PART 1: GENERAL TRUSTS & ESTATES POLICIES
SHOULD PEOPLE BE ABLE TO DECIDE WHAT HAPPENS TO PROPERTY AFTER DEATH?
a. YES: Encourage Gratuitous Transfers of Wealth
i. (1) Preserves Legitimacy – Integrity of court to find just results (public wants right to decide)
1. John Locke: Natural Law- right to dispose of one’s estate emanates from natural law- long custom
are creates of civil laws
2. Society acknowledges a connection between our lives and property. This may be partly why we
give so much respect to the desires of the dead expressed through their wills
ii. (2) Efficiency: Incentive to keep working and accumulate wealth during life
1. Hirsch & Wang- Qualitative Dead Hand: Testators have a natural right to bequeath – can do with
wealth what they please
2. Serves the public interest by promoting creation of wealth (jobs to run estate)
iii. (3) Utilitarian: Allowing people freedom of testation encourages them to take care of the elders, those who
benefit from the estate to provide services that otherwise would be provided by society
1. Life Cycle Hypothesis (Sherman): Devises are accidental. Risk adversity and uncertainty about
one’s own future needs and date of death
b. NO: State Should get Wealth upon Death
i. (1) Wealth Disparity: Accumulation may lead to wealth-based oligarchy (need social advancmnt)
ii. (2) Fairness: Unfair for people who didn’t make the money to inherit it at expense of the public
iii. (3) Don’t Want Dynasty Trusts: Statutes preventing lengthy dead hand control in RAP
1. C/L rule invalidates fut. interests that may vest beyond perpetuities period
a. No more than 21 years after death of last identifiable living person at time interest was
created (only violating part removed; rest is still valid)
b. Void interest: cut it right out of trust, create a resulting trust back to settlor's estate
2. Some states have adopted the Uniform Statutory RAP (provides 90 year window)
a. Uses a wait-and-see rule, look at real life to see if interest vests within 90-yr period
b. If it has not vested, USRAP allows trust reformation to make an ultimate distribution to
the principal of the trust in the way that most closely represents the intent of the settlor
c. Good Practice: In a well drafted trust with serial interests, lawyers will include a
Perpetuity Savings Clause for what courts should do with an interest if a court deems an
interest to not vest within the time of lives in being plus 21 years.
WHAT IS THE LAWYER’S ROLE IN TRUST AND ESTATE PLANNING?
a. Lawyer’s role is mostly a planner- to help the client achieve their objectives
b. Lawyer’s role is as a counselor (but only with compete information can you be an effective client counselor) Ask:
What facts are important for drafting purposes?
i. MR 1.6: Can’t reveal information relating to the representation of the client unless client consents
ii. MR 1.7: Can’t represent client if it’s a conflict of interest – repping one is directly adverse to other
iii. A fiduciary relationship exists when one has a special confidence in another so that the latter, in equity and
good conscience, is bound to act in good faith. (Hotz v. Minyard – car dealership)
1. Holding: Dobson was Judy’s attorney, he had an ongoing fiduciary relationship with her, so he had
a duty not to misrepresent the contents of the first will.
2. Good Practice: Sign a letter saying no secrets, and withdraw if you do
d. But screwed if you withdraw, so give them time to fix, or family meeting
iv. Majority: Attorney who drafts document owes intended beneficiaries a duty of reasonable care.
i. Most states don’t have a privity bar and would have allowed grandkids to sue in Barcello
ii. Whether a D owes a duty to the P depends on: Risk, foreseeability, and the likelihood of injury
weighed against the social utility of the actor’s conduct, the magnitude of the burden of guarding
against injury, and the consequences of placing the burden on D
v. Minority: Attorney preparing estate documents owes a duty only to his client (testator) not to third parties
benefited by the estate plan. (Barcello v. Elliott – no will signatures, grandkids screwed)
1. Holding: Because attorney did not represent beneficiaries, he owed no professional duty to them.
When a will is declared invalid, questions about what the testator wanted, so can’t hold attorney
responsible as it might have been deceased’s’ intent to invalidate will
2. Only 5 states uphold the privity bar found by majority opinion
3. Policy For: Attorneys are the cheapest cost avoider. No privity bar efficiently allocates risk to the
person responsible for drafting it – nobody else is in a better position to prevent negligence
(cheapest cost avoider)
4. Policy Against: Need to have limits on the AC relationship and liability to suit, don’t encourage
frivolous malpractice suits by disgruntled beneficiaries
PART 2: WILLS
DID THE PERSON DIE WITH A WILL?
YES, THERE WAS A WILL
a. UPC §2-502(a): Wills must be (1) in writing, (2) signed by testator or someone else with the testator’s
presence and direction, (3) either by two other individuals after testator (or acknowledged by a notary)
i. (b) Anything else is valid as a holographic will whether or not witnessed/ signed
ii. (c) Intent that a document be a will can be established by extrinsic evidence
iii. A will is an ambulatory instrument, it has no legal effect until the testator’s death, irrevocable then
iv. UPC §2-506: COL: Valid if executed in compliance with 2-205 or 2-503 or if it complies with the
law (1) at time and place where executed, or (2) testator’s domicile at time of execution or death
b. (1) Legal Capacity: UPC § 2-501 —an individual at least 18 y.o. to make a will.
c. (2) Testamentary Capacity & Intent: UPC § 2-501—testator must be of “sound mind”
i. UPC §2-503: Person executing will has to be “of sound mind” (legal, not medical standard)
ii. Testator is able to: (1) know the nature of the business they’re conducting (making a will), (2)
recollect the property to dispose of (the natural objects of their bounty), (3) scope of their property,
and (4) put them together in a coherent plan: At the time the will is EXECUTED or REVOKED
d. (3) Compliance with statutory formalities: Policy Functions served by Statute of Wills Formalities
i. (1) Protective (make it be in the presence of certain trusted people, witness decrease criminals,
reduces fraud or undue influence),
ii. (2) Ritual (formality, ensure careful reflection)
iii. (3) Evidentiary (hard copy is more legitimate, creates a record for probate if challenged),
iv. (4) Channeling (promotes uniformity, easier access to the courts to know what kind of document it
is, what’s required to go through probate, efficient)
v. Statute of Frauds: No action brought on any agreement not performed within a space of 1 year
unless the agreement is in writing, signed by the party to be charged
vi. Same requirements for wills to be in writing – tried to codify common practices among estate
planners (person in a K is still alive and can explain, but in a will, they’re not around anymore)
WHAT KIND OF WILL WAS IT?
1. NUNCUPATIVE WILLS: Declared orally as opposed to in writing – allowed in very specific circumstances
a. Common when people weren’t literate – speak will aloud before witnesses/court
b. Few states recognize and they limit amount that can be transferred (usually soldiers, sea)
2. NOTARIAL WILLS: Written will, signed by testator and attested to by a public notary
a. As seen in UPC § 2-502(a)(3)(b): common in Europe partly because public notaries have a better
legal status than in the US
3. A HOLOGRAPHIC WILL: Handwritten doc has less chance of forgery, enhanced assurance of authenticity
a. But sometimes creates problems –litigation, fraud, discovery of holographic wills after probate
b. Historical part of rural life where a dying T may not be able to find two disinterested witnesses
c. Type 1: Written, Signed and Dated: (9 states retain this rule for holographic will)
i. Absolutely everything has to be in the testator’s handwriting
d. Type 2: UPC “Material Provisions”: (7 have adopted this 1969 UPC approach)
i. UPC §2-502(b): A will not complying with §2-502(a) is valid as a holographic will, whether
or not witnessed, if signature and material portions of doc are in testator's handwriting
ii. Important provisions have to be in testator’s handwriting including dispositive language (“I
leave my residue to __”) and indication of testator’s intent
iii. But then issue because material provisions were not handwritten with form wills
e. Type 3: “Material Portions”: Some statutes require the entire holographic document be in testator’s
handwriting, dated and signed (material provisions in testator’s handwriting), issue with form wills
i. UPC 1990 version designed to validate a holographic will that has typed boilerplate form
ii. Court considers extrinsic evidence to determine whether document has testamentary intent
iii. Can look at type portion to show testamentary intent, and look at meaning of handwritten
language in light of the form provisions
f. A document is a codicil instead of a will if it amends a portion of the estate not the whole thing –
holographic if it doesn’t have every necessary element to be valid. (Estate of Charles Kuralt)
i. Holding: Sufficient evidence to find that the June 1997 letter expressed Kuralt’s intent to
effect a posthumous transfer of his Montana property
1. “Dear Pat” letter a holographic codicil, not will because only devised part of estate
g. Courts split on whether holographic will may incorporate by reference something typed. (Easter
Sunday Will) Fraud? No channeling function, more evidentiary function having handwriting on the
same page as the typed doc – prevents someone from typing something up and stapling it together
4. FORMAL ATTESTED WILL: Most common kind (95% of wills). Requires:
a. (1) IN WRITING: Unlikely that audio, video, or digital will would satisfy writing requirement
1. But see: Nevada says digital wills can be valid, but proponent must prove by clear and
convincing evidence that the digital file is the only file of the will that exists
b. (2) SIGNED BY TESTATOR
i. Any mark representing their consent or by proxy if proxy signs at testator’s request and in
their presence (focus on intent: what is closest thing to honoring the decedent’s intentions?)
ii. Taylor v. Holt: Can even have a computer generated signature
1. UPC eliminated “at the end” requirement of signing wills
iii. Publication – act of letting witnesses know that it’s a will that the testator signed
1. Usually orally – “this is my will and I want you to sign it as witnesses” but some states
require you to publish your intention and the witnesses (required in NY)
iv. Starting in 19th century, courts required signature to be at will's end (UPC doesn’t)
c. (3) SIGNED BY WITNESSES/ATTESTED
i. Most require that wills be attested- witnessed by a minimum number of competent witnesses
1. Requires witnesses to sign in the presence of testator – not “conscious presence” to be
down the hall (Morris v. West) – strict interpretation of rules, found invalid for probate
2. CL: An interested witness was struck from will (might make the will fail entirely)
3. Modern Majority: Void the gift to the interested witness but save the will and still
allow the witness to serve as a witness.
ii. Good Candidate: Witnesses who can be found easily, won’t die first, and who can testify at
the testator’s death, reputable in the community and who won’t inherit from intestate statute
iii. Attestation Clause: Boilerplate stating the will formalities have been satisfied (witnesses sign)
1. Makes witnesses be more aware of what they’re signing – then are bound to it
2. Not required by states, but creates a presumption that it’s valid in court
iv. Timing: Under UPC §2-502: ok if post-death signature is still within “reasonable time”
d. (“4”) – EXECUTION CEREMONY (not part of strict requirements)
1. Minimum Requirements: (1) will in final form (numbered, bound) with attestation
clauses and self-proving affidavit if authorized, (2) two witnesses present, or three if
risk of contest (drafter can be a witness) – law enforcement personnel good witnesses
2. One room with drafter and the client (review pages, introduce witnesses)
3. Sign only one document (ask “is this your will? Do you want it to be executed, etc.?”)
4. As testator to read the “testimonium clause” out loud (makes you see how competent
they are), then count the number of pages, initial each one, then testator signs
WHAT WAS INCLUDED IN THE WILL?
