1. WEALTH TRANSFER UPON DEATH
a.
A decedent has the right to dispose of her or her property at death. Although the
states have broad authority to regulate the process, the states cannot completely
abrogate the right.
b. Theory: Some argue that the power to transfer wealth at death is natural and good in that
it encourages one to save and promotes family values, while other argue that power to
transfer wealth at death perpetuates economic disparity and unfairly rewards those lucky
enough to have been born to rich parents.
c.
Dead hand: A decedent may condition a B's gift on the Bs behaving in a certain manner
as long as the condition does not violate public policy.
i.
Validity: "Dead hand" control is generally upheld unless the condition
constitutes a complete restraint on marriage, requires a B to practice a certain
religion, encourages divorce or family strife, or directs the destruction of property.
d. Who takes?
i.
First you must determine whether the property is probate or nonprobate.
ii.
Nonprobate Passes pursuant to the terms of the nonprobate intrustment
1.
Property held in JT
2.
Life insurance Ks (modern trend expands this to all Ks w/ payableon-death clause)
3.
Legal life estates and remainders
4.
Inter vivos trusts
iii.
Probate  passes pursuant to the terms of D's will, otherwise through
intestacy (this is the default)
2. WILLS: CAPACITY AND CONTESTS (Grounds for Will Contests)
a.
Mental Capacity
i.
Age Requirement: 18 in all states and UPC
ii.
Testamentary Capacity Requirement (testator must be of sound mind) (4
prong test): T must be able to know:
1.
The nature and extent of his or her property
2.
The natural objects of his or her bounty
3.
That the disposition of the property is being made
4.
Relating these elements to one another and forming an orderly
desire regarding the disposition of the property.
iii.
*NOTE: TESTATOR DOES NOT HAVE TO BE OF AVERAGE
INTELLIGENCE, HE/SHE SIMPLY MUST MEET THE REQUIREMENTS.
iv.
MENTAL INCAPACITY ISN'T THE SAME AS GENERAL INSANITY
General insanity (or mental illness) is ONLY EVIDENCE that there may be
mental incapacity, it is NOT PROOF!
v.
Defects in capacity: Even if the testator has the testamentary capacity
generally, if the will or any part thereof is cause by a defect in capacity (insane
delusion, undue influence, or fraud), the court strikes down as much of the will
as was affected by the defect.
b. Insane delusions: only part of the will caused my the insane delusion fails; if the entire
will was caused by the insane delusion, the entire will fails. If insane delusions are shown,
but they do not affect the dispositions the entire will stands.
i. In Re Strittamer
ii. Jurisdictional split: Test for Insane Delusion
1. Majority: reasonable person test If a rational person in T's
situation could not have reached the same conclusion, the belief is an
insane delusion
2. Minority: any factual basis test If there is any factual basis to
support the testator's belief, it is not an insane delusion.
3. In Re Honigman
i.
Mistake is NOT an incapacity and the court will give affect to wills made
under misapprehension or mistake.
ii.
Justifications for capacity rule
1.
Might not be true will/intent
2.
Reciprocity: want to protect people who care for family/elderly
3.
Reassurance for the rational: provides incentive to make will before
you go crazy
4.
Legitimacy of legal institutions
c.
Undue Influence
i.
Occurs where another substitutes his/her intent for the intent of T; where
there is coercion (typically mental or emotional, not physical)
ii.
To establish undue influence, it must be proved that:
1.
the testator was susceptible to undue influence
2.
the influencer had a motive to exercise undue influence
3.
the influencer had the opportunity to exercise undue influence
4.
the disposition is the result of undue influence
iii.
There is a presumption of undue influence where there is
1.
A confidential relationship; the defendant receives the bulk of T's
estate; T was of weakened intellect
a.
Suspicious circumstances (the testator was of weakened
intellect and the defendant takes the bulk of T's estate).
i.
Lipper v. Weslow
ii.
Seward
iv.
Once the presumption arises the burden shifts to the defendant to prove that
there was no undue influence
v.
No contest clause: If T suspects that someone may challenge his/her will, T
may include a clause that provides that if the beneficiary challenges the will (or
any provision in the will) he/she is barred from taking.
1.
Some jurisdictions will enforce the clause if there is probable cause
to support a challenge.
2.
Other jurisdictions will enforce the clause UNLESS
a.
There is reasonable cause to support the claim
b.
The challenge is based on a claim of forgery, revocation, or
misconduct by a witness or the drafter
vi.
Gifts to drafting attorneys
1.
General rule Any time an attorney who drafts an instrument receives
a substantial gift under it, a presumption of undue influence arises unless the
attorney is married to T.
Most jurisdictions require clear and convincing evidence that the gift was
2.
truly T's intent to overcome the presumption; some jurisdictions create an
irrebuttable presumption.
(Some jurisdictions apply the presumption regardless of the size of the
3.
gift; others apply the presumption to any gift to T's attorney, even if the
attorney did not draft the instrument; and some jurisdictions require an
independent attorney to consult T and determine the gift is T's true intent to
overcome the presumption).
The presumption can often be overcome by Independent Counsel
4.
a.
But not always:
i.
In Re Will of Moses
LESSON FOR Unwary:
If ever asked to draft a will that DOES

NOT go to the NATURAL OBJECTS of Bounty
ASK:
Do you have such blood

relatives?
Why are you disinheriting

them?
Who is the person this is all

going to?
And put it in the will

vii.
Red Flags For Undue Influence Challenges
1.
Age differences
2.
Class differences
3.
Race differences
4.
Same sex
a.
In Re Kaufman's Will
viii.
Alternatives for people in the position of Moses and Kaufman:
1.
Trust
a.
Higher standard for incapacity
b.
Trusts show ongoing intent to leave money (whereas a will
can be executed in one day)
c.
Courts are more reluctant to void trust b/c they have to
undo every transaction from the inception of trust
2.
Joint accounts
d. Fraud
i.
Elements of fraud:
1.
Reliance ( reasonably rely that the person was telling the truth)
2.
Misrepresentation
3.
Intent
4.
Purpose of affecting the distributional plan
ii.
Two Types of Fraud
1.
Fraud in the inducement: a person intentionally misrepresents a fact to
T to induce T to execute a will (or amend a provision in a will or revoke a will)
in reliance upon the misrepresentation.
a.
T was deceived by misrepresentation and would have acted
differently BUT FOR the fraud.
2.
Fraud in the Execution: A person intentionally misrepresents the nature
of the document (either completely or in part) that the testator is signing.
a.
Ex: "Here, sign this" and it turns out to be something
(anything) other than T's will.
e.
Duress
i.
A donative transfer is procured by duress when the wrongdoer threatened
to perform or did perform a wrongful act that coerced the donor into making a
donative transfer that donor otherwise would not have made.
ii.
Overt coerciveness
iii.
Latham v. Father Divine
iv.
A constructive trust is sometimes a fraud rectifying remedy. This is an
equitable remedy, not really a trust.

1.
May be imposed where no fraud is involved if the court thinks that
unjust enrichment would result if the person retained the property.
f.
Tortious Interference with Expectancy
i.
This is a tort action.
ii.
P still has to prove either fraud or undue influence.
iii.
Advantages of bringing this claim:
1.
It is not a will contest for purposes of a no contest clause
2.
Punitive damages may be available
3.
The action is subject to the standard statute of limitations, not the
shortened probate statute of limitations
3. WILLS: FORMALITIES AND FORMS
a.
Execution of Wills
i.
Purpose
1.
In many jurisdictions strict formalities are required to execute a valid
will. Although the modern trend has lessened many of these formalities they
still exist, and serve the following functions:
a.
The Ritual Function- B/C any transfer is a significant event,
and when the will is read T will not be able to speak for himself b/c
he’ll be dead. Therefore the ritual functions serve the purpose of
allowing T to be aware of the full gravity of executing a will.
b.
The Evidentiary Function- How do we know that a writing
offered after T’s death is truly meant to be his will? The strict
execution rules allow T to be confident that his will that was executed
in accordance w/the laws of his jurisdiction and that no other false
documents will be given credence by the court.
c.
The Protective Function- The execution formalities allow for
more certainty that a will shall not be executed under duress or undue
influence b/c the neutral witnesses should, in theory confirm that the
document they are attesting to is truly the will of the testator, free of
any undue influence.
d.
The Channeling Function- The execution formalities
contribute to wills providing T with a routine, accepted, and reliable
means of disposing of property.
ii.
COMMON LAW Approach to Attested Wills
1.
Three basic formalities for an attested will: (1) writing (2) signature by
the testator (3) attestation by witness
a.
Writing
b.
Signature by the testator
i.
Anything the testator intends to be his or her signature
constitutes his or her signature
ii.
If the testator is interrupted while in the act of signing
and thus does not complete his or her signature, the assumption
is that the testator intended to write his or her whole signature
and that the partial signature was NOT intended to constitute a
valid signature
iii.
Most states permit another to sign for the testator as
long as the signature is made in the testator's presence and at
the testator's direction
iv.
The signature must be at the end of the will
c.
Attestation by witnesses
i.
ii.
c.
d.
e.
f.
g.
Most jurisdictions require the testator to sign or
acknowledge his or her signature in the presence of two
witnesses present at the same time. The witnesses must sign the
will (and in most jurisdictions, know that they are signing a will)
Presence
The testator has to sign in the presence of the

witnesses and the witnesses have to sign in the presence of
a testator.
Line of sight- this requires proof that T

either did or could have physically seen the witness
sign his will.
Stevens v. Casdorph (1998)

