INTESTACY THE DEFAULT DISTRIBUTION SCHEME
The Intestate Distribution Scheme
Surviving Spouse: Who Qualifies
Survival Requirements
Calculating Share for surviving spouse
Calculating Share for descendants/issue
Calculating Share for ancestors and remote collaterals
Descendents/issue: Who Qualifies
Gifts to Children: advancement (satisfaction in intestate)
Bars to Succession
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TESTAMENTARY CAPACITY
Requirements of Testamentary Capacity
Insane Delusion: defect to capacity
Undue Influence: defect to capacity
No Contest Clause
Fraud: defect to capacity
Duress: defect to capacity
Tortious influence with an expectancy
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WILLS EXECUTION, REVOCATION, AND SCOPE
Common Law approach to attested wills
Formalities
Interested Witness
Swapped Wills
Modern Trend Approach to attested wills
Curative Doctrines
Holographic Wills
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Revocation
Will vs. Codicil
Dependent Relative Revocation (Chuck E. Cheese)
Revival
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Scope of a Will
Republication by codicil
Incorporation by reference
Acts of independent significance
Contracts Concerning Wills
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CONSTRUING WILLS
Reformation
Patent vs. Latent Ambiguity
Lapse/anti-lapse
Class gift
Dealing with changes in testator’s property
Ademption (specific gift transfer)
Stock splits
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Satisfaction (advancement in testate)
Exoneration of liens
Abatement (testator gives away more than he has)
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WILL SUBSTITUTES AND PLANNING FOR INCAPACITY
Inter Vivos Trust
Revocable Trust
Spendthrift Trust
Payable on Death Clauses
Life Insurance
Superwill
Multiple party accounts
Pour over will
UTATA – Uniform Testamentary Additions to Trusts Act
Joint Tenancies in Real Property
Planning for possible incapacity
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LIMITATIONS ON THE TESTAMENTARY POWER TO TRANSFER
Elective Share vs. Community property
The Omitted Spouse Doctrine
The Omitted Child Doctrine
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TRUSTS OVERVIEW AND CREATION
Equitable Remedy Trusts
Trust Requirements
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Appendix A: Extra Questions
Appendix B: MS Health Care Directive
Appendix C: Principal and Income Act of 2013
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Notes:
-TOC has shifted around so the numbers won’t be exact.
-On the final the essay was comprehensive. It covered every topic we covered during the class so be
prepared for that. Good luck.
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INTESTACY: THE DEFAULT DISTRIBUTION SCHEME
I. The Intestate Distribution Scheme
A. Introduction
1) Intestacy is the norm
2) Heirs vs Heirs Apparent
a. A person alive has no heirs, only heirs apparent.
3) Expectancies: what a child expects when their parent dies
a. An expectancy is not a property interest
b. Expectancy is not transferable, however a court of equity may rule otherwise.
4) Descent and distribution statute
Personal property = place of domicile
Real Property = where located
B. UPC Approach an intestate scheme
Who takes?
1) Surviving Spouse
How Much?
100% if no issue or parents; or
100% if all decedent’s issue are also issue of
surviving spouse and surviving spouse has no other
issue; or
$200k + 75% of rest if no issue but surviving
parent; or
$150k + 50% of rest if all issue are also issue of
surviving spouse and surviving spouse has other
issue; $100k + 50% if one or more issue not issue
of surviving spouse.
2) Issue (kid)
Equally
3) Parents
Equally, or all to the survivor
4) Issue of Parents (brother/sister)
Equally
5) Grandparents/issue
50% to paternal grandparents or survivor;
otherwise to their issue equally;
50% to maternal grandparents or survivor;
otherwise to their issue equally;
If no surviving grandparents or issue on one side,
all to the other side
6) Escheat to State
100%
1) Tiered Approach – possible takers are listed in order, in tiers.
2) Community Property – intestate distribution presumes the jurisdiction does not recognize
community property
3) UPC favors surviving spouse and state.
- In MS divided in = shares for spouse and child
II. Surviving Spouse: Who Qualifies
A. Marriage Requirement
1) Cohabitants – no
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2) Common Law Marriage – if jurisdiction recognizes common law marriage
B. Same Sex Couples
1) Same sex marriage - Hotly debated issue
2) Civil Unions – Many of the same state rights and duties as married couple
3) Contract Claim
4) DOMA – States don’t have to give gay marriages full faith and credit
C. Putative Spouses – Marriage is either void or voidable. Ok for intestate schemes. (Spouse can still
collect)
D. Married but separated – still qualify as a spouse for purposes of the intestate distribution scheme.
Divorce is the bright line.
Spousal Abandonment – you may be disqualified from inheriting from the other spouse.
E. Survival Requirements
-If claimant fails to meet survival requirement, claimant is treated as if he predeceased the
decedent.
1) Common law/USDA : To qualify as an heir the party had to prove by a preponderance of the
evidence that he survived the decedent by a millisecond. This is a question of fact.
2) The Clear and Convincing Standard: Claimant must prove by a clear and convincing standard
that he survived the decedent.
3) UPC 120-hour approach: Must prove by clear and convincing evidence that he survived
decedent by 120 hours. (5 days)
Ex: (Under 120 jurisdiction) Brothers Pete and Repeat were sitting on a fence. Pete fell off, and
died. Repeat was so shocked by his brother’s demise, that a few seconds after Pete died, Repeat
died of a heart attack. Pete’s will gave all of his estate to Repeat if Repeat survived him. If not,
Pete’s estate would pass to Carla. How should Pete’s estate be distributed?
A. All to Carla under the 120-hour rule.
B. One-half to Repeat and one-half to Carla under the S.C. Share Act.
C. All to Repeat (under common law)
D. It is impossible to tell without more evidence.
Determining time of death:
a) Common law: A person is dead when there is irreversible cessation of circulatory and
respiratory functions.
b) Modern Trend: Irreversible cessation of total brain activity.
Mechanics of the survival requirement: 1) Did the claimant actually survive the decedent? 2) Did
the claimant legally survive the decedent?
-Apply separately to each decedent.
III. Surviving Spouse: Calculating Share
A. Traditional intestate distribution Scheme: Surviving Spouse takes 100% only in the absence of any
surviving issue, parents, or issue of parents.
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If Surviving issue:
a) one surviving child: 50% of intestate property
b) more than one surviving child: typically surviving spouse takes 33%
c) if surviving parents or issue of parents (brother and sister of decedent): typically the
surviving spouse takes 50%
d) small estates: gives the surviving spouse the first 50 or 100k then appropriate fraction
B. UPC Approach
1)Surviving issue and surviving spouse takes 100%: If the surviving spouse is also the parent of
the surviving issue and the surviving spouse has no other issue.
2)Surviving issue and surviving spouse takes < 100%: If not all of the surviving issue are issue of
the surviving spouse (surviving spouse take 100k + 50%)or surviving spouse has own issue
(surviving spouse takes 150k + 50%).
3) No issue but surviving parents: 200k + 75%
4) UPC does not consider surviving issue of parents: Surviving spouse gets 100%
IV. Descendants/Issue: Calculating Shares
A. Determining which issue take:
1) Issue of predeceased children take in their place
2) If a person takes, his or her issue do not
3) Absent Adoption, only blood relatives qualify as heirs
B. Calculating shares where one or more of the decedent’s children predecease the decedent survived
by issue
Per Stirpes (MS uses)
Where is the estate
divided first?
How many shares is the
estate divided into at
that generation?
How to treat dropping
shares?
Per Capita w/
Representation
First generation live
taker
One share each party
alive; one share each
party dead but survived
by issue
Drop by bloodline
First generation always
One share each party
alive; one share each
party dead but survived
by issue
Drop by bloodline
Per Capita at Each
Generation (UPC)
First generation live
taker
One share each party
alive; one share each
party dead but survived
by issue
Drop by pooling:
dropping shares are
added together and
then divided equally
among all eligible takers
at next gen.
C. UPC approach: Has adopted the per capita at each generation approach. Most other jurisdictions are
split between the other two.
D. Negative Disinheritance:
Common law: must be done through will, any intestate property will go to heir if they deserve a
share.
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Modern trend/UPC: can be disinherited through a will even if there is some intestate property.
Intent must be clear.
V. Shares of ancestors and remote collaterals
A. Collateral Relatives
Parents – first line
Grandparents – second line
Great-grandparents – third line
B. Distributing Shares
1) Parentelic approach
This distribution approach keeps going out by collateral lines until there is a line in which
there is a live taker. Distribution procedure then depends by jurisdiction. (count up until
you find someone who has given you both DNA)
2) Degree of Relationship Approach
Count the degrees of relationship between the decedent and the relative. Relatives with
the closest degree take to the exclusion of others. (count up and down tree)
3) Degree of Relationship w/ a parentelic tiebreaker approach
First, count the degrees of relationship between the decedent and the relative. Relatives
with the closest degree take to the exclusion of others. Then if there are multiple takers
in the same degree those in the closer parentelic/collateral lines take to the exclusion to
those in farther lines.