1. Integration Doctrine: Allows you to integrate multiple pages as a part of one single will
a. All pieces of paper which are present at the execution and which the testator intended to be part of
the will are a part of the will (stapler) – testator should sign or initial each page of their will
2. Incorporation by Reference: Will which disposes of property in accordance with an uncontested
document will be considered valid if: (1) The writing was in existence when a will is executed, (2) the
language of the will manifests this intent to incorporate the document, and (3) it describes the writing in
sufficient detail to identify it (UPC §2-510) (FOR ALL KINDS OF PROPERTY)
a. FOR PERSONAL PROPERTY: Can look at separate doc as long as the writing is (1) signed by testator
and (2) described items and devisee with reasonable certainty (UPC §2-513, modern but minority)
i. Allows tangibles to be executed after the execution of the will, can change it after too
b. Incorporation by Reference can apply to incorporate language or instruments that have never been
validly executed OR prior validly executed wills (like her diary /memo in Clark v. Greenhagle)
3. Republication by Codicil: A properly executed will may incorporate by reference into its provisions any
document not so executed and witnessed whether the paper refereed to is a list or memorandum if: (1) it
was in existence at the time will was executed, (2) and it is identified by clear and satisfactory proof
a. A codicil is a testamentary instrument in compliance with SOW that modifies, or revokes a will
i. Testator’s intention prevails provided that it is consistent with the rules of law
ii. Codicil and Will are treated as ONE WILL (date of execution is date testator executed codicil)
b. Clark v. Greenhagle: Personal property list modified over the years (“Ginny Clark farm picture”)
i. Holding: The will is treated as if it was re-executed at the time of the last codicil, so since the
last codicil was in 1980, the notebook was “in existence” when the “will” was executed
1. Judicial activism of them trying to do the right thing
4. Facts of Independent Significance: Escape mechanism from strict elements of incorporation by reference
a. UPC §2-512: Events of Independent Significance: A will may dispose of property by reference to
acts and events that have significance apart from their effect upon the will’s dispositions, and are
used to describe (1) who the will’s beneficiaries are, or (2) what property beneficiaries will receive
1. Legislators were worried about potential for fraud
b. What events may have changed the disposition of the testator’s estate after execution of the will?
1. Independent: Execution/revocation of another person’s will, (UPC §2-512) making a trust
a. A named beneficiary dying, the birth of a child, marriage
b. Referring to a brokerage account (point is to make money)
c. Referring to lists of people (who works there, membership in something else)
d. Referring to a security box (point is for safekeeping)
2. Not Independent: Put in a place with no purpose other than to differentiate disposition
a. Physical placement of assets (like in a drawer, high chance of fraud)
i. No reason for property in the envelope except to dispose of it under the will
b. Memorandum prepared in future about disposition of an estate
c. List written by testator (not list of something else – high chance of fraud)
c. In Re Tipler’s Will: Claimed holographic codicil was unenforceable because it referred do a doc
not yet in existence (H didn’t make his will until after W’s codicil), BUT a holographic will leaving
an estate to persons named as ben’s under H’s will would contain all material provisions in
Testatrix’ handwriting, and thus is valid as a holographic codicil even though the specific identity
of the ben’s is contained in another document were not in her handwriting, and it happened after
1. Holding: Mr. Tipler’s will had an independent significance of distributing his estate and
was not written with the intention of distributing Mrs. Tipler’s estate
WHAT IF THE WILL DEVISES SOMETHING THE TESTATOR DIDN’T OWN?
1. ADEMPTION: A devisee has been adeemed by testator’s disposal of specifically devised property
a. Where property can’t be properly transferred to beneficiaries because testator no longer owns it
1. No desire for them to get the value of property – just specific property not equivalent value
b. ADEMPTION BY EXTINCTION: Only applies to SPECIFIC GIFTS (not general or residuary)
1. If Specifically Devised Item Is Not in Testator’s Estate at time of his death:
2. IDENTITY Theory of Ademption: Specific gift is adeemed unless the item can be specifically
identified as part of the estate at the time of the testator’s death.
a. Church v. Morgan: Wrote will, then changed to higher yield account, then died
i. Can’t use extrinsic evidence to show the reasons why the money was
transferred to another account because the will is unambiguous on its face
ii. Holding: There was no ambiguity, but just series of stupid mistakes in
transferring money around after will execution – person gets screwed
iii. Notes: Could counter by saying “all of the funds” in account meant as of the
time when the will was signed/validated, OR that language followed by the
account name raises an ambiguity, can get extrinsic evidence before the court
3. INTENT Theory of Ademption: Courts allow extrinsic evidence to show the testator’s true
intent as to whether a specific gift should be treated as adeemed
a. Good Practice: If unsure of theory, attorneys should get clients to avoid specific
gifts to the extent possible – no problems with ademption, or just make clients super
aware that if they dispose of those assets then they must change the will accordingly
4. UPC §2-606: Non-Ademption of Specific Devises:
a. (a) Specific devisee has the right to specifically devised property in estate AND:
b. If a testator involuntarily had property taken away from them, and they haven’t been
fully compensated (like condemnation proceeding), even though the beneficiary
can’t receive the specific property, they are entitled to the cash value of that asset
i. This UPC code addresses indebtedness going the other way where someone
owes something to the beneficiary (like T transfers interest in fire insurance
payout after the house which they specifically dvised burns down), OR
ii. (4) Any real property or tangible property owned at death which testator
acquired as a replacement for specifically devised property, or
c. Some inquiry into the testator’s intent, away from identity theory and into intent
i. (5) A pecuniary devise equal to the value (at the date of disposition) of other
specifically devised property disposed of during testator’s lifetime
ii. ONLY IF (6) Ademption would be inconsistent with testator’s manifested
plan of distribution (so reduces specific devisee’s rights)
d. (b) If specifically devised property is sold/condemned/insurance or recovery for
injury is levied against it, specific devisee has the right to a general pecuniary devise
equal to the net sale price, amount of the unpaid loan/insurance proceed/recovery
i. Doesn’t create a loophole out of ademption for Church v. Morgan situation
e. (d): Section (b) doesn’t apply if after the sale/mortgage/recovery, it was adjudicated
that testator’s incapacity ceased and testator survived adjudication for at least 1 year
c. ADEMPTION BY SATISFACTION: Satisfaction is the failure of a non-specific testamentary gift
because the testator has already transferred the property to the beneficiary between time of the Will
execution and testator’s death. Does Not Apply to Specific Devises.
a. Ademption – Just need to have the non-existence of the asset (no writing)
b. Ademption by Satisfaction – Need intent that it counts against inheritance (writing)
2. Common Law: Presumption against satisfaction UNLESS the beneficiary claiming no
ademption by satisfaction was testator’s child (in which case presumption of satisfaction)
3. Modern UPC: Presumption against satisfaction can be overcome by WRITTEN evidence
a. UPC §2-609: Property given during testator’s lifetime is treated as a satisfaction of
devise if: (i) The will provides for deduction of the gift, or
b. (ii) The testator declared in a contemporaneous writing that the gift is in satisfaction
of the devise or its value is to be deducted from value of devise or
c. (iii) Devisee acknowledges in writing that gift satisfies devise or is to be deducted
4. (b) For partial satisfaction: value gift at time gift given or at testator’s death, whichever first
5. (c) If devisee fails to survive the testator, gift is treated as a full or partial satisfaction of the
devise under §2-603/4 unless testator’s contemporaneous writing provides otherwise
WHAT IF THERE IS NOT ENOUGH MONEY IN THE ESTATE TO FOLLOW THE WILL?
1. THEN THE ESTATE MUST ABATE. Abatement rules determine the order of priority among various
devisees when the value of the estate is insufficient to satisfy all of the devises in the will.
a. UPC §3-902: (a) Shares of distributes abate without any preference or priority between real and
personal property in the order of: property not disposed of in the will  residuary devises 
general devises  specific devises.
1. (b) But exception if the will has a different abatement order rule (this is just default)
a. Or if the testamentary plan would be defeated by the usual order of abatement, shares
of the distributes abate as may be necessary to give effect to the intention of the testator
b. If everyone is in the same class, but have to sell some property to satisfy creditors, what do you do?
1. Abatement within each classification is proportional. If one recipient’s property is sold, then
other beneficiaries have to reimburse the seller for the proportional amount they lost in sale
c. People with higher priority gifts less likely to suffer loss from abatement issues
1. FIRST TO ABATE: Residuary: Gifts setting that everything else is given to one
2. SECOND TO ABATE: General: Gifts stated in dollar amounts (“I give $20k to Bob”)
a. Demonstrative Devise: Somewhere between general and specific
i. “I give all of my real property to Z” (Probably specific but open to argument)
3. LAST TO ABATE: Specific: Explicit gifts (“I give my Monet painting to Darla”)
a. Normally tangible personal property, but can be a specific gift of land “I give Joe my
residence on Main Street” or “I give Marty my bank account at Liberty Loan”
b. **LOOK OUT FOR SECURITY INTERESTS IN PROPERTY**
d. In Re Estate of Potter: Daughter (“my house on Main Street), son (“1/2 of cash value of house”)
1. Step 1: Classify the gifts, but don’t look at the testator’s intent, look at the words of the will,
2. Step 2: Then abate from the priority given to the classes (Daughter’s specific > son’s general)
e. Good Practice: Ask about intent, can draft an equal abatement clause: “It is my desire under the
will to treat my Z and X equally, so if any abatement is required, I direct my executor to abate gifs
to my Z and X on an equal basis even if that means items of property must be sold.”
2. DO LIENS ABATE? (Normally involved in the class of specific gifts)
a. A lien is a security interest in property, which has to be attached to specific items of property
b. Common Law: When a will made a specific disposition of property subjected to alien, the devisee
took free and clear (estate pays mortgage) –unless contrary to testator’s intent under the will
c. Today’s Default Rule: Rebuttable presumption that specific devisee takes subject to a mortgage lien
unless testator’s contrary intent appears from the will or surrounding circumstances
1. Some banks have a provision requiring the loan to be paid off if the property is transferred
a. Banks can’t legally force repayment of inherited properties in sale, buyer assumes debt
2. “Just Debts” provision – will’s direction that executor pay testator’s “just debts” isn’t enough
to express an intention that the estate pay off the underlying mortgage
WHAT IF THE WILL LEAVES MONEY TO SOMEONE TOO YOUNG TO USE IT?
1. INTESTATE – Look at who was close to parents (grandparents, then siblings, then close friends)
2. WITH A WILL – Can appoint guardian, or conservator of minor’s estate, or create a trust in their name
a. Guardian of the Person: Appointment of guardian of minor children
i. Usually have alternate choices – if nobody contests person chosen under the will, then appointed
1. PHRASE: “If it becomes necessary that a guardian be appointed for any of my children, the
following people are guardians, in this order”
b. Conservator of the Minor’s Estate: What to do with child’s inherited property?
i. Property guardianship – more expensive, conservator picked by will or court appointed
1. Supervised by court, unless child/guardian makes direct complaint to the court about handling
of property, only intervention is annual filing of transaction accounting
2. PHRASE: “I nominate Z as conservator of the estate X and guardian of the property of such
child if appointment becomes necessary”
c. Trust for Beneficiary Under 21: If this will distributes property to a beneficiary who has not
attained the age of 21 years, then such distribution is to be held in trust by (trustee) to distribute for
the benefit of such beneficiary’s expenses as his discretion deems appropriate to pay for support –
i. Short Form Trust: (Created in supplement pg 38)
1. Payments made for support, educational and medical expenses
ii. Full Trust: Best for significant property, more detailed provisions
1. Can specify more clearly the kinds of distributions to be made (like what type of school?)
3. BY STATUTE – Can set aside property for orphans
a. Custodian under Uniform Gifts to Minors Act (18) / UTMA (21): Alternative to putting it in the will
1. Statutory way of setting aside – Provides simple trust where custodian manages property for
minor child and can spend money for kid’s use or benefit
2. Custodian instead of a conservator – ultimate distribution at different ages
WHAT IF THE WILL’S NAMED BENEFICIARY ALREADY DIED?