Facts: Two attesting witnesses never actually saw
the decedent sign his will, and the decedent's nieces
and nephews argued as to the will's validity.
Held, A decedent's signature must be in the
presence of two competent witnesses, both of whom
acknowledge the decedent's signature in the
presence of each other.
Order of Signing
i.
Many courts hold that there is an implicit order of signing
requirement in that the testator must sign or acknowledge
before either of the witnesses sign the will.
ii.
MODERN TREND  it does not matter who signs first as
long as the testator and witnesses all sign as part of one
transaction (as long as no one leaves the room before all
parties have signed the will.)
Self Proving Affidavits
i.
These are frequently included in a will and are signed
by the witnesses and the testator in order to facilitate the
probate process. This affidavit will not stop will contests.
The affidavit acts as a deposition and prevents the need
for witnesses to appear at probate hearings.
Writing Below Signatures
i.
Where there is writing (typed or handwritten) below the
testator's and/or witness's signatures, the validity of the
writing depends (1) on whether the state requires the
testator and/or witnesses to subscribe the will (sign the will
at the end)(in which case the gift is invalid), and (2) if the
will need not be signed at the end, on temporally when the
gift was added to the will (if before it was signed, valid; if
after it was signed, invalid).
Delayed Attestations
i.
At common law, the witnesses have to sign the will
immediately after the testator signs or acknowledges the
will.
ii.
MODERN TREND Delayed attestation is permitted as
long as the witnesses sign within a reasonable time of the
testator signing or acknowledging.
Interested Witness
i.
Estate of Parsons (1980)
Facts: The distant and disinherited relatives of a
deceased woman contested her will, trying to get the
property left to other people for themselves.
Held, A disclaimer of property bequeathed to a person
in a will is ineffective to transform an interested witness
into a disinterested one within the meaning of a statute
requiring two disinterested witnesses to attest the
validity of a will.
b. If one of the witnesses to a will takes under the will, the
witness as a conflict of interest.
i. COMMON LAW The entire will was void
ii. MODERN TREND  Varies by jurisdiction.
1. Some void the entire gift to the witness
2. Others purge the interested witness of the
"excess" interest that he or she would take if
this will were valid
3. Others say that the interested witness
scenario only creates a rebuttable
presumption of wrongdoing on the part of
the interested witness (and apply the purging
approach if the witness cannot rebut the
presumption)
iii. Purging statutes are used to purge an attesting
witness of any benefit he or she received under the
attested will unless a certain number of
uninterested witnesses also attest to the will.
1. Purpose was to prevent interested parties
from testifying about a will, as it was feared
that they might not testify truthfully.
iv. Purging statutes are also used to protect the testator
from fraud and undue influence at the moment
when he or she executes a will, by ensuring that at
least two persons without any financial motive to
defraud the testator are present.
v. 2 types of purging statutes today:
1. (1) The one represented in Parsons It takes
from the witness only those benefits that he
or she would have received under the will
that exceed the benefits that would have been
received if the will had never been executed.
2. (2) Requires that any devise to the attesting
witness is voided, such that nothing is taken
under the will (regardless of whether
intestacy laws would have provided the
witness with something).
vi. Some states follow the UPC § 2-505  It has done
away with the traditional purging principals such
that "a will or any provision thereof is not invalid
because the will is signed by an interested witness.
h. Swapped Wills
i.
iii.
Where 2 testators with the same testamentary scheme
(typically spouses) accidentally sign each other's will, the
traditional common law approach is that the wills are
invalid. Modern trend, the will may be probated under
scrivener's error.
ii.
In Re Pavlinko's Estate (1959)
Facts: Difficulties arose when a husband signed his
wife's will, she signed his, and one was taken to probate
after both of their deaths.
Held, A will must be signed by the testator.
c. In Re Snide (1981)
A will may be reformed and admitted to probate when
justice so requires.
Facts: A husband and wife each mistakenly executed the
other's will, and after the husband's death the guardian
ad litem representing the couple's minor child refused to
concede to the validity of the will.
Held, Under narrow circumstances, a will can be
validated through reliable evidence of a valid
testamentary scheme, although formalistic requirements
are lacking.
MODERN TREND/UPC Approach to Attested Wills
1. The modern trend tries to facilitate the execution of attested wills by
reducing the number of statutory requirements and/or by reducing the
degree of compliance the courts require with respect to the execution
requirements.
a. UPC Execution Requirements:
i.
Witnesses present at the same time: The witnesses need not
be present at the same time; the testator can sign or
acknowledge in front of the witnesses separately.
ii.
Acknowledgement: At common law, if the testator uses the
acknowledgement method of executing the will, the testator
has to acknowledge his/her signature. Under the UPC, the
testator can acknowledge the signature or the will in front of
the witnesses.
iii.
"Conscious Presence" Test: the witness is in the presence of
the testator if the testator, through sight, hearing, or general
consciousness of events, comprehends that the witness is in the
act of signing.
iv.
Writing Below Signature: The UPC does not require the
witnesses to subscribe the will (sign at the bottom or end).
v.
Delayed attestation: The UPC provides that the witnesses
may sign the will within a reasonable time after witnessing the
testator sign or acknowledge (this also implicitly rejects the
requirement that the witnesses have to sign in the testator's
presence).
vi.
Interested witnesses: Has been abolished completely by the
UPC.
vii.
Curative Doctrines
1.
2.
3.
4.
iv.
UPC § 2-503 gives the court power to dispense with
formalities if there is clear and convincing evidence that
D intended the document to be his/her will.
Substantial compliance holds that a will was properly
executed as long as (1) there is clear and convincing
evidence that the testator intended the document to be
his/her will, and (2) there is clear and convincing
evidence that the testator complied with the Wills Act
formalities.
1.
The UPC repudiates strict compliance and
now advocates harmless error/dispensing power.
The harmless error/dispensing power statutes excuse
noncompliance with the Wills Act. This power holds that
the will was properly executed as long as there is clear
and convincing evidence that the testator intended the
document to be his or her will.
What the dispensing power won’t cure- Although the
dispensing power will cure defects in execution it will not
cure the following types of problems:
1.
Defective revocation by physical act
2.
Execution by a T who lacks testamentary
capacity
3.
T validly executing a will under mistake of
fact or law
Holographic Wills
1. These wills need not be witnessed, but:
a. There must be a writing
b. The writing has to be in the testator's handwriting (either completely
or at least material provisions--the jurisdictions are split)
c. The writing must be signed by the testator
d. The writing must express testamentary intent (intent that the
document be the decedent's will)
e. Some jurisdictions require that the writing be dated
2. The jurisdictions are split over whether the testamentary intent must be
expressed in the testator's handwriting or whether it can be expressed in
printed material on the document
3. Kimmel's Estate (1924)
A TESTAMENTARY DISPOSITION IS NOT INVALID SIMPLY
BECAUSE IT IS NOT SET OUT IN A FORMAL DOCUMENT
Facts: Two sons of a deceased man sought to have a letter that their father
sent to them on the day of his death probated as a valid holographic will.
Held, A letter can be a valid holographic will, as can one of a variety of
other documents.
iv. In re Estate of Kuralt (2000)
A HANDWRITTEN LETTER PROMISING TO LEAVE PROPERTY
TO ANOTHER ESTABLISHES PRESENT TESTAMENTARY INTENT
Facts: A famed CBS news reporter sent a handwritten letter to his
mistress expressing his desire to bequeath to her his Montana property,
and the mistress sought to admit the letter into probate as a codicil to the
reporter's will.
b.
Held, when a document evinces a present testamentary intent, the court
will honor the testator's intent.
Revocation of Wills
i.
Revocation by Writing or Physical Act
1.
All states permit revocation of a will in one of two ways: (1) by a
subsequent writing executed with testamentary formalities or (2) by a
physical act such as destroying, obliterating, or burning the will.
2.
Oral declaration, without more, that a will is revoked is inoperative in
all states
a.
Such an allowance would open the doors for fraud
3.
If a duly executed will is not revoked in a manner permitted by statute
then the will is admitted to probate.
4.
Physical Act
a.
A will may be revoked by a physical act as long as the act is
destructive in nature (burning, tearing, obliterating, scratching, so
forth) and is performed with the intent to revoke (a physical act will be
invalidated if there was no intent to destroy the will. Physical acts do
not revoke if they were done by mistake, to the wrong document, or T
changed their mind before the document was fully destroyed or
obliterated). The act may be performed by the testator or by another,
but, if by another, the act must be performed in the testator's presence
and at the testator's discretion.
5.
Writing
a.
A testator can revoke a will by writing if the writing qualifies as
a will (either attested or holographic). A subsequent will can revoke a
prior will either expressly or implicitly (through inconsistency), and
either in whole or in part (in which case it is a codicil).
i.
Example T writes "VOID" across the first page of
her will, but does not sign and date it afterwards. The act of
writing "VOID" does not qualify as a valid revocation, because
it does not qualify as a valid will (neither attested nor
holographic). If T writes "VOID" across the will this qualifies
as a destructive act. Assuming the testator had the intent to
revoke at the time she performed the act, which is implicit in the
nature of the act, the act of writing qualifies as revocation by act.
ii.
Inconsistency/ Revocation by Subsequent Instrument
1.
A subsequent will wholly revokes the previous
will by inconsistency if the testator intends the subsequent
will to replace rather than supplement a previous will.
2.
A subsequent will that does not expressly
revoke the prior will but makes a complete disposition of
the testator's 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 testator's estate, it is not
presumed to revoke the prior will but is viewed as a codicil.
Example T leaves all his property to X. Then he
drafts a codicil that states Blackacre goes to Y. It is
assumed that the codicil overrides only that one
provision and not the entire original will, therefore
X would inherit the residual.
c.
Codicil
i.
A codicil supplements/amends an existing will rather than
replacing it
ii.
An important exception to the general rule that codicils
must qualify as a valid will in their own right is that
handwritten amendments (interlineations) to a
holographic will constitute a valid holographic codicil,
even if the interlineations do not qualify as a valid
holographic will in their own right.
iii.
Holographic codicils to attested wills are valid, attested
codicils to holographic wills are valid.
iv.
Revocation of a codicil does not revoke the underlying will.
Revocation of a will revokes all codicils thereto.
f. Harrison v. Bird (1993)
IF A PERSON DESTROYS A COPY OF HIS OR HER WILL, A
PRESUMPTION ARISES THAT THE WILL AND ALL DUPLICATES,
WHETHER IN OR OUT OF THE PERSON'S POSSESSION, HAVE
BEEN REVOKED
Facts: The administrator of a deceased woman's estate attempted to
probate a duplicate copy of a will whose original had been destroyed at
the request of the decedent.
Issue: Can revocation of a will be presumed when a person's will is not
found among her personal effects after death?
Held, YES. 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.
7. Probate of Lost Wills: Where a will was last in the testator's possession and
cannot be found after the testator's death, a presumption arises that the
testator revoked the will (by act). THIS PRESUMPTION IS
REBUTTABLE. In the absence of statute, a will that is lost, or is
destroyed without the consent of the testator, or is destroyed with the
consent of the testator but not in compliance with the revocation statute
can be admitted into probate if its contents are proved.
8. Partial Revocation by Physical Act. In several states, a will cannot be
revoked in part by an act of revocation; it can only be revoked in part by
a subsequent instrument.
a. Two reasons:
i.
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.
ii.
Permitting partial revocation by physical act offers
opportunities for fraud.
1.
The person who takes the "new gift" may be the one
who made the canceling marks.
b. If partial revocation by 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.
c. Example T’s will says “I give Blackacre to A B and C, and the
residue of the estate goes to E." Then after execution T crosses B’s
name out and revokes E’s residuary provision. If the state allows
partial revocation by a physical act then the residuary will pass to
2.
iii.
T’s heirs by intestacy, and the shares and A and C will share
Blackacre. If the state doesn’t recognize partial revocation then the
markings and notations will be ignored.
Dependent Relative Revocation and Revival: 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.
a. Example  Will 1 was revoked by will 2. Then it turns out that will 2 wasn’t
validly executed. The dependant relative revocation doctrine ignores the
revocation of will 1 and allows it to be probated. Even if the original will is
not physically present or in existence it may still be probated b/c under
the doctrine it is as if it had never been revoked.
b. LaCroix v. Senecal (1953)
TESTAMENTARY CHANGES MAY BE VOIDED IF THEIR IMPACT
ON EXISTING WILL PROVISIONS WAS UNINTENDED
Facts: After clarifying the identity of a residual beneficiary, the testator
inadvertently voided a similar gift intended for Senecal, the other residual
beneficiary.
Issue: Was the gift to Senecal void as a result of her husband's witnessing
of the codicil's execution, even when the only change to the original will
intended by the testator was to clarify the identity of the other residual
beneficiary?
Held, NO. The doctrine of dependent relative revocation sustains a
revoked gift if a testator cancels or destroys a will with a present intention
of making a new one immediately and as a substitute and the new will is
not made or, if made, fails of effect for any reason.
3. Circumstances Where DRR Applies: It applies only (1) were there is an
alternative plan of disposition that fails or (2) where the mistake is recited
in the terms of the revoking instrument or possibly, is established by clear
and convincing evidence.
a. Example T revokes a million dollar bequest to A b/c she believes
mistakenly that A has won the lottery. If A can show by clear and
convincing evidence that T revoked this gift only b/c she mistakenly
believed A had won the lottery the revocation will be denied, and the
original bequest probated.
4. Be Careful- Dependant relative revocation can’t save defective revocations
where the revocation fails b/c of a lack of compliance with revocation
requirements. Don’t go beyond the scope of the doctrine.
Revival
1. If T executes will #1, and thereafter executes will #2, and thereafter revokes
will #2, the jurisdictions are split over what is necessary to revive will #1.
a. English approach- will #2 never revoked will #1, so when will #2 is
revoked, will #1 is "uncovered" and can be probated. (The English
approach takes literally the statement that a will not effective until
the testator dies, so even if will #2 had never been revoked it would
be effective only if it were still in existence when the testator died.) A
handful of states follow the English approach.
b. American approach- Americans follow the approach that a will is
effective the moment that it is properly executed. Therefore, will #2
revokes will #1 the moment will #2 is executed. The jurisdictions
that follow the American approach are split over what is necessary
to revive will #1 when will #2 is revoked.
i.
iii.
Minority- require that will #1 be reexecuted (or incorporate it
by reference into a valid new will). Only going through the
Wills Act formalities again is testamentary life given to will #1.
ii.
Majority/UPC- all that is needed is intent to revive will #1.
The question is how will #2 was revoked.
1.
Where will #2 is revoked by act, the general rule is
that the courts will take virtually any evidence of the
testator's intent to revive will #1.
2.
Where will #2 is revoked by writing (will #3), the
intent to revive will #1 must be expressed in will #3.
3.
Under the UPC, if will #2 is a codicil, revocation of
the codicil automatically revives the provisions of the
underlying will that the codicil had revoked.
iv.
Revocation by Operation of Law: Change in Family: In all but a few states,
statutes provide that divorce revokes any provision in the decedent's will for the
divorced spouse. In the remaining states, revocation occurs only if divorce is
accompanied by property settlement.
1. In some jurisdictions this not only applies to the ex-spouse, but to the exspouse's family members.
Components of a Will
1.
Integration of Wills
a.
Under the doctrine of integration, all papers present at the time of
execution, intended to be part of the will, are integrated into the will.
b.
Typically, there is no problem, for the pages of the will are physically
connected with a staple or ribbon, or, page to show an internal coherence of
the provisions.
c.
Attorneys could avoid problems by assuring that all the pages of the
will are fastened together before T signs or have T sign or initial each page
of the will.
i.
Relates to documents that were not attested. They were present
at the time of execution and there was an intent for the document to be
part of the will.
ii.
There needs to be some type of internal coherence so it can be
recognized as part of the document
2.
Republication by Codicil
a.
Under the doctrine republication by codicil, a will is treated as
reexecuted (republished) as of the date of the codicil.
i.
"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 testator's intent."
b.
The fundamental difference between republication by codicil and the
doctrine of incorporation by reference is that republication applies only to a
prior validly executed will, whereas incorporation by reference can apply to
incorporation into a will language or instruments that have never been
validly executed.
c.
The legal significance of a codicil is that the will is considered reexecuted as of the date of the codicil.
i.
Ex. You write a will in 1970. Then you attach a codicil in 1990
the whole will is regarded to be written in 1990.
ii.
The codicil republishes the entire will.
d.
e.
3.
a.
b.
iii.
iv.
v.
Republication by codicil applies to a validly executed will.
**Example Suppose T revokes will #1 by will #2 and then executes a
codicil to will #1. The first will is republished, and thus the second will is
revoked ("squeezed out") by implication.
Incorporation by Reference
Any writing in existence when a will is executed may be incorporated
by reference if the language of will manifests this intent and describes the
writing sufficiently to permit its identification.
Clark v. Greenhalge (1991)
THE CARDINAL RULE IN THE INTERPRETATION OF WILLS IS
THAT THE INTENTION OF THE TESTATOR SHALL PREVAIL,
PROVIDED IT IS CONSISTENT WITH RULES OF LAW.
Facts: A woman who was due to receive a painting under a friend's will
filed suit when the executor, who liked the painting himself refused to give
it to her.
Issue: Can specific written bequests of personal property contained in a
notebook that was maintained by a decedent be incorporated by reference
into the terms of that person's will?
Held, YES. A properly executed will may incorporate by reference into
its provisions any document or paper not so executed and witnessed,
whether the paper referred to be in the form of a mere list or
memorandum, if it was in existence at the time of the execution of the will
and is identified by clear and satisfactory proof as the paper referred to
therein.
In order for incorporation by reference to apply certain elements must be
met:
1. First, there must exist a valid will (or validly executed codicil) that
was executed after the document to be incorporated was created.
2. Second, the will must explicitly make reference to the document to
be included, and the language used must clearly indicate that the
referenced document is to be incorporated into the will.
3. Third, the party seeking to have the referenced document admitted
as a part of the will must be able to prove that the document in hand
is the document referred to in the will.
REMEMBER: The doctrine of incorporation by reference IS NOT THE
SAME as the doctrine of integration of will or the doctrine of
republication by codicil.
1. The doctrine of integration is used to incorporate documents present
at the execution, and those documents need not be explicitly referred
to in the will if it is clear that their inclusion is consistent with the
testator's intent.
2. The difference between incorporation by reference and
republication by codicil lies in the fact that a codicil can only
republish a validly executed will, whereas incorporation can make
unexecuted documents part of the will.
Johnson v. Johnson (1954)
Facts: A suit was brought contesting the validity of an unattested,
unsigned will which was purportedly republished (and thereby made valid
when it previously was not) by a holographic codicil written at the bottom
of the typewritten will.
iv.
Issue: Can a valid holographic codicil be used to republish (and thereby
give effect to) an unexecuted non-holographic will?
Held, YES. A codicil validly executed operates as a republication of a will
no matter what defects may have existed in the execution of the earlier
document--a proper execution of the codicil extends to the will; further,
upon proper execution of a codicil, the codicil and will are incorporated as
one.
Acts of Independent Significance
1. Under the acts of independent significance, the trust must have its own
significance independent of its effect upon the decedent's probate
property--that is, the trust must be inter vivos and have property in it
when the testator dies.
2. Subsequent amendments to the trust can be given effect regardless when
they are created, but many jurisdictions subjected the trust to probate
court supervision (at least as to the property being poured into the trust).
3. Basically, if the B or property designations are identified by acts or events
that have a lifetime motive and significance apart from their effect on the
will, the gift will be upheld under the doctrine.
a. EXAMPLE T devises "the automobile that I own at my death" to
her nephew N, and gives $1000 "to each person who shall be in my
employ at my death." At the time the will is executed T owns a
Toyota worth $4,000. Shortly before her death, T trades the Toyota
in for a new Cadillac worth $40,000. In the year before her death, T
fires two long-time employees and hires three new ones. The gifts
are valid.
i.
While T's act in buying the Cadillac had the practical effect
of increasing the value of her gift to N, it is unlikely that this is
what motivated her purchase. It is more probable that she
bought the car because she wanted it. Similarly, T's act in
hiring and firing various employees were doubtless prompted
by business needs rather than the desire to make or unmake
legatees under the will. Indeed, cases involving this form of
devise typically assume the validity of the gift without
discussion of the acts of independent significance doctrine.
4. CONSTRUCTION OF WILLS
i.
Mistaken or Ambiguous Language in Wills
1.
The Traditional Approach: No Extrinsic Evidence No Reformation
a.
Assuming a properly executed will, upon the testator's death it has to
be probated.
b.