4) Half-bloods
Common law: Only whole-blooded relatives are entitled to inherit
UPC and modern trend majority: treat half-bloods the same as whole-bloods
Modern tend minority: whole-blooded take more than a half-blood
Ex. Michael died intestate in 2009. He had never been married nor had he fathered children. His
parents predeceased him. He was survived by his sister Pam, and his half-brother Dwight. In a
state that treats half-bloods as ½ relations, how should Michael's estate be distributed?
A. All to Pam.
B. One-half each to Pam and Dwight.
C. One-third to Dwight and two-thirds to Pam.
D. All to Dwight.
VI. Descendents/Issue: Who Qualifies
A. Inheriting from and through
Parent-child relationship establishes inheritance rights in both directions as a general rule.
Presumption: child born to married couple is presumed to be the child of that couple.
1) UPC 2008 Revision: Genetic parent can inherit from and through child unless child died before
age of 18 and there is clear and convincing evidence the parental rights could have been
terminated based on non support, abandonment, abuse, neglect.
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2) Posthumously born child: child born after 280 days of dad’s death the burden is on the child
to establish paternity.
3) Adoption: Under classic adoption a child inherits from and through adopting parents and
adopting parents from and through the child. They sever ties with their natural parents.
-Gershon: adoption severs ties with former parent
-In MS can still inherit thru family of natural parents but more limited in inheritance thru
adopting parents family (siblings –yes; cousins-no)
Ex. Homer and Marge had a son Bart. In 2007, Homer died when he ate too many doughnuts.
In 2009, Marge married Moe. Later that same year, Moe adopted Bart. In 2010, Homer’s father,
Ed, died intestate. Then Marge and Moe died a month later, also intestate. Who can Bart inherit
from? (this ? does not apply step parent adoption exception)
A. Only Moe.
B. Only Marge
C. Only Marge and Moe
D. Marge, Moe, and Ed.
4) Step-parent adoption exception: Natural parent as same gender adopting parent loses from
and through with child, but child keeps. Adopting Parent now has from and through with child in
both directions.
5) Post death adoption: 2008 UPC revision, child retains the right to inherit through both natural
parents if both are dead
6) Equitable Adoption: Natural parents transfer custody of their child to a couple who promises
to adopt the child but who fails to do so legally.
a) Think of this as a breach of k COA.
b) That 1) by applying the doctrine courts should remember its equitable nature and
apply it to promote equity and 2) that the doctrine should apply any time the child is led
to believe that he or she was adopted.
7) Child born out of wedlock
a) Common law – Child of no one. Could not inherit.
b) UPC/modern trend: automatically has a child-parent relationship with mother, but
inheritance from and through father requires proof of paternity.
Jurisdictions vary as ways to establish paternity.
8) Reproductive Technology: Posthumously conceived child:
UPC trend: Conceived child inherits from deceased parent if 1) while the parent was
alive he or she authorized the posthumous use of the genetic material in a signed
writing, or there is clear and convincing evidence of such consent; and 2) the child is in
utero within 36 mo. of or born w/in 45 mo. of the parent’s death.
9) Surrogacy: child custody disputes have a res judicata effect on what constitutes the parent
child relationship. Surrogate mother has no rights absent a court order to the contrary.
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10) Same Sex Couples (lesbians)2008 UPC revisions – Child can have a relationship with birth
mother and another if the other party 1) consented in writing to the birth mother’s assisted
reproduction w/ the intent to be the other parent , or 2) functioned as a parent of the child
within two years of the child’s birth.
VII. Gifts to Children
A. Advancements: Whether inter vivos gifts a decedent made to an heir should count against the heir’s
share of the decedent’s probate estate. MS Sec. 91-1-17
1) Common law: If a parent makes an inter vivos gift to a child a rebuttable presumption arises
that the gift constitutes an advancement that counts against the child’s share of the parent’s
intestate estate. If advancement exceeds share then child will not be permitted to share in
distribution of parent’s estate.
a) Child predeceases - advancement doctrine still applies.
2) Modern trend/UPC approach: Inter vivos gifts do not constitute an advancement unless a
writing indicates that the donor intended the gift to constitute an advancement.
a) writing requirement: 1) If the donor creates the writing, the writing must be made
contemporaneously with the inter vivos gift; 2) If the donee creates the writing, the
writing may be made at any time.
b) donee predeceases – gift does not count against donee’s issue unless the writing
expressly provides so.
Ex. Bertram had two sons, Jim and John. In 2008, Jim asked his father for $50,000 to start a new
business. Bertram gave him $50,000 and put the following in writing, and signed it, and gave it
to Jim, as he handed him the money, "You realize that this will count against your share when I
die, signed Dad." Jim said nothing. Bertram died intestate in 2010 leaving an estate of $100,000.
He was survived by Jim and John. How should Bertram's estate be distributed?
A. Nothing to Jim; $100,000 to John.
B. $25,000 to Jim; $75,000 to John.
C. $50,000 to Jim; $50,000 to John.
D. $33,333 to Jim; $66,667 to John.
Ex: Parent has 400k and parent gives 50 k to child A when parent alive. Parent dies w/ 400k and
3 children A,B,C. Court determines transfer to A was advancement. Use hodgepot/hotchpot:
400k + 50k = 450k/3 = 150k. From 400k probate A gets 100k and B&C gets 150K.
B. Transfers to minors
1) Guardianship/Conservatorship
a) Guardians have minimal powers over the property. They have to account regularly to
probate court and this can be inefficient.
b) Modern trend is conservatorship. The conservator takes title as trustee for the minor.
The conservator still needs to account to the court but much less often (once a year).
2) Custodian
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Has discretionary power to use the property for the benefit of the minor, as the
custodian deems appropriate, without court approval. This arrangement is best for
small to moderate sized gifts.
3) Trust
The trust controls the scope of the trustee’s power over the property. It has higher
upfront costs so it is most appropriate when the gift is large.
VIII. Bars to Succession
A. Homicide: Judicial Approaches – no statute
1) Decedent’s property passes to killer
2) Killer is barred b/c of equity reasons
3) Legal title passes to killer, but a constructive trust is imposed to prevent unjust enrichment
B. Statutory/UPC approach: treat the killer as if he predeceased the decedent.
C. Intentional and felonious
1) Manslaughter
a) voluntary: barred
b) involuntary: not barred
2) Self defense
a) not barred
3) Assisted Suicide
a) greatly debated
D. Killer’s issue: Can often pass to killer’s issue although states vary.
-UPC would arguably permit killer’s issue to take share.
E. Scope: All types of property
-Joint tenancy is converted to tenancy in common.
F. Abandonment/Elder Abuse – A number of states have addressed this
G. Disclaimers: Party disclaiming is treated as predeceased.
1) Benefits of disclaiming
a) Redistribute the property – ex. So it goes back to surviving spouse.
b) Avoid gift tax consequences
c) Avoid creditors
2) Scope
-Traditional: only probate
-Modern trend: non-probate and probate
3) Execution requirements
-most require disclaiming party to do so w/in 9 mos. of the decedent’s death.
TESTAMENTARY CAPACITY
I. General Testamentary Capacity
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A. Policy Justifications
1) Public Opinion – legal system should require capacity
2) People Age and we want to protect that
3) Family protection
Will is valid if executed during a lucid interval.
B. Requirements of testamentary capacity
1) At least 18 years old
2) Be of sound mind (requires the ability to know…)
a) the nature and extent of his property
b) the natural objects of his bounty
c) the nature of the testamentary act he is performing
d) and how all these relate together to constitute an orderly plan of disposing of his or
her property
C. Burden of Proof
1) Majority Approach: burden is on the contestant to prove lack of testamentary capacity
2) Minority Approach: the proponent bears the burden of proving testamentary capacity
D. Standing: Will benefit financially
E. Testamentary Capacity vs. contractual capacity
-Contractual capacity is a higher b/c state cares more about contracts. Conservator is appointed
if a person lacks contractual capacity. Since contractual is higher than testamentary having a
conservator does not mean a person lacks testamentary capacity.
-Contractual capacity > testamentary capacity > capacity to marry
-Attorney has ethical duty to assess the capacity of an individual before drafting his or her will.
II. Insane Delusion (1st defect to capacity)
A. Definition
-An insane delusion is a false sense of reality to which a person adheres despite all evidence to
the contrary.
B. Doctrinal Approaches
1) Majority: Rational Person Test
-If a rational person in the testator’s situation could not have reached the same
conclusion, the belief is an insane delusion.
2) Minority: Any Factual Basis to Support Test
- If there is any factual basis to support the testator’s belief, it is not an insane delusion.
-This approach better protects testator’s intent.
-Fact-Sensitive: both majority and minority are very fact sensitive
-Religious and Spiritual Beliefs: courts and juries are reluctant to apply the doctrine to these
beliefs.
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C. Causation
1) Majority
a) “but for” the insane delusion, the testator would not have disposed of his or her
property as he or she did. (high)
b) some courts allow an approach that says the insane delusion materially affect the
will’s provisions. (middle approach)
2) Minority (low)
-require only that the insane delusion might have affected the disposition of the
testator’s property.
D. Dead man statute
Statute that prohibit a witness who has an interest in the outcome of the proceedings to testify
about alleged oral statements the decedent made when the decedent is not alive to respond to
the testimony.