1. Void Devises- If testator devised to a person who was dead at the time of will drafting and executing
i. Different than a lapsed devise (died between will execution and testator’s death)
1. Some jurisdictions’ antilapse statute applies to both
2. If the beneficiary dies after will execution, then the gift lapses, unless an anti-lapse statute applies
1. IF IT LAPSES: Goes into your residuary
2. IF ANTI-LAPSE APPLIES: Goes to the devise’s recipient’s descendants
3. Cure: Use multi-generational language unless testator wants to exclude issue of deceased
3.
4.
5.
6.
7.
8.
9.
4. Automatic Cancellations: If after will execution, testator and stepchild’s parent divorce,
devise to stepchild is revoked – so antilapse statute would NOT save the revoked devise
COMMON LAW: If a devisee dies before the testator, the law assumes the testator wouldn’t have wanted
devised property to pass to devisee’s descendants or heirs SO THE GIFT JUST DISAPPEARED - LAPSED
a. No orbit at common law, and no override language
b. However, most jurisdictions (except LA) have an “anti-lapse” statute that gives the devise to the
children of deceased instead of reverting back to the testator’s estate. Most anti-lapse statutes
protect a gift only if it’s made to someone who is of close relation to the testator – anti- lapse statute
won’t apply to reincarnate gift if too far out of “orbit” (orbit distance varies by state, escheat line?)
Good Practice: Lawyer needs to talk with client about various contingencies
a. Spell out the plan carefully to avoid any ambiguity in phrasing, name alternative/ substitute takers
PRE-1990 UPC §2-605: (Majority)
a. Orbit: Saves gifts to devisees who are grandparents and lineal descendants of testator’s
grandparents (aunts, uncles, nephews, nieces)
b. Mere words of survivorship ARE ENOUGH to override anti-lapse statute
1. Issue of deceased beneficiary takes the devise by representation
POST-1990 UPC §2-603: (Minority)
a. Orbit: Saves gifts to grandparents and descendants of grandparents AND STEP KIDS
1. Or the donor of a power of appointment exercised by the T’s will
b. Mere words of survivorship ARE NOT ENOUGH to override anti-lapse statute
1. Insert an express "alternative devise" under UPC §2-603(b)(4), or OR under (b)(3) provide
additional evidence that shows a sufficient indication of intent around anti-lapse statute
2. Morse v. Sharkey: “50% thereof to my brothers and sister that survive me, share and share
alike, or to survivors thereof”
a. Enough signs of intent to override the anti-lapse statute because of its duplicative
nature, but the 50% that goes to “H’s relatives” doesn’t apply to anti-lapse statute
because not within the protective orbit
c. UPC §2-603(b)(4): Alternative Gift: Names an alternate taker to receive the gift intesad of the
devise passing to the deceased person’s heirs
1. Alternative taker is valid if that person is allowed to take under the will (no contest)
2. Substitute gift- when the anti-lapse statute does apply, and the gift goes to your kids
a. Substitute gift is superseded by the alternative taker
LAPSE OF SPECIFIC & GENERAL DEVISE: If a specific or general devise to a beneficiary lapses, property
passes into the residue of the testator’s estate
a. Ex: $50k to D, and the remainder of my estate to X,” but then D dies, $50k goes to X in residuary
LAPSE OF RESIDUARY DEVISE: If testator devises the residue of her estate to one person and that lapses,
residue passes by intestate succession
a. Old: If two residue recipients, and one dies, the other gets the fraction of the residue which they
would have split, rest by intestate succession (if both die, goes through intestacy)
b. Modern: If two residue recipients and one dies, remaining survivor gets all (no intestacy), but if
both residuary beneficiaries die, then through intestacy
LAPSE OF CLASS GIFTS: Disposition to individually named beneficiaries, which form a natural class
a. If individuals are named, it is to be treated as a gift to the individuals absent clear and convincing
intent to create a class gift (Not a class gift “To my bowling partners, Bob and Joe”)
b. COMMON LAW: If testator devises to a class, the remaining class splits evenly the amount that
would have gone to a devisee of the class if they hadn’t predeceased the testator
1. The C/L rule would exclude the deceased class member's issue
c. UPC §2-603(B)(2): If it is a class gift (but not to issue, descendants, or heirs or relatives/family) then
a substitute gift is created in the surviving descendants of a deceased devisee
1. Property devisee would have gotten is passed along to their issue by representation
d. If they compete, ANTI-LAPSE RULE TRUMPS CLASS GIFTS (If class is within the orbit):
1. "I give $100,000 to be divided among my brothers"
2. Class gift would tell us to shift the gift from going from 5 to 4 people, if one of class
members died before testator, BUT applying the anti-lapse rule, brothers are in the
protective orbit, so anti-lapse trumps and dead brother’s issue inherits his 1/5 share
3. But if there were words of survivorship, or alternate takers, those would trump
YES, BUT THE WILL WASN’T COMPLETE
1. Courts might be selective about the formality requirement if they feel that someone is being taken
advantage of, or someone is being wrongly disinherited, but being flexible incentivizes attorneys from
being careful, might do statutory minimum and ultimately increase litigation overall
a. Good Practice: Lawyer should know state statutory requirements, be totally compliant
EVEN THOUGH THE WILL IS NOT VALID UNDER §2-502, CAN IT BE USED?
2. YES: If there is an intention to make a statutorily invalid will stand as the final version, extrinsic
evidence can be allowed to show testator’s intent. (Estate of Hall)
a. Joint Will (invalid for lack of witnesses), specifically invalidated former wills, and H instructed W to
tear up the Original Will – so extrinsic evidence shows intent to make Joint Will binding
b. Holding: Need two witnesses to watch the testator sign, but if not, can still be valid if the
circumstances show that the decedent intended the doc to be the will
3. (1) Harmless Error/Dispensing Power: Even though a document wasn’t executed in compliance with
UPC §2-502, treated as if it was if it establishes by clear and convincing evidence what testator wanted
a. Dispensing power is a mechanism for assuring the testator 's wishes are given full effect, despite
lapses by the lawyer, or by an uncounseled testator. Dispensing power will eliminate many instances
in which courts have frustrated T's intent by rigidly adhering to statutory formalities
4. (2) Substantial Compliance Doctrine: Judicially created, will that has less than the strict statutory
formality requirements can be admitted if it has testator’s testamentary intent and sufficiently conforms to
formalities so that the underlying purposes of the formalities are served
a. Too ironic to insist on literal compliance if it invalidates what testator intended – frustrates the whole
purpose of formalities (but how to prove intent?)
b. In Re Rainey: Testator and witnesses didn’t sign on the attestation clause, just the self-proving
clause (isn’t even part of the will), looked at each policy element –valid even tho unsigned, no 2-503
5. (3) Strict Compliance with Gloss: Hold with strict compliance, but small door for extreme circumstances
of minor non-compliance (best rule if state doesn’t completely validate a near-miss rule like §2-503)
a. Ex: Two wills for a couple- husband signed wife’s and vice versa
b. This case is so unique, validate this one without undermining the bright line rule
6. (4) Strict Compliance: Need 100% compliance with the statute
a. No substantial compliance, no deviation with gloss or policy argument
EVEN THOUGH IT MET §2-502, I DON’T KNOW WHAT THE WILL MEANS?!
1. If testator’s actual thoughts can’t be ascertained directly, then goal of interpretation is to infer from the
terms on the page, the testator’s intent the words represent
a. Interpretive issues arise even when there is no “time gap” (like abatement, ademption and lapse
deal with events testator or lawyer didn’t anticipate during will execution)
2. Method 1: Reading the Wills as a Whole
a. Reading of the will as a whole might show testator’s meaning even though a particular devise
appears ambiguous – don’t look beyond 4 corners of doc (unless an extraordinary circumstance)
b. Ex: Will says “I leave everything to my daughters Jane and Jane to be divided equally” but rest of
will has “daughters Jane and June” (obvious it’s a type-o)
3. Method 2: Plain Meaning Rule: Courts adopt the “plain meaning” of the words of a will and will
prohibit admission of extrinsic evidence unless the terms of the will itself are ambiguous
a. Construe words according to their technical meaning unless a contrary intent is apparent. Look at
the primary and ordinary sense of the word. (Estate of Carroll)
i. Estate of Carroll: Whether “nieces and nephews” included both side of family
1. Holding: Primary meaning should control. Niece/nephew just means immediate
descendants of the named person’s – not their in-laws.
2. No contrary intent to use anything other than plain technical/legal meaning of the
words, no ambiguity was present in will, so no extrinsic evidence is admissible
ii. But courts differ (same thing, opposite result in Martin v Palmer)
1. RST (3d) Property: Endorses more liberal approach: ALLOWS EXTRINSIC
evidence to cure, and doesn’t distinguish between patent and latent ambiguities
b. Evidence of surrounding circumstances are inadmissible to control the construction of the will, or
to discern the intent of the testator. (Britt v. Upchurch)
i. Declarations of testator’s intent are inadmissible to control the construction of his will
ii. Direct declarations of testamentary intent are inadmissible to explain a latent ambiguity,
and one can use extrinsic evidence to prove things other than testator’s intent. Use
evidence about conveyances to prove no undue influence, or mental capacity
WHEN IS THERE AN AMBIGUITY?
c. Ambiguity is an uncertainty in meaning that is revealed by the text or by extrinsic evidence other
than direct evidence of intention contradicting the plain meaning of the statement. If no doubt
exists as to property bequeathed, identity of beneficiary, there is no room for extrinsic evidence.
d. LATENT: Ambiguity becomes apparent with reference to extrinsic evidence in its application
i. IF YOU WANT EXTRINSIC EVIDENCE, ARGUE IT’S A LATENT AMBIGUITY (NOT PATENT)
ii. A latent ambiguity presents a question of identity and extrinsic evidence can be admitted
to identify the person or thing to which the will refers
1. Direct statements of testator’s intent are generally not admissible, except if used
to “solve” an equivocation (leaving it to “Danny” if he has three lover Danny’s),
maybe would be allowed if court is clarifying instead of adding to the will
2. Ex: If testator has 2 daughters but leaves property “to my daughter” but one was
disowned after she married outside the faith – introduce extrinsic evidence?
iii. Britt v. Upchurch: Give my daughter my “House at 2615 Cooleemee Street”
1. The word “residence,” creates a latent ambiguity, and extrinsic evidence is
admissible to find testator’s intent – extrinsic evidence used to infer how the
property was used, was not a direct statement of what testator meant in his will
e. PATENT: Ambiguity that is apparent on the face of the will (leaves house to X in one part of the
will, but to Z in another – uncertainty on the face of the will)
i. Once ambiguity is categorized as patent – historically didn’t allow extrinsic evidence, but
now more likely to allow extrinsic evidence (but minority trend)
ii. Ex: “I give the variable portion of my estate to X” – what does “variable” mean?
