
Must use grantor. Grantor must be trustee, no need for delivery
Planning for incapacity
Power of attorney expires on lac of capacity
Durable power of attorney expires on death, but survives incapacity
Trust survives both
Agent-Principle Relationship for Healthcare
Instructional directives ie DNR
Proxy Directives
Hybrid – instructions with proxy to decide
Biggest limit on testamentary freedom: not estate tax but right of surviving spouse, which differs
in community vs separate property states.
In community property states, spouse already owns ½ because income earned during the
marriage is 50% earned by yourself and 50% by your selfless agent for the principal of your
spouse who cannot be disinherited of half.
In separate property states, of which 2/3 states in the US, including Ohio, are, forced share.
Curtesy right – 100% right to life estate in the land of the wife for the husband, vests
upon birth of first child
Dower right – 1/3 life estate in land from husband to wife that vests upon marriage
Estates & Trusts Review Notes
Ohio has modified dower right regardless of gender. All spouses have 1/3 life estate in real
property owned during the marriage, but not owned upon death. Forced share 1/3 of ½ in Ohio if
less than 2 children and 1/3 to children. If 2 or more children, 1/3 or ½ of probate estate.
Most states, not Ohio, apply to total probate and non-probate estate.
No forced share for children anywhere except Louisiana.
Protection for unintentionally omitted children. If forgotten, entitled to modified intestate share
of non-spousal estate. Share in estate minus spouses share.
Right of beneficiaries & creditors run conterminously. Beneficiary can take so too can the
creditor. Neither can reach discretionary trusts.
Nothing to beneficiary, creditor cannot force distribution either. If beneficiary is entitled to a
distribution and can force, so too can the creditor.
Hamilton Order – order whereby if trustee chooses to make a distribution, must give to creditor
first.
All discretionary or mandatory, all spendthrift or not, all revocable or irrevocable
Trusts can be modified or terminated in several ways
Private trust – background rule: all beneficiaries and grantor agree
Claflin Doctrine: beneficiaries consent & proposed modification does not conflict with
material purpose of the trust. Do not need unanimity so long as interests of dissenting
beneficiaries are sufficiently protected.
Equitable Deviation – unforeseen circumstances & proposed modification/termination furthers
trust purpose
Charitable trust modified as close as possible to purpose of old one
Private Trust
Ascertainable beneficiaries
Enforced by beneficiaries
Rule against perpetuities
Charity Trusts
Charitable Purpose
Enforced by State Attorney General
Exempt from RAP