-Today only a minority of states have these statutes
-Some have completely abolished
-Some allow testimony if corroborated by other evidence or if the court finds such
testimony reliable
III. Undue Influence (2nd defect to capacity)
A. Definition
-When one influences the testator to the extent that the will expresses the influencer’s intent,
not the testator’s intent.
B. Doctrinal Approaches
1) Traditional Rule Statement
a) Susceptibility – was the testator susceptible to the undue influence?
b) Opportunity – did the defendant have the opportunity to exert undue influence?
c) Motive – did the defendant have a motive for exerting undue influence?
d) Causation – did the undue influence cause the testator to dispose of his or her
property in a way that the testator would not have otherwise? *
-The party challenging the will bears the burden of proof.
2) Burden Shifting Approach
The Presumption of undue influence arises if:
a) There was a confidential relationship between the defendant and the testator
-At a minimum the testator has to confide in the other party
b) the defendant receives the bulk of the testator’s estate; and*
c) the testator was of weakened intellect
d) defendant was active in the procurement or execution of the will (some jurisdictions
for third or add as fourth)
-If the elements of the burden-shifting doctrine are satisfied, a presumption of undue
influence arises, and the burden shifts to the defendant to rebut the presumption.
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3) In Class
a) Confid. Relationship
b) weakened testator
c) access/opportunity
d) unnatural disposition (this is the key)
Comparison:
Presumption doctrine provides that where the P can prove the first three elements of
the traditional doctrine by this particular evidence, then a presumption of causation
arises, and the burden shifts to the defendant to show no undue influence.
C. Gifts to Attorneys
1) Majority Approach – presumption of undue influence arises unless the attorney is related to
or married to the client
a) most jurisdictions require clear and convincing evidence that the gift was truly the
testator’s intent
2) Minority Approach – Irrebuttable presumption of undue influence
a) two exceptions 1) the attorney is related to or married to testator 2) the will was
reviewed by an independent attorney who advised the testator about the potential for
undue influence to make sure the gift was the free and voluntary act of the testator.
-Lawyers must think about ethical considerations
D. No Contest Clause: If a beneficiary under the instrument sues contesting the instrument, or a
provision in the instrument, the beneficiary loses whatever he or she is taking under the instrument
1) Enforceability
a) Majority/UPC approach – refuse to enforce a no contest clause if there is probable
cause to support the will contest
b) Minority approach – no contest clause unenforceable if the claim is one of forgery,
revocation, or misconduct by one active in the procurement or execution of the will.
E. Anticipating and Deterring challenges
1) Unnatural disposition
Juries often condemn this
2) Deterring will contests
Explanatory Statement
-Don’t include in will
-speak in general statements
3) Inter vivos trusts
Use and inter vivos trust, because courts are more unlikely to hold an inter vivos trust to
be invalid years after its creation
IV. Fraud (3rd defect to capacity)
A. Definition: Fraud occurs when someone 1) intentionally misrepresents 2) something to the testator,
3) with the intent of influencing the testator’s testamentary scheme, 4) and the misrepresentation
causes the testator to dispose of his or her property in a way that he or she would not have otherwise.
1) Fraud in the inducement
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- when a person misrepresents a fact to the testator for the purpose of inducing the
testator to execute a will with certain provisions, or for the purpose of inducing the
testator to revoke a will
2) Fraud in the execution
- when a person misrepresents the nature of a document the testator is signing
B. Elements
1) Mens Rea – Made knowingly and for the purpose of influencing testator’s testamentary
scheme.
2) Causation – The fraud must cause the testator to dispose of his or her property in a way that
he or she would not have otherwise.
3) Remedy
Fraudulent Provisions
-Strike
Fraudulent failure to revoke
-Strike
Fraudulent failure to execute
-Create Constructive trust
V. Duress (4th defect to capacity)
A. Definition: Can be viewed as a subset – and extreme example – of undue influence. When a
wrongdoer performs, or threatens to perform, a wrongful act that coerces the donor into making a
donative transfer he or she would not have otherwise made.
VI. Tortious Influence with an expectancy
A. Rule
The plaintiff has to prove
1) the existence of an expectancy
2) a reasonable certainty that the expectancy would have been realized but for the interference
3) intentional interference with the expectancy
4) tortious conduct involved with the interference, such as fraud, duress, or undue influence;
and
5) damages
B. Advantages
1) not a will contest
2) Punitive damages available
3) Longer statute of limitations
WILLS EXECUTION, REVOCATION, AND SCOPE
I. Executing a Valid Will
A. Overview
1) What are the formalities?
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Varies from jurisdiction to jurisdiction. A traditional attested will at a minimum includes
a writing that is signed and witnessed.
2) How closely should they be followed?
a) common law: 100% compliance
b) modern trend: substantial compliance or harmless error / dispensing power approach
B. Functions Served
1) Evidentiary – offered for probate so that it truly reflects the testator’s last wishes
2) Protective – protecting from fraudulent claims and protecting intent
3) Ritualistic – impresses upon a testator what he is doing
4) Channeling – encourages individuals to consult an attorney
II. Common Law Approach to Attested Wills
A. Typical Statute
Requires writing, signature, and a witness.
B. Typical Formalities
1) Writing – as a general rule, oral wills are not permitted.
2) Signature – No requirement testator sign his whole name but if he intends to but does not the
rule under strict compliance is that the partial signature does not qualify. Any mark even a X
may qualify.
3) Signing by Another – ok, testator’s direction must be express. Must sign the name in
testator’s presence.
4) Witnesses – Most jurisdictions require the testator sign or acknowledge in the presence of at
least two witnesses who are present at the same time.
a) Under most statutes the testator need not sign in front of the witness as long as the
testator acknowledges, in front of the witnesses present at the same time, that the
signature already present on the document is the testator’s signature.
5) Presence
a) Line of sight test – the actor who has to perform in the presence of the second party
has to perform the specified act so that the second party either sees or has the
opportunity of seeing the act. The latter means that the second party would have
actually seen the specified act if the second party had looked at the right moment.
b) Conscious presence test – The modern trend approach is that presence is defined by
whether the party, in whose presence the act has to be performed, can tell from sight,
sound, and general awareness of the events that the required act is being performed.
c) Modern trend/UPC – Abolish the requirement that the witnesses sign in the presence
of the testator. Instead the only requirement is that the testator sign or acknowledge
the will in the presence of the witnesses.
6) Order of signing
a) Traditional Approach – The testator has to sign before either witness can sign.
b) Modern Trend - A witness may sign the will before the testator signs or
acknowledges, as long as all the parties sign the will as part of one ceremony.
7) Writing below signature
a) Whether the jurisdiction requires the will to be “subscribed” – signed at the end.
b) Temporally: when was the writing added.
Ex: subscribe + added after will signed
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-Only writing above signature
Ex: subscribe + added before will signed
-analyze trend: traditional: whole will invalid, modern: strike provision below
and keep part above.
Ex: need not subscribe + added after will signed
-writing below signature not part of will.
Ex: need not subscribe + added before will signed
-whole will is valid.
8) Delayed Attestation
Modern trend is to allow the witnesses to sign later w/in a “reasonable time period.”
C. Interested Witness – what remedies to apply if an interested witness signs ie., not take under the will.
1) Invalidate will
2) Void interested witness’s gift
3) Purging Approach: Witness has a conflict of interest only to the extent he or she stands to
take more under the will then he would otherwise and purges the interested witness of his or
her excess interest under the will.
a) Calculate how much the witness would take if the will were not valid
b) How much the witness would take under the will? Then purge of excess amount.
c) Don’t necessarily use intestate scheme if there was a previous will.
4) Rebuttable presumption of misconduct: Witness gets the chance to rebut presumption and
keep entire gift.
5) Abolish the doctrine – UPC and minority
D. Swapped wills – Issue: whether the will the person signed, but which was not drafted for him or her
to sign can be probated as a valid will.
1) General Rule: Use strict compliance.
2) Modern Trend: Courts more concerned with testator’s intent then Wills Act formalities.
Misdescription Doctrine – help construe a validly executed will that contains a
misdescription.
a) The court takes extrinsic evidence to determine the extent of the misdescription.
b) Strikes the words that constitute the misdescription.
c) Checks to see if enough words are left to give effect to testator’s intent.
-Not often used in swapped wills scenario b/c the doctrine is then being used to validate
a will, which is not the use.
- Which will – should present the one decedent actually signed.
-One court says that testamentary intent attaches to the testamentary scheme it
reflects.
-Scrivener’s error/fraud: apply constructive trust either way, b/c testator’s intent is
frustrated unless a court tries to save it.
III. Modern Trend Approach to Attested Wills
A. Introduction
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1) Less formal requirements
2) Requires less degree of compliance (not 100%)
B. Curative doctrines –UPC judicial philosophy
1) Substantial Compliance – the court has the power to probate the will if
a) Clear and convincing evidence shows that the testator intended this document to
constitute his last will and testament.
b) Clear and convincing evidence shows that the will substantially complies with the
statutory Wills Act formalities.