f. MISTAKE: Mistake if the language of the will has only one meaning but that meaning isn’t the
testator’s intent – a word or phrase in the will that doesn’t mean anything
i. C/L MAJORITY RULE: A court WILL NOT allow in extrinsic evidence to reform a will
to rectify a mistake, instead the provisions are just deleted. (Knupp v. DC)
ii. Knupp: Clause 5 says X passes to person in Clause 3, but nobody listed
1. Extrinsic evidence can be used only to interpret something written, but not to add
something to the will) – most courts follow this mistakes can’t be cured by
reformation no matter how strong the extrinsic evidence is
iii. RST§12.1/UPC §2-805: Can revise a mistake (doesn’t matter whether it was the testator
or drafting attorney who made it) as long as there is clear and convincing evidence of
what the testator intended AND that there was a mistake of fact or law
1. Allows courts use extrinsic evidence to reform a mistake or omission in the will
2. Erickson v. Erickson: Reviewing a will where the lawyer improperly listed a
group of charitable beneficiaries of the residual estate
3. Scriviners Errors Rule- If the mistake is caused by the drafter, not the testator,
and there is clear and convincing evidence of the nature of the mistake and the
testator’s true intent, then extrinsic evidence WILL BE allowed to resolve
mistake (even if it means adding language to the will)
iv. Policy: Risks opening the floodgates to litigation b/c allows anyone to claim a mistake
v. Good Practice: Lawyers aren’t guarantors of their documents – but expected to have
reasonable professional competence
1. Knupp – Lawyer had to agree that there was malpractice (clear case)
2. Britt – Was “residence” ambiguity something lawyer should have seen?
HOW DO COURTS ADDRESS AN AMBIGUITY?
g. ALLOW EXTRINSIC EVIDENCE:
i. Using outside evidence to illuminate meaning of the words testator used in will
ii. Always need some outside information (who is “daughter” in the will?) to distribute
h. Construe ambiguities by looking at donor’s intent established by a preponderance of the evidence
i. Policy For Allowing: Sometimes outside evidence is best proof of testator’s intent
1. Fairness: If it was an attorney’s mistake, can’t penalize the deceased
2. Intent: Should strive to honor the deceased by getting as close to their intent as
possible and the best way is to read the document in light of their outside life
ii. Policy Against Allowing: Too many uncertainties involved in introducing extrinsic data
1. Statute of Wills: The document should be able to stand alone as testator’s intent
2. Judicial Economy: Benefit of keeping probate streamlined and straightforward
but introduction of extrinsic evidence delays and confuses
3. Potential for Fraud: Testator likely wanted that document alone to be able to
decide disposition of their estate, not some other person speaking later
a. The will is the only evidence of intent that should be allowed
YES, BUT IT SHOULDN’T BE USED
1. THE WILL VIOLATES PUBLIC POLICY
a. A will’s provision will not be enforced if it violates public policy. If the provision is found to
violate public policy, the violating condition is struck, but the gift remains.
i. If condition in a will that calls for something illegal, then it per se violates public policy
1. Provisions attempting to disrupt existing family relationships are typically invalidated
ii. Incentive trusts are allowed, but watch out for unintended consequences (slayer, Ford)
b. Unconstitutional to restrict marriage by religion. Can’t restrict marriage under 14th A, and can’t
discriminate based on religion, state involved because enforcing the provision
i. Shelly v. Kramer: Deed subject to restrictive covenants allowing sale only to whites, state
enforcement was an action under the constitution
c. A gift conditioned on recipient marrying into a certain class is reasonable. A partial restraint of
marriage which imposes only reasonable restrictions is valid, and not contrary to public policy
i. The right to marry is protected from restrictive state legislation, but this is a restriction on his
access to money, not the right to marry whoever he chooses. (Shapira v. Union National)
1. Rule: From a constitutional standpoint, a testator may restrict a child's inheritance, and
because it’s only a partial, not a total restriction, it’s not contrary to public policy. Seven
years is adequate time to find someone, and allowed to look from whole Jewish faith
2. Shapira court distinguishes from Shelley by saying that here, the court is not being asked
to enforce any restriction upon Daniel's constitutional right to marry. Rather, it is being
asked to enforce the testator's restriction upon his son's inheritance.
2. THE WILL WAS REVOKED OR WAS ATTEMPTED TO BE REVOKED
a. METHOD #1: REVOCATION BY SUBSEQUENT INSTRUMENT/ INCONSISTENCY
i. UPC 2-507(a): Whole or part of will is revoked if testator: (1) expressly revoked prior wills,
or (2) revoked it with inconsistency if subsequent will makes a complete disposition of the
estate, (3) if subsequent will makes an incomplete disposition, assumed to be a codicil
1. UPC doesn’t use “codicil” but “subsequent will” to avoid confusion
2. Revocation of a codicil leaves the will, without the revoked codicil, intact
ii. There must be sufficient testamentary intent to revoke a subsequent will, as proved in the
creation of a new will, which disposes of the testator’s estate. (Gushwa v. Hunt)
1. One can revoke a previous will by a will or a codicil, but you can’t revoke with a
document that doesn’t dispose of any property – no sufficient testamentary intent
because even though he signed paper with appropriate formalities to make it a will (T
and two witnesses signed it), the second document wasn’t a will, because it didn’t
dispose any of his property (Gushwa v. Hunt – faxed half the will, edited photocopy)
b. METHOD #2: REVOCATION BY PHYSICAL ACT
i. Good Practice: Inform client that any marks on the will are important so let a lawyer re-draft
something don’t just write on it because those markings may make the whole thing invalid
ii. UPC 2-507(a)(2): Whole or part of will is revoked if testator: performed a revocatory act on
the will, if the act was preformed with the intent of revoking the whole/part of will, or if
someone else did it in the testator’s conscious presence by their direction
1. Includes: burning, tearing, canceling, obliterating, or destroying will or ANY part of it
iii. CL presumption (rebuttable) that a mark on the will is the testator’s and that it was
done with intent to revoke the will (in whole or part).
1. Revocation by anything other than writing on the actual will itself is invalid. To revoke
by a physical act, must be performed “on the will” so a photocopy isn’t enough – need
to write on the original copy (Gushwa v. Hunt)
iv. Partial Revocation by Physical Act: The UPC permits partial revocation by physical act
(majority), while some states prohibit partial revocation (minority) – worried about fraud
1. Majority: Most jurisdictions allow partial revocation but do NOT allow a T to directly
change or modify (as opposed to revoke) a provision for a devisee by physical act.
v. If testator possessed the will until death, and it can’t be found after death, then there is a
presumption that testator destroyed the will with intent to revoke. (Henson-Hammer)
1. Strength of presumption depends on control decedent had over place where it was kept,
and who else had access to the will (here – the daughter was suspect, wanted intestate)
2. Daughter doesn’t take advantage of presumption – only in effect when testator is the
only one with access to the will, so since she had access presumption was overcome
a. So classified as a “lost will” – probated as long as terms can be shown with
sufficient definiteness (here photocopy is enough for probate)
b. Revoked v. Lost Will: Necessary to have revocatory intent to revoke it, but if
you’re disorganized and throw it away, might just be a “lost will”
c. METHOD #3: REVOCATION BY OPERATION OF LAW:
i. Like divorce, omitted kids – court automatically thinks your intention must have changed
1. Applies to interests/benefits created in a will AND those created by other “governing
instruments”; applies to trust and non-probate transfers (life insurance, pensions)
ii. Modern UPC §2-804: Revocation of Probate/Non-Probate Transfers by Divorce
1. Revokes any revocable disposition of property made to a former spouse, or nominating
of a divorced individual’s former spouse or their relatives from any representative
capacities (but nullified if they remarry or if divorce is invalid)
a. Egelhoff v. Egelhoff: (Federal pensions beneficiary contracts are binding
regardless of divorce, but may be different under state law if they adopt UPC)
iii. Pre- 1990 UPC§ 2-508: Revocation by Change of Circumstances
1. Except under §2-804, a change of circumstances does not revoke a will or any part of it
a. Revocation by divorce only applies to interests/benefits created in a will.
WHEN WOULD YOU BE PREVENTED FROM REVOKING A WILL?
i. UPC §2-514: Contracts Concerning Succession
ii. A contract about disposition may be established only by showing: (i) the material provisions
of a contract, (ii) express reference in a will to a contract and extrinsic evidence proving
terms of the contract, and (iii) writing signed by decedent evidencing contract
1. Joint Will: Courts frequently find contract obligations when parties execute joint wills
2. Mutual Wills: Joint will made at the same time and the wills are basically mirror images
a. Some jurisdictions say that it provides evidence of the existence of a K (not all!)
3. Garrett v. Read: H&W had same will, H died, wife rewrote – disinherited husbands kids
a. Holding: Original will was both a will and a K. Was revocable as a will, but
enforceable as a K. To establish that reciprocal wills were executed under an
agreement, court didn’t need express contractual provision, used extrinsic
evidence from drafting attorney, and inferred from plural pronouns, joinder and
consent language – a constructive trust was a proper remedy
iii. Good Practice: What if she had won the lottery after? Need to draft provisions about wealth
accumulated: Have to do something special and particularized to them – want to decrease
litigation (maybe draft a specific contractual agreement into the mirror wills)
1. A PREVIOUS WILL WAS REVIVED
a. Revocation of last will doesn’t reinstate prior will – reinstatement requires formalities and intent
that aren’t present in destroying final will
i. Steps: (1) Have Valid Will #1, (2) Revoked by Valid Will #2, (3) Will #2 Revoked
b. RESTRICTED REVIVAL: Will #1 comes back to life if it is re-executed with proper formalities or if
it’s republished by codicil (codicil adopted that refers back to Will #1)
i. Majority: Will #2 legally revokes Will #1 when Will #2 is executed
1. BUT will #1 is revived when Will #2 revoked if testator so intends
ii. Minority Non-UPC: Revoked will cannot be revived unless re-executed with testamentary
formalities or republished by being referred to in a later duly executed testamentary writing
c. UPC §2-509: REVIVAL OF A REVOKED WILL:
i. (a) WHOLLY REVOKED: If subsequent will that revoked previous will is later physically
revoked under §2-507(a)(2), the previous will REMAINS REVOKED unless it is revived (as
shown that the testator intended previous will to take effect as executed (at that time or later)
ii. (b) PARTLY REVOKED: But a later will that partly revokes a previous will DOES REVIVE the
portion of the previous will unless it is evident that the testator didn’t want the previous
portion to take effect (so presumption that it reinstates unless overcome)
iii. (c) WHOLLY OR PARTLY REVOKED: If a later will that revoked a previous will is also
revoked by a later will (now 3 wills) – the previous will remains revoked unless it’s part is
revived. The previous will is revived to the extent that it appears from the terms of the later
will that the testator intended the previous will to take effect.