The starting assumption is that the written will is the best evidence
of a testator's intent and extrinsic evidence should not be admissible to
vary its meaning.
c.
In construing wills, a majority of jurisdictions still follow 2
traditional rules that, operating in tandem, bar the admission of evidence
to vary the terms of the will:
i.
"Plain meaning rule" ("no extrinsic evidence rule")
1.
Extrinsic evidence may be admitted only if there is
ambiguity in the will, but the plain meaning of the words of
the will cannot be disturbed by evidence that another meaning
was intended.
ii.
"No reformation rule" (flows from the plain meaning rule)
Reformation is an equitable remedy that, if applied
to a will, would admit extrinsic evidence, and reform the will
anytime there is clear and convincing evidence (1) that the will
contains a mistake, and (2) its effect upon the testator's intent.
2.
Justification: the court is thereby compelled to
interpret the words that the testator actually used, not to
interpret the words the testator actually used, not to interpret
the words that the testator is purported to have intended to
use.
d.
Mahoney v. Grainger (1933)
A WILL DULY EXECUTED AND ALLOWED BY THE COURT
MUST, UNDER THE STATUTE OF WILLS, BE ACCEPTEDAS THE
FINAL EXPRESSION OF THE INTENT OF THE PERSON
EXECUTING IT.
Facts: First cousins of the testatrix challenge the court's ruling that they
could not take under the will as "heirs at law" of the testator.
Issue: May extrinsic evidence be presented to try to prove the testator's
intent in a will provision?
Held, NO. When the instrument has been proved and allowed as a will,
oral testimony as to the meaning and purpose of a testator's language
must be rigidly excluded.
v. Personal usage exception. If the extrinsic evidence shows that T always
referred to a person in an idiosyncratic manner, the evidence is admissible
to show that T meant someone other than the person with the legal name
of the legatee.
1. EXAMPLE"to my dear Ms. Busybody." Nora Busybody works in the
local market but never met T. She tries to claim the gift. Joan Sloan, who
T often referred to as Ms. Busybody, is T's best friend. The bequest goes
to Sloan (if that’s what T intended).
vi. Patent Ambiguity v. Latent Ambiguity
1. At common law the courts would only admit extrinsic evidence to
correct a latent ambiguity, not a patent ambiguity.
a.
Patent Ambiguity: An ambiguity that is apparent from the
face of the will; no extrinsic evidence is necessary to establish
that there is ambiguity.
i.
EXAMPLE in one clause T leaves the "disposable
portion of my estate" to A. In another clause T leaves
"the entire estate" to A and B. The devise fails.
ii.
Unless the court can correct the mistake, the devise fails.
EXAMPLE, T leaves 25% of her estate to each of three
charities. Court construes clause to give 1/3 to each of
three charities assuming that T wanted to dispose of the
entire estate.
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 applied to T's property or designated B's. There are 2
types:
i.
Equivocation: where a will clearly describes a person or
thing, and two or more persons or things exactly fit that
description. "to my favorite student Mr. Brown" T had
1.
ii.
two students named Mr. Brown so court must use
extrinsic evidence to determine which Mr. Brown is the
intended B.
ii.
Misdescription: No person or thing exactly fits the
description, but two or more persons or things partially
fit it. "I give my house at 432 Tux Blvd. to my niece,
Mary." T lives on 342 Tux Blvd. Applying the
misdescription doctrine, the court takes evidence to
establish the misdescription and strikes 432 from the
will. The will then reads, "I give my house at Tux Blvd.
to my niece, Mary." Which house on Tux Blvd becomes
an ambiguity that the court takes extrinsic evidence to
help resolve. Assuming T only owned one house on Tux
Blvd, that is an adequate description for the court to give
effect to the gift.
1. See also pg . 370 for the Mrs. Hess on Barbara Circle
case.
2. Extrinsic Evidence In General
a.
Extrinsic evidence of the circumstances under which a will is
made (except evidence expressly excluded by statute) may be
considered by the court in ascertaining what the testator
meant by the words used in the will.
b.
If, in light of such extrinsic evidence, the provisions of the will
are reasonably susceptible of two or more meanings, an
uncertainty arises on the face of the will and extrinsic evidence
relevant to prove any of such meanings is admissible.
c.
If, on the other hand, in light of such extrinsic evidence, the
provisions of the will are not reasonably susceptible of two or
more meanings, there is no uncertainty arising on the face of
the will and any proffered evidence attempting to show an
intention different from that expressed by the words therein, is
inadmissible.
Slouching Toward Reformation: Correcting Mistakes Without the Power to
Reform Wills
1. Modern practice repudiates a lot of common law practice such as the plain
meaning rule (considers extrinsic evidence of the circumstances
surrounding T at the time he or she executed the will in analyzing what
T's intent was when he or she executed the will and whether there is
ambiguity in the will), and the latent v. patent ambiguity distinction
(admitting extrinsic evidence any time there is an ambiguity).
a. The "plain meaning" rule is rejected by the Restatement.
i.
Restatement holds that the court can allow in any extrinsic
evidence even if there is no ambiguity to figure out the
testator's intent.
2. The Causes and Effects of Will Defects
a. If intentional wrongdoing causes a mistaken term in a will (fraud),
the term can be struck, or its effect undone.
b. If lack of volition has an innocent cause (lack of capacity) the will is
not given effect.
c.
d.
v.
ii.
If a particularly bizarre mistaken belief about a member of T's
family influence's T's dispositive scheme, the courts sometimes
remedy this mistake by calling it insane delusion.
If a mistake term has an innocent cause (mistake), then no relief is
available to correct the error.
Effect:
Lack of Volition
Effect:
Mistaken Terms
Cause:
Intentional
Wrongdoing
Undue Influence,
Duress
(relief granted)
Fraud
Cause:
Innocent Acts
Lack of Capacity,
Insane Delusion
(relief granted)
Mistake
(relief granted)
(no relief)
Arnheitner v. Arnheitner (1956)
MISTAKEN IDENTIFICATION OF PROPERTY DOES NOT
ALWAYS VITIATE (MAKE VOID) A TESTAMENTARY GIFT
Facts: A decedent's executrix petitioned the court to reform the
decedent's will to correct a mistaken reference after her death.
Issue: May the court change the language of a decedent's will when
an obvious mistake is detected after death?
Held, NO. 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.
iii.
Openly Reforming Wills for Mistake (GO OVER THIS AGAIN)
1. Scrivener's error: Under the modern trend, if there is clear and convincing
evidence of scrivener's error, and clear and convincing evidence of its
effect upon T's intent, extrinsic evidence is admissible to establish and to
correct the error. (Scrivener's error is a new doctrine, and the full scope
of the doctrine has yet to be established.
2. Erickson v. Erickson (1998)
EXTRINSIC EVIDENCE IS REQUIRED TO DEMONSTRATE THAT
A WILL, DESPITE ITS FORMALLY PROPER EXECUTION,
SUBSTANTIALLY MISREPRESENTS THE TRUE INTENT OF THE
TESTATOR
Facts: Ronald's daughter challenged her father's will, made two days
before he married, in which he left everything to his new wife.
Issue: Should evidence of a scrivener's mistake be admissible to establish
the testator's true intent?
Held, YES. If scrivener's error has misled T into executing a will on the
belief that it will be valid notwithstanding T's subsequent marriage,
extrinsic evidence of that error is admissible to establish the intent of T
that his or her will be valid notwithstanding the subsequent marriage.
Death of Beneficiary Before Death of Testator
1.
Introduction
a.
A gift lapses if the beneficiary of that gift dies before T does, or if the B
is treated as dead. If a gift lapses it automatically fails. Lapse may be avoided
by drafting in a contingent gift in case the recipient predeceases T, but if that
ii.
language is not specifically included in the will then the gift will lapse and
not go to the beneficiaries survivors.
b.
In the absence of an antilapse statute there are default rules that apply
if the will does not provide what happens when a devise predeceases the
testator:
i.
Specific or general devise: If a specific or general devise
lapses, the devise falls into the residue.
1.
Ex. T bequeaths her watch (a specific bequest) to A
and $10,000 (a general bequest) to B. The residuary devisee is C.
A and B predecease T. The watch and the money goes to C.
ii.
Residuary devisee: If the devise of the entire residue lapses,
because the sole residuary devisee or all the residuary devisees
predecease the testator, the heirs of the testator take by intestacy. If a
share of the reside lapses, such as when one of two residuary devisees
predeceases the testator, at common law the lapsed residuary share
passes by intestacy to the testator's heirs rather than to the remaining
residuary devises. This is called the no-residue-of-a-reside rule (its
quickly fading because it does not carry out the intent of the testator.
1.
Ex. After making several specific and general devises
to a number of persons, T devises the residue of her estate onehalf to B and one half to C. B predeceases T. B's one half shares
goes to T's heirs, not to C.
iii.
Class gift: If the devise is to a class of persons, and one
member of the class predeceases the testator, the surviving members of
the class divide the gift.
1.
Ex. T bequeaths $10,000 to the children of A. One
child of A, named B, predeceases T. At T's death, T is survived
by another child of A, named C. Because this is a class gift, C
takes B's share which is the entire $10,000.
iv.
Void devise: Where a devisee is dead at the time the will is
executed, or the devisee is a dog or car or some other ineligible taker,
the devise is void. The same general default rules govern the
disposition of void devises as governed lapsed devises.
c.
Estate of Russell (1968)
A DOG CANNOT BE THE BENEFICIARY UNDER A WILL; ANY
SUCH GIFT WILL RENDER THE GIFT VOID.
Facts: Thelma's niece challenged the will after Thelma attempted to leave
her estate in equal shares to her dog and a boyfriend, thereby excluding
the niece.
Issue: Does a void gift to a residuary beneficiary cause the property which
is the subject thereof to pass under the laws of intestate succession?
Held, YES. That portion of any residuary estate that is subject of a void
gift to one of the residuary beneficiaries remains undisposed of the by the
will and passes to the heirs-at-law.
Antilapse Statutes
1. Anti-lapse may save a gift that otherwise would lapse and fail. It provides
that where a gift is a lapsed gift if
a. the predeceased B meets the requisite degree of relationship to T
(varies by jurisdiction), and
b. the predeceased B has issue who survive T, then
c. the gift to the predeceased B will go to the issue of the predeceased B
d.
as long as the will does note express an intent that anti-lapse should
not be applied (low threshold--historically, an express survival
requirement or an express gift-over to an alternative taker
constituted an express contrary intent).
2. Common Law: anti-lapse doctrine applies to lapsed gifts only, not void gifts.
3. Modern/UPC: applies to any qualifying beneficiary who predeceases T
regardless of whether B dies before or after the execution of the will. The
UPC applies only to devises to a grandparent or a lineal descendant of a
grandparent (amended to include devise to a stepchild).
4. Minority Jurisdictions (2 variations): (1) can apply to the kindred of T or
kindred of T's spouse OR (2) there doesn’t need to be any kind of special
relationship
5. Allen v. Talley (1997)
THE PRIMARY CONCERN OF THE COURT IN THE
CONTSTRUCTION OF A WILL IS TO DETERMINE THE
TESTATOR'S INTENT
Facts: Lewis challenges his aunt's will, which left her estate to her living
brothers and sisters, making no provision for him since his father is dead.
Issue: Do the words "living brothers and sisters" used in a will constitute
words of survivorship such that application of the antilapse statute is
precluded?
Held: YES. The phrase "living brothers and sisters" used in a will
constitute words of survivorship such that application of the antilapse
statute is precluded.
vi. Five Things to Think About in Terms of Anti-Lapse Statute
1. Who is the beneficiary?
2. Was the beneficiary alive at the time of the will's execution?
3. Is this a gift to a class or an individual?
4. Does the beneficiary have lineal descendants?
5. Is the anti-lapse statute contrary to the express intent of the testator as
expressed in the will? (very important)
vii. Nonprobate transfers. Under the law of wills, a B is required to survive T in
order to take. I B does not survive, an antilapse statute may be applicable
if the terms are met.
viii. Payable-on-death (P.O.D) designations. Under the law of K, third-party B's
of Ks are not required to survive the benefactor or the time of
performance and may pass their K rights to their heirs or devisees.
ix. Revocable trusts. Inter vivos trusts ordinarily create vested or contingent
remainders in B's. The law of future interests thus comes into play.
iii.
Class Gifts
1. Class gifts are treated differently from gifts to individuals.
a. If a class member predeceased the testator, the surviving members
of the class divide the total gift, including the deceased member's
share.
b. The crucial question is: What is a "class"?
i.
Test whether the testator is "group minded"
1.
Ex. "to A's children" or "to my nieces and nephews"
2.
Beneficiaries described by their individual names,
but forming a natural class, may be deemed as a class
gift if the court decides, after admitting extrinsic
iii.
evidence, that the testator would want the survivors to
divide the property.
2. Lapse and Class Gifts- Is a particular gift a class gift, and if so how is it
affected if one or more members of the class predecease T?
a.
Common Law Rule- Under common law the descendants of
deceased members of a class were afforded no protection if a
member of the class predeceased T.
b.
The Modern Rule- Most anti-lapse statutes now apply to class
gifts, and afford descendants some protection. It would work
in the following manner. If:
i.
There is a class gift
a.
And a member of the class predeceases T
i.
And there is no instruction specified in the will on what
to do
ii.
There is an anti-lapse statute that applies to class gifts,
and applies in this case b/c the beneficiary has the
proper statutory relationship to T
iii.
Then the deceased member’s descendant takes his share
3. Class Gifts- A gift to beneficiaries who are defined by one or more common
characteristics. Examples would be children, grandchildren, employees,
siblings, etc.
a.
Composition of The Class- When is membership of a class
determined, and under what conditions may someone who
shares the common characteristics required for membership
in the class be excluded from the class?
i.
An Open Class- A class that may get larger. For example
if T leaves a gift to his grandchildren, and there is still a
possibility of his children having more grandchildren,
then the class has the potential to grow.
ii.
A Closed Class- Meaning that no one may come into the
class after the gift has been made. Example if T leaves a
gift to his grandchildren now living (meaning living at
the time he wrote the provision) then even if more
grandchildren are born and share the same
characteristics they cannot be eligible as members of the
class.
1. A fetus is considered to be alive at the time a
bequest is given.
4. Dawson v. Yucus (1968)
Generally, naming an individual in a bequest prevents the gift from
becoming a class gift.
Facts: A testatrix devised an interest in land to two of her nephews, one of
whom was deceased, and the other is challenging the bequest.
Issue: Does a bequest to two named individuals who are both nephews to
the testatrix constitute a class gift?
Held, NO. The language of a devise, naming two individual persons, does
not come within the designation of a class but is to the individuals
distributively.
Changes in Property After Execution of Will
1.
Ademption by Extinction
a.
b.
c.
There are 4 different types of gifts a person can make in a will: (1)
specific devise (2) general devise (3) demonstrative devise (4) residuary
devise.
i.
Specific devises: a disposition of a specific item of T's property.
Ademption only applies to specific devises.
1.
"I give my car to Alice;" "I give Blackacre to Alice;"
or "I give my three-carat diamond to Alice." These gifts are
construed as specific gifts of the car, land, or diamond that T
owned when he/she executed the will.
ii.
General devise: T intends to confer a general benefit and not
give a particular asset.
1.
" I give $10,000 to Bill;" "I give a 1995 Saturn to
Bill." These are general. The gift is measured by any means T
selects. If there is not $100,000 in cash or 1995 Saturn in T's
estate upon his/her death, the legacy is not adeemed; other's
assets must be sold to satisfy Bill's legacy.
iii.
Demonstrative devise: It’s a hybrid. It's a general devise from a
specific source.
1.
"I give Dave $1000 from my checking account at TD
Bank;" or "I give Dave $100,000 paid from the proceeds of sale
of my General Motors stock." These are treated as general gifts
for construction purposes. If T does not own any GM stock at
his/her death the devise is not adeemed. Other assets must be
sold to raise $100,000.
iv.
Residuary devise: Conveys that portion of T's estate not
otherwise effectively devised by other parts of the will.
1.
"I give to Bob all the rest, residue, and remainder of
my property and estate." This is the most common but not the
only was to dispose of a residuary estate. Any clause that gives
away all T's property except whatever was given away
specifically or generally is a residuary gift, such as "I give all my
property to Bob."
Ademption: Most common construction issue concerning T's property
arises when T makes a specific gift in his or her will and thereafter the item
in question is transferred. The issue is what, if anything, should the
beneficiary take?
i.
Under the common law approach, if T makes a specific devise
and the item that is the subject of the specific gift is not in T's estate at
the time of death, under the identity approach an irrebuttable
presumption arises that the gift was revoked and B takes nothing.
Under the UPC, a presumption against revocation arises, and the B is
entitled to any replacement property T owns at the time of death or, if
none, the monetary equivalent of the gift.
ii.
The identity approach to the doctrine of ademption is the
traditional and still majority approach to the doctrine. For a more
detailed explanation see pg. 161 Emmanuels.
Wasserman v. Cohen (1993)
A TRUST, PARTICULARLY WHEN EXECUTED AS PART OF A
COMPREHENSIVE ESTATE PLAN, SHOULD BE CONSTRUED
ACCORDING TO THE SAME RULES TRADITIONALLY APPLIED
TO WILLS
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
Facts: A trust beneficiary sued the trustee for the sale of proceeds of a
building which would have been conveyed to her had it not been sold.
Issue: Should the doctrine of ademption, as traditionally applied to wills,
also apply to a trust?
Held, YES. The doctrine of ademption, as traditionally applied to wills,
should also apply to a trust.
Classify the devise as general or demonstrative rather than specific. If T
bequeaths "100 shares of Tigertail Corporation" to A, and T owns no
shares of Tigertail at death, the court will probably hold this to be a
general devise. A is entitled to the value of 100 shares.
Classify the inter vivos disposition as a change in form, not substance. T gives
"my 100 shares of Tigertail Corporation to A. Tigertail merges with Lion
Corporation, which retires the Tigertail stock and issues in its place 85
shares of Lion stock for 100 shares of Tigertail. Most courts hold that the
corporate merger is only a change in form, not substance and A takes the
85 shares of stock.
Construe the meaning of the will as of the time of death rather as of the time of
execution. I give "my Lincoln automobile to Sam." At the time of
execution T owned a 1998 Lincoln. At the time of death T owned a 2008
Lincoln. Language broad enough to cover the new Lincoln. This falls
under the doctrine of independent significance.
Create exceptions. If the conservator of an incompetence or insane person
transfers the item, most cases have held the legacy not adeemed on the
theory that ademption requires a voluntary act of T.
If, as a result of the transfer of the item that was the subject of the specific
gift, T is owed an outstanding balance, the outstanding balance goes to B.
UPC: The lastest version of the UPC presumes that where a specific devise is
no longer in T's estate, the gift shouldn't be adeemed. If T has acquired
property to replace the original specific gift, B gets the replacement
property. If T has not acquired replacement property, B is entitled to the
monetary equivalent of the specific gift, unless it is inconsistent with T's
intent.
See stocks and exoneration of liens on page C16-17 in Emmanuls.
Doctrine of satisfaction. At common law, if B under a will receives an inter
vivos gift from T of the same type of property as the gift in the will and B
is T's child, a rebuttable presumption arises that the inter vivos gift counts
against the child's testamentary gift.
1. UPC/modern trend. If T makes an inter vivos gift to any B under his
or her will, the gift does not count against the B's testamentary gift
unless there is a writing evidencing such an intent. If the donor
creates a writing, it must be contemporaneous with the gift; if the
donee creates a writing it can be created any time.
2. NOTE: Advancement v. Satisfaction Essentially deals with the
same issue. However, advancement comes into play when the decedent
dies intestate and satisfaction arises when the decedent dies testate.
Abatement: If at the time of death T had made more gifts than he or she has
assets, the doctrine states that the residuary gifts should be reduced first,
general gifts second, and specific gifts last. (This order is based on the
presumption that the more precise the nature of the gift, the more
important it must have been to T.)
1.
Some states permit the court to vary from this order if abating the
residuary first appears inconsistent with T's overall testamentary
scheme (T intended the residuary taker to take the bulk of her or
her probate property and abating the residuary clause would be
inconsistent with this intent.)
5. INTESTACY
i.
The Basic Scheme
1.
Introduction
a.
Despite the benefit of nonprobate transfers and wills, the majority of
people die intestate. Any property not disposed of by nonprobate means falls
to probate, and any probate property not disposed of by will falls to intestacy.
i.
Net Probate- The probate property that falls under the intestacy
laws has already been reduced by taxes, funeral expenses, and any
possible family allowances.
1.
Example- If D has a 150,000 probate estate, but has
funeral expenses of 50,000, then his net probate estate that will
be subject to the laws of intestacy will be 100,000.
b.
Under intestacy, a decedent's personal property is distributed according
to the descent and distribution statute of the state where the decent was
domiciled at the time of death, and the decedent's real property is distributed
according to the laws of descent and distribution of the state there the real
property is located.
c.
A typical intestate distribution (basic order of who takes): (1) surviving
spouse [any property not passing to a surviving spouse passes as follow] (2)
issue (3) parents (4) issue of parents (5)grandparents/issue of grandparents
(6) next-of-kin (7) escheats to state
Who takes
How much?
Surviving spouse
100% if no surviving issue, parents, or issue of
parents; OR
50% if one child, or issue of one deceased child,
or no child but parents, or issue of parents; OR
33% if > one child (alive or deceased with
issue)
Issue
Equally
Parents
Equally
Issue of Parents
Equally
Grandparents
Equally
Issue of Grandparents Equally
Next-of-kin
By degree of relationship
Escheat to the state
100%
iv. NOTE**Any property not passing to a surviving spouse falls to the first tier
where there is a live taker. Once that tier is determined, all the property
ii.
that the surviving spouse did not take is distributed at that tier. No
property falls to a lower tier.
1. EXAMPLEPete dies and is survived by his wife, Gerri, his four
kids, and his mom. Under typical intestate distribution Gerri takes
33%, and the rest is distributed equally amongst his four children.