2) Dispensing Power/harmless error – If will not executed in strict compliance with the
jurisdiction’s Wills Act formalities, the court is empowered to probate the will if clear and
convincing evidence shows that the decedent intended the document to constitute his or her
last will and testament. (like substantial compliance w/o the second prong)
3) Majority
-Strict Compliance
4) Minority/UPC
-dispensing power/harmless error approach
5) Minority modified
-Harmless error doctrine, but signature cannot be dispensed.
IV. Notarized Wills
Revised UPC –Valid if signed by a notary.
V. Holographic Wills
-They do not require a witness.
-Half the states recognize including the UPC.
A. Requirements
1) Writing
2) Signed – most don’t require will to be signed at the end, but if not it raises questions.
3) Dated – Some states require, UPC does not.
4) Handwritten – split between entirely or material provisions
Entirely: Any printing may invalidate under a strict compliance approach.
Material Provisions and UPC: Include the “who gets what”, and administrative
provisions, and maybe testamentary intent.
6) Testamentary Intent – more essential because there is no ritualistic function with a
holographic will.
Strict Approach: Must only be ascertainable from testator’s handwriting.
UPC Approach: Testamentary intent can be derived from the handwritten material, nonhandwritten, or extrinsic evidence.
VI. Revocation
-A will may be revoked by act, writing, presumption, and operation of law.
A. Revocation by Act
-By physical act that is destructive such as tearing or burning and is performed with the intent to
revoke. May be performed by another, but if by another, the act must be performed in the
testator’s presence.
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1) Common law – must affect some part of the written portion of the will
2) Modern Trend/UPC – Just affect some part of the will
-Writing as a revocation by act
Partial Revocation by Physical Act:
-If jurisdiction does not recognize: Simply ignore and give effect to the will as originally written
-Modern Trend/UPC approach: recognize partial revocation by physical act
Majority/UPC: goes to residuary, but can’t increase a gift outside
Few States: Pass via intestacy
Ex. Adam Lambert validly executed his will in 2008. Among several other provisions, Adam left
$7500 to David Cook. Under the will the residue of Adam’s estate goes to Ryan Seacrest. In
2009, Adam became angry with David, and scratched out David Cook’s name, and substituted
Crystal Bowersox on the face of the will. How should the $7500 in question be distributed?
In a state allowing partial revocation
A. All of it to Crystal.
B. All of it to David.
C. All of it to Ryan Seacrest.
D. All of will pass to Adam’s heirs by intestacy. (this answer is too broad)
B. Revocation by Writing
-Subsequent writing must qualify as a valid will. It must do so either expressly or implicitly by
inconsistency.
1) Express Revocation: Just has to say “I revoke my prior will.”
2) Revocation by Inconsistency: Disposes of property in a way inconsistent with the prior will.
Will vs. Codicil
-Codicil only partially revokes or amends the prior will.
-A codicil is a will that merely amends an existing will. Must follow Wills Act formalities.
-Exception: hand written amendments to a holographic will constitute a valid
holographic codicil, even if they don’t constitute a valid holographic will in their own
right.
1) Mixed wills and codicils: Holographic codicils to attested wills are valid, and attested codicils
to holographic wills are valid.
2) Revocation of codicil/will: Revocation of a codicil does not revoke the underlying will.
Revocation of a will revokes all codicils thereto.
C. Revocation by Presumption
-If a will was last in testator’s possession and cannot be found following death the presumption
arises that the testator revoked the will by act.
-weak presumption
1) Presumption not overcome: will revoked
2) Presumption rebutted: will deemed lost and extrinsic evidence is admitted to prove its terms.
If terms are established the lost will is probated.
Duplicate Original:
-Each one must be properly executed.
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Revocation by Act or Writing: Revoking one revokes all
Revocation by Presumption: Jurisdictional split
a) Revokes all duplicate originals, because revocation by presumption is a subset of
revocation by act.
b) Not revoke all duplicate originals, unless none of the duplicate original wills are
found.
D. Revocation by operation of law
1) Divorce:
a) Traditional: Apply only to wills, not to will substitutes
b) Modern Trend/UPC: Wills and will substitutes. There is a split over scope. UPC
extends to ex-spouse’s relatives.
c) Domestic Partners: follow rules of jurisdiction in states that recognize.
2) Revocation by marriage, birth of child: effect of doctrines is to give the new spouse or child a
share of testator’s property before giving effect to the will.
-new gift being read into the will
E. Dependent Relative Revocation (Chuck E Cheese)
-Even if a will is validly revoked it may be possible to probate the will if the revocation was based
upon a mistake of fact or law and if the testator would not have revoked had the testator known
the truth
-Tends to only apply when:
1) There is a failed alternative testamentary scheme
2) If the mistake is set forth in the writing that revoked the will and the mistake is beyond the
testator’s knowledge.
Revocation by Act
Classic Example is where testator revokes a gift by act on the belief that new will or codicil is
valid, but the new will is not. Options are take nothing under new will or go back to original will.
-Usually a mistake of law
Revocation by Writing
The courts require that the mistake be set forth in writing and that the mistake be beyond the
testator’s knowledge (Testator is upset about marriage of a friend, but really friend never got
married)
-Usually a mistake of fact
Ex. In 1990, Tess executed a valid last will and testament leaving her entire estate to Bud. In
1993, Tess wrote "VOID" (revocation by act) on the face of the 1990 will and executed another
will leaving everything to Jim. In 1995, after a serious disagreement with Jim, Tess tore up the
1993 will. Tess was survived by Bud and Jim, neither of whom are related to Tess, and by Tess's
parents. How should Tess's estate be distributed?
In a state without the doctrine of revival
A. To Bud since the 1990 will was revived.
B. To Jim since the 1993 will was conditionally revoked.
C. To Bud since the 1990 will was never validly revoked.
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D. To Tess’s parents, equally.
F. Revival: Validly executes will #1, thereafter validly executes will #2 that expressly or implicitly revokes
will #1, and thereafter validly revokes will #2 intending to give effect to will #1
1) English Approach: Revival is a non-issue. Will # 1 is the will.
2) American Approach: Testator must do something to “revive” will #1.
Minority Approach: Re-execute will #1 through Wills act formalities.
Majority/UPC: prove intent to revive will #1.
Proving Intent:
By Act: The courts will take any evidence, including testator’s statements.
By Writing: The intent to revive will #1 must be set forth in will #3.
Will #2 as will vs. codicil:
UPC: The part of will #1 that was revoked by will #2 is presumed to be automatically
revived.
VII. Scope of a will
A. Integration: Those pieces of paper that are physically present at the time of the execution and that
the testator intends to be part of the will constitute the pages of the will.
B. Republication by Codicil:
-Generally: automatically redates the underlying will.
-Implicitly or Explicitly
-Validly executed codicil does not automatically reexecute and republish the invalid will, but
may be possible through incorporation by reference.
States that do not recognize incorporation by reference may stretch republication by
codicil to reexecute an invalid underlying will, but only if the invalid will went through a
valid execution ceremony but is invalid for some other reason.
-Republication by codicil has curative powers if there were problems with the original will
execution ceremony.
C. Incorporation by Reference: A valid will can incorporate by reference a document that was not
executed with will’s act formalities as long as
1) The will expresses the intent to incorporate the document
2) The will describes the document with reasonable certainty
-Low threshold for first two requirements
3) The document being incorporated was in existence when the will was executed
-must prove document existed by a preponderance of evidence
-as it existed at the time was executed unless reduplicated by codicil
UPC tangible property list
-Allows a testator to give away his tangible property with a list that does not have to be
executed with Wills act formalities even if list is created after, as long as the will expressly states
such an intent.
D. Acts of independent significance: A will may dispose of property by reference to acts outside of the
will as long as the referenced act has significance independent of its effect upon the testator’s probate
estate.
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-Writing as an independent act: Saying you will give 10k to anyone your brother gives 10 k to in
his will. The brother’s will has its own independent significance.
Ex. Randy executed a valid will with the following provision:
I leave my car to Simon. (has its own inter vivos significance)
When Randy executed the will, he owned a 1970 Buick. At Randy’s death, he owned a BMW.
Which of the following is true? (referencing an act outside of the will)
A.
B.
C.
D.
Randy’s personal representative will be required to buy Simon a 1970 Buick.
Simon will get the BMW under the doctrine of Acts of Independent Significance.
Simon takes nothing, because a specific gift has been adeemed.
Simon will be entitled to any remaining proceeds from the sale of the 1970 Buick.
E. Temporal Perspectives
Backward looking:
-Incorporation by reference
-Republication by codicil
Forward looking:
-Acts of independent significance
VIII. Contracts Concerning Wills
A. Writing Requirement:
Modern/UPC: Contract must be evidence by some writing signed by decedent.
B. Contract not to revoke will:
1) Joint wills: typical between husband and wife. Upon first death property goes to surviving
party of the joint will and upon death of surviving party, all of the second-to-die’s property goes
to some agreed upon beneficiary.
2) Mutual wills/mirror: Two wills having the same testamentary scheme
Contract not to revoke: UPC says no. Surviving spouse may do what they wish.