1. Will #1 (validly executed) is either wholly or partly revoked by Will #2
a. Then Will #2 is revoked by Will #3 (a subsequent instrument)
b. SO Will #1 only revived if within the terms of Will #3 (no automatic revival)
d. DEPENDENT RELATIVE REVOCATION (DRR):
i. If a testator purports to revoke will upon a mistaken assumption of law or fact, the revocation
is ineffective if testator would not have revoked the existing will if knew they knew the truth
1. Policy: If there is no valid revival, then look to DRR as escape tool to follow T’s intent,
assuming that T would rather have the old will than for estate to pass through intestacy
a. So say Will 2 is closer to what they had wanted
2. (1) Valid revocation  (2) Revocation was based on a mistake that new document could
be given legal effect  (3) Provide good evidence of testator’s actual intent
ii. Oliva-Foster v. Oliva: Will #1 left life insurance to wife, then wrote Will #2, wife gets life
insurance, then H told W to tear up Will #1, Will #2 was invalid for lack of witnesses (true)
1. Holding: Will #1 wasn’t revoked by subsequent instrument, because “Will #2” in 2002
doesn’t count – but Will #1 is revoked by W tearing it up at H’s direction
2. DRR applies –intended the old will to be destroyed and new will to take its place, intent
he wanted Will #1 to apply (and both wills leave insurance to W, so same result really)
3. Will #1 is revoked on condition that will #2 is valid, condition isn’t satisfied, so the
condition of will #1 isn’t impacted
2. TESTATOR DIDN’T HAVE THE CAPACITY TO MAKE IT
a. Policy for Requiring Standard: Protect family members’ expectations of inheritance, protect their
true intent, (lost when they get old or lose their mind), want to improve legitimacy of courts
b. INCAPACITY: Capacity is a question of fact for jury - determined at time the will was executed
i. UPC §2-503: Person executing will has to be “of sound mind” (legal, not medical standard)
1. Capacity is sufficient if testator is able to: (1) know the nature of the business they’re
conducting (making a will), (2) recollect the property to dispose of (the natural objects
of their bounty), (3) scope of their property, and (4) put them together in a coherent plan
ii. The burden to prove no capacity falls on the contestant (otherwise capacity is presumed)
1. Can you still have capacity if you have Alzheimer’s? Courts say yes.
iii. Good Practice: Maybe don’t make a will now, wait until they recover (stroke, withdrawal)
1. Lawyer must exercise their own judgment – if they clearly lack testamentary capacity,
obligated to not draft a will (but err on the side of exercising testamentary freedom) – no
need to hire a doctor – close calls can be decided in court (suspicious if you get a doc?)
a. Err on the side of finding testamentary capacity (try to effectuate their desires)
2. Barnes v. Marshall: Will with $½ M estate left $5 to only heir, off meds/Jesus/President
a. Holding: Sufficient evidence he lacked testamentary capacity as seen in his
eccentricities. Forgetfulness isn’t evidence of incapacity or unsound mind BUT
HERE, the stories go beyond “eccentricities” and are sufficient evidence of
unsound mind – plus strong medical testimony that he was unsound
iv. Insane Delusion: A testator’s insane delusion will invalidate the will for lack of capacity if the
delusion produced the disposition made in the will. (Dougherty v. Rubenstein)
1. Testator must have a belief that: (1) no similarly situated person with access to the same
facts could believe, and (2) THEN a causal link between insane delusion, and the
dispositive plan you want thrown out
a. His will must have been a consequence of this insane delusion – if they have an
insane delusion, but it doesn’t impact disposition in the will, will is valid
2. Policy: Can you allow disinheritance if they acknowledge why they’re disinheriting
someone, and it’s a mean but logical reason?
3. Dougherty v. Rubenstein: Old alcoholic, son put in home after hospitalized, neighbor
moved him out, thought son was stealing, cut son out of will, son sued estate
a. Being able to care for yourself independently for 6 years is not proof of
testamentary capacity, but he wasn’t insane because this wasn’t unfounded
b. Belief that son moved him into home was real, so he could have been
disinherited from resentment, not from an illusion, so maybe thinking son stole
was an insane delusion, but it didn’t cause the disinheritance
c. UNDUE INFLUENCE: Where free will of testator is overcome by someone else’s desires
i. Argument: Intent of the influencer is substituted for the intent of the influence, written will
does not reflect the testator’s true intent (usually involves a threat or manipulation)
1. DO NOT need lack of capacity for undue influence (but often go together)
ii. Presumption that person contesting the will has the burden to prove undue influence, but if
they can show: (1) the existence of a confidential relationship between the testator and the
person charged with influencing testator, and (2) suspicious circumstances in the creation of
the estate plan where dominant party receives a benefit, then burden shifts to a presumption of
undue influence – person saying will valid has to prove otherwise
1. DeLapp v. Pratt: Normal will, then changed leaving whole farm to the son
2. Step 1: Was there a confidential relationship?
a. Normally confidential parent-child relationships only when: (1) There is a
fiduciary relationship (like if a kid were overseeing assets), or (2) if there is
reliance (testator relies on person who is charged with influencing)
b. Dominant subservient: If the influencor is dominant to the influencee because of
their superior knowledge (like doctor, lawyer, tries to advise older parent)
3. Step 2: Were there suspicious circumstances?
a. Consider whether there was: (1) Secrecy of will’s existence, (2) testator’s
advanced age, (3) lack of independent advice in will’s preparation, (3) testator’s
illiteracy or blindness, (4) the unjust or unnatural nature of will’s terms, (4)
testator being in emotionally distraught state, (5) discrepancies between will and
testator’s expressed intentions, (6) fraud or duress toward testator
iii. Good Practice: Could have used family meeting – so they were all aware that she wanted
Arthur to get the farm, OR have her evaluated by a shrink
1. But only get a certification by a shrink if it’s questionable whether she’s normal or not
2. Its bad to put extrinsic evidence of testator’s direct dispositive intent? But the extrinsic
evidence is meant to address her capacity – not directed at resolving the ambiguity
iv. As an attorney, don’t draft the will if you know you’re getting more than other siblings
1. Some jurisdictions void any gift to drafting attorney regardless of evidence
2. Many jurisdictions presume undue influence if drafting attorney benefits
3. Presumption can be rebutted by proof of obtaining independent counsel
a. MR 1.8: May breach if you draft a relative’s will and you’re a beneficiary and
don’t inform them that they should get an independent attorney
d. CONTESTING THE WILL
i. No-Contest Clause: States that a beneficiary who challenges the will has their gift under the
estate is voided (so have to give them something in the will for the provision to apply)
1. But if they lose, then beneficiary doesn’t get anything, so have to give them a big chunk
to pay them off enough not to contest the will
ii. Good Practice: Have testator write letter saying why/how they’re structuring estate plan
1. Start planning before he got sick – living with it a long time shows his intent
2. Policy: Does this increase litigation where the No-Contest clause tries to prevent it?)
iii. MAJORITY: If a will contest fails, the no-contest clause is enforceable and the will contestants
lose what they would have received under the will had they not contested it
iv. MINORITY: UPC §3-905: A will provision penalizing an interested person for contesting the
will or instituting proceedings is unenforceable if probable cause exists for the proceeding
1. Probable Cause: RST 3d §8.5 "probable cause exists if: A reasonable person would
believe that there was a substantial likelihood that the will contest would succeed."
v. Seward Johnson: Old man married younger girl, kids wealthy, multiple will revisions, left
increasing amounts to wife, gave nothing to kids, younger wife gets all
vi. Holding: Will valid, but H should have brought in another lawyer who doesn’t have such a
close relationship with the wife (she was drafter, executor of estate and trustee, big fees)
1. Could have used a no-contest clause – but would have had to pay them off basically
3. THE SURVIVING SPOUSE WANTS TO ELECT INSTEAD
a. Most separate property states protect surviving spouses from disinheritance by creating a statutory
right to a fixed share of the inheritance
i. Policies For: Society wants to encourage a partnership theory of marriage, don’t want to have
one spouse accumulate all the assets while the other is responsible for domestic affairs
ii. Policies Against: Posner- Inefficient to negotiate what happens if you breakup
b. Common Law States: Treat property as individually owned unless husband and wife took title as
tenants in common (Separate property, as opposed to “community” property)
i. Elective share descends from C/L interests of dower and curtesy (which were life interests) =
early approach to elective share in U.S. was to treat elective share as a support interest. Over
time, we've moved toward viewing the policy support for elective share as marital partnership
c. Elective Share Statutes: Permitted surviving souse to elect to take a statutory percentage
i. Sometimes a wife can waive her husband’s will and take same portion of the property that she
would have taken had he died intestate – the statutes do not apply to property husband
conveyed during his lifetime and which wasn’t part of his estate at death
1. Can be claimed in cases where there was either a will or intestacy
a. There must be MARRIAGE at time of death – surviving spouse has to file an
election with the probate court to claim it (6-9 months)
b. UPC §2-212(a): Surviving spouse is living when petition filed for elective share
ii. However, in order for there to be an equitable determination of what constitutes the deceased
spouse’s “estate,” courts sometimes look to “illusory transfers” or to intent to defraud the
marriage by leaving the surviving spouse an artificially low remaining estate
1. Intent to Defraud: Whether transfer was made with consideration or was a gift, size of
transfer as % of total estate, time between transfer and death, relations between husband
and wife during transfer, source from where property came, whether transfer was
illusory, whether wife was otherwise adequately provided for
iii. Sullivan v. Burkin: $15k through probate to wife, but $85k in trust, wife wanted trust
1. The trust was not testamentary in character – not included as estate assets
2. All property that goes through the probate system AND any property that the decedent
“gave away” but retained an interest in such that the transfer is really more testamentary
than inter vivos. IF the transfer was “illusory”  gift is still valid, BUT the property in
question is included in the decedent’s estate subject to the elective share
a. No inquiry into motive/whether transfer was in bad faith):
iv. Neuman v. Door: 80 y.o. married a 40 y.o. she moved out, too hard to divorce
1. Holding: This act was a fraud on the marriage- intent to defraud the wife of the share
she is entitled to under the marriage statute
v. APPROACH 2: Use UPC either Pre-1990 or 2008
STEP 1:
Calculate the Net
Probate Estate
(Same)
UPC §2-204: Augmented estate (created in 1969) includes:
 Assets owned by decedent directly, and other interests that H transferred during
his life, but retained ownership control over or gave it away so close to death that
we say it was owned at death
o Reduced by funeral/administration expenses, homestead allowances,
family allowances, exempt property, and enforceable creditor claims
STEP 2:
Calculate NonProbate Transfers
by Decedent NOT
Surviving Spouse
(Same)

STEP 3:
Calculate NonProbate Transfers
by Decedent to the
Surviving Spouse
(difference in
whether or not to
add in surviving
spouse’s own
assets)

STEP 4:
Compute value of
surviving spouse’s
“augmented estate”
Add transfers from decedent TO OTHERS over which:
o Over which: Decedent retained the right to possession/income, or decedent
retained the power to revoke, consume, or invade the principal;
o Property transferred into joint tenancy (but not with surviving spouse)
o Any property transferred by the decedent within two years of death, to the
extent the transfer exceeded $3,000 per donee per year;
1969 DEAD MAN  SPOUSE:
o Property transferred to
surviving spouse during
decedent’s life
o Property received by
surviving spouse at
decedent’s life
o Life insurance proceeds,
trust payouts, pension
payments
 EXCLUDES the surviving
spouse’s property/SS’s transfers
to others during marriage that
kept strings of ownership
 EXCLUDES life insurance
payments to a third party
 §2-203(a):
 NET PROBATE + TRANSFERS
= AUGMENTED ESTATE
STEP 5:
Compute “marital
property portion”
of augmented
estate

FINAL STEP
Determine if
disposition for
spouse is sufficient
for elective share

Surviving Spouse gets 1/3 of the
augmented estate


PROBATE TRANSFERS


NET PROBATE + TRANSFERS
= AUGMENTED ESTATE

§2-203(b): Multiply augmented estate
by % that is keyed to length of marriage
They have been married for __ years so
(_%), so gets $X = marital portion
Then you could elect to get 50% of the
marital portion
Lifetime gifts don’t have to be included
because already presumed to be
included in the surviving spouse’s
amount
But include non-probate transfers to
others besides surviving spouse
Numbers aren’t even, but same as prorata calculation


INCLUDES life insurance payments
to third parties
INCLUDES the surviving spouse’s
property at decedent’s death and SS’s
lifetime transfers during marriage to
others that kept strings of ownership
(charged against the elective share)


Did the surviving spouse’s
disposition make up enough to
satisfy the elective share?