Mom gets nothing
2. EXAMPLE Ann dies intestate survived by her children and her
grandmother. Under the typical intestate distribution scheme, her
property is distributed among her children. Her grandmother gets
nothing.
Share of Surviving Spouse
1. Marriage Requirement-The term spouse assumes that the couple has gone
through a valid marriage ceremony (most states include putative spouses,
where the couple goes through what at least one spouse believes to be a
valid marriage ceremony, but the marriage is either void or voidable.)
Cohabitants do not qualify unless the jurisdiction recognizes common law
marriage and the couples meet the requirement for common law
marriage. Once married, even if a couple legally separates they continue
to qualify as spouses until a court enters its final order of dissolution. In
some states, where one spouse abandons another spouse, then the
abandoned spouse may be disqualified from inheriting from the other
spouse.
a. Domestic Partners- In some states, same-sex couple can enter into a
civil union, or register as reciprocal beneficiaries or domestic
partners and receive inheritance rights and elective share rights
similar to those of a spouse.
2. Simultaneous death- A person succeeds to the property of a decedent only if
the person survives the decedent for an instant of time. When a person dies
simultaneously with his heir or devisee, does the heir or devisee succeed to
the person's property?
a. The Uniform Simultaneous Death Act provides that if "there is NO
sufficient evidence" of the order of deaths, B is deemed to have
predeceased the donor. Thus neither inherits from the other.
b. At common law, to qualify as an heir one has to prove by a
preponderance of the evidence that he or she survived the decedent
by a millisecond.
c. Under the modern trend/UPC, some jurisdictions require the heir to
prove by clear and convincing evidence that he or she survived the
decedent by a millisecond, while other jurisdictions require the
taker to prove by clear and convincing evidence that he or she
survived the decedent by 120 hours (5 days).
d. Janus v. Tarasewicz (1985)
SURVIVORSHIP IS A FACT WHICH MUST BE PROVENBY A
PREPONDERANCE OF THE EVIDENCEBY THE PARTY
WHOSE CLAIMS DEPEND ON SURVIVORSHIP
Facts: A mother sued for the life insurance proceeds on her son's
life, after her son and daughter-in-law died from taking cyanidelaced Tylenol.
Issue: Was there sufficient evidence to establish that Theresa Janus
survived her husband Stanley?
iii.
Held, YES. The diagnosis of death must be made in accordance with
the usual and customary standards of medical practice.
iii. Calculating Share
1. Typical State Statute- the surviving spouse takes 100% of the
property if there is no surviving issue, parents, or issue of parents;
50% if decedent has one child (alive or dead but survived by issue)
or no surviving issue but surviving parents or issue of parents; and
33% if more than one child (alive or dead but survived by issue)
2. UPC- spouse takes 100% if no issue or parents, or 100% if all of the
decedent's issue are also issue of the surviving spouse and the latter
has no other issue; $200,000 plus 75% of the rest if the decedent has
no surviving issue, but surviving parents; $150,000 plus 50% of the
rest if all of the decedent's surviving issue are also issue of the
surviving spouse but the latter has other issue; or $100,000 plus
50% of the rest if one r more of the decedent's surviving issue are
not issue of the surviving spouse.
a.
The UPC does not consider issue of parents when distributing
intestate share.
Share of Descendants
1. If there is no spouse or the spouse's share has been set aside, the issue take
the remainder of the property to the exclusion of everyone else.
2. When of several children has died before the decedent, the child's
descendents shall represent the dead child and divide the child's share
amongst themselves. (they take "by representation")
a. Example  Lets create a couple, John and Jane. John and Jane live
in a non-UPC state where a wife is entitled to half of an intestate
estate. John and Jane have a child, Joe. Suddenly John dies
intestate. Jane would get ½ of the estate, and the other ½ would pass
down to Joe.
b. In this example let’s say Joe had a son, so Jane and John were
grandparents. Let’s say Joe dies and then John. Jane would get ½ of
the estate, and the other ½ would pass on to Joe’s son, since Joe
himself is dead.
c. In this example let’s say John and Jane had 3 kids, Joe, George, and
Rick. If John dies Jane gets ½ the estate and each of the boys would
get an equal 1/6 of the estate.
d. But what happens if John dies and one of his children is dead also?
How are the shares divided up? Who inherits and how many
shares?
e. Analytical steps in calculating shares:
i.
First, at which generation should the decedent's property be
divided first?
ii.
Second, at whichever generation the estate is divided first,
how many shares should the estate be divided into?
1.
The answer to this step is always the same: one share
for each decedent who is alive at the generation, and one
share for each descendant who is dead but survived by
issue.
iii.
Third, how are the "dropping" share distributed?
iv.
Although the second answer is always the same, there are
different answers to the first and third step, and three
different doctrines have developed that correspond to three of
the different possible combination of answers.
1.
Per stirpes (English per stirpes)- Under the per
stirpes approach, the first division of D's property
always occurs at the first generation (whether anyone is
alive at that generation or not); the property is divided
into one share for each party at that generation who is
alive or who is dead but survived by issue; and the share
for those who are dead but survived by issue drop by
bloodline to their respective issue. This approach treats
each line of decendants equally.
1.
EXAMPLEIf John and Jane had 3 sons,
but one son, Rick, was dead, and then John died
intestate, Jane would get ½ of the estate and each
of the boys would still get 1/6 of the estate. Ricks
descendants would then divide that 1/6 amongst
themselves. So if Rick had 2 children they would
each get 1/12 of the estate.
2.
Per capita with representation (per capita approach
or Modern American per stirpes approach)- Under the
per capita approach, the first division of decedent's
property always occurs at the first generation of issue
where there is a live taker; the property is divided into
one share for each party who is alive at that generation
and one share for each party who is dead at that
generation but who is survived by issue; and the shares
for those who are dead but survived by issue drop by
bloodline to their respective issue.
1.
EXAMPLEJohn dies, but all three of his
sons predeceased him. Jane would get half and the
estate of John's issue would be divided starting
with Rick's children and both children would take
1/4 of the estate.
3.
Per capita at each generation- Under the per capita
at each generation approach, the first division of
decedent's property always occurs at the first generation
of issue where there is a live taker; the property is
divided into one share for each party who is alive at that
generation and one share for each party who is dead, but
survived by issue; and the shares for those who are dead
but survived by issue drop by the pooling approach (the
shares are added together and then distributed equally
among the issue of the deceased parties at the prior
generation.) see page 30 for chart.
1.
EXAMPLE D died intestate. He had 2 sons
Charlie and Cal who are both dead. Charlie has 2
kids one who is alive and one dead. Cal has one
child who is dead. Since there are 3 grandchildren
the estate would be divided up into 3’rds, but only
one is living so he gets 1/3 of the estate. Charlie’s
dead child has 3 sons and Cal’s dead child has 2
ii.
sons. In total there are 5 great grandchildren, all
the shares are divided equally so each one gets 2/15
of the estate.
4.
Criticism: Under both per stirpes and per capita with
representation, there is potential for descendants of
equal degree to take unequally.
5.
Benefit of per capita at each generation: All
descendants who are equally related to the decedent take
equally, because it "pools" the dropping share and
divides it equally among all of the eligible takers at the
next generation.
iv.
Shares of Ancestors and Collaterals
1. The decedent, the decedent's spouse, and the decedent's issue are the
decedent's immediate family. All of the decedent's other relatives are
called his/her "collateral relatives. If the decedent has no spouse or issue,
how D's property is distributed to the collateral heir varies by
jurisdiction. There are two possible approaches:
a. Parentelic system: the intestate estate passes to grandparents
(maternal and paternal side1/2 each) and their decedents, and if
none to great-great-grandparents and their descendants, and so on
down each line descended from an ancestor until and heir is found.
b. Degree-of-relationship system: The intestate estate passes to the
closest of kin, counting degrees of kinship. To ascertain the degree of
relationship of D to the claimant you count the steps(counting one
for each generation) up from the decedent to the nearest common
ancestor of D and the claimant, and then you count the steps down
to the claimant from the common ancestor. The total number of
steps is the degree of relationship.
v.
How to Analyze an Intestacy Question in 6 Easy Steps
1. Determine the share of the surviving spouse
2. If the spouse doesn’t get the entire estate, or if there is no surviving spouse
consider the shares to be dealt out to the decedents descendants and the
issue of representation within that jurisdiction.
3. If D has no spouse or descendant his parents are usually statutorily next in
line, to divide the estate in equal shares.
4. If D’s parents don’t survive D’s siblings are next in line to inherit, and the
descendants of the descendant’s siblings by representation.
5. If D has no siblings then the estate will pass to remote ancestors under the
parentelic or degree of relationship system.
6. If there are no eligible ancestors the estate will escheat to the state.
Transfers to Children
1.
Adopted Children (see Folami's adoption chart)
a. Adoption- In most jurisdictions if you adopt a child they are considered
as natural born for consideration as heirs.
i.
Common law Rule- Adopted kids may inherit from both their
natural and adoptive parents.
ii.
Modern Rule- If the natural parents no longer have any place
in the adopted child’s life, and their adoptive parents have
assumed all parental duties then the adopted child may not
inherit from their natural parents, but may inherit from their
adopted parents.
iii.
Adoption by a Step Parent- If a natural parent is adopted to the
adopting parent the child may then inherit from his natural
parents.
b. Step Children- they share no common blood. They usually not
considered heirs unless they are adopted.
c. Hall v. Vallandingham (1988)
AN ADOPTED CHILD SHALL BE TREATED AS A NATURAL
CHILD OF HIS ADOPTED PARENTS
Facts: Four children who were adopted by their mother's second
husband were not allowed to inherit when their (deceased) natural
uncle died intestate.
Issue: Did the trial court err in denying four children the right to
inherit through their natural paternal uncle when these children
were adopted by their stepfather after the death of their natural
father the remarriage of their natural mother? No.
Held, NO. Because an adopted child has no right not inherit from
the estate of a natural parent who dies intestate, it follows that the
same child may not inherit through the natural parent by way of
representation.
i. In a large majority of states, an adult person, married or unmarried, may
adopt any other person, minor or adult, but the adoption of a lover may
not be allowed.
1. Minary v. Citizens Fidelity Bank & Trust Co. (1967)
ADOPTING YOUR SPOUSE WILL NOT MAKE HIM/HER
YOUR PARENTS' HEIR
Facts: T's son adopted his wife for the purposes of making her an
heir so she could take under the residuary clause of his mother's
will.
Issue: Is an adult who was adopted for the sole purpose of making
her an heir, entitled to share in a distribution of trust assets to the
heirs of T?
Held, NO. Adoption of an adult for the purposes of bringing that
person under the provisions of a preexisting testamentary
instrument, when he/she clearly was not intended to be so covered,
should not be permitted.
ii. Virtual (Equitable) adoption: permits an equitably adopted child to inherit
from the foster parents
1. Arises where (1) the natural parents and adoptive parents agree on
adoption (2) the natural parents perform by giving up custody of the
child (3) the child performs by moving in with the adoptive parents
(4) the adoptive parents partially perform by taking in the child but
never complete adoption (5) the natural parent dies intestate.
2. O'Neal v. Wilkes (1994)
THE FIRST ESSENTAL OF A K FOR ADOPTION IS THAT IT
BE MADE BTWN PERSONS COMPETENT TO CONTRACT
FOR THE DISPOSITION OF THE CHILD
Facts: A child was denied intestate inheritance from her "adoptive"
father's estate because her aunt had no authority to contract for her
adoption.
Issue: Was there a valid K to adopt O'Neal, such that she is entitled
to inherit Cook's estate as property?
ii.
iii.
iv.
Held, NO. A relationship less that that of legal guardian will not
give on the authority to enter into an adoption K, and any such K is
thus invalid.
Posthumous Children: A child conceived before D’s death but born alive
afterward are usually allowed to inherit under an intestacy scheme. The mother
must give birth within 280 of the father's death.
Nonmarital Children
1. Under the common law the child did not inherit, because they were
considered a child of no one.
2. The parent-child relationship extends to every parent and child regardless of
the marital status of the parents. The child automatically inherits
from/through the mother for the purposes of intestacy
a. When the mother and father do not marry or attempt to marry, a
parent-child relationship is presumed to exist between a father and
a child if:
i.
while the child is less than age 2, the father lives in the same
household as the child and openly holds out the child as his
natural child (UPA)
ii.
the father acknowledges his paternity in a writing that is
filed with an appropriate court or administrative agency
(UPA)
iii.
There is a judicial determination of paternity
iv.
The father marries the child’s mother (this can happen at
any point in the child’s life and still legitimize him)
v.
The father acknowledges his paternity of the child
vi.
Determination of paternity through DNA testing either
before or after the fathers death
Advancements
1. Common law- Inter vivos gifts to a child are irrebuttably presumed to count
against the child's share of D's intestate estate.
2. Modern trend-Inter vivos gifts do not count against an heir's share of D's
intestate estate unless there is a writing by the donor contemporaneous
with the inter vivos gift expressing such an intent or a writing by the
donee acknowledging such an intent.
3. Hotchpot: Where there is an advancement, the amount of the advancement
is added back into D's intestate estate, and then each heir's share of the
hotchpot is determined. In distributing the decedent's intestate property,
an heir who receives an advancement has the value of the advancement
credited against his or her share (of the hotchopt amt). If a gift is treated
as an advancement, the donee must allow its value to be brought into a
hotchpot if the donee wants to share in the decedent's estate.
a. Ex D died intestate leaving three children A, B, and C. D gave
inter vivos gifts to each: A $25,000; B $50,000; and C $75,000. D
died w/ probate estate of $150,000. How much does each child take?
i.
Analysis The inter vivos gifts are added back (on paper)
to the actual probate estate to create the hotchpot. The
hotchpot here is $300,000 ($150,000 plus the inter vivos gifts:
$25,000 +$50,000 + $75,000). Then the hotchpot is divided
equally among the children. $300,000/3 = $100,000. Because A
received $25,000 inter vivos, A receives only $75,000. Because
B received $50,000 inter vivos, B receives only $50,000 from
the actual probate estate. And because C received $75,000
inter vivos, C receives only $25,000 from the actual probate
estate.
4. Rationale: The doctrine is based on the assumption that the parent would
want an equal distribution of assets among the children and that true
equality can be reached only if lifetime gifts are taken into account in
determining the amount of equal shares.
v.
Guardianship and Conservatorship of Minors
1. Minors do not have the legal right to manage their property
2. Several approaches to protect minors:
a. Guardianship (parents are natural guardians but the court will
appoint one if no parent exists)
b. Property manager (appointed by court)
c. Conservator
d. Custodianship
iii.
Bars to Succession
1.
Homicide
a.
In Re Estate of Mahoney (1966)
THE DOCTRINE OF CONSTRUCTIVE TRUST IS INVOKED TO
PREVENT A SLAYER FROM PROFITING FROM HIS/HER CRIME,
BUT NOT AS AN ADDED CRIMINAL PENALTY
Facts: A widow appealed from the Probate Court's decreeing of her
husband's estate to her parents after she was convicted of killing him
Issue: In the state of VT, may a widow convicted of manslaughter in
connection with the death of her husband inherit his estate?
Held, NO. In VT, while legal title to D's property passes to the slayer,
equity holds the slayer to be a constructive trustee for the heirs or next of
kin of the decedent.
ii. Most states have slayer statutes to keep courts from having to jump through
equitable hoops to keep murderers from inheriting under intestate
succession.
ii.
Disclaimer
1. Under common law, when a person dies intestate real and personal property
pass to D's heirs by operation of law. An intestate successor can not
prevent title from passing. If the heir refuses to accept the law treats that
person as though the predeceased D and title passes to the next intestate
successor.
a. People may do this for tax or medicaid purposes.
2. If a person dies testate the devisee can refuse to accept the devise, thereby
preventing title from passing to the devisee. Any gift, whether inter vivos
or by will, requires acceptance by the donee.
6. RESTRICTIONS ON THE POWER OF DISPOSITION: PROTECTION OF THE
SPOUSE AND CHILDREN
i.
Rights of the Surviving Spouse
1.
The goal is to protect the surviving spouse from a deceased spouse
disinheriting and from creditors.
2.
Marital Property Systems
a.
Every jurisdiction has several doctrines that protect surviving spouses
(and, to some degree, children) that have the effect of limiting one's power to
transfer one's property at death. A surviving spouse has a right (1) to
support, and (2) to a share of the couple's marital property.
b.
2 marital property systems:
Separate property
1.
Whatever the worker earns is his no sharing of
earnings
2.
If one spouse is the wage earner while the other works
at home then all of the property acquired during marriage
belongs to wage earning spouse (other than gifts or inheritances
from relatives or gifts by the wage earner to the homemaker)
3.
Under the elective share doctrine, the surviving spouse
entitled to an elective share in the estate of the deceased spouse
regardless of the terms of the deceased spouse's will.
1.
Elective share-Under the separate property
system, although each spouse owns his or her earnings
acquired during marriage as his or her separate property,
upon death the elective share doctrine provides that the
surviving spouse is entitled to share of the deceased
spouse's property regardless of the terms of the deceased
spouse's will. How much property the surviving spouse is
entitled to (typically one-third of the estate subject to the
elective share) and what property is subject to elective
share varies by state.
ii.
Community Property
1.
All of the earnings (ex. Lottery ticket does not count as
earnings) of the spouses and property acquired from earnings
are community property
2.
Each spouse is the owner of an undivided one-half
interest in the community property
3.
Death dissolves the community
4.
The deceased spouse owns and had testamentary power
over only his or her half-share
5.
Community property can be divided upon death and
upon divorce
6.
**NOTE: IN A COMMUNITY PROPERTY STATE
THERE IS NO ELECTIVE SHARE
7.
Rationale: Under the community property approach,
the spouses are considered partners. Any property acquired as a
result of the time, energy, and/or labor of either spouse is
considered owned by the partnership.
Rights of Surviving Spouse to Support
a.
In virtually every state a surviving spouse has a right for support
(typically for life) under (1) the social security system, (2) private pension
plans pursuant to ERISA, (3) the homestead exemption, (4) the personal
property set-aside, and (5) the family allowance.
i.
Social security- Like a public pension plan. All are required to
participate. Only a surviving spouse can receive the worker's
survivor's benefit (a stream of income for life--that is support). The
worker spouse cannot transfer the benefit to anyone else.
ii.
Private pension plans- Two main types of private pension plans
1.
Defined contribution plan
1.
typically funded by contributions from both the
employer and the employee
i.
3.
2.
iii.
iv.
v.
vi.
at retirement the employee is entitled to the
asses in the fund held in her name, including any
investment returns that have accrued over the years
2.
Defined benefit plan
1.
typically funded by the employer
2.
at retirement, the employee is entitled to a
defined benefit--for example, 40% of the average of the
employee's three highest yrs of annual income
3.
ERISA requires that the spouse of an employee must
have survivorship rights if the employee predeceases the spouse
4.
Purpose: to insure a stream of income to surviving
spouses
5.
If employee spouse survives to retirement age the
pension must be paid as a joint and survivor annuity to the
employee and his or her spouse, unless the nonemployee spouse
consents to some other form of payment like a lump sum
6.
If the employee spouse dies before retirement and the
pension is vested, the surviving spouse is entitled to a preretirement survivor annuity.
7.
A spouse can waive rights under benefit plans
1.
ONLY A SPOUSE CAN DO THIS, THIS
CANNOT BE DONE UNDER A PREMARITAL
AGREEMENT
Homestead exemption-Generally, the surviving spouse gets a
life estate in the property. This is to ensure that he/she has some place
to live. Different states simply grant money to the spouse for housing
support. The UPC suggests that the spouse should only receive
$15,000. Some states require the decedent to claim homestead
exemption while alive, while other estate permit it to be claimed as part
of the probate estate.
Personal property set-aside- Certain personal tangible property
is set-aside free from creditors. UPC sets the limit of property at
$10,000. The set-aside is usually subject to several conditions and
limitation, but, if these are met, the decedent usually has no power to
deprive the surviving spouse of the exempt items.
Family allowance- Since probating assets can take a very long
time a surviving spouse has a right to receive a family allowance
during probate (but not for life). The amount varies by jurisdiction.
Some are allowed a fixed amount, and some take into account the
standard of living the surviving spouse was accustomed to at the time
the deceased spouse died.
Dower and Curtsey- At early common law, the principal
method of providing spousal support was either down or curtsey.
1.
Dower (only 4 states have it)
1.
When a husband dies a wife has dower in all
LAND of which her deceased husband had been seised
during marriage and which was inheritable by the issue of
husband and wife
2.
Dower entitles the widow to a life estate in onethird of her husband qualifying land.
3.
iv.
Remains inchoate until the husband's death,
the husband cannot sell the property free and clear of his
wife's interest.
4.
No bona fide purchaser or non bona fide
purchaser can deny a widow of her dower.
5.
Today, it functions primarily to make the
signatures of both spouses a practical requirement to the
same of one spouse's land.
6.
Advantages:
a.
It protects the wife interest from
creditors
7.
Disadvantages:
a.
Its only a life estate
b.
If she predeceases the husband the
property reverts back to her husband, does not pass
to her heirs
c.
It only gives the surviving spouse an
interest in LAND, not in stocks or other assets
2.
Curtsey
1.
The husband's support interest in wife's land
2.
Comparable to dower except (1) the husband