C. Contract Rights vs. spousal protection rights
-Pretermitted spouse doctrine
-Elective share doctrine
Order of takers
a) Creditors take before beneficiaries
b) Spouses claiming spouse protection take before beneficiaries
c) Creditor’s claims before spousal protection claims
Issue: Contract beneficiary vs. will beneficiary. If contract is breached their claim moves them up
from mere beneficiary to creditor
New spouse, who takes first:
Majority: contract beneficiaries take before spouse
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Minority: Contracts that discourage or restrain the right to marry are void as against
public policy.
Property affected: Without clear drafting, deceased and surviving party’s property
Right to use: surviving party has life estate, with right to use and consume such property
reasonably
Survival Requirement: No survival requirement to claim their benefits under contract, unlike
general wills doctrine.
CONSTRUING WILLS
I. Admissibility of Extrinsic Evidence: General Rule
A. Validity vs. Construction – courts more willing to take evidence of wills validity than construction
absent an ambiguity.
1) Common Law: Courts very reluctant to admit extrinsic evidence to help construe a will
-Policy reason is to protect intent
Modern Trend: Reformation
-Policy Reason: Intentional wrongdoing and mistake should both be corrected
a) Clear and convincing evidence of a mistake
b) Clear and convincing evidence of its effect upon the testator’s true intent
c) Then extrinsic evidence should be admissible to overcome presumption of accurate
testamentary intent
2) Plain Meaning Rule – the words used in the will should be given their plain meaning
Majority Approach – follows Plain Meaning Rule
-Personal Usage Exception – If the testator has always referred to a person by a
name other than the person’s true name, the courts will then use extrinsic
evidence.
Modern Trend – Repudiates Plain Meaning Rule
3) Patent vs. Latent Ambiguity
Patent Ambiguity – An Ambiguity that is apparent from the face of the will
-At common law extrinsic evidence is not allowed to construe.
Latent Ambiguity – Not apparent of the face of the will
-At common law the courts admit evidence to establish and construe a latent
ambiguity.
Latent Ambiguity Doctrines:
a) Equivocation – Is where the language in a will fits more than one object or
person equally well. (Two Mr. Brown’s)
b) Misdescription – Description appears ok on the face, but when the court goes
to apply it no person or object matches the exact description. (Numbers or
names inverted)
-Court strikes misdescription then uses extrinsic evidence
c) Personal Usage Exception – discussed above
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Modern Trend – Repudiates Distinction between Latent and Patent. Allows extrinsic
evidence in for both.
4) Construing vs. Rewriting – Courts are willing to construe but not rewrite
5) Scrivener’s Error (Type of Reformation)
a) Clear and convincing evidence of a scrivener’s error
b) Clear and convincing evidence of its effect upon the testator’s true intent
c) Then extrinsic evidence is admissible to establish and correct the mistake
6) Probable Intent (Type of Reformation) – deals with unforeseen change in circumstances that
occurs after a will is executed, that is not provided for in the will, and that materially frustrates
the testator’s intent, the court takes extrinsic evidence surrounding the testator, with particular
attention paid to family considerations.
II. Changes in the Beneficiary
A. Survival Requirement
1) Common law – Beneficiary must survive, prove by a preponderance of the evidence
2) Modern Law/UPC – Beneficiary must prove by clear and convincing evidence that he survived
3) Transferor’s Intent – Will may impose a longer survival requirement. Above is just default
B. Lapse
- If a beneficiary fails to survive the testator, the gift is said to lapse. A lapsed gift fails.
-Rationale: the testator would prefer that the gift be revoked.
-Void gift and lapsed gift are almost interchangeable. A void gift is a gift made when the
beneficiary is dead when the will is executed.
C Failed/void gift – default takers
-Specific gifts – Goes to residuary or intestacy
-General gifts – Goes to residuary or intestacy
-Residuary Gift – If it fails completely it goes to intestacy
-Part of the Residuary (split over part that fails)
-Common Law: If part fails that part then goes to intestacy
-Modern Trend/UPC: As long as any part of the residuary is valid, that part catches
whichever part of the residuary clause fails
D. Saving Failed Gifts
1) Anti-lapse statutes
a) Basic rule – 1) where there is a lapse, and 2) the predeceased beneficiary meets the
statutory degree of relationship to the testator, and 3) the predeceased beneficiary has
issue who survive the testator, the lapsed gift goes to the issue of the predeceased
beneficiary 4) unless the will expresses a contrary intent.
-Expanded to include situations where the beneficiary is treated as predeceasing the
decedent.
b) What an anti-lapse doctrine applies to:
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Common law: Lapse gift only, not void
Modern Approach/UPC: Lapse and void gifts apply, and will substitutes
c) Survived by issue: The issue must survive the testator by 120 hours under the UPC
d) Contrary Intent: If the beneficiary is related closely enough to the testator and is
survived by issue the testator is presumed to have preferred that the gift go to the issue
rather than fail. This presumption is rebuttable and contrary intent MUST be expressed
in the will under most anti-lapse statutes
Low threshold:
1) Any express words of survival.
2) Any express gift over in the will to another beneficiary in the event of the first
beneficiary’s death constitutes a sufficient “express contrary intent.”
-UPC: Saying “if he survives me” is not enough to bar anti-lapse statute
e) Spouses: general rule is that anti lapse does not apply
-To prevent issue of predeceased spouse taking when they are not issue of the
testator as well.
2) Class gift – A gift to more than one individual with a right of survivorship.
-Transferor’s intent sometimes needs to be analyzed
1) How did the testator describe the beneficiaries?
As a group indicates a class gift, by name indicates not so
2) How did the testator describe the gift?
In the aggregate indicates a class gift, by distinct shares indicates not so
3) Do the beneficiaries share a common characteristic?
Sharing a common characteristic indicates a class gift, not sharing does
not
4) What is the testator’s overall testamentary scheme?
Two aspects of the testator’s estate plan should be examined under this
factor
a) Express Right of Survivorship – If there was another class gift
that said express right to survivorship then additional ones
should say the same. There are counter arguments to this such
as obviousness.
b) Alternative Takers – Look at who would take the failed gift if
not a class gift. Is there anything to indicate that the testator
wouldn’t want that person to take the property.
-This is a very fact sensitive process
-The UPC and majority applies anti-lapse to a class gift first and then if
that doesn’t work applies the class gift doctrine.
-Exception for void gifts – don’t apply anti-lapse
Ex. (Class Gift) Ellen's will made the following residuary bequest:
"All of the rest, residue and remainder of my estate I leave to my nieces, share and share alike."
Ellen had four nieces at the time of making the will. Two of the nieces, Mary Kate and Ashley,
predeceased Ellen. Mary Kate died testate in 2005 and her will left her entire estate to Ashley.
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Ashley died intestate in 2006 leaving her husband and one child as her heirs. How should the
residue of Ellen's estate be distributed assuming Ellen died in 2010 without any other kindred?
A. It should be divided equally between Ashley's child and the two living nieces.
B. It should be divided equally between the two living nieces. (these are the only two left in
class)
C. It should be divided one-half to Ashley's child and one-fourth each to the two living nieces.
D. It should be divided one-fourth to Ashley's widower, one-fourth to Ashley's child, and one
fourth each to the two living nieces.
III. Change in Testator’s Property
-Most doctrines developed deal with common scenarios
A. Types of gift:
1) Specific Gift
- A specific gift
- Modified by “my” a lot of times
2) General Gift
- A gift of pecuniary value that is satisfied by using any item that fits description of that
gift
- Demonstrative gift – I give 1k from my checking account at wagon wheel bank.
Classified as a subset of general gifts.
3) Residuary Gift
- A gift that gives away all of the testator’s property that has not otherwise been given
away
B. Ademption – What to do when specific gift has been transferred
1) Common law/identity approach (majority)
- irrebuttable presumption arises that the testator intended to revoke the gift
a) Identity Approach – court won’t take any extrinsic evidence as to why the item
cannot be found
b) Voluntary vs. Involuntary Transfer – If the gift was involuntarily transferred, the
identity approach is arguably unreasonable
c) Efficiency vs. Intent – Exalts efficiency
2) Modern Trend/ judicial “modified intent” approach
- Exempts property that was transferred through an act that is involuntary
3) Avoidance / softening doctrines to identity approach
a) Characterize gift as general and not specific
b) Change in form not substance – ex change from one account at a bank to same type
of account at another
c) Construe at the time of death
-General rule is at time of execution
-Desire not to give the beneficiary a gift that is worth substantially more
- Very fact sensitive. It depends on what the court prefers
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d) Outstanding balance doctrine – 1) The specific gift item is transferred
voluntarily/involuntarily and 2) When the testator dies there is still an outstanding
balance due the testator as a result of the transfer , then 3) the beneficiary of the
specific gift that was adeemed takes the outstanding balance in lieu of the specific item
4) Conservatorship/Durable POA
- Modern trend to not apply ademption when the transfer happens by a conservator,
whether voluntary or involuntary. Instead the beneficiary receives general pecuniary
value.