If not, abate from other
dispositions to satisfy the pool
o Allocated ratably from
each transfer
2010 DEAD MAN  SPOUSE:
o Life insurance, etc.
ADD IN SURVIVING SPOUSE’S ASSETS
AND SURVIVING SPOUSE’S NON-



vi. WAIVER OF ELECTIVE SHARE RIGHTS
1. Good Practice: Each party should have a full schedule of assets attached to the
agreement so that it is clear that full disclosure is made
a. Only allowed under the PRE if you can competently represent both parties
b. Maybe malpractice if you write a will and each wants to disinherit the other
spouse but you don’t make either sign a waiver of that right – duty to inform
2. Form: A written contract signed by the surviving spouse (before or after marriage ok)
3. UPC §2-213: Waiver of Right to Elect: Applies to right to election of homestead
allowance, exempt property and family allowance (either in whole or in part)
4. Unenforceable If: (1) waiver executed involuntarily, unconscionable when executed, or
did not have or could not reasonably have had an adequate knowledge of the property or
financial obligations of the decedent (Geddings v. Geddings)
d. Community Property States: Assume that both H&W share in ½ of assets – all accumulated by
either spouse during marriage – assumed to be based on the joint efforts of husband and wife
i. Marriage as a partnership – recognize one spouse’s efforts while the other is raising the kids
ii. Each spouse only has testamentary capacity over his or her half of the community property
1. Policy: Community property cuts down on risk-taking or overall economic productivity
because both spouses have to work, and then pay people for their services rendered
a. Or both contributed to marriage, should have equitable division of tangible assets
2. Usually “estate” is all your separate property, and ½ of the community property that you
can do whatever you want with
a. Separate property (got before marriage and gifts/inheritances during marriage)
b. Community property (all earnings and property acquired during marriage by
either spouse (besides gifts and inheritances)
3. Community property states have no elective share statutes
iii. How does a spouse transfer property from personal to community property?
1. Looking for evidence of “transmutation” where property moved from separate 
community property (presumption that it stays separate)
iv. JOINT TITLE GIFT PRESUMPTION: Property was titled in both the names of H&W
1. Need a separate writing saying that you intend to transmute it from separate property to
community property (ex: a “transmutation agreement” or if deed had said “as
community property and not as separate”), problem with “comingling” where you can’t
trace the original account balances
v. AT DEATH: If first spouse dies and doesn’t have a will, all their separate property and their
“half” of the community property goes intestate.
1. The surviving spouse gets their ½ immediately  The other ½ goes into the deceased
spouse’s estate where it will be distributed according to his/her wishes
vi. Estate of Borghi: W owned house, married, paid off then re-titled it in both names, died
1. Issue: Is real property acquired by one spouse prior to the marriage later community
property once they are married? Did the inclusion of the other spouse on the deed
change it from separate property to community property?
2. Holding: No. Character of property is determined at the date of acquisition (designated
when you get it), then have to overcome this presumptive designation to change it
a. There must be sufficient evidence of intent to overcome the presumption that the
separate property becomes community property –change in legal title is not
controlling evidence to overcome presumption
b. Dissent: Reasonable for any non-lawyer to think that holding property in both
people’s names makes it community – she did this change, so her intent is clear
vii. ISSUES FOR MIGRATING COUPLES: Marry in one state and then moves to another kind of state
1. Separate  Community: Quasi-Community Property: Surviving Spouse has to show
what part of deceased spouse’s estate would have been community property if it had
been earned/acquired in a community property state throughout their marriage
a. Property acquired in separate property state remains separate after moving, but
presumption that property is considered community property under transmutation
2. Community  Separate: Historically, surviving spouse got to between elective and
community property, but then statute passed (UDOCPRADA, 15 states), to correct the
problem of spouses moving to separate property jurisdictions and taking ½ community
property share, and then electing to get another portion of the remaining assets
i. If your spouse is going to die, want it to be community  separate
ii. Says the surviving spouse does NOT get the elective share of the
community property in the estate
4. SOMEONE WAS LEFT OUT
a. (1) INADVERTENT DISINHERITANCE OF SPOUSE – OMITTED SPOUSE
i. Arises When: The will is made  then the marriage must occur AFTER the marriage
ii. Policy: Legislators assume that testators who fail to change their pre-marital wills do so
inadvertently – marriage automatically revokes a pre-marital will
1. Good Practice: Sign a codicil, restate the terms of the existing will, so republishes and
brings it forward in time - the will would incorporate by reference the prior amendment
of the trust (happened before codicil), or wait until after you get married to execute will
iii. Minority: If a person marries after making a will and the spouse survives Testator, the will is
revoked as to SS, UNLESS provision has been made for spouse by marriage K, or is provided
for in the will, or is mentioned in the will in such a way as to show an intention not to make
such provision; and no evidence to rebut the presumption of revocation. (Prestie v. Prestie)
1. Prestie v. Prestie: H&W married, moved to Vegas, divorced, H gave W life estate in
condo, but will an trust gave nothing to W, son got everything
2. Holding: An amendment to an inter vivos trust cannot be used as evidence to rebut the
presumption that a will is revoked as to an unintentionally omitted surviving spouse
when the two are married – looked ONLY at the will, where wife was not provided for
iv. Majority UPC Approach: §2-301: Entitlement of Spouse- Pre-Marital Will
1. If a SS married T after T executed his/her will, SS is entitled to receive as an intestate
share, no less than the value of the share of the estate he/she would have received if:
a. Testator had died intestate as to that portion of the estate, if any, that is neither:
i. (1) devised to a child of the testator born before marriage (from another
marriage) nor, (2) devised to a descendant of such child UNLESS:
1. It appears from the will or other evidence that the will was made
in contemplation of the testator’s marriage to surviving spouse
2. OR the will expresses the intention that it is to be effective
notwithstanding any subsequent marriage OR
b. (3) Testator provided for the spouse by transfer outside the will
c. IF all of the decedent’s estate is going to his children – Surviving Spouse
SHOULD take the ELECTIVE share instead of the omitted spouse share
2. So Prestie decided under UPC: surviving spouse would get ½ of probated state (NV
intestacy), and still gest life estate in the condo from the trust
b. (2) INTENTIONALLY DISINHERITED CHILDREN
i. Intentional Disinheritance: Theoretically, parents have the full right to give nothing to kids
1. Louisiana protects children against intentional disinheritance (if under 24 or invalids)
2. If desired, use language of affirmative disinheritance with specific reference to the child
ii. Discretionary Approach: Court decides, but might lead to too much litigation, and interferes
with testamentary freedom (but litigation rare in Australia where used)
iii. Policy: Most of the developed world recognizes testamentary freedom, but other countries
balance that right against morality and justice to the dependent family members
1. UK Jurisdictions: More contact between children - parents (kids know they will get
money regardless of parents intentions, so more conversations about finances)
2. Family maintenance statutes (in other countries) would permit judge to make awards to
omitted spouse or children based on the circumstances for their family maintenance
c. (3) OMITTED CHILDREN:
i. (1) WILL WRITTEN BEFORE THEIR BIRTH
1. When any testator omits to provide in his will for any of his children, unless it appears
that such omission was intentional, such child must have the same share in the estate as
if he had died intestate (Estate of Glomset)
ii. UPC §2-302(a): If a testator fails to provide for any of their children born or adopted after the
will, the omitted after-born/adopted child receives a share in the estate as follows:
1. (1) No kids when will written: Kid gets intestate share, unless SS takes under will
2. (2) Testator had 1+ kids alive when will executed who took under it: After-born can:
a. (i) Get a portion of the estate that the then-living children were given
b. (ii) Receive what child would have received if testator gave all kids equal shares
Children covered?
All of decedent’s children (OK)
Children born after will executed (UPC)
Admissible evidence?
No extrinsic evid. (MO, OK)
Extrinsic evidence (MA, UPC)
3. What kind? The interest given to after-born kid must be of the same character, equitable
or legal/present or future, as that devised to the then-living children under the will
a. Omitted child cannot take more than the devises made to the testator’s thenliving children. (Divide (total $ devised to then-living children) / (# of children))
4. Whose share is it taken from? Devises to the testator’s children who were then living
when the will was executed abate ratably to provide for the omitted child’s portion
5. What exceptions? Neither (a)(1) or (a)(2) applies if the omission was intentional or, the
testator provided for omitted after-born by a transfer outside of the will (in lieu of will)
as shown by the testator’s statements or the amount of transfer or other evidence
a. If testator fails to provide because they believed the child to be dead, child is
entitled to share in the estate as if the child were an omitted after-born child
iii. (2) PRETERMITTED CHILD
1. A person who would likely stand to inherit under a will, except that the testator did not
know of the party at the time the will was written
2. C/L: Presumed that omission was INTENTIONAL
3. MODERN STATUTES: Presumed that omission of child was UNINTENTIONAL
a. So pretermitted kids inherit as if they were an after-born child after a will, unless
you think they’re an intentionally disinherited (then just follow will)
4. Missouri-type: Extrinsic evidence not generally available to show testator’s intent
a. Estate of Glomset: Joint wills, if both died, went to son, no mention of daughter
i. Holding: No extrinsic evidence allowed. No ambiguity, and clear that he
didn’t mention daughter, and no reason not to – she’s a pretermitted heir.
ii. Dissent: Statute is meant to protect from unintentional– this is intentional
5. Massachusetts-type: Extrinsic evidence generally admissible to prove intent
a. Excluded child entitled to inherit unless such omission appears intentional
b. Whose share is it taken from? Devises to testator’s then-living children when will
was executed abate ratably to provide for the omitted child’s portion
iv. Overcoming Pretermitted Child Statutes
1. Padilla: “I declare that I have no children whom I have omitted to name or provide for
herein” (INSUFFICIENT)
2. Hilton: Leaving a nominal gift to “any person who seeks to share in my estate as a
pretermitted child” (INSUFFICIENT)
NO: SOMEONE DIED WITHOUT A WILL
I.
DISTRIBUTION OF ESTATES UNDER INTESTACY LAW
a. Intestate: Property of a person who dies without a valid will are to be distributed in accordance with the
intestate succession statutes in effect in the jurisdiction
b. Policy: Give property to those who deserve it
i. Look at efficiency- Who will put property to the best use for economy?
ii. Look at intent- look at decedent’s actual relationship to beneficiaries and who they would on average
probably give to (most common)
1. How would people determine likely preferences? How would courts enforce?
WHEN ARE INTESTACY STATUTES APPLICABLE?
(1) Someone with no will
(2) Someone with a will that was invalid
(3) Property owned by decedent that was not included in the will
(4) To interpret a provision in will leaving to “my heirs” but not specified
(5) To determine who has standing to contest a will
WHO GETS THE PROPERTY UNDER INTESTACY LAWS?
1. The UPC’s general policy is encourage family harmony, and to not differentiate between traditional and
non-traditional marriages with respect to adoption, and divorce
a. Preserve debtor’s basic human dignity, to relieve taxpayers of obligation to provide for insolvent
debtors, to promote efficiency – personal property likely to be worth more to debtor than to anyone
else – stays with person who values them most
b. Intestacy laws reflect the probable intent of the decedent. US laws are in contrast to China and
British Commonwealth countries, where probate courts are given more discretion to give property
to relative who are needy or deserving and had a special relationship with the decedent
c. WAIVER OF RIGHT TO ELECT - APPLIES TO HOMESTEAD/FAMILY AND EXEMPT PROPERTY
i. UPC §2-213(a): Right of election may be waived, wholly or partially before or after marriage,
by a written contract signed by surviving spouse.