did not acquire curtsey unless children were born of the
marriage, and (2) the husband was given a life estate in
the entire parcel of land.
3.
Curtsey survives today in only a handful of
states, but in most of these it is only a label given to the
support interest of the husband, which in fact has been
made identical with the wife's support interest.
3.
If you compare dower to elective share the elective
share is 1/3 of husband's property (real and personal) and dower
is 1/3 of land only.
4.
4 Approaches
1.
Some jurisdictions only giver dower
2.
Some jurisdictions give dower with the option
of elective share
3.
Some give elective share only. (majority of
jurisdictions)
4.
UPC augmented estate.
(these are all separate from the community property system.
This only applies in states where there is separate property)
Rights of Surviving Spouse to a Share of Decedent's Property
1. Elective Share and Its Rationale
a. Unlike dower, elective share is subject to creditors.
b. It applies regardless of the length of marriage.
c. Inter vivos trust is not subject to the elective share
d. Traditional statutes provide the surviving spouse with an election:
i.
The spouse can take under the decedent's will
ii.
The spouse can renounce the will and take a fractional share
of the decedent's estate.
iii.
In Re Estate of Cross (1996)
5.
A SURVIVING SPOUSE ELECTING AGAINST D'S WULL
RECEIVES AN INTESTATE SHARE
Facts: A man with a will dies leaving everything to his son,
and nothing to his surviving spouse. The surviving spouse
suffers from Alzheimer's and lives in a nursing home paid for
by Medicaid. Since the surviving spouse is legally incompetent,
the probate court judge elects for the surviving spouse to take
against the decedent's will and receive her intestate share.
Issue: Did the probate court judge abuse his discretion in
electing for the decedent's surviving spouse, who depended
solely on Medicaid benefits, to take against the will?
Held, NO. The court may elect for an incompetent surviving
spouse to take against the decedent's will.
iv.
In Re Estate of Cooper (1993)
A HOMOSEXUAL PARTNER IS NOT A SURVIVING
SPOUSE
Facts: Decedent died testate leaving everything but a valuable
piece of real estate to his homosexual lover. The surviving
lover attempted to elect against the decedent's will.
Issue:Is the survivor of a homosexual relationship, alleged to
be a "spousal relationship," entitled to a right of election
against the decedent's will?
Held, NO. The term "surviving spouse" does not include
homosexual life partners for purposes of the elective share
statute.
5.
NOTE: Congress enacted the Defense of Marriage Act, which
provides that no state shall be required under the Full Faith
and Credit Clause of the Constitution to give effect to a samesex marriage contracted in another state.
1.
Only 3 states allow same sex-couples inheritance and
elective share rights: VT, HI, CA
Policy justifications The surviving spouse contributed to the
decedent's acquisition of wealth and deserves to have a portion of it
(partnership theory) OR to provide the surviving spouse with
adequate support (support theory)
1.
There is tension btwn the two theories. The partnership theory
militates toward awarding the surviving spouse 1/2 of D's
property acquired through marriage, whereas in many cases
the support theory justifies a smaller share but would apply it
to all D's property.
2.
ExH dies leaving a will that excludes W. Then before W
exercises her right of election, but before the period for doing
so runs out, W dies. Should W's personal rep be allowed to
renounce H's will and take a forced share? If the answer is
Yes, then W's elective share of H's property will pass to W's
heirs or devisees. Under the support theory, the answer should
be No; after death W no longer needs support. Under the
partnership theory, however, the answer should be Yes; W is
entitled to a direct disposition of her share of the property
accumulated in the marital partnership. In mist states, and
under the UPC the answer is no.
3.
6.
The elective share has to be claimed, and because only the
surviving spouse can claim it, the elective share looks more
like a form of support than a true sharing of marital property.
Property Subject to the Elective Share: More than any other part of
the elective share doctrine, the jurisdictions are split over what
property is subject to the elective share.
1.
Common law- in a number of states, the elective share entitles
the surviving spouse to a share of the deceased spouse's
probate estate, regardless of the terms of he deceased spouse's
will. A spouse can AVOID the elective share, however, by
putting his/her assets into nonprobate arrangements.
2.
Modern trend- The modern trend is to expand the reach of the
elective share to limit the deceased spouse's ability to avoid the
doctrine by using nonprobate arrangements. The jurisdictions
are split, however, over how to best identify when the elective
share doctrine should expanded to cover nonprobate transfers.
Two tests:
a.
Illusory transfer test  The courts analyze whether the
nonprobate agreement really constituted an inter vivos
transfer or whether the decedent retained such an
interest (life estate, right to revoke, right appoint) in the
property that the transfer is more testamentary than
inter vivos (and thus the property in question is subject
to the elective share).
b.
Intent to defraud test The issue is whether D intended
to defraud the surviving spouse of his or her elective
share rights in the property. The jurisdictions that
follow the intent to defraud approach are split over
which approach should be taken to the intent to defraud:
a subjective approach (did the decedent actually intend
to defraud the surviving spouse of his/her elective share
rights in the property in question) or an objective
approach (focusing on a variety of factors: the amt of
property in question relative to the overall property,
when the nonprobate agreement was created relative to
the party's death and relative to the party's marriage,
how much of interest the deceased spouse retained, and
so on).
c.
Present donative intent test Under the present
donative intent test, the courts focus on whether the
deceased spouse really had a present donative intent at
the time he/she created the donative transfer.
3.
Sullivan v. Burkin (1984)
Inter vivos trust assets do not become part of the decedent's
estate.
Facts: During his lifetime, Sullivan created a trust under
which he transferred real estate to himself as the sole trustee.
When he dies, he left a will intentionally disinheriting his
estranged wife, Mary Sullivan. Mrs. Sullivan evoked her right
to take an elective share.
4.
5.
Issue: Should assets held in an inter vivos trust be considered
as part of the estate in determining the surviving spouse's
elective share of the estate?
Held, NO. Assets held in an inter vivos trust are not part of the
estate for purposes of the surviving spouse's elective share.
Analysis: IMPORTANT
1.
As a result of this decision, assets in a trust will be
considered part of the estate for purposes of the
surviving spouse's elective share.
2.
The effect of this holding is that there is no consideration
of the motive or intention of the spouse in creating the
trust, and it eliminates the need to determine whether
the spouse has in good faith divested himself of
ownership of the property or has made an illusory
transfer.
3.
What the court in Sullivan sought to avoid was the
"illusory transfer" test laid down by Newman v. Dore
and referenced in Sullivan.
4.
The test is the most widely accepted judicial test for
subjecting nonprobate property to the elective share,
despite the uncertainty and confusion that it created.
5.
The Sullivan court bypasses those problems by selecting
an objective test.
Exception to Sullivan: BONGAARDS V. MILLEN (2003) Jean
Bongaard was the life tenant of a trust established by her
mother. She transferred the trust to her sister before she died.
Jean's husband tried to claim an elective share of that estate.
The court rejected the husband's claim. Why? The assets here
were created by the mother, which is a third party, unlike
Sullivan where the trust was created as part of the marriage.
The trust was not created by a deceased spouse.
States have enacted statutes providing objective criteria for
determining what nonprobate transfers are subject to the
elective share. These statutes eschew the illusory transfer and
other like tests, favoring instead a clear list of nonprobate
transfers that are added to the probate estate to constitute a
net estate or an elective estate against which the surviving
spouse may elect to take his or her statutory share.
1.
1969 UPC augmented estate approach: The surviving
spouse is entitled to receive 1/3 of the deceased spouse's
augmented estate. The augmented estate includes not
only the decedent's probate estate, but also certain
nonprobate and gratuitous inter vivos transfers made
during the marriage: (i) any transfers where the
deceased spouse retatined the right to possession or
income from the property, (ii) any transfers where the
deceased spouse retained the power to revoke or the
power to use or appoint (dipose of) the principal for
his/her own benefit, (iii) any joint tenancies with anyone
other than the surviving spouse, (iv) gifts to third parties
within two yeas of the deceased spouses death in excess
6.
7.
of $3000/yr, and (v) property given to the surviving
spouse either inter vivos or via nonprobate transfers
(include life estate interest in trusts). Life insurance
proceeds to someone other than the surviving spouse are
expressly excluded.
2.
1990 UPC marital property approach: The surviving
spouse starts out entitled to only 3% of the deceased
spouse's augmented estate, and the percentage increases
2 to 3% percentage points a year, reaching 50% after 15
years of marriage. The augmented estate includes both
spouses' property, including property the deceased
spouse transferred before marriage if he/she retained
substantial control over the property, and life insurance
proceeds paid to parties other than the surviving spouse.
a. This is called sliding scale. It gradually increases the
share depending on the length of marriage.
3.
New York approach: New York gives the surviving
spouse $50,000 or 1/3 of D's augmented estate. It
includes not only D's probate estate but also (i) gifts
causa mortis (ii) gifts to third parties within one year of
the deceased spouse's death in excess of $10,000; (iii)
Totten trusts (saving account trusts); (iv) JTs and Ts by
the E (real or personal), ot the extent of the deceased
spouse's contribution; (v) payable-on-death transfers;
(vi) inter vivos transfers where the deceased spouse
retained the right to possession or income from the
property, or the power to revoke or the power to use or
appoint (dispose of) the principal for his or her own
benefit.
a. Property that the surviving spouse receives by virtue
of the deceased spouse's death, be if from
nonprobate transfers or probate transfers (will or
intestacy), is credited against the surviving
spouse's elective share.
4.
Delaware approach: It rejects the UPC approach in
favor of the federal government's estate tax approach.
All property includible in D's gross estate for federal
estate tax purposes (regardless of whether any tax is
due) constitutes the D's estate that is subject to the
surviving spouse's elective share.
Funding with life estates: Property given under a will counts
against the elective share. However, where the spouse is only left a
life estate interest (which arguable constitutes support for life and
not an outright share), most states will not count the life estate
interest against the elective share.
Waiver
1.
Can spouses agree to waive the survivor's elective share?
a. The general rule is that a surviving spouse may waive
his or her right to elective share (homestead,
personal property aside, and family allowance) at
5.
6.
any time, asl long as the waiver is in writing and
signed by the waiving spouse.
b. Not enforceable surviving spouse can prove
i. That it was not made voluntarily
ii. That it was unconscionable when executed,
and, before executed, didn't know nor
reasonably could have known the deceased
spouse's financial situation and didn't
voluntarily and expressly waive the right to
know such information.
2.
In Re Estate of Garbade (1995)
PRENUPTIAL AGREEMENTS ARE PRESUMED
VALID ABSENT FRAUD
Facts: Unemployed wife and wealthy husband execute a
prenuptial agreement prior to their wedding, which
contains a waiver of the right to elect against the estate
of D.
Issue: Is a prenupt containing a waiver of the right to
elect against D's estate presumed valid absent a showing
of fraud?
Held, YES. Parties may waive their right to elect against
D's estate in a prenupt.
Rights of the Surviving Spouse in Community Property
1. H and W own earnings and acquisitions from earnings in undivided equal
shares. All property that is not community property is separate property.
2. Commingled property- Arises when separate property is mixed with
community property.
a. Inception-of-title rule
3. "Putting Spouse to an Election"- (widow's election) W executes a will
devising ALL the community property in trust to pay the income to H for
life, with remainder to others on H's death, and requiring H to elect
between surrendering his half of the community property and taking
under W's will. If H does not forfeit his share of the community property
he gets to keep his half, but does not get the benefit of the life estate.
Migrating Couples and Multistate Property Holdings
1. Migrating couples pose special problems because (1) property is either
separate or community at the time of acquisition depending on where the
couple was domiciled (2) changing domicile doesn't change
characterization of property, and (2) spousal protection approach
depends on where the couple is domiciled at the time of death.
a. From Separate to Community Property: The risk here is that the
spouse will be underprotected. The applicable doctrine at the time of
death will be the community property approach, but if the couple
spent most of their marriage in a separate property jurisdiction the
risk is that the couple's assets will be primarily, if not exclusively,
separate property.
i.
Quasi-community property attempts to deal with this
problem by providing that upon the spouse's death, his/her
separate property that would have been characterized as
community property if the couple had been domiciled in a
community property jurisdiction when the property was
7.
acquired is characterizes as quasi-community property and is
treated like community property for distribution purposes.
Not all community property states recognize this approach.
a.
This approach only gives rights to the non-wageearning spouse if the wage earning spouse dies first. If
non-wage earning spouse dies first he/she cannot devise
spouse's property.
b. From Community to Separate: The risk here is that the surviving
spouse will be overprotected. The doctrine at the time of death will
be the elective share approach. The risk is that the surviving spouse
will "double dip" in the spousal protection schemes. Upon death of
one spouse, the surviving spouse will get his/her half of the
community property outright, and D's half will go into probate
where the surviving spouse can claim an elective share in the
probate property.
i.
The Uniform Disposition of Community Property Rights at
Death Act provides that D's share of community property is
not subject to the elective share doctrine. But not all separate
property jurisdictions have adopted the Act.
Spouse Omitted from Premarital Will
1. Estate of Shannon (1990)
A DISINHERITANCE CLAUSE IN A WILL DOES NOT APPLY TO A
FUTURE SPOUSE
Facts: Unmarried testator executed a will intentionally disinheriting
everyone except his daughter. Testator subsequently married and died
without making any revisions to the will.
Issue: Does a disinheritance clause in a will intentionally omitting all other
living persons and specifically disinheriting any legal heir who contests
the will apply T's spouse whom he married after the execution of the will?
Held, NO. A disinheritance clause in a will does not apply to a testator's
subsequently acquired spouse without showing that the disinheritance was
intentional.
2. Pretermission statutes are intended to protect spouses and children who
came along after the testator's will was drafted (designed to prevent
unintentional disinheritance). The rationale is that the testator would
have wanted them included in his will, but that he failed to subsequently
revise his will, due to ignorance, accident, or mistake. For that reason,
most states require evidence of clear intent to omit the spouse or children
from the will.
1. In most states, if the testator shows such intent to disinherit, the
children have no recourse. In other words, a parent need not
bequeath anything to his children. However, elective share statutes
in most states would provide the surviving spouse with a statutory
share of the estate.
3. The courts generally hold that (1) a general disinheritance clause is not
sufficient to constitute an intent to disinherit that spouse (the will must
demonstrate intent to omit that specific spouse, and (2) the clause must
have been executed when T was contemplating marrying that specific
spouse.
4. UPC: Broadens the evidence that can be used to prove that the spouse's
omission from the will was intentional to include (1) evidence from the
b.
will, (2) other evidence that the will was made in contemplation of T's
marriage to the surviving spouse, or (3) a general provision in the will that
if is effective notwithstanding any subsequent marriage.
1. The UPC also limits funding of the omitted spouse's share to
property not devised to D's issue (1) who were born before T
married the surviving spouse, and (2) who are also not issue of the
surviving spouse.
5. Revocable trust: IN some states, the omitted spouse doctrine has been
extended to cover bother probate and nonprobate property in a revocable
inter vivos trust created by the deceased spouse.
Rights of Issue Omitted From the Will
i.
Protection from Intentional Omission
a.
In all states, except Louisiana, a child or other descendant has no
statutory protection against intentional disinheritance by a parent. There is
no requirement that T leave any property to a child.
b.
A Look Abroad: Family Maintenance Statutes
1.
In many commonwealth countries (England, Australia, and
some of the Canadian provinces), a surviving spouse has no elective
share rights, but a surviving spouse and children (and anyone else
who was dependent upon the decedent during his or her lifetime) have
the right to petition the probate court for maintenance.
2.
The court may, in its discretion, award maintenance out of the
decedent's estate if the dependent is without adequate provision for his
or her proper maintenance, education, or advancement in life.
1.
The courts assess a reasonable amount to be provided.
3.
Some have argued that the U.S. should adopt the family
maintenance doctrine.
4.
Lambeff v. Farmers Co-operative Executors & Trustees Ltd.
(1991)
AN ABANDONED CHILD MAY CLAIM AGAINST HER
FATHER'S ESTATE
Facts: The plaintiff, abandoned by the decedent as a child and
omitted from his will, claimed a statutory provision from the
decedent's will.
Issue: Was the omitted daughter entitled to a statutory provision
from her decedent's father's will?
Held, YES.By statute, an omitted child who has been left without
adequate provision for her proper maintenance, education, or
advancement in life may claim provision from her parent's estate.
b.
Protection from Unintentional Omission
i. Where an individual executes a valid will, thereafter has a child, and
thereafter dies w/o revoking or revising his or her will, a presumption
arises that T did not intend to disinherit the child. As a general rule, the
omitted child receives his/her intestate share.
a. Rebuttable presumption: The presumption that the testator
accidentally disinherited his or her child is rebuttable, but the
traditional omitted child doctrine provides that the presumption
can be rebutted only by showing that: (1) the failure to provide for
the new child was intentional and that intent appears from the will;
(2) the testator provided for the child outside of the will and the
intent that the transfer outside of the will be in lieu of the child
taking under the will is established by any evidence, including the
amount of the transfer; or (3) the testator had one or more children
when the will was executed and devised substantially all of his or her
estate to the other parent of the omitted child.
1.
"Missouri" type statute: Under what is known as the
"Missouri" type of omitted child statute, the intent to omit the
child must be determinable solely from the terms of the will.
Extrinsic evidence is not admissible.
2.
"Massachusetts" type statute: Under what is known as the
"Massachusetts" type of omitted child statute, extrinsic
evidence is admissible to help determine whether the omission
of the child was intention.
ii. Azcunce v. Estate of Azcunce (1991)
A CHILD BORN THE TIME A CODICIL IS EXECUTED IS NOT A
PRETERMITTED CHILD
Facts: Testator executed a will and later codicil. The testator then had
another daughter and executed another codicil. The second codicil made
no provisions for the second daughter.
Issue: Is a child born after the execution of her father's will but before the
execution of a codicil to the will a pretermitted child when the will and
codicil fail to provide for such child?
Held, NO. A child must be born after the making of the will or the last
codicil in order to be a pretermitted child.
a. Pretermitted statutes are not intended to address the issue of
disinheritance of the testator's children. Instead, they are designed
to protect children from being accidentally omitted from the will.
The statutes only apply to children born after the execution of the
will.
b. The assumption is that if the testator had wanted to include a child
already in existence at the time he executed the will he would have
done so.
c. In Azcunce, the rule would forgive the testator's forgetfulness or
ignorance for neglecting to revise his will after the birth of another
child, but it would not forgive the testator's failure to adequately
advise his attorney on the new addition to his family.
d. In cases such as Azcunce, it would seem more reasonable to require
proof that the testator intended not to included his lastest child,
since no reason was presented as to why the testator would have
provided for three of his children, but not the fourth.
c. Accidentally over looked? Some states provide that if T fails to provide for a
child in a will because he/she mistakenly believed the child is dead, the
child receives the share he/she would under the omitted child doctrine.
Some states cover a child that T did not know about.
d. UPC: applies only to children born or adopted after will execution. Evidence
of intent to disinherit is limited to the express terms of the will. If T had
no children at execution, the child is entitled to intestate share, UNLESS T
left substantially all of his/her property to the spouse and the omitted
child is a child of the spouse, then the omitted child is not entitled to take
under intestacy.
i. If T had one or more child living at execution and T devised
property to one or more of the children, the omitted child's share
comes out of the gift to the other children and is determined by
calculating what the children would have taken if they each received
an equal share of gifts to the children. The UPC covers children
thought dead, but not children unknown.
e. Revocable trusts: In some states the omitted child doctrine has been
extended to cover both probate property and property in a revocable inter
vivos trust created by the deceased parent.
7. TRUSTS
a.
Introduction
i.
Background
a.
A trust is, generally speaking, a device whereby a trustee manages
property as a fiduciary for one or more beneficiaries.
1.
The trust holds legal title to the property and, in the usual trust,
can sell the trust property and replace it with property thought more
desirable.
b.
The beneficiaries hold equitable title and, in the usual trust, are
entitled to payments from the trust income and sometimes from the trust
corpus too.
c.
Four common uses of trusts in estate planning (see examples on pgs.
487-88)
1.
Revocable trust: it is an inter vivos trust; the creator retains the
power to revoke the trust
2.
Avoidance of probate
3.
Testamentary marital trust: surviving spouse keeps the
property for his/her life upon the death of that surviving spouse the
benefit tacks on to the children (i.e. a life estate in trust).
Benefit: no estate tax