5) UPC/Intent Approach –creates a mild presumption against ademption
a) Replacement Property Exception – If testator owns property at death that was
acquired to replace property that was a specific gift in his or her will, the beneficiary of
the specific gift gets the replacement property.
b) Outstanding balance doctrine
c) Testator’s Intent approach –If the first two doctrines don’t apply then if beneficiary
can prove
i) Ademption would be inconsistent with testator’s plan of distribution, or
ii) Testator did not intend for ademption to apply
d) Conservatorship exception – after 1 year of being not incapacitate this does not apply
-UPC approach is willing to accept increased costs of administration and increased
potential for fraud.
Ex. (Absent a statute contrary) Donald Trump owned a building on Coliseum Dr. in Oxford, MS.
In 2004, Trump executed a valid will which left his Coliseum Dr. property to Ivanka. In 2006,
Trump sold his Coliseum Dr. property to Cindy Lauper. Lauper paid $250,000 in cash and gave
Trump a $700,000 promissory note secured by a trust deed on his Coliseum Dr. property. Lauper
has paid $180,000 on the note and the current unpaid balance is $520,000. The $250,000 cash
and the $180,000 payment were deposited in a bank account at First National Bank. Trump died
in 2010 and Ivanka survived. How should Trump's estate be distributed?
A. $250,000 cash and the remaining payments on the promissory note to Ivanka; the balance as
the will directs.
B. $180,000 cash and the remaining payments on the promissory note to Ivanka; the balance as
the will directs.
C. Only the remaining payments under the promissory note to Ivanka; the balance as the will
directs.
D. Nothing to Ivanka, since her property has been adeemed.
C. Stocks
1) Common Law
Specific Gift: stock split results in additional shares for beneficiary
General Gift: stock split results in beneficiary not taking additional shares
2) Modern Trend
Both general and specific get additional shares, b/c intent was to give % interest in the
company.
3) UPC
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No specific/general distinction, beneficiary gets the benefit of whatever changes
occurred between the date of execution of the will and date of the death of the
testator, even if the stock is stock of a completely different corporate entity.
4) Stock dividends
Modern/UPC trend is “percentage of ownership” theory and award the stock dividend
to the devisee
D. Misc. Construction doctrines
1) Satisfaction – If, after executing a will the testator makes an inter vivos gift to a beneficiary,
should that count against the beneficiary’s testamentary share.
a) Common law – 1) if the beneficiary is a child and 2) of “like kind” to that devised
under the will, then a rebuttable presumption arises that the testator wanted the inter
vivos gift to count against the child’s share
b) Modern Trend/UPC – Reverses the presumption.
-Absent a writing expressing such intent
c) Satisfaction applies to general gifts only
d) Advancement is the same issue as satisfaction, but when the decedent dies intestate
2) Exoneration of liens – should the beneficiary take a property free and clear of debt (issue of
testator intent)
a) Common Law: presumption is free and clear
b) Modern Trend/UPC approach: Reverses presumption
-Express reference to debt is needed to overcome
3) Abatement – If the testator gives away more in his will than he has to give.
a) General Approach – Residuary reduced first, then general, then specific
-Reason why: The more precise the more important to testator
-Criticism: Residuary is often largest gift to most important, ie. wife.
b) Minority Approach – Follow general approach but give courts flexibility to look at
overall testamentary wishes.
-When there is true abatement the residue gets nothing
Ex. When abatement occurs, the residuary beneficiary almost always takes:
A. Only what is left after satisfying the specific, demonstrative and general bequests to the
extent possible.
B. Nothing.
C. Priority over the other beneficiaries, since the presumption is that the residuary beneficiary is
the one most favored by the testator.
D. Both A & B.
(***Problem above appeared on the fall 2012 final w/o the word “always”. Does that change the
answer? Not sure***)
WILL SUBSTITUTES AND PLANNING FOR INCAPACITY
I. Overview to the Wills Substitutes
-Life Insurance Contracts
-Joint Tenancies
-Certain Possessory Estates and Future Interests
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-Inter Vivos Trusts
-Now more will substitutes are recognized
A. Controlling Law:
-Wills Act formalities vs. type of species law
1) Common Law: Substitutes are controlled by other areas of law they belong to not willsrelated construction documents .
2) Modern Trend: Subject the will substitutes to the wills-related construction documents.
Why: Wills-related doctrines better suited to deal with these issues.
II. Inter Vivos Trusts
A. Trust is a bifurcated gift
Settlor - donor
Trustee – holds legal title
Beneficiaries – holds equitable title
-life beneficiary
-remainder interest
1) Settlor as trustee and life beneficiary
-ok arrangement, if irrevocable b/c like any other inter vivos gift
2) Revocable trust + settlor as life beneficiary
-ok arrangement, nowadays
-Seems just like a will
-Seems just like a trust
-Trustee still owes beneficiaries a duty
-Contingent Remainder
-Argument that creator of one of these trusts still satisfies the functions underlying wills
act formalities
3) UTC/Modern Approach
-Duty of trustee is exclusively to settlor
4) Revocability
a) Traditional/Majority: Trusts are irrevocable
b) UTC /Modern Trend: Trusts may revoke or amend unless trust expressly states
irrevocability
5) Revocation – particular method expressed: when a trust sets forth an express, particular
method of revocation, only that method is valid
a) Traditional: Settlor’s intent controls
-Criticism: this is boilerplate
b) Modern/UTC: A method set out should not be construed as exclusive method unless
the trust provision expressly makes it exclusive.
-Items in revocable trust are available to creditors after settlor’s death
6) Revocation – no particular method expressed
-Power may be expressed in any manner that adequately expresses the intent to revoke
-Divorce, in many jurisdictions the trust is not revoked by divorce. Modern Trend/UPC is
to revoke. UTC has implicitly adopted this.
7) Rights of Creditors of the Settlor
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Common Law: Creditors can’t get settlor to use power to revoke
Modern Trend: Creditors can get settlor to revoke
-revoking is like writing a check
-Spendthrift trust – If settlor has a life beneficiary the clause is null and void as to the settlor’s
creditor
Ex. Miley Cyrus created a trust for the benefit of her friend Hanna Montana. The terms of the
trust provide that Hanna’s interest was not subject to voluntary or involuntary assignment.
Which of the following is true?
Spendthrift
A. The provision is enforceable against everyone except Hanna’s former spouse or her children.
B. The provision would be effective to prevent future creditors from asserting a claim against
Hanna’s interest in the trust, but is not effective against any of her current creditors.
C. The provision will be effective and enforced, but Hanna’s interest could be reached by her
child, if that child had an unpaid child support order.
D. Trust interests are never assignable, so the language in the trust is redundant and therefore
unnecessary.
8) Post Death – What happens when a settlor dies and has a life estate in his revocable trust
a) Common Law – Settlor has no more interest so nothing for creditors to touch
b) Modern Trend/UTC – Insofar as settlor could get use out of the assets during his life,
the creditors are able to reach the property.
-Creditors must exhaust settlor’s probate assets first
III. Contracts with Payable-On-Death Clauses
A. Life Insurance
1) Whole life (ordinary, straight) – purchases coverage for life at upfront purchase price
2) Term Life (pure) – Coverage is purchased for a fixed amount of time. No “forced savings”
Common Law: Life insurance is the only POD that does not need will’s act formalities.
-Can’t just open a bank account and say POD.
Modern Trend/UPC: Extends the exemption for life insurance to any and all k’s and instruments
with POD clauses (employment k’s, promissory notes, deposit agreements, pension plans,
retirement accounts, etc)
3) Revocability – Revocable at any time
4) Construction: The modern trend/UPC applies will’s related rules to will substitutes
-However, UPC is silent as to survival requirements for POD, unlike life insurance
Ex. Lulu owns the Carlton Arms Apartments with Rusty as joint tenants with rights of
survivorship. Lulu is also the owner of a $350,000 Individual Retirement Account (IRA) and a
$1,000,000 life insurance policy each naming Maggie as the beneficiary on her death. Lulu’s
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validly executed will provides that the life insurance proceeds Apartments and savings account
will all pass to Donna upon Lulu’s death.
The will is effective in passing:
A. The life insurance proceeds only.
B. The IRA only.
C. The joint property and the IRA.
D. None of the property specified in the problem.
Ex. Anna is insured under a life insurance policy that names Beatrice as the primary beneficiary,
and Claude as the contingent beneficiary. Anna’s will devised Blackacre to Beatrice and the
residue of her estate to Xavier. Beatrice’s will devised her entire estate to Zelda. Beatrice is not
a relative of Anna. Unfortunately, Anna and Beatrice were killed in an auto accident. Anna was
pronounced dead on the scene and Beatrice died some 25 minutes later in route to the hospital.
The life insurance proceeds and Blackacre will pass as follows: (under common law)
A. Both will pass to Beatrice, and then to Zelda.
B. Both will pass to Xavier, because Beatrice did not survive Anna by 120 hours.
C. The life insurance will pass to Claude, but Blackacre will pass to Xavier.
D. The life insurance will pass to Claude, but Blackacre will pass to Zelda.
B. Transfer on Death Deed TODD
1) Deed must be executed and recorded inter vivos, but it does not become effective until the
death of the grantor.
