IN CLASS WILLS AND TRUSTS 1996 Trust There are seven elements of a valid trust: a settlor or trustor; a trustee; trust property (res); delivery of the trust property to the trustee; intent to create a trust; beneficiaries; a valid trust purpose. Settlor/Trustor Hal is the trustor, because he created the trust. Trust Property He funded it with $200,000 of trust property, so there is trust property. Delivery of Trust Property The trust property was delivered, and thus funded the trust. Trustee Trustee, Inc. is the trustee. Intent to Create Trust Since the will had provisions instituting the Trust, Hal had intent to create a trust. Beneficiaries Hal and his wife, Wanda, were the income and remainder beneficiaries, respectively. Valid Trust Purpose Estate planning is a valid trust purpose. Thus, the Trust was valid. WHO GETS THE TRUST PROPERTY 1998 Wanda’s Death – trust effect In 1998, Wanda died prior to the death of Hal. In this case, Hal was to have the income from the trust for Hal’s life and the remainder was to Wanda, but Wanda died prior to Hal. Resulting Trust When an express trust fails because the sole beneficiary is dead, equity creates a resulting trust in the settlor or, if the settlor is dead, the settlor’s estate. [What happens at the time of death?] Here, both wanda and Hal are dead. Therefore, there is likely a resulting trust in Hal’s estate and the trust property will pass by the terms of the residue in Hal’s will. Anti-Lapse The only way to avoid the resulting trust and give the trust res to Wanda’s heirs (the children, Stan and Dawn) through her will is by application of an anti-lapse statute. When a gift would otherwise lapse by reason of the death of a beneficiary, an anti-lapse statute will give the gift to the issue of the predeceased beneficiary if the predeceased beneficiary is kindred of the testator/trustor or of the testator’s/trustor’s ex- or deceased spouse. Wanda, the predeceased beneficiary, was neither since she was not kindred to Hal or herself, so the anti-lapse statute does not apply. Consequently, Wanda’s will is inapplicable to transfer any of the trust assets. Therefore, the $200,000 trust res is distributed through the residuary clause of Hal’s will. OVERALL CONCLUSION THE DISTRIBUTION OF HAL’S ESTATE $20,000 Under the Uniform Simultaneous Death Act, beneficiaries are deemed to predecease the testator if they die simultaneously. Under the will, the $20,000 would have gone to Frank, but Frank died simultaneously with Hal. Thus, Frank is deemed to have predeceased Hal. Thus, the gift to Frank lapses in the absence of an anti-lapse statute. SEE RULE ABOVE. when a gift would otherwise lapse by reason of the death of a beneficiary, an anti-lapse statute will give the gift to the issue of the deceased beneficiary if the deceased beneficiary is kindred of the testator/trustor or of the testator’s/trustor’s ex- or deceased spouse. Frank is a friend, not kindred of Hal, so the $20,000 gift lapses, and will be distributed through the residuary clause of Hal’s will. $35,000 Codicil A codicil modifies a prior will. Since the pink paper was dated in 1989, it could not modify a 1996 will, and thus is not a codicil. Integration The will consists of all papers or writings actually present at the time of execution and that the testator intended to physically constitute her will. Intent and presence is presumed when the papers are physically connected or there is an internal sense of connectedness shown by the provisions running from one page to the next. Here, the pink paper is not internally connected or showing with a provision. However, the will does specifically refer to the pink paper. Therefore, a court may find this reference sufficient to intergrate the pink paper into the will. Incorporation by reference The $35,000 is to go to the “person named on a sheet of pink paper dated December 31, 1989 and located in my top desk drawer.” That person was “my next-born child, if any,” as of that date. Assuming that Stan had already been born in 1989 (given the use of the term “next-born” it suggests Stan likely already had been born), that would mean Dawn, who was born in 1998. This calls for a discussion of whether the pink paper was incorporated by reference into the 1996 will. Incorporation by reference requires that the incorporated writing be in existence as of the date of execution of the will, that the will shows an intent to incorporate the writing, and that the writing be sufficiently described in the will. The pink paper was in existence as of the date of execution of the will, because the paper was dated in 1989 and found in the top desk drawer in 2000, and the will was dated in 1996. The will shows Hal’s intent to incorporate the writing, because it explicitly refers to, describes, and identified the location of, the pink paper. Finally, given that the paper was described as “pink” (which it was), and could be found in Hal’s “top desk drawer” (which it was), it was sufficiently described in the will. The pink paper is thus incorporated by reference into the will, and Dawn, assuming she is the next-born child, will receive the $35,000. RESIDUE VALIDITY OF THE CODICL Common Law Presumption of Undue Influence The common law presumption of undue influence may apply to invalidate the codicil in this case. When a beneficiary is in a confidential relationship to a testator, participates in some way in “procuring” a gift, and the gift is an “unnatural” bequest that favors the beneficiary, a common law presumption of undue influence arises which, if not rebutted, invalidates the gift. Here, Florence may be in a confidential relationship with Hal. Although, it is not expressly clear, Florence was a fortune-teller, whom Hal regularly consulted while grieving Wanda. This suggests that Florence held a confidential relationship to Hal. It is further unclear as to whether she “procured” the gift, but if she advised Hal, she may have advised or suggested that he should leave his estate to her. Finally, the gift is unnatural, since it is to a stranger, Florence, and not to Stan or Dawn, the natural objects of Hal’s bounty. Thus, a presumption of undue influence may well arise. If so, and Florence does not meet her burden of proving the codicil was not procured by undue influence (and no facts suggest that she can), the codicil will be invalidated. Standard Undue Influence If a court does not find a common law presumption of undue influence, Stan and Dawn may argue that the will is invalid due to standard undue influence. They must show: (1) there was influence exerted on the testator; (2) the effect of the influence was to overpower the free will and mind of testator; and (3) the product of the influence was a will which would not other have been executed but for the influence. They will have to show a number of factors: (1) the testator was susceptible to undue influence; (2) the beneficiary had the opportunity to exercise undue influence; (3) the beneficiary had the disposition to influence the testator; and (4) the gift to the beneficiary was inequitable. Stan and Dawn could argue that Hal’s grief over Wanda’s death made him susceptible to undue influence, something that is also indicated by his willingness to see a fortune teller. However, normally, susceptibility is best shown by a weakness of body or mind that is significant enough to overpower the free will and mind of the testator. There is no such evidence of overpowering Hal’s free will here. Given that Hal made “regular” trips to see the fortune teller, she had the opportunity to exercise undue influence. It is unclear whether Florence had the disposition to influence Hal, and since all she did was “predict” his son would become a criminal, when she could have said much more and directly suggested Hal change his will, this may not be sufficient evidence of disposition to influence. Finally, the gift is inequitable, since it is to a stranger, Florence, and not to Stan or Dawn, the natural objects of Hal’s bounty. Overall, there does not seem to be sufficient evidence of susceptibility or disposition to find standard undue influence. Nevertheless, there is likely a presumption of undue influence, and Florence will likely be unable to overcome the presumption so the codicil will not be valid. FRAUD?