4.
Trust for incompetent person (aka dynastic trust): keeps the
money within the family; if it violates the RAP it will be cancelled out
5.
Trust for minor see above
6.
Discretionary trust: useful in spreading the tax burden.
Distribute the income to the grantor and beneficiaries. Other benefits
is that it can hide from creditors
7.
Charitable trust
Types of Trust
d.
1.
Inter vivos trust: created while the settlor is alive. A trust is
created when it is funded--when property is transferred to the
trust/trustee.
2.
Testamentary Trust: If the trust is created when the settlor dies
(either in his/her will or funded via his/her will).
3.
Remedial trusts: arise by operation of law and thus are not
subject to the requirements to create a valid trust. They are used as
equitable remedies by courts to order one party who is currently hold
property to transfer the property to another party whom the court
concludes has a stronger equitable claim to the property. 2 types:
1.
Resulting trust-an equitable reversionary interest that
arises by operation of law in two situations: (1) where an express
trust fails or makes an incomplete disposition or (2) where one
person pays the purchase price for property and causes title to
ii.
the property to be taken in the name of another person who is
not a natural object of the bounty of the purchaser.
1.
Example 1 O devises property to X in trust
to pay the income to A for life and upon A's death to
distribute the property to A's descendents. A dies w/o
descendents. The remainder to A's descendant's fails. X
holds the remainder on resulting trust for Os heir or
devisees.
2.
Example 2 B purchases Blackacre w/money
supplied by A. Unless B can show that A intended to make
a gift to B, B hold title to Blackacre on resulting trust for
A, often called a purchase money resulting trust.
3.
In both settings the transferee is not entitled to
the beneficial interest, so it reverts back to the transferor.
Once a resulting trust is found, the trustee must reconvey
the property to the beneficial owner upon demand.
2.
Constructive trust- used to prevent unjust enrichment.
Historically, the courts required (1) a confidential or fiduciary
relationship btwn the transferor and the transferee (2) a promise
(express or implied) by the transferee, (3) that the transferor
transferred property to the transferee in reliance upon the
promise, and (4) the transferee refuses to honor the promise
thereby constituting unjust enrichment.
1.
Under the modern trend, the courts tend not to
emphasize the elements so much as the equitable notion
that the constructive trust is used to prevent unjust
enrichment.
Parties to a Trust
a.
3 parties  The settlor gives property to the trustee to hold and
manage for the benefit of a third party party (beneficiary). One person can
wear two or all three hats as long as there is a co-trustee or co-beneficiary.
b.
The Settlor  this is the person who creates the trust
1.
May be created during the settlor's life (inter vivos trust) or
created by will (testamentary trust)
2.
Inter vivos trust may be created either by declaration of trust (
in which the settlor declares that he holds certain property in trust) or
by a deed of trust (in which the settlor transfers property to another
person as trustee).
1.
Declaration of Trust [DOT] (often used as a will
substitute). DOT of personal property requires neither delivery
not a deed of gift. All that is necessary is that the donor manifest
an intention to hold the property in trust. Although a DOT of
personal property may be oral, if the trust is to be funded with
real property, the Statute of Frauds requires a written
declaration of trust.
1.
The settlor himself/herself is the trustee
2.
Deed of trust [DdOT]. IF the settlor is not the trustee of
an inter vivos trust, a DdOT or the trust property must be
delivered to the beneficiary.
3.
If the trust is created by will the settlor cannot be trustee.
c.
The Trustee
Serves 3 distinct functions: Investment, Administration, and
Distribution, see 492
2.
There may be one or several
3.
It may be an individual or a corporation (such as a bank)
4.
The trustee may be the settlor or a third party, or the trustee
may be a beneficiary
5.
If a settlor creates a trust but fails to name a trustee, a court
will appoint a trustee to carry out the trust. This is also stated as :A
trust will not fail for want of a trustee.
1.
(However, if the trust is created by a DdOT and no
trustee is named, the trust mail fail for want of a transferee or
for want of delivery).
6.
In order to protect the beneficiary the trustee is held to a
fiduciary standard of conduct which comprises duties of loyalty,
prudence, and subsidiary rules.
1.
Duty of loyalty: the trustee must administer the trust
solely in the interest of the beneficiaries; self-dealing (wherein
the trustee acts in the same transaction both in its fiduciary
capacity and in an individual capacity) is often limited and often
prohibited altogether.
2.
Duty of prudence: The trustee is held to an objective
standard of care
3.
Subsidiary rules
1.
The duty of impartiality between classes of
beneficiaries such as the income beneficiaries (who are
interested in income and high yields) and remaindermen
(who are concerned about preservation of principal and
appreciation in values)
2.
The duty to keep the trust property separate
from the trustee's own property
3.
The duty to inform and account to the
beneficiaries
7.
A trustee must have active duties otherwise the trust would
have no purpose. If a trust fails because the trustee has no active
duties, the beneficiaries acquire legal title to the trust property.
d.
The Beneficiaries
1.
The beneficiary holds equitable interests
2.
Have personal claim against trustee for breach of trust
3.
The trustee owes them a fiduciary duty
4.
Personal creditors of trust beneficiary cannot reach trust
property
e.
Merger: If the same party is both trustee and beneficiary, and there is
no other trustee of beneficiary, the legal and equitable title are said to merge,
and the trust is terminated. One cannot hold oneself to a fiduciary duty.
Creation of Trust
i.
Four factors of a valid trust
a.
Was there intent to create a trust? Not outright gift.
b.
Was their property/funding transferred to the trust/trustee?
c.
Beneficiaries? Ascertainable?
d.
Was the trust properly put in writing? (if necessary)
1.
b.
ii.
a.
b.
c.
d.
e.
f.
g.
ELEMENT 1: Intent to Create a Trust
Definition- No trust may be created unless there is a proper
manifestation of intent to create by the settlor. If the trust is testamentary
rather than inter vivos the intent must be manifested within the settlors will.
For an inter vivos trust (unless there is a transfer of land) the trust may be
manifested orally, in writing, or even by conduct.
Capacity- The capacity to create a valid trust depends on the type of
trust that is being created.
1.
Testamentary trust- The settlor must have the capacity to create
a valid will.
2.
Revocable Inter Vivos Trust- The Settlor must have the
capacaity to make a valid conveyance of property by gift, this is a
slightly higher standard than testamentary capacity.
3.
Irrevocable Inter Vivos Trust- The capacity to make a valid
gift, trust free.
No specific word needs to be used. The only question is whether the
grantor manifested an intention to create a trust relationship (or that the
transfer of property is made with the intent to benefit a third party.)
1.
Ex  When a grantor conveys property to a grantee to hold
"for the use and benefit" of another this is a sufficient manifestation
of an intent to create a trust.
There needs only to be evidence that the property was to be retained
and managed by some person for some considerable time in the future for
the benefit of another person.
Jimenez v. Lee (1976)
GIFT TO MINOR CAN LEAD TO CREATION OF TRUST
Facts: Daughter, recipient of two gifts as a minor, sought an accounting
from her father for his management and disposition of the gifted
property.
Issue: Does the transfer of property with the intent that it be used for the
educational needs of a third party create a trust?
Held, YES. The words "in trust" need not be used to create a trust so
long as the transfer of property is made with the intent to vest ownership
in a third party.
Precatory language: In a surprising large # of cases, the testator expresses a
"wish," "hope," or "recommendation" that the property devised should
be disposed of by the devisee in some particular manner, but this language
does note clearly indicate whether the testator intends to create a trust
(with a legal duty so to dispose of the property) or a moral obligation
which is not enforceable in court.
i. Precatory trusts. "to A with the hope that A will care for B" or
devise a land "to C and it is my wish and desire that D should be
able to live on the land during her life." These are examples of
unenforceable dispositions.
ii. Was the trust properly put in writing? (if necessary)
Hebrew University Association v. Nye (1961)
WHEN A GIFT FAILS FOR LACK OF DELIVERY, A TRUST
CANNOT SAVE THE DAY
Facts: Scholar's wife's verbal donation of her husband's library held valid
inter vivos gift despite lack of actual delivery of books.
iii.
Issue: May a gift that fails for lack of delivery be affected by virtue of a
declaration of trust?
Held, NO. If a donor intends to make an inter vivos gift but fails to
complete the gift by effecting delivery of the gifted property, imply a
declaration of trust will not save the gift.
h. Hebrew University Association v. Nye (1966)
GIFTS OF BOOKS VALID EVEN THOUGH BOOKS NOT
ACTUALLY GIVEN
Facts: Scholar's wife's verbal donation of her husband's library held valid
inter vivos gift despite lack of actual delivery of books.
Issue: Is actual delivery of gifted property required for a valid inter vivos
gift?
Held, NO. Although delivery is required for an inter vivos gift to be valid,
that delivery need to be actual. Constructive or symbolic delivery may be
sufficient where there is clear intent to give the property away and
delivery is as nearly perfect as possible under the circumstances. In other
words, the owner must not only express a clear intent to make the gift, but
also must divest him/herself of all dominion over the property.
ELEMENT 2: Necessity of Trust Property
a. Some property must be transferred to the trust/trustee. There are two key
components to the funding requirement: (1) the act of funding, and (2)
what type of property interests will qualify as an adequate property
interest for purposes of funding the trust.
b. Virtually any property interest except for future profits and expectancies
qualify as adequate property interests.
c. Unthank v. Rippstein (1964)
PROMISE TO PAY CASH MONTLY FOREVER DIES WITH
PROMISOR
Facts: D's promise made prior to his death to pay $200/month and
attempt to bind his estate to continue such payments after his death held
unenforceable.
Issue: May a promise to make payments on a monthly basis even after
death be enforced as a trust?
Held, NO. Declaration of trust requires clear expression of intent to create
a trust.
iv. To have a valid declaration of trust, the intended donor must clearly express
an intent to create a trust and subject oneself to the duties of a trustee.
v. Brainard v. Commissioner Taxpayer, who promised to give profits realized
from trading in stocks to his mother and sister was responsible for taxes
on all profits. Held, the declaration was nothing more than a gratuitous
undertaking to create a trust in the future when the profits were realized.
There being no valid trust when the profits were realized they were
taxable to the taxpayer as his property before being transferred to the
trust.
a. Grantor trust- Where the settlor/grantor retains sufficient dominion
and control over the trust, under what are known as the "Clifford
regulations," the trust is known as a grantor trust and the settlor is
deemed owner of the income generated by the trust, and the income
is taxable to the settlor.
i.
Two exceptions (see pg. 517 in casebook)
iv.
vi. Rstmnt 3rd provides: "An expectation or hope of receiving property in the
future, or an interest that has not come into existence or has ceased to
exist, cannot be held in trust."
vii. Speelman v. Pascal (1961)
Facts: Writer and licensee's gift of share of profits from his musical
version of Pymalion to his secretary before profits were earned held
enforceable.
Issue: Does delivery of an assignment of right to receive future property
complete a valid, inter vivos gift?
Held, YES. Gift of property to be acquired in the future is held valid so
long as donor has right to receive future property and there is an
expectation that the same will be received.
i. The key is that there must be some real expectation that the
property is to be received or that there is a legal right to receive it.
ELEMENT 3: Necessity of Trust Beneficiaries
a. A trust must have one or more ascertainable beneficiaries. Reason: There
must be someone to whom the trustee owes a fiduciary duty.
b. Policy- a private trust must be for the benefit of its beneficiaries
c. Exceptions- (1) charitable trusts do not need ascertainable beneficiaries
(discussed in further detail in sec VII.) (2) unborn children. A trust
created for O who is childless, for the benefit of he future children would
be valid. The courts would protect the unborn child's interest.
i. If at the time the trust becomes effective the B's are too indefinite to
be ascertained, the attempted trust may fail for want of B's.
d. What is ascertainable? It means that you must be able to identify the B's by
name. If their name is not expressly set forth in the trust, the trust must
contain a formula or description of the B's that permits the court to
determine by objective means who they are.
e. Clark v. Campbell (1926)
Facts: Trust created by D's will for "friends" fails for want of
ascertainable B.
Issue: Do "friends" qualify as an ascertainable group sufficient to sustain
a bequest or private trust?
Held, NO. A bequest to an indefinite person or group is invalid.
i. To make a bequest to a class of persons or create a trust for the
benefit of a class, make sure a stranger could determine who the
members of the class are.
vi. See power of appointment pg. 521 in casebook and 212 in Emmanuel's
vii. In re Searight's Estate (1950)
Facts: Trust created by D's will for care of his dog, Trixie, deemed
enforceable because of trustee's agreement to take on duties.
Issue: Is a trust in favor of a non-human beneficiary enforceable?
Held, YES. Honorary trust enforceable where trustee applies trust corpus
to purpose of trust and trust does not violate the RAP.
h. Honorary trust-Trusts for the benefit of a pet or trusts to maintain one's
gravesites, while honorable, technically fail for want of B's. One of the
principal purposes for the ascertainable B requirement is to determine
who has standing to come into court and hold the trustee accountable.
Neither a pet nor a gravesite has standing to come into court and sue a
trustee. If the B of a trust is not an ascertainable person, the trust fails,
but may be saved as an honorary trust.
i.
e.
The trustee must be "willing" to honor the terms of the trust as long
as the purpose is specific and honorable, not illegal.
ii. If the trustee stops honoring the trust, he/she cannot keep the
property. A resulting trust is imposed.
iii. Most honorary trusts fail because they violate the RAP since the
administration period tends to continue for longer than 21 years.
iv. Since charitable trusts don't fall under the RAP if it can qualify as
this type of trust then it is so named.
ELEMENT 4: Necessity of a Written Instrument
i. The Statute of Frauds requires an inter vivos trust of land to be in writing,
and the Wills Act formalities requires that a testamentary trust be created
by a will.
ii. Oral Inter Vivos Trusts of Land
i. Common law-Under the SOF, the terms of an oral trust involving real
property can not be enforced against a transferee because oral
conditions are not permitted to vary from the terms of the deed. In
other words, if B makes an oral agreement with A to hold property
for the benefit of C and does not put the terms in the deed, B
outright owns the property free of any trust.
ii. Modern trend- Common law is harsh and constitutes unjust
enrichment. Restatement imposes a constructive trust on the
trustee; therefore, B gets the property outright. (Often the settlor is
the intended B so the constructive trust looks much like a resulting
trust).
1.
ALSO, if the purported trustee has procured the transfer as
a result of fraud or undue influence, or if the purported
trustee stood in a confidential relationship w/transferor, or if
the transfer was made w/an eye towards the transferor's
impending death, the courts will impose a constructive trust.
2.
Hieble v. Hieble (1972) A son and daughter hold property in
trust for their mother who suffers from cancer. They orally
agreed to re-convey the land, upon her request, if she
recovered. The son refused to re-convey the land upon his
mother's recovery. Held, The son stood in a confidential
relationship with his mother in light of her weakened physical
condition and the son's assurances that he would help her.
With no evidence that the grantor intended to defraud the
court, the court imposed a constructive trust in favor of the
mother.
iii. Unclean hands- The court will not come to the aid of one who has
"unclean hands." Meaning the purported trustee will be permitted
to keep the property free of trust where the grantor transferred
property as a way to his/her assets from creditors, impending
divorce, etc.
iii. Oral Trusts for Disposition at Death
i. Testamentary trusts must be in writing pursuant to the Wills Act
formalities. If trust fails for a want of writing the issue is whether
the relief should be a resulting or constructive trust. The answer
turns on whether the failed testamentary trust is a secret or semisecret trust.
ii. Olliffe v. Wells (1881)
c.
SECRET TRUST ENFORCEABLE; BUT NOT SEMI-SECRET
TRUST
Facts: Bequests to B of will to be used in his discretion as he knew
decedent wished, failed to establish trust for lack of ascertainable B.
Issue: Is a semi-secret trust valid?
Held, NO. Semi-secret trust not enforceable for lack of an
ascertainable B.
c. Secret trust- Where a bequest is made to a B that is absolute on its
face, meaning the B appears to have received the entire interest in
the property for his own use, but D and B have previously orally
agreed that the property be held in trust for a designated, but secret,
purpose.
i.
The courts admit extrinsic evidence to determine that the
devisee was to take as trustee, and use the evidence to impose a
constructive trust on the devisee ordering the devisee to
transfer the trust to the intended B.
d. Semi-secret trust- Fails because the terms are not set forth in the
will. It is "semi-secret" because something in the express language
suggests that the devisee was not intended to take for his/her own
benefit.
i.
The courts do not need extrinsic evidence to determine that
the devisee was not intended to take for his/her own benefit;
therefore, the court will not take extrinsic evidence to
determine the terms of the trust or who the intended B's are.
The trust fails and the court imposes a resulting trust to give
back to the settlor/testator. Typically the property then falls to
the residuary clause, or if the intended trust was the residuary
clause or there is no residuary clause then it falls to intestacy.
Revocable Trusts
i.
Introduction
i.
If a trust is silent as to its revocability, in all but two states its
irrevocable. If the trust is revocable and expressly provides for a particular
method of revocation, only that method suffices. If the trust is revocable and
does not provide for a particular method of revocation, any method that
adequately demonstrates the settlor's intent to revoke suffices (including the
revocation methods that apply to wills).
1.
Farkas v. Williams (1955)
THE RETENTION BY THE SETTLOR OF A TRUST OF THE
POWER TO REVOKE, EVEN WHEN COUPLED WITHT THE
RESERVATION OF A LIFE INTEREST IN THE TRUST
PROPERTY, DOES NOT RENDER A TRUST INOPERATIVE
FOR WANT OF EXECUTION AS A WILL
Facts: A settlor/trustee died intestate and his heirs have sued the B,
claiming that the property held was an invalid inter vivos trust.
Issue: Did the declaration of trust create valid inter vivos trusts
effective to give the purported B title to the stock after the death of
the settlor-trustee?
Held, YES. The retention of the power by the trustee to sell or
redeem the stock and keep the proceeds for his own use does not
render a trust instrument testamentary in character and does not
invalidate an inter vivos trust.
b.
ii.
In Re Estate and Trust of Pilafas (1992)
THE SETTLED AND PREDICTABLE COMMON LAW RULES
GOVERNING THE REVOCATION OF TRUSTS SHOULD NOT
BE DISPLACED BY THE DISTINCT STATUTORY RULES FOR
REVOCATION OF RULES
Facts: The original trust and will documents of a decedent could not
be found after his death, so his children seek to have them declared
revoked.
Issue: Can a decedent's will and trust agreement be presumed
revoked if they cannot be found after his death?
Held, YES and NO respectively. A will last seen in T's possession
that cannot be found after T's death is presumed revoked, however
when a settlor reserves a power to revoke his trust in a particular
manner, he can revoke it only in that manner.
b. Creditor's Rights- When a life tenant's interest is extinguished, creditors of
the life tenant have no right to reach the property. Under the modern
trend, however, where the settlor is the life beneficiary if a revocable
trust, creditors of the settlor can reach the property in trust even after the
settlor's death.
c. State Street Bank & Trust Co. v. Reiser (1979)
IT VIOLATES PUBLIC POLICY FOR AN INDIVIDUAL TO HAVE AN
ESTATE TO LIVE ON, BUT NOT AN ESTATE WITH WHICH TO
PAY HIS DEBTS
Facts: A bank sued to reach the assets of a decedent's trust to pay a debt
owed by the estate of the settlor of the trust.
Issue: May the assets of a decedent's inter vivos trust be used to pay a
debt owed by the estate of the settlor of the trust?
Held, YES. Where a person places property in trust and reserves the right
to amend and revoke, or to direct disposition of principal and income, the
settlor's creditors may, following the death of the settlor, reach in
satisfaction of the debts to them, to the extent not satisfied by the settlor's
estate, those assets owned by the trust over which the settlor had such
control at the time of his death as would have enabled the settlor to use
the trust assets for his own benefit.
Pour-Over Wills
a. Pour-over wills- A pour over will is a will that contains an express clause
giving some or all of D's probate property to the trustee of D's inter vivos
trust, to hold and distribute pursuant to the terms of the trust. Typically
the pour-over clause is the residuary clause, but it doesn't have to be. The
clause can transfer to the trust a specific or general gift, but the norm is
either the residuary clause or a general gift of money.
i. Common Clause- "I give the rest, residue, and remainder of my estate to
the trustee of my inter vivos trust, to hold and distribute pursuant to its
terms.
b. A pour-over will and trust combination is the most common estate planning
combination today, though the property being poured over to the t7rust
under the terms of the will does not avoid probate.
i. Where a will has a pour-over clause giving probate property to the
trustee T's separate trust, the pour-over clause must be validated
under incorporation by reference, acts of independent significance,
or the Uniform Testamentary Additions to Trusts Act (UTATA).
1.
d.
Incorporation by reference: A will can incorporate by
reference a trust instrument in existence at the time the will is
executed, but it cannot incorporate trust amendments made
after the will is executed. Hence, if the trust is amended after
the will is executed, the probate assets will either be disposed
of in accordance with the terms of the trust as it stood at the
time of execution of the will and no as subsequently amended,
or, if this would not be in accordance w/ T's intent, pass by
intestacy.
2.
Acts of Independent Significance: Under this doctrine a will
may dispose of property by referring to some act that has
significance apart from disposing of probate assets-in this
context, by reference to an inter vivos trust that disposes of
assests transferred to the trust during life. Under this doctrine
the trust instrument does not have to be in existence when the
will is executed, but the trust must have some assets in it
before the time of T's death.
3.
Note the difference between the two: Independent
significance requires that the inter vivos trust have some
property transferred to it during life, which the trust disposed
of; incorporation by reference requires that the trust
instrument be in existence at the time the will is executed.
4.
UTATA: Under the most widely adopted version of UTATA,
the pour-over clause is valid as long as (1) the will refers to the
trust, (2) the trust terms are set forth in a separate writing
other than the will, and (3) the settlor signed the trust
instrument prior to or concurrently w/the exection of the will
(under the most recent version of UTATA, the trust
instrument need only be signed before the settlor/testator dies,
not before or concurrently with the will). The trust need not be
funded inter vivos, yet it will not be subject to probate court
supervision after it is created; and amendments to the trust
can be given effect regardless of when they are created.
c. Clymer v. Mayo (1985)
DIVORCE REVOKES DISPOSITIONS IN FAVOR OF THE
DIVORCED SPOUSE, BUT NOT NECESSARILY THE RELATIVES
OF THE DIVORCES SPOUSE
Facts: Clara died three years after she divorced her husband, never
having changed the terms of trust agreements providing for him upon
death.
Issue: Did D create a valid inter vivos trust? Should Mayo's interest in the
trust be revoked? Are the nieces and nephews by marriage entitled to take
under Trust B?
Held, YES. (1) An unfunded life insurance trust is a valid inter vivos trust;
(2) Divorce revokes provisions for the divorced spouse; and (3) Divorce
will not revoke provisions made for a blood relative of a divorced spouse.
iii.
Use of Revocable Trusts in Estate Planning (see pg. 316-22)
Rights of the Beneficiaries to Distributions from the Trust
i.
Trusts can be divided into mandatory trust and discretionary trusts. In a
mandatory trust, the trustee must distribute all the income.
Example  O transfers property in X to distribute all the income to A.
This is a mandatory trust. The trustee has no discretion to decide either the
persons who will receive the income or the amt to be distributed.
ii.
In a discretionary trust, the trustee has discretion over payment of either the
income or the principal or both. Discretionary powers of a trustee may be drafted
in limitless varieties.
a.
Example  O transfers property to X in trust to distribute all the
income to one or more member of a group consisting of A, A's spouse, and
A's children in such amounts as the trustee determines. This is a kind of
discretionary trust known as a spray trust. The trustee must distribute all the
income currently, but has discretion to determine who gets it and in what
amount. If desired, the trustee could be given the discretionary power to
accumulate income and add it to principals.
i.
Note that these are sometimes considered support trust (an
ascertainable standard) as opposed to a purely discretionary trust
("sole and uncontrolled")in which the payouts are not governed by
stated support standard.
ii.
Discretionary support trust- combines an explicit statement of
discretion with a stated support standard ("such amounts as the
trustee shall, in his uncontrolled discretion, deem necessary to support
my children in the style of living to which they are accustomed.")
b.
Advantages/Disadvantages: Advantage Provides greater flexibility
than a mandatory trust, b/c settlor cannot foresee all of the problems or
opportunities that her family might face after the trust is created.
Disadvantage Harder to police the trustee. May abuse discretion. Primary
safeguard for abuse of discretion is the fiduciary obligation.
c.
Marsman v. Nasca (1991)
TRUSTEE WHO FAILED TO GIVE MONEY TO MAN GOING
BROKE IS NOT PERSONALLY LIABLE FOR BREACH OF HIS
DUTIES.
Facts: B of a trust created by his wife's will for his support went broke
and lost house despite his trust set up to support him and maintain the
house.
Issue: Is a trustee of a support trust required to inquire as to the needs of
a B?
Held, YES. Trustee has a duty to inquire as to B's needs when managing
trust set up for B's support.
d. Exculpatory clause- A contractual provision that relieves someone of
liability unless certain conduct is present, usually conduct that is willful or
malicious.
Rights of the Beneficiary's Creditors
i.
Spendthrift and discretionary trusts both provide a means of making property
available to the beneficiary, but not the beneficiary's creditors.
ii.
Discretionary Trusts
a.
The creditor cannot, by judicial order, compel the trustee of a of a
discretionary trust to pay him.
i.
The theory is that, because the beneficiary has to right to a
payment, neither does the beneficiary's creditors.
b.
In some states a creditor may be entitled to an order directing the
trustee to pay the creditor before paying the beneficiary.
a.
e.
c.
iii.
The trustee need not pay any part of the trust fund to the beneficiary,
but if the trustee determines to do so the trustee must pay the creditors who
now stand in the beneficiaries shoes.
d.
Where there is a mandatory trust the creditor can force the trustee to
distribute the income to the creditor pursuant to the terms of the trust just as
the B could have. The trustee must distribute the income to the creditor.
e.
Traditional view
i.
The beneficiary of a support trust (payments of income of the
necessary amount for support or income) cannot alienate her interest.
1.
Nor can the beneficiary of creditors, except suppliers of
necessity. They may recover through the B's right to support.
2.
Unlike pure discretionary trust, there is authority
which holds that the beneficiary's children and spouse may
enforce claims for child support and alimony against the
beneficiary's interest in support trust.
f.
Restatement and UTC reject the distinction between and support and
discretionary trust.
i.
Restatement  if the terms of a trust provide for a beneficiary
to receive distributions in the trustee's discretion, a transferee or a
creditor of the beneficiary is entitled to receive or attach any
distributions the trustee makes or is required to make in the exercise of
that discretion."
1.
HENCE, the Restatement allows the beneficiary's
creditors to stand in the beneficiary's shoes and compel
distribution.
g.
Protective trusts. Arises in a jurisdiction that does not recognize
spendthrift trusts.
i.
The trustee is directed to pay income to A, but if A's creditors
attach A's interest, A's mandatory income interest ceases, whereupon a
discretionary trust automatically arises.
ii.
The trustee then has the discretion to apply the income for A's
benefit.
Spendthrift Trusts: If the settlor includes a spendthrift clause (a clause that
prohibits beneficiaries from transferring their interests) in the trust, the general rule
is that the B's creditors cannot step into the B's shoes--they cannot reach the B's
interest in the trust.
a.
Exceptions- Not all creditors are subject to spendthrift clauses. As a
general rule, the are four categories who are not subject to spendthrift
clauses: (1) children entitled to child support (2) ex-spouses entitled to
alimony (3) creditors who provide basic necessities, and (4) government
entities entitled to taxes. These creditors can still step into B's shoes and
reach into B's interests to the extent that it is mandatory, but they cannot
force a trustee to exercise his/her discretion in favor of them.
b.
Express clause: In most jurisdictions, unless the settlor expressly
inserts a spendthrift clause, but spendthrift provisions are routinely included
in professionally drafted trusts.
c.
Support trusts: A support trust is a trust that requires the trustee to pay
as much income (and principal if expressly provided) as necessary for the
B's support and education. The key is tat the trustee can distribute only as
much as necessary for support. The benefit to qualifying as a support trust is
that even in the absence of an express spendthrift clause the B cannot
vi.
transfer his/her interest, and only creditors who provide basic necessities are
entitled to reach the B's interest in the trust.
d.
Scheffel v. Krueger (2001)
PROPERTY IN A SPENDTHRIFT TRUST IN NOT AVAILABLE TO
CREDITORS
Facts: Scheffel sought to attach Krueger's interest in a spendthrift trust to
satisfy a civil judgment against him.
Issue: May a judgment creditor attach a judgment debtor's interest in a
spendthrift trust?
Held, NO. The statute authorizing spendthrift trusts creates a absolute
prohibition against attaching the assets in those trusts.
e. Shelley v. Shelley (1960)
MAN WHO ABANDONS TWO FAMILIES MUST PAY ALIMONY
AND CHILD SUPPORT FROM TRUST FUNDS
Facts: Child support and alimony obligations of B of spendthrift trust
may be satisfied by taking funds.
Issue: May a spendthrift trust be reached by former wives and children
for satisfaction of child support and alimony obligations?
Held, YES. Income from and corpus of spendthrift trust is reachable by
children to whom a child support obligation.
iv.
Self-Settled Asset Protection Trusts
a. It is against public policy to permit one to shield one's assets from creditors.
Accordingly, creditors of a beneficiary who is also the settlor can reach
the B's interest in the trust to the full extent that the trustee could use the
trust property for the benefit of the B/settlor (that is, the creditors can
reach the property whether the B/settlor's interest is mandatory or
discretionary). Moreover, spendthrift clauses in favorof aB who is also the
settlor are null and void.
1. A handful of states recognize self-settled asset protection trusts in
favor of a B who is also a settlor if (1) the trust is irrevocable, (2) the
trust interest is discretionary, and (3) the trust was not created in
fraud of creditors.
Modification and Termination of Trusts
a.
Introduction: A trust ends naturally when all of the trust principal is disbursed
pursuant to the terms of trust. Under special circumstances, however, the terms of
the trust may be modified or the trust may be terminated prematurely. (The
discussion implicitly assumes an irrevocable trust. If the trust is revocable, all that is
necessary to modify or terminate the trust is for the settlor to revoke the trust.)
1.
Settlor and B's consent: If the settlor and all the B's consent, the trust
can be modified or terminated, regardless of the trustee's objections.
2.
Trustee and B's consent: If the trustee and all the B's consent, the trust
can be modified and terminated, regardless of the settlor's objection.
b.
Where all the B's consent but the trustee objects, the common law courts
developed doctrines that permit the Bs to overcome the trustee's objections under
limited circumstances.
1.
Modification
1.
At common law, courts order the terms of a trust to be modified
if (1) all the B's consent, and (2) there is an unforeseen change in
circumstances that materially frustrates settlor's intent. The trust is
modified to promote the settlor's presumed intent under the
circumstances. At common law, the courts construe what constitutes
an "unforeseen" change and what constitutes "materially frustrating"
very narrowly to protect settlor's intent. The modern trend construes
those terms broadly to give the Bs greater control over the trust
property. The mere fact that a proposed modification would be more
advantageous to one or more Bs, however, is not enough to warrant
modifying a trust, even if all the Bs consent.
2.
In re Trust of Stuchell (1990)
COURT REFUSES TO MODIF TRUST TO PROTECT
DISABLED CHILD
Facts: Bs of trust sought to modify terms to allow continuation of
trust in order to protect disabled remainderman from losing state
benefits.
Issue: May a trust be modified by the agreement of all beneficiaries?
Held, NO. Terms of trust may not be modified after death of settlor
unless modification prevents purpose of trust from being
substantially impaired due to circumstances that arise after settlor's
death and which were unknown to settlor at time trust was created.
ii. Termination
a. At common law, under the Claflin doctrine, courts order a trust to
be terminated prematurely, even if the trustee objects, if (1) all the
Bs consent and (2) there is no unfulfilled material purpose. What
constitutes an "unfulfilled material purpose" is fact sensitive and
turns on the wording and purpose of each trust, but there is a
handful of trust purposes that almost all courts have held constitute
an unfulfilled material purpose: (1) discretionary trusts, (2)
spendthrift trusts, (3) support trusts, and (4) trusts where the
property is not to be distributed to the B until he or she reaches a
specific age.
b. In re Estate of Brown (1987)
BENEFICIARIES MAY NOT TERMINATE A TRUST
Facts: Remaindermen of trust sought to terminate trust early.
Issue: May a trust terminated by the agreement of all beneficiaries?
Held, NO. A trust may not be terminated early even if all
beneficiaries agree unless all material purposes have been achieved.
iii.
Trustee Removal
a. The traditional approach is that settlor's intent controls. If the settlor
selected a particular trustee, that trustee cannot be removed, even if all
the Bs consent, unless the trustee is unfit to serve or commits a breach of
trust.
b. UTC: provides more grounds for which a trustee can be removed, though it
does not go so far as to give the Bs the power to change trustee if all
beneficiaries consent. Under the UTC, settlors are given standing (along
with trustees and Bs) to seek removal; the trustee can be removed if (1)
there is a material breach of trust; (2) infighting among co-trustees
substantially impairs its administration; (3) the trust has under
performed persistently and substantially relative to comparable trusts; or
(4) due to changes circumstances, change of trustee is in Bs best interests.
8. CHARITABLE TRUSTS
i.
Nature of Charitable Purposes
a.
Unlike a private trust, a charitable trust need not have an ascertainable
beneficiary to be valid.
1.
ii.
iii.
iv.
However, to qualify as a charitable trust, the trust must have valid
charitable purpose.
b.
Shenandoah Valley National Bank v. Taylor (1951)
A CHARITABLE TRUST IS VALID WHEN THE SETTLOR'S
DOMINANT INTENTION IN CREATING THE TRUST IS
CHARITABLE.
i. Facts: Would-be intestate heirs challenged a will in which the testator
created a "charitable trust" to distribute money to children enrolled at a
specific elementary school biannually before Christmas and Easter.
ii. Rule: To be upheld as a valid charitable trust, the dominant intent of the
settlor or testator must have been charitable than merely benevolent.
iii. Court says
a. A charitable purpose includes:
1.
The relief of property
2.
The advancement of education
3.
The advancement of religion
4.
The promotion of health
5.
Governmental or municipal purposes
6.
Other purposes the accomplishment of which is beneficial to
the community
iii.
One of the most important distinctions between a private trust and a charitable
trust is that a charitable trust is not subject to the RAP, where a private trust is.
iv.
A majority of states have modified the RAP by adopting the "wait-and-see"
doctrine
v.
Charitable trust must have charitable purpose, not mere benevolence.
a. Example 1: A trust for the benefit of sick or needy employees is a valid
charitable trust, whereas a trust for the general benefit of employees is not
valid.
b. Example 2: A trust to pay the salary of a law professor is valid because it
promotes education, whereas a trust for the general benefit of lawyers is
not.
c. Example 3: A trust awarding scholarships of prizes for educational
advancement is charitable, even if only one or two students will receive
the scholarships or prizes, provided that the eligible class of recipients is
broad. Whereas, a trust to educate a person or particular named persons
is not charitabe.
vi.
The lawyer drafting a will making a gift to charity should make sure
a. Of the exact legal name of the charity
b. And if the client wants an estate tax charitable deduction, which is usual,
whether the charity is exempt under the IRS Code.
Modification of Charitable Trusts: Cy Pres
Under the cy pres doctrine, if the settlor's exact charitable purpose cannot be
carried out, the court may direct the application of the trust property to another
charitable purpose that approximates the settlor's intention.
In re Neher (1939)
THE DOCTRINE OF CY PRES CAN BE USED TO MODIFY A
CHARITABLE GIFT WHEN IT IS IMPOSSIBLE OR IMPRACTICABLE TO
CARRY OUT THE DONOR'S INTENT
i.
Facts: Trustees of a village to which a testatrix left her real estate and directed
it be used as a hospital in memory of her husband petitioned the court to modify
the will to allow them to build an administration building rather than the
hospital.
ii.
Rule: When a donor has a general charitable purpose for a gift or devise, the
doctrine of cy pres can be used to modify the gift if the original intention of the
donor becomes illegal or impossible.
e.
Cy pres may not be employed simply to promote what the court views as a worthy
charitable agenda; it is rather a power whose permissible use is confined to the
perpetuation and advancement, to the extent possible, of the particular dispositional
agenda prescribed in the dispositional instrument.
f.
UTC allows for cy pres if a particular charitable purpose becomes "unlawful,
impracticable, impossible to achieve, or wasteful."
i.
The Restatement also includes wasteful. The addition of which reflects a
deliberate effort to the expand the range of circumstances under which the
court might properly modify a charitable trust.
g.
Don't confuse cy pres with administrative deviation.
i.
A court will permit deviation in the administrative term of a trust when
compliance would defeat or substantially impair the accomplishment of the
purposes of the trust.
h.
Discriminatory Trusts
i.
If a the trustee of a racially restrictive trust is a governmental body (such as
a public school granting scholarships to whites), courts have held that the
administration of the trust in a racially discriminatory manner is
discriminatory state action forbidden by the Equal Protection Clause of the
Constitution.
ii.
When a trustee is a private individual and not a public body, enforcing the
racial restriction is usually not unconstitutional as discriminatory state action.
iii.
Restricting the benefits of a private charitable trust to one gender is not
unconstitutional, but it too may violate other federal or state law prohibiting
gender discrimination.
9. CONSTRUCTION OF TRUSTS: FUTURE INTERESTS
a.
Classification of Future Interests
i.
Types of Future Interests
a.
Interests in the transferor known as:
1.
Reversion (most important thing to know for this class)
2.
Possibility of reverter
3.
Right of entry (aka "power of termination")
b.
Interests in the transferee known as:
1.
Vested remainder
1.
Indefeasibly vested remainder
2.
Vested remainder subject to divestment
3.
Contingent remainder
2.
Contingent remainder
3.
Executory interest
All future interests in property must be placed in one of the above categories
b.
Future Interests in the Transferor
i. Reversion
a. A reversion is the interest remaining in the grantor, or in the
successor in interest of a testator, who transfers a vested estate of a
lesser quantum than that of the vested estate which he has.
1.
If a reversion is retained in an inter vivos conveyance, it is
retained by the grantor.
2.
c.
If a reversion is retained by a will, it is retained in the
testator's heirs who are substituted by law for the dead
transferor
b. All reversions are a vested interest.
c. O transfers property in trust "to A for life."
1.
O has a reversion. A has a life estate
d. Blackacre "to A for life, and residuary to B." (Blackacre after A's
life and everything else that is left of O's property."
1.
A has a life estate and B has a vested remainder
e. O creates a trust "for A for life, then to A's children who survive A"
1.
A has a life estate, and A's children have a contingent
remainder.
1.
They are unascertained and they have to meet a
condition precedent.
2.
O has a reversion.
ii. Possibility of reverter
a.
A future interest that remains in the grantor who conveys a fee
simple determinable.