2) Deed is revocable during the grantor’s life
3) Transfer is effective upon death and avoids probate
C. Superwill – permitted to change terms of will substitute
UPC only adopts if the contract permits the beneficiary of a policy to be changed by a
subsequently executed will.
D. Pension plans – property right in a fund of money
1) Defined Benefit – Employee receives annuity for the remainder of his life
-many couples purchase joint and survivor annuity
2) Defined Contribution Plan – Employee and employer contribute. Upon retirement, the
individual has rights to funds in his account
-ERISA, Fed law preempts state laws on time-of-death issues
IV. Multiple Party Accounts
A. Depositor’s Intent (why would they open a multiple party account)
1) Joint Tenancy
-right of survivor ship, passes nonprobate
-traditionally this is the only account out of these 3 that a bank would allow
2) Convenience/Agency
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- added only as convenience to depositor, no right of survivorship
3) POD Account
- No interest inter vivos, but right of survivorship
Extrinsic Evidence – used to assess true intent, even at common law
-paperwork that says joint tenancy creates a presumption that requires clear and
convincing evidence to overcome
-Criticism: promoting litigation/strike suits
UPC Approach - Presumption approach characterizes account from a joint tenancy to a POD
-Changes Burden of proof from commons law
B. Totten Trusts – set up by depositor in benefit of the beneficiary
-Depositor has legal title
-Beneficiary has equitable title
-It is revocable
-testamentary modification allowed
-survival requirement: yes, this is unique
V. Pour Over Wills and Inter Vivos Trusts
-Most common estate planning scheme today
A. Pour over will:
-Contains clause giving some or all of the decedent’s probate property to the trustee of the
decedent’s inter vivos trust
-The norm is to transfer the residuary
-Needs to be validated b/c does not follow wills act formalities
1) Common Law
a) Acts of Independent Significance
-A will can reference an act of independent significance as long as it has its own
significance apart from its effect upon distribution of property
-A trust has independent significance as the manager of property placed their
inter vivos
-Some courts require probate court supervision for the trust, treating it as a
testamentary trust
b) Incorporation by Reference
-1) the will expresses the intent to incorporate the document 2) the will
describes the document with reasonable certainty 3) the document was in
existence at the time the will was created
- #3 is the only issue up for contention usually
-Funding: references the trust instrument and not the trust. It doesn’t matter if
property is in there.
-Trust amendments: The document only incorporates the trust as it existed at
the time the will was executed.
-Otherwise will needs to be re-executed for updates
Probate Court Supervision: Deemed a testamentary trust
B. UTATA
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Requirements:
1) The will refer to the trust
2) Terms of the trust be set forth in a writing separate from the will
3) Trust instrument be executed prior to or concurrently with the execution of the will
-revised UTATA says you can sign any time before you die
-UTATA is a hybrid trust, can be completely unfunded at time of death, but still treated like an
inter vivos trust
Problem: divorce, should UTATA be treated like a testamentary which is subject to the
divorce doctrine, or an inter vivos trust, which is not
Validating pour-over clause
- First under UTATA
- If trust funded inter vivos then use acts of independent significance
- If trust not funded inter vivos then us incorporation by reference
-if none of these work then pour over clause fails and then the property passes
via intestacy or residuary
C. Revocable trusts
Benefits Inter Vivos
-Professional Management
-Segregating assets
- Taxes – stays with settlor of trust as long as he has power over trust
Benefits Time of Death
-Costs – probate is a lot
-Tying property up – probating takes a lot of time
- Creditors Claims
-Better to go through probate, limited time to bring claims
- Privacy – Trusts are private
- Ancillary Probate – for probate in other jurisdictions
- Family protection doctrines – some jurisdictions have protective doctrines to probate
property
-Testamentary Trusts – cost more money, they are typical of probate process
-Choice of law options – Inter vivos trust allows choice of law by settlor
-UPC gives testator’s the same benefit negating this benefit
-Challenges to the testamentary scheme – more difficult to challenge a trust
- Estate Taxes – no estate tax benefits exist
- Dead hand control – facilitates conditional gifts
VI. Joint Tenancies in Real Property
-Everyone owns with right of survivorship. When there is only one owner left then the property
goes to probate
-Execution of the will does not sever the joint tenancy
-Creditors of a joint tenant must assert while the tenant is alive
VII. Planning for the Possibility of Incapacity
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A. Asset management
1) Inter vivos trust is the best tool
2) Durable Power of Attorney
-creates principal – agent relationship
- continues despite the incapacity of the principal
-agent’s power terminates upon principal’s death
-scope of most durable power of attorney is created in writing
B. Health Care Management
1) Living will (advance directive, instructional directive or a medical directive)
-No extraordinary medical treatment occur when there is no reasonable expectation of
recovery
-Lack flexibility under many situations
2) Durable Power of Attorney for health care decisions
-Makes health care decisions for one after one becomes incapacitated
-Provides more flexibility
3) Decision maker for incompetent
-w/o any of the above states say immediate family authorized to make health care
decisions. Mirror intestacy usually.
4) Physician assisted Suicide
- Oregon
5) Disposition of one’s body
Uniform Anatomical Gift Act
-Give body to science
-All states have this in some form
LIMITATIONS ON THE TESTAMENTARY POWER TO TRANSFER
I. Spousal Protection Schemes: An Overview
Different Types:
1) Support for the rest of surviving spouses life
2) An outright share of the martial property
a) Separate property approach
-Has elective share claim regardless of the terms of the will
b) Community approach
-Half goes to the spouse from earnings made during the marriage. The other
half goes to probate
-This is better protection than Separate Property Approach
II. Surviving Spouses Right to Support
Has a right to:
-Social Security
-Private Pension Plan
-Homestead – Prevent children and wives from being evicted from their homes
-Personal Property Set Aside
-Family Allowance (1 year) to get back on your feet
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III. Surviving Spouse’s Right To A Share of the Marital Property
A. Elective Share (1/2 in MS) v Community Property (Spousal Election/Annunciation of Will)
1) Rights during marriage
-Spouse has rights under community property
2) Scope of Property covered
-Elective share covers all property, community just property acquired during the
marriage.
3) Fractional Share
-Historically 1/3 for elective and 1/2 for community.
IV. The Omitted Spouse (pretermitted spouse doctrine)
-Intended to omit spouse or just didn’t have a chance to revise will
A. Presumption
Where the testator 1) marries after executing his will and 2) dies without revising or revoking his
will. Creates a presumption that the testator accidently disinherited the spouse.
Rebuttable:
a) The failure to provide for the new spouse was intentional and that intent appears
from the will
-Intent must be express
b) The testator provided for the spouse outside of the will (intent that transfer outside
of will was in lieu can be shown by any evidence)
c) The spouse validly waived the right to share in the testator’s estate
B. The Share
-typical statute gives omitted spouse her intestate share of the testator’s property
1) UPC:
- Expands intent: Can be a general provision
-Receives half intestate share unless testator devises all his probate estate to his child or
decedents from a former relationship, the surviving spouse will not receiver her share.
2) Modern Trend
-Recognizes Inter vivos revocable trust as a will substitute commonly used
V. The Omitted Child
1) Omitted Child Presumption
-Testator meant to amend his will to provide for his child but died before getting around
to it.
-Many states also have a statute for overlooked child, believe to be dead or testator
doesn’t know
2) Rebuttable
a) The failure to provide for the new child was intentional and that intent appears from
the will
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b) The testator provided for the child outside of the will (intent that transfer outside of
will was in lieu can be shown by any evidence)
c) The testator had 1 or more children when will was executed and devised substantially
all of his estate to the other parent of the omitted child
-The child can inherit down the road
3) Share
-If presumption is not rebutted the child will get his intestate share
4) UPC
-Includes adopted children
-Evidence of intent to omit must come from will
-doesn’t look at third rebuttable factor
TRUSTS OVERVIEW AND CREATION
I. Definition:
A trust is a legal device that separates the benefits of property ownership from the burdens of
property ownership
A. Trust as a gift:
-Intent : use word trust, maybe not enough though, make intent clear
-Delivery
-Acceptance
Necessity of Trust Property: -there is nothing in here
-Must be ascertainable
Exception: pour-over trust from will
B. Three Requirements for Every Trust
-Settlor, grantor, trustor (creates)
-Trustee
-One or more beneficiaries (trustee can be the only beneficiary)
Settlor:
-Declaration of Trust
-Transfer in Trust
-18 years or older
Trustee: (trust will not fail for want of trustee, court will appoint)
-18 years or older
-bank or trust company w/ trust powers
-other institutions granted trust powers by statute
-you can have co-trustee’s
-benefit: a bank & a person, best of both worlds
Beneficiaries: (be a beneficiary over a trustee if given choice)
-Income Beneficiaries
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-Beneficiaries of corpus (what is left)
-Mixed (all the income + additional)
C. Equitable Remedy Trusts
1) Resulting Trusts
-Go back to settlor
2) Constructive Trust
-Fraud
-Mistake
-Undue Influence
-Breach of a confidential relationship
D. Revocable Grantor Trust: (MS 91-5-11)
Such devise or bequest shall not be invalid because the trust is amendable or revocable, or both,
by the settlor or any other person or persons; nor because the trust instrument or any
amendment thereto was not executed in the manner required for wills.