1. (b): Waiver is unenforceable if surviving spouse proves that: (1) waiver executed
involuntarily, unconscionable when executed, or did not have or could not reasonably
have had an adequate knowledge of the property or financial obligations of the decedent
2. Homestead Allowance Exception
a. UPC §2-402: Homestead allowance is exempt from and has priority over all other claims against
the estate – like creditors – and is in addition to any share passing to the surviving spouse or minor
or dependents by the decedent’s will (unless provided by intestate succession or by elective share)
i. UPC homestead allowance doesn't protect the physical house for the family; just gives the
family cash that can be used in any way they want
ii. Includes: Clothing, some exceptions for family homestead
1. If Surviving Spouse: Entitled to a homestead allowance of $22,500
2. If no Surviving Spouse: Each minor child and each dependent child of decedent is
entitled to the same homestead allowance ($22,500) divided by number of children
iii. Applies to: Surviving spouse and minor children remain entitled
3. Family Allowance Exception
a. UPC §2-404: Surviving spouse and minor children whom decedent was supporting are entitled to a
reasonable allowance in money out of the estate for maintenance during period of administration
i. In addition to: Homestead, exempted property, and anything passing to kid or spouse in the will
ii. Duration: Not longer than one year
iii. Payout: Paid as a lump sum or in installments, paid to surviving spouse if living, or to children
or persons in their custody
1. Maximum amount is $27k (personal rep’s can make family payments up to $27k
without being asked, but above that is at probate court’s discretion)
4. Exempt Property
a. UPC §2-403: Protects up to $15k of “personal property” (some states include cars) from the claims
of creditors – family can put it to more use than stranger
i. In addition to: Homestead, exempted property, and anything passing to kid or spouse in the will
ii. Includes: Household furniture, cars, appliances, personal effects
iii. Amount: Spouse or children are entitled to other assets needed to make up the $15,000 value. If
there is no surviving spouse, decedent’s children are entitled jointly to the same value.
a. Rights to make up a deficiency of exempt property has priority over all claims
against the estate – but abates as necessary for homestead and family allowance
5. Creditors
6. Surviving Spouse Take to the Exclusion of Descendants
a. Difference between real property (rules of descent) and personal property (rules of distribution)
i. Surviving spouse wasn’t an “heir,” but has a lifetime interest in decedent’s real property
WHO IS A SPOUSE?
i. Common Law Marriage: C/L marriage used to be common, deemed married if you were
living together for a certain number of years, but it was complicated so not all states use it
ii. Same-Sex Partner: Many states ALLOW same-sex partners to acquire intestate succession
rights by registering as domestic partners or entering into a “civil union”
iii. Transgender Partner: KS found marriage between a transgender individual was void under
KS law, so spouse NOT ALLOWED to entitled to inherit under intestate succession
No descendants/parents survive decedent
All kids are from that marriage AND
surviving spouse has no other surviving
descendants
Parents but not descendants survive
All surviving kids of dead man are with
the SS, BUT surviving spouse has 1+
surviving kids not with decedent
1+ of dead man’s kids are not from SS
Surviving spouse takes 100%
Surviving spouse takes 100%
SS takes $300,000 plus ¾ of the balance
SS takes $225,000 plus ½ of the balance
SS takes $150,000 plus ½ balance
7. Descendants Take to the Exclusion of Parents or Collaterals
a. A decedent’s direct lineal descendants take to the exclusion of collateral relatives
i. So long as decedent has children, grandchildren, or great grandchildren, virtually all intestate
succession statutes preclude D’s siblings or any more distant relatives from inheriting
ii. Any living descendant of decedent cuts off rights of the descendant’s own children to inherit
WHO IS A DESCENDANT?
i. Most courts have to interpret intestacy statutes not adopted to deal with these unique problems
ii. Half Blood: Normally treat half-bloods and whole-bloods the same under the UPC
1. UPC §2-107: Kindred of Half Blood: Relatives of the half blood inherit the same share
they would inherit if they were of whole blood
iii. Adopted Kid: Creature of statue because not recognized by common law
1. UPC §2-118: Adoptee and Adoptive Parent: A parent-child relationship exists between
an adoptee and the adoptee’s adoptive parent, but once adopted, there is no parent-child
relationship between adopted kid and their genetic grandparents, unless:
a. (In these cases have two sets of parents for inheritance purposes only)
b. (1) Stepchild is Adopted by Stepparent (UPC encourages step-parent adoption)
c. (2) Kid is Adopted by Relative of Genetic Parent
d. (3) Kid is Adopted After Death of Both Genetic Parents
e. (4) Kid is Product of Assisted Reproduction, or Gestational Child Later Adopted
2. Non-UPC: Estates of Donnelly: Opposite result than UPC – cut off for good
a. The legislature intended to remove an adopted child from his natural bloodline
for purposes of intestate succession, so the statute says adopted child is not to be
considered an heir of his natural parents (cuts off inheritance from natural
grandparents too) (even though she was adopted by her step-parent
iv. Kid Out of Wedlock: SCOTUS almost said that illegitimacy is a suspect classification
1. UPC §2-117: No Distinction Based on Marital Status: A parent-child relationship
exists between a child and child’s genetic parents regardless of parents’ marital status
a. Have to go through adjudication to establish parent/child relationship (DNA)
2. Trimble Gordon: Allowed inheritance from intestate father was court ordered to support
3. Lalli v. Lalli: Permitted a non-marital child to inherit from father only where there had
been a declaration of paternity before father’s death
v. Foster Kids: Only if parents placing kid in foster home contracted for foster family to adopt
1. Look at direct expression of the decedent’s intent to adopt and acting consistent with
that intent by establishing a close familial relationship
2. Clear and convincing evidence that the parent considered the child to be their child (CA
rule), as shown by: conducting themselves as parent/child, providing financial support,
long-term relationship, child takes parents name, intent of parties, etc.
3. Adoption by Estoppel: Look at reasonable detrimental reliance which arises when a child
lives with adult and adult conducts themselves so that kid relies on them as parents
vi. Kids from In Vitro: Look at intent to become parent to decide if relationship forms
1. The functioning of genetic parents being considered the same as legal parents is the
foundation of the modern inheritance system. However, this is complicated when…
2. Uniform Probate Code: Looks at an intent-based approach to defining parent-child
relationships (looking at actions and intentions instead of legal relationships)
a. UPC §2-210: Assume that sperm donor has no intent unless proven otherwise
i. Unless intent to act as parent, donor has right to anonymity (not parent)
b. UPC §2-212: Woman carrying a kid under a gestational agreement without
intent to function as the resulting child is the “gestational carrier” not the parent
i. BUT assume that the woman who becomes pregnant with aid of
reproductive technology intends to be the child’s mother
ii. People Who Can be Involved: Hopeful mother, hopeful father, biological
mother, biological father, gestational carrier (surrogate)
3. Social Security Benefits: Under federal law, benefits are available to deceased’s minor
children if the child would have been an intestate heir under applicable state law
a. Woodward: Banked sperm before undergoing chemo treatments, but then he
died, she use the sperm and had twins, claimed survivors social security benefits
b. Holding: If deceased had an intent for sperm to be used, they can inherit
ii. Kids Born After Parent’s Death:
1. C/L: If child is born within 10 months of death, presumed the dead husband is the father
2. Length of Keeping Estate Open: How long, and how much should be reserved?
a. UPC (not adopted anywhere) requires that child be in utero within 36 months of
death of the parent (CA says 2 years), potion of estate has to be set aside
3. Rule: No clear way to reserve part of the estate for the potential beneficiary, maybe just
keep the whole estate open for that length of time that other beneficiaries might come up
WHAT IS THE JURISDICTION’S RULE FOR DISTRIBUTION?
a. Good Practice: Have a provision in the will that names and describes the rule that you want to
apply (administer my estate under the per stirpes rule, meaning that x”)
b. PER STIRPES/STRICT PER STIRPES DISTRIBUTION: Gives descendants the same shares they would
have received IF: (1) Order of deaths had been “normal,” (2) assuming that X’s kids wouldn’t first
consume all inheritance, and (3) assuming that kids would be who parents would leave estate to
i. Step 1: Divide into shares at first generation descending from the decedent (even if all/no dead)
1. Unless an entire chain is completely dead, then divide into that chain
ii. Step 2: Give each surviving kid one share, and give the deceased kid’s kid’s an equal percentage
their parent’s would have received had they been alive (don’t recombine for next generation)
2. Critique: May cause equally related individuals to be treated differently,
therefore, known as “strict” per stirpes (grandkids might get different amounts)
c. MODERN PER STIRPES DISTRIBUTION: Most states use this (MAJORITY APPROACH!)
i. Step 1: Find the closest generation to the descendant with someone living
i. Closest generation is the siblings (look at the oldest and the closest to them in age)
ii. Step 2: Divide by the number in that generation (both surviving and deceased)
iii. Step 3: Then the living people in that generation take that amount, but that generation’s kids
split if their parents are dead
1. First generation gets same amount, but if share passes down, grandkids different
2. Applies “equally near equally dear” ONCE, then reverts back to the per stirpes rule
d. UPC’S §2-103 PER CAPITA AT EACH GENERATION (“REPRESENTATION PROVISION”)
i. Step 1: Start at the closest generation with someone living
ii. Step 2: Divide by the number of shares (including those who have already died)
a. The remaining estate is divided into as many equal shares as there are surviving descendants
in the generation nearest to D which contains one of more surviving descendants (kids), or
whose descendants have surviving descendants (grandkids)
iii. Step 3: Then recombine what’s left, and divide between number alive at next generation
a. Each surviving descendant in the closest generation gets one share, and the remaining
shares, if any, are recombined and then divided in the same manner among the surviving
descendants of the deceased descendants (everyone in a generation gets the same amount)
b. Complaints: Somebody in the great grandkids gets mad that one side of the family gets to
split more because the other side has more kids
8. Parents Take to the Exclusion of Collaterals/Others
a. (1) UPC is a type of “parentelic” system – Where they first look to descendants of deceased, then
to the parents of the deceased, then to the siblings of the parents of the deceased
i. UPC 2-103(a): Surviving spouse  descendants  parents
1. Give equal shares to both surviving parents, or all to one parent if only one is living
a. If no parents, then look to grandparents, each side getting ½ to split up, if
grandparents are dead, then divide by number of other kids that grandparent had,
and then passes down each side like per stirpes (dead uncle’s share goes to nieces)
2. Once it’s on each side, use the “by representation” to decide how to allocate per side
b. (2) Others have a “degree of relationship” system – Estate is distributed to decedent’s “next of kin”
as defined by Table of Consanguinity
i. Niece – 3, Grandparents – 2, so someone with a closer degree of relationship takes first
ii. Closest person gets all, or if multiple people as close, split evenly among them
WHEN IS SOMEONE A PARENT?
a. (1) If the Parents are Married and Kid Born during Marriage (Uniform Parentage Act: §204(a)(1))
i. Crusades Presumption – If a kid was born within 280/300 days of the husband leaving,
presumed to be the child of that man (kids born after the death of “father” at war
b. (2) Assumed to be the Mom If: (Uniform Parentage Act §201):
i. You gave birth to the child, you were judged by a court to be the mom, you adopted the kid
c. (3) Assumed to be the Dad if: (Uniform Parentage Act §201):
i. You were assumed to be the dad and you didn’t object, you acknowledged that it was your kid
(and didn’t rescind or challenge acknowledgement), court judged you the dad, you adopted it,
you consented to assisted reproduction which resulted in the birth, reside with kid for 2 years in
the same household
d. Wingate v. Estate of John Ryan: Child didn’t now who was father until 10 days before genetic
dad’s death, Catholic, didn’t want to tell people he had it (DNA matched, estate didn’t contest heir)
i. Probate Code was binding but informed by factors in Parentage Act (which gave her the right to
inherit from presumed dad (Wingate) and from the genetic dad)
1. Amended the standard of proof based on advanced DNA technology. She filed within a
“reasonable time” because she filed a day after he died, even before probate proceeding
2. Policy: Don’t want to give immunity to parents of children born out of wedlock who
don’t establish parentage before they’re 23
9. Collaterals/Non-Relatives Take the Rest
a. If decedent had no close living relatives, closest living relatives (even if distant) were entitled to
inherit – only if decedent had no living relatives would decedent’s estate escheat or pass to the state
b. Collateral – Brothers and sisters, nieces, cousins – anyone who isn’t a direct lineal descendant
i. Wife’s sister’s kids are called nephews/nieces, but can’t inherit under intestate statues
1. Brothers/sisters in law are not entitled to intestate succession
2. Step kids aren’t included in descendants or “issue” (UPC only gives step kids
inheritance rights in limited circumstances)
ii. UPC: Only way it goes to step-kids, and everyone else has to be dead
c. Modern “Laughing Heir” Statutes: At C/L, if D had no close relatives, his closest living relatives
remained entitled to take, no matter how distant in relation.