Ex O conveys "to the school board so long as used for a
school"
The school board has a fee simple determinable; O

has a possibility of reverter
b. A right of reentry for condition broken is the future interest that is
retained by the grantor who conveys a fee simple subject to a
condition subsequent.
1.
Ex O conveys "to school board, but if the land ceases to be
used for school purposes, O has a right to reenter."
1.
O has fee simple subject to a condition subsequent; O
has right of reentry (which O has the option to exercise
or not)
Future Interests in the Transferee
i. Remainders
a. A remainder is a future interest in a transferee that will become
possessor, if at all, upon the expiration of all prior interests
simultaneously created.
1.
Once the preceding estates expire, if the remainder is not
contingent the remaindermen is entitled to possession.
b. When property is certain to become possessory it is called an
indefeasibly vested remainder.
1.
Ex "to A for life, then to B"
1.
Here B takes, and if he dies before A then the
remainder passes through his will or intestacy, or
escheats to the state.
2.
CONTRAST WITH, "to A, then to B, if B survives A"
1.
This is not certain to become possessory. If B
survives, then B takes. If not, then the property reverts
to O.
2.
Here, B has a contingent remainder.
c. Remainders are either vested or contingent.
d. A remainder is vested if it:
1.
Is given to a presently ascertained person
2.
b.
It is not subject to a condition precedent (other than the
termination of preceding estates).
e. A remainder is contingent if it:
1.
Is not given to a presently ascertained person
2.
Is subject to a condition precedent
f. If a remainder is given to a class of persons, some but not all of who
are ascertained, and the remainder is not subject to a condition
precedent, then the remainder is vested in the present members of
the class subject to partial divestment by additional persons coming
into the class.
g. DISTINCTION between remainder vested subject to divestment and a
contingent remainder
1.
An RVSD is given to ascertained persons, with a proviso that
the remainder will be divested if a condition subsequent
happens. It is NOT subject to a condition precedent, such as is
a contingent remainder
ii. Executory Interests
a. An executory interest differs from a remainder in that it is a divesting
interest.
b. A remainder NEVER divests a preceding estate prior to its
expiration; that is what the executory interest does.
c. An EI that divests ANOTHER TRANSFEREE if a specified event
happens is called a shifting executory interest because, if the event
happens, the EI will shift the property from one transferee to
another transferee.
d. An EI that may DIVEST THE TRANSFEROR IN THE FUTURE is
called a springing EI because, if the event happens, the property will
spring out from the transferor to the transferee.
iii. NOTE: Remainders in default of appointment (pg. 630)
The Class-Closing Rule
i.
The Class-Closing Rule
a.
A class can close on of 2 ways:
1.
Physiologically (when the person who feeds the class
dies…i.e. to A's children, when A dies)
2.
Rule of convenience (not all jurisdictions have adopted this
notion)
b.
A class will close wherever any member of the class is entitled to
possession and enjoyment of his or her share.
1.
The key point in time is when one member is entitled to
demand payment.
2.
The class closes when the right to payment arises.
3.
The fact that a class is closed does not mean that all members
of the class will share in the property. No additional members can
come in, but present class members can drop out by failing to meet
some condition precedent.
c.
Immediate gifts
1.
Where there is an immediate gift, the class closes as soon as
any member can demand possession
2.
Ex  T bequeaths $10,000 to the children of B. B is alive
and has two kids, C and D. C and D can demand immediate
b.
c.
d.
possession of their shares. The class closes. C and D are paid $5000
each. A year later E is born. E does not share in the bequest.
d.
Postponed gifts
1.
If the gift is postponed until a life tenant dies, the class will
not close under the class-closing rule until the time for taking
possession.
2.
Thus, a gift to a class of remaindermen will not close until
the life tenant is dead, and it will not then close under the rule of
convenience unless on remaindermen is entitled to possession.
1.
T bequeaths $10,000 "to A for life, then to the
children of my daughter B."
1.
The class will not close in any event, under
the rule of convenience, until the death of A. Suppose
that B survives A. the class will close at A's death if (a)
child of B is then alive, (b) a child of B predeceased T nd
the gift did not lapse but went to such child's issue under
an antilapse statute, or (c ) a child of B was alive at T's
death or was born after T's death and such child
predeaceased A. In each of those cases, a child or the
child's representative can demand payment at A's death.
e.
If the interest of one member of the class fails the entire gift to the
entire class fails.
f.
Lux v. Lux (1972) (THIS CASE TALKS ABOUT WHAT TO LOOK
FOR WHEN LOOKING TO SEE IF A TRUST WAS CREATED, ALSO
DISCUSSES PRECATORY LANGUAGE)
Facts: Testator left her real estate in trust for the benefit of her
grandchildren as a class, the corpus of the trust to be distributed when the
youngest of her grandchildren reached the age of 21.
Held, The class closes when one member of the class is entitled to take
under the will-in this case, when the youngest of the then-living
grandchildren reaches 21.
Rule of Convenience: a class will close wherever any member of the class is entitled
to possession of his or her share.
i. Once the class has close, no person born into the class hereafter would be
entitled to take.
Example of precatory language: " I leave $50,000 to my nephew in the hope that
he will use it for a college education."
Vested remainder subject to divestment v. contingent remainder
i. "For A to life, then to B if B survives A, and if B does not survive A, to C"
 A has life estate
 B has contingent remainder (subject to RAP)
 C has alternate contingent remainder (subject to RAP) (alternate
contingent remainder cause B has a contingent remainder) AN
EXECUTORY INTEREST CAN NEVER FOLLOW A
CONTINGENT REMAINDER
 O has reversion
ii. "for A to life, then to B, but if does not survive A, to C"
a. A, life estate
b. B, vested remainder subject to divestment (a condition subsequent
must occur for C to take)
c.
C, executory interest (C has exeutory interest, because B has vested
interest, even though its subject to divestment)
e.
For A for life, then to B or her heirs: because there is an OR B has a life estate
and the heirs have a contingent remainder
10. THE RULE AGAINST PERPETUITIES
a.
Basic purpose is to limit the duration of trusts/restraints on alienation.
b.
applies to contingent and executory interests
c.
It does not apply to reversions or vested interests
 VR v. CR
a.
"To A for life, then to B"
RAP doesn’t apply