E. Mandatory v Discretionary Trust:
1) Mandatory: All the trust income payable annually to A
2) Discretionary: As much income as the trustee in her sole discretion deems necessary to A
F. Protective Trusts
1) Discretionary: safe from creditors and ex spouse until you get check
2) Spendthrift: Prevents child from assigning
-restraint on assignment and alienation
-good in except for child support
-use language not subject to voluntary or involuntary transfer
-can’t set up where you’re settlor and benefeciary
Appendix A: Extra questions
Ex. Rick Flair’s estate consists of sports memorabilia having a value of $150,000 and cash
totaling $70,000. Flair made the following bequests in his will:
1. I bequeath all of my sports memorabilia to George “the Animal” Steele;
2. I bequeath the sum of $600,000 to Randy Savage;
3. I bequeath the sum of $100,000 to Dusty Rhodes;
4. All the rest, residue and remainder of my estate, I bequeath to Hulk Hogan.
Assuming that all of Flair's debts have been paid and that none of the legatees are related to
Flair, how should Flair's estate be distributed
A. The sports memorabilia to George and $70,000 to Hulk.
B. The sports memorabilia to George, $60,000 to Randy and $10,000 to Dusty.
C. Everything to Hulk, because the residuary beneficiary is the primary beneficiary.
D. The sports memorabilia to George, and $70,000 to Randy.
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Ex. Sid conveys property to Trustee in trust “to pay Bertha the income for life.” There is no
provision for disposition of the corpus on Bertha’s death.
On Bertha’s death:
A. Trustee gets the property free of trust under the doctrine of merger.
B. The property passes to Bertha’s lineal descendants.
C. Trustee holds the property in a resulting trust for Sid or Sid’s estate.
D. Trustee holds the property in constructive trust for Sid or Sid’s estate.
Ex. Which of the following is generally true about trusts?
A.
B.
C.
D.
Trust assets are presumed to be assignable.
A trust can be created orally.
Trusts are presumed to be revocable.
All of the above.
Ex. In 2010, Bozo, died leaving a will validly executed in 2003. One of the provisions of Bozo’s
will left “my property at 81 Mary Street” to Clarabelle. In 2005, Bozo’s was judicially determined
to be incapacitated, and a guardian was appointed to oversee his property. During Bozo’s
incapacity, the guardian was forced to sell all of the property at 81 Mary, in order to assure
Bozo’s well-being. The net proceeds from the sale of the stock totaled $550,000. Fortunately,
Bozo recovered from his incapacity in 2008, and the guardianship was removed. Which of the
following statements is most correct?
Under modern statutes:
A. Clarabelle’s interest in Bozo’s estate was adeemed, because she was willed specific
property which was not part of Bozo’s estate at the time of Bozo’s death.
B. Bozo’s estate must pass via intestate succession since she lacked capacity at the time of her
death.
C. Clarabelle can petition the court for a pecuniary interest in the proceeds of the sale of the
specific property, unless there was a spendthrift provision in effect.
D. Clarabelle will be entitled to a general pecuniary bequest of $550,000 from the estate.
Ex. Which of the following statements is true about a grantor trust?
A. The settlor cannot be the trustee.
B. The settlor cannot be the trustee and a beneficiary.
C. The grantor trust avoids probate, but the assets can still be reached by the surviving
spouse’s elective share.
D. The grantor trust is really a legal fiction, and is thus subject to probate
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Ex. Peter Griffin’s will has a clause in it stating that any beneficiary contesting his will shall forfeit
any amounts given to them under this will. Brain was named as a beneficiary of $40,000 in
Peter’s will, but he is concerned that the will was never validly executed. If Brian files a petition
challenging the will:
A. The court will hear his challenge, but he will forfeit the amount left to him in the will.
B. He will forfeit the amount left to him under Peter’s will, and the court will refuse to hear her
challenge since he will no longer be an interested party.
C. The court will not hear his challenge, but he will be allowed to keep his share of the estate.
D. The court will hear his challenge, and he will not have to forfeit his interest in the estate, if
he can show that there is probable cause for the challenge. (maj/UPC approach)
Ex. In 2001, Fred created an irrevocable trust requiring the trustee to pay all of the trust income
to Wilma until she reaches the age of 30. When Wilma turns 30, the trust will terminate, and all
assets will be distributed to Wilma. In 2004, Fred died. In 2010, Wilma, aged 25, comes to your
office to seek your advice. Wilma would like to terminate the trust early and get all the assets
now, rather than waiting until she is 30. What advice do you give her?
A. Tell her that since she is the sole beneficiary, she can terminate the trust early, and without
court approval.
B. Explain to her that, because she is the sole beneficiary and the settler is dead, she can
terminate the trust for any reason with court approval.
C. Explain to her that, even though she is the sole beneficiary, the court will not terminate the
trust if it determines that continuance of the trust is necessary to achieve any material
purpose of the trust.
D. Tell her that the trust was void ab initio since violated the Rule Against Perpetuities by having
an age restriction greater than 21.
Ex. Using the facts in Question 21 (above), would your advice to Wilma change, if Fred was still
alive?
A. Yes. If Fred was still alive, the court could allow a termination or modification upon
consent of Fred and Wilma, even if doing so would defeat a material purpose of the trust.
B. Yes. If Fred was still alive, he and Wilma could terminate the trust without court approval.
C. No, because the court can never terminate an irrevocable trust if it determines that
continuance of the trust is necessary to achieve any material purpose of the trust.
D. No, because the Rule Against Perpetuities would still be violated.
Appendix B:
Mississippi Advance Health-Care Directive
Explanation
You have the right to give instructions about your own health care. You also have the right to name
someone else to make health-care decisions for you. This form lets you do either or both of these things.
It also lets you express your wishes regarding the designation of your primary physician. If you use this
form, you may complete or modify all or any part of it. You are free to use a different form.
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Part 1 of this form is a power of attorney for health care. Part 1 lets you name another individual as
agent to make health-care decisions for you if you become incapable of making your own decisions or if
you want someone else to make those decisions for you now even though you are still capable. You may
name an alternate agent to act for you if your first choice is not willing, able or reasonably available to
make decisions for you. Unless related to you, your agent may not be an owner, operator, or employee
of a residential long-term health-care institution at which you are receiving care.
Unless the form you sign limits the authority of your agent, your agent may make all health-care
decisions for you. This form has a place for you to limit the authority of your agent. You need not limit
the authority of your agent if you wish to rely on your agent for all health-care decisions that may have
to be made. If you choose not to limit the authority of your agent, your agent will have the right to:
(a) Consent or refuse consent to any care, treatment, service, or procedure to maintain, diagnose, or
otherwise affect a physical or mental condition;
(b) Select or discharge health-care providers and institutions;
(c) Approve or disapprove diagnostic tests, surgical procedures, programs of medication, and orders not
to resuscitate; and
(d) Direct the provision, withholding, or withdrawal of artificial nutrition and hydration and all other
forms of health care.
Part 2 of this form lets you give specific instructions about any aspect of your health care. Choices are
provided for you to express your wishes regarding the provision, withholding, or withdrawal of
treatment to keep you alive, including the provision of artificial nutrition and hydration, as well as the
provision of pain relief. Space is provided for you to add to the choices you have made or for you to
write out any additional wishes.
Part 3 of this form lets you designate a physician to have primary responsibility for your health care.
After completing this form, sign and date the form at the end and have the form witnessed by one of
the two alternative methods listed below. Give a copy of the signed and completed form to your
physician, to any other health-care providers you may have, to any health-care institution at which you
are receiving care, and to any health-care agents you have named. You should talk to the person you
have named as agent to make sure that he or she understands your wishes and is willing to take the
responsibility.
You have the right to revoke this advance health-care directive or replace this form at any time.
I wanted to let you know about a new Act that was passed by the MS. legislature. It goes into effect on
January 1, 2013. Those taking the MS Bar Exam this coming summer should take special note of it. Bar
examiners often ask questions based upon newly enacted legislation. The explanation of the Act is from
the MS Bar.
Appendix C:
New Law: HB 732: Principal and Income Act of 2013
The Uniform Principal and Income Act of 2013 (UPAIA) provides procedures for trustees
administering an estate in separating principal from income. The revisions better ensure the intention of
the person who created the trust is the guiding principle for trustees. The Act allows a trustee to
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make adjustments between principal and income in the event the trust’s income in a particular year is
too low. This provides a way to ensure the trustee is treating income and remainder beneficiaries in an
impartial manner. The Act conforms our Principal and Income Act with the State’s adoption of the
Uniform Prudent Investor Act which was signed into law in 2006. The Uniform Prudent Investor
Act allows trustees to maximize trust value by investing for total return. The 1962 version of the
UPAIA had conflicted with the Uniform Prudent Investor Act by requiring trustees to allocate assets
to maximize trust income at the expense of total return. Furthermore, The UPAIA clears up
confusion about whether certain types of receipts should be allocated to principal or to income.
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