b.
To A for life, then to B if B survives A
A life estate, B contingent remainder, O has reversion

c.
To A for life, then to A's children
If he has no children A's children have contingent remainder

Summary
of
the
Rule

a.
Introduction
i.
The RAP is a restriction on the remote vesting of interests, in trust or
otherwise, but it does not apply to charitable trusts, which are privileged with
an exemption from the Rule.
ii.
Vested interests are not objectionable, but contingent interests are.
iii.
Every contingent remainder must satisfy the RAP in order to be valid. The
only vested interest subject to the RAP is vested remainder subject to open.
iv.
REMEMBER: a remainder is vested if
a.
It is given to a presently ascertained person
b.
AND, if it is not subject to a condition precedent
c.
a remainder is contingent if
It is not given to a presently ascertained person

OR it is subject to a condition precedent

v.
If O conveys a fund in trust " for A for life, then to B," B has a vested
remainder, but if O conveys a fund in trust "for A for life, then to B if B
survives A," then B has a contingent remainder.
vi.
The RAP limits the time during which property can be made subject to
contingent interests to "lives in being plus 21 years."
vii.
JUSTIFICATION: (1) to keep property marketable and available for productive
development in accordance with market demands, and (2) to limit "dead hand"
control over the property, which prevents the current owners from using the property
to respond to present needs.
viii.
All legal and equitable contingent future interests created in transferees are
subject to the RAP.
ix.
In a nutshell, the vulnerable interests are contingent remainders, executory
interests, and vested remainders subject to open, while the protected interests
are vested remainders subject to divestment, indefeasibly vested remainders,
and reversions.
x.
The rule applies to each bequest devised.
xi.
For class gifts, the RAP applies to each and every member of the class. The
entire gift fails if there is one offending member.
xii.
The rule is a rule of proof
a.
A contingent future interest is void from the outset, if it is not certain
that the interest will either vest or fail--that one or the other must happen-
b.
-within 21 years after the death of some life in being at the creation of the
interest."
What is a life in being?
1.
It is any person if you can prove that the interest will vest or
fail within that life or within 21 years after its expiration.
2.
Example on how to make the necessary proof that an interest
will vest or fail within the relevant lives:
1.
O transfers a fund in trust "to pay the income to A or
life, then to A's children for their lives, then to pay the
principal to B." A has no children. A's life estate is vested in
possession upon creation. The remainder to A's children for
their lives will vest in possession or, if there are no children,
fail upon A's death. B's remainder is vested in interest upon
creation. Thus, all interests created by the transfer area valid.
1.
A has life estate. Not subject to RAP.
2.
A's children have a life estate. Subject to
RAP.
3.
B has a vested remainder. Not subject to RAP
4.
A's children are subject to RAP, because it’s
a contingent remainder.
1.
We will know for certain within 21
years who A's children are.
2.
T bequeaths $10,00 "to A when she marries" and
$5000 to "A's first child."
1.
A has springing executory interest
2.
A is the measuring life.
3.
Passes the RAP we will know upon A's death
whether A marries, and we will also know if she has
children.
4.
T could be a measuring life, but we won't
know for sure within 21 years after T's death whether A
will be married. So, we use A as a measuring life.
3.
O, a teacher, declares a trust of her first edition of
Charles Dickens's Bleak House "for the first student in O's
current wills class to be sworn in as a judge."
1.
Those students in the CURRENT class can be
measuring lives.
2.
We will know at the end of their lives whether
or not they became judges.
4.
O transfers a fund in trust "to pay the income to A
for life, then to pay the principal to A's children who reach
21."
1.
A is the measuring life.
2.
We will know within 21 years after A's death,
and within their lives whether or not they reach 21.
5.
T bequeaths a fund in trust for A for life, then to the
first child of A to be admitted to the bar."
1.
Fails, because of the after-born problem. The
time starts ticking after settlor's death. A has E, F and
G. So if A had G after settlor's death G isn't a measuring
life. The whole gift fails though, because it’s a class gift.
6.
To A for life then to B if B goes to the planet Saturn.
Its good because he could be a measuring.
We'll know when he dies if he went. This is good.
7.
To A for life then to B if any person goes to the planet
Saturn.
1.
This fails. Let's say in year 24 someone goes
to Saturn. There is no cap as to when this could happen.
No one knows how long it will take for a person to go to
Saturn.
8.
To A for life, then to B for life in any person goes to
the planet Saturn.
1.
It has to happen within B's life. So it doesn’t
fail. B is his own measuring life.
2.
During A's life estate B has a contingent
remainder. Then when A dies, B has a springing
executory interest. If no one goes to Saturn then the
interest never springs and the settlor's heirs keep.
3.
The crucial question is: When will the interest vest?
1.
An interest that is vested upon creation is not subject
to the Rule.
2.
A contingent interest satisfies the Rule if it will
necessarily vest, if at all, either in possession OR in interest
within the relevant lives in being plus 21 years.
4.
REMEMBER: The RAP does not directly limit trust duration.
I is concerned only with the time when interests vest. Hence the RAP
indirectly limits the duration of a trust.
5.
See pg. 677 for valid transfers
c.
The rule is about possibilities rather than probabilities. It doesn't
matter if something is extremely unlikely to happen. It's still a possibility.
1.
A bare possibility is enough. The interest must vest within
the time allowed my the rule. If there is any possibility that the
interest will vest outside that time, then the gift will fail.
When the Lives In Being Are Ascertained
a.
The perpetuities period begins when the perpetuities period starts to
run. Generally, when the instruments takes effect.
1.
If an interest is created by will, the validating life or lives
must be in being at the testator's death.
2.
If the interest is created by irrevocable trust, the validating
life or lives must be persons in being when the deed or trust takes
effect.
3.
If created by revocable trust, the date when the trust
becomes irrevocable (settlor's death usually).
b.
Different rules for determining validating lives govern revocable
trusts and interests created by the exercise of a power of appointment.
1.
If the interest is created by an inter vivos trust revocable by
the settlor alone, the validating life or lives must be persons in being
when the power to revoke terminates.
2.
If the power to revoke terminates at the settlor's death, as is
usually the case, the validating lives must be person's alive at the
settlor's death.
1.
xiii.
3.
xiv.
a.
b.
c.
d.
e.
xv.
a.
b.
b.
The perpetuities period begins when the power to revoke
terminates because, so long as one person has the power to revoke
the trust and receive absolute title to the trust assets, the property is
not tied up.
RAP ESSENTIALS
What are the interests created?
Which interests are subject to RAP?
When does the clock for RAP start running?
What are the lives in being?
Do the interests that are subject to RAP vest within any of those
lives?
1.
NOTE: After-borns and the Fertile Octogenarian, the
Unborn Widow
NOTE: Class gifts--(two more questions)
When does the class close?
Is the condition precedent satisfied?
RAP and Class Gift
i.
Basic rule: all or nothing
a.
If the bequest to one member of that class is void the entire class gift
fails
ii.
Exceptions (don't worry about this):
a.
Gifts to subclass
b.
Gifts of a specific sum
iii.
Modification: Rule of Convenience
iv.
When can a class gift close?
a.
When the class feeder dies or pursuant to the Rule of Convenience,
when the first member can take.
1.
Feeder--> to A's children: A is the feeder
2.
NOTE: If the answer to these is within the RAP period, then
and only then go to 2nd question.
v.
When will all contingencies be resolved?
a.
Will they be resolved within the RAP period.
Case 10: T bequeths property to A for life, then A's children for life, then for A's children
a.
A has life estate
b.
A's children have contingent remainder in life estate
c.
A's grankids have contingent remainder in fee
d.
The class closes for A's children @ A's death.
i.
A is the measuring life. Within 21 years of A's death we will know who his
children are.
e.
What about A's grandchildren?
i.
When will the class close? Since A is the measuring life will the class close
w/in 21 years of A's death? Maybe not. The class will close when all of A's
children die. At A's death we will know who A's children are, but we will not
know who the grandchildren. They are not lives in being they cannot be
measuring lives.
ii.
What if there is a grandchild alive when T dies. The grandchild still has a
vested remainder subject to open, because you still have to go through the 2 life
estates. The Rule of Convenience won't save this, because of the after-born
child.
Case 11: O transfers property in an irrevoable trust to "daughter A for life, then principal
to grandkids." At the time of the transfer, O has one grandchild, G alive.
a.
A life estate
b.
A's grandchildren have a contingent remainder in life-estate
c.
A is the measuring life
d.
Class closes at A's death.
e.
This is an irrevocable trust, so the clock starts ticking when its created.
Case 12 "for A for life, then to distribute the property to such of A's children as attain the
age of 25."
a.
Kids has contingent remainder. They are not ascertainable and there is a condition
precedent
b.
When will the class close physiologically?
i.
When A dies. We will then know who the kids are.
ii.
Condition? Reach age 25. Is this fine?
a.
No, we will not know within 21 years of A's death whether the
children reach 21. Any child that is less than 4 years old, it will not vest
within 21 years of A's death.
b.
If there the age was 21then this would work.