10. If No Heir can be Found, Estate Escheats to the State
a. When decedent dies intestate without heirs, estate typically escheats to the state, or governmental
entity as designated by statute, but courts don’t like to escheat (even though don’t like “laughing
heirs” who are happier with their inheritance then they are sad at death of distant relative)
i. UPC §2-105: No Taker: If there is no taker, then the intestate estate passes to the state
II. ISSUES IN ESTATE DISTRIBUTIONS
WHAT IF YOU DON’T KNOW WHO DIED FIRST?
1. Simultaneous Death: Applies to both intestacy and wills
a. In order to take by intestate succession, an heir must survive the decedent. However, when a
decedent and their heir die at the same time, issues arise as to who died first, and if we can’t tell,
what assumptions should we make about who survived? (frustration of decedent’s intent)
b. WHEN IS SOMEONE DEAD? Determination of Death:
i. An individual has sustained either irreversible cessation of circulatory and respiratory
functions OR irreversible cessation of all functions of the entire brain, including the brain stem
ii. Good Practice: Possible to include in your will a survivorship clause: “I leave it to my wife if
she is alive 30 days after my death” so overrode the intestate survivorship provisions
c. UPC §2-104: Requirement of Survival by 120 Hours
i. Survivorship by 120 hours as proven by clear and convincing evidence (greater than “sufficient
evidence” standard at common law (so reach the opposite result in UPC and in Villwock case)
d. Simultaneous Death Act: Need sufficient evidence that persons died other than simultaneously, but
if not, then property of each person shall be disposed of as if he or she had survived the other
i. Used in Villwock case – sufficient evidence (just act like each survives the other)
e. JFK, Jr. Problem: Property disposed of as if they had survived each other (John’s assets disposed
of as if he survived her, so nothing he owned goes to her, and nothing she owned went to him)
f. Estate of Villwock: Emergency room physician observed both of them, calls the time of death, but
also testifies before the court about the order of death
WHAT IF THE PERSON DOESN’T ACCEPT THE DISTRIBUTION?
1. Disclaimer (for inheritance by will and intestate succession)
a. Any devisee of an estate has a right to refuse property whether a decedent died intestate or testate
b. Application: Treats the person who is disclaiming as if they died before the decedent
i. Can disclaim a dollar amount or a proportional share, but you can’t take any benefit from the
property you’re disclaiming, and can’t direct where the property goes if you disclaim it
c. Procedure: Disclaimer must be in writing and filed with the personal representative within 9
months of death. Some jurisdictions also require filing with local probate court
i. UPC: Disclaimer can be filed at any time (but IRS requires it to be disclaimed within 9 months)
d. Benefits: (1) Avoids estate tax, but money might go to who you would give to anyway
i. (2) Can avoid creditors claims (you have no assets but money stays in family)
ii. (3) To transfer title: Real property titles only transfer once, don’t have to wait for probate to be
finished until you can give it up and retitle it in someone else’s name (if intent to sell anyway)
iii. (4) Can keep family disagreements from occurring if you’re rich but you inherit before others
WHAT IF THE PERSON HAS ALREADY RECEIVED PART OF THE DISTRIBUTION?
1. Advancements: A gift from decedent to beneficiary intended to count against recipient’s share
a. Common Law: Large gift from parent to child raised presumption that it was an advancement
i. So the gift counted against the child’s intestate share (not valid anymore)
b. Today: UPC §2-109: Gift during life are not treated as advancements against the recipient’s
intestate share unless there is a writing that gives evidence to treat it as an advancement
i. Writing Requirements: Decedent must declare in writing, at time gift was made, that it was an
advancement, with an acknowledgement in writing by the person who received it
ii. The acknowledgement by recipient can be made at any time
c. “Hotchpot”: Treats advanced property as if it were in the estate when computing intestate share
i. Amounts already received charged against the shares of the heirs who received those amounts,
but if their advancement was bigger than the share they were entitled to, the advancement
doctrine does not require A to give back any of advancement
2. “Satisfaction”: Someone is given a gift under a will, but also given a gift during life, does the gift during
life count against the gift given in the will?
ARE THERE ASSETS THAT NEED TO GO THROUGH PROBATE?
a. BENEFITS OF PROBATE: Only 25% of estates actually go through probate
i. (1) Proof of Ownership – Get clear chain of title to property
1. Bank might need proof of ownership to turn over stocks/accounts
ii. (2) Protects Beneficiaries – Shorter SOL for creditors or adverse claimants against estate assets
1. If they don’t submit proof of claim to assets, claims are forever barred (usually 90 days)
2. Non-Claim Statutes: Promotes efficient and timely winding up of a decedent’s affairs
3. UPC: §3-801: Rep can publish a notice 3 successive weeks in general circulation– 4 months
until claims barred OR give written notice to creditor then 60 days until claims barred
iii. (3) Family Arbitration – Parties have a neutral party (judge) to oversee matters
b. PROBATE DRAWBACKS:
i. (1) Time Consuming – Probate usually takes about 18 months
ii. (2) Costly – Paying court expenses is costly, have to pay attorney’s fees to manage
iii. Try to avoid if: No question about who is entitled to his property, all debts paid, title to property is
not a problem (no real prop, joint accounts, cash, etc.), property to agreeable, competent adults
III. NO PROBATE NEEDED:
a. Non-Probate Asset: Most wills, are resolved informally after death without judicial interference
i. Good Practice: Use as many non-probate interests as you can have. Lifetime gifts are the most
common non-probate transfer – no property passes thru estate because changed hands before death
1. How to Choose Non-Probate Plan Beneficiaries:
2. (1) Name testator’s estate as beneficiary – can administer the estate as a whole even if
someone else redrafts a will later, but generates significant commissions for estate executor
3. (2) Name individual beneficiaries (income tax advantages to designate a person)
4. (3) Designate a trust as beneficiary of assets
ii. SMALL ESTATE ADMINISTRATION: File opening affidavit by personal rep, they manage estate, file
another affidavit by the court (usually between $20-100k)
1. "Hold harmless" provisions for bank --> if someone brings in a death certificate and proof of
relationship, then bank can pay out what was in the account w/o oversight by any PR
iii. CAR TITLES: Sometimes can transfer car title from decedent to beneficiary by taking death certificate
to DMV–liable to suit if wrong person to get car
iv. TRUSTS- Trusts don’t terminate on death of a person, continues on untouched by probate process
after decedent’s death (can be testamentary in which case they begin at death)
v. LIFE INSURANCE – Proceeds of life insurance policies pass free of income tax, creditors' claims, state
death taxes, and, in some C/L jurisdictions, free of spousal elective share claims (not UPC)
1. Term Insurance: Pure death benefit – no cash value, premiums reflect risk during that term
a. Get more cash value for term – usually provided by your employer
2. Whole Life Insurance: Company invests premium to generate cash for insured
a. Guaranteed payment, so expensive - buy term and invest the difference (best option)
2. Creditors: Creditors can’t get access to life insurance money – wanted to guarantee that no
matter what your status, your family would get that amount
a. Modern UPC §2-804 Revocation by Operation of Law (insurance companies hate)
3. Lincoln Life and Annuity v. Casewell: Decedent drafted a will “devising and bequeathing”
insurance benefit to various charities, only $25k of the $200k going to Caswell
a. The will shows insured’s intentions, but if there is no showing of incapacity to
substantially comply with the requirements of the policy, then the beneficiary status
on the life insurance is binding. Ben Designation > Will Provision
4. What if a life insurance beneficiary dies before decedent? (good to name contingent B)
a. Look to Lapse: Normally would lose interest, but maybe anti-lapse applies
b. Insurance policies: If policy holder has not named contingent beneficiaries, then
will be paid out to the estate of decedent policy holder
vi. SOCIAL SECURITY: Estates lawyers need to take client’s SS payouts into account (non-transferrable)
1. Full benefits are calculated on a sliding scale; based on how much earned/paid into system
2. Married Couple: If payout of one spouse is less than ½ of their spouse’s, they can elect to
take the spousal benefit and receive 50% of the amount their spouse is receiving
3. Married – One Deceased: SS can chose to continue receiving their own amount OR they can
elect to receive 100% of the deceased spouse’s check
4. Divorce after Married >10 years – ex-spouse allowed to make the spousal share claims
vii. PENSION PLANS: If you contribute money into the pension plan, that’s yours to take away (whether
invested or not), but can’t take out employer’s contribution until you’re vested (3-7 years maybe!)
1. UPC – A will cannot override the POD (payable on death) designation
2. Araiza v. Younkin: Beneficiary designation controls unless there is clear and convincing
evidence of intent to the contrary – provision in the will was clear, so the will controls
3. Defined Benefit Plans: A promise of a particular amount of payment on a regular basis after
retirement – KNOW what you will receive weekly after you retire
a. But when you die, that’s it – no more to give so sucks if you die quickly
4. Defined Contribution Plans: Don’t know how much money you get at the end, but know
how much money exists right now that will build for your retirement
a. If employee dies before retirement, beneficiary POD designation controls (not the
will) - so don’t necessarily pass through probate estate
5. Upon Retirement: If employee retires, can take pool of money in a lump sum, or annuity
a. Lump Sum: Becomes part of probate estate (plus income tax penalty
b. Annuity: Get paid every x weeks for life – but once you die that’s it (no probate)
6. Married Couple: One spouse has pension plan but one doesn’t - when one accumulates
rights, the other spouse has a 50% right in that fund (like community property)
a. Employee covered by plan named other spouse, retires eventually, if they take a
lump sum payment, need to get consent from other spouse because money is
employee’s money, not split between 2 spouses anymore
7. Divorce: Spouse not covered has a 50% right to all amounts contributed to plan during the
marriage, and on all amounts earned from those contributions
a. Can either disentangle assets then do qualified trade of assets OR have rights to 1/2
of the pool of money that was earned during the marriage and on all amounts earned
from those contributions
8. Creditors: Creditors have NO RIGHT to go after your pension plan (rare exceptions)
viii. JOINT TENANCY IN LAND: When A and B JT is created, each owns 50% right to possession
1. At death, remaining right passes automatically to the other without going through probate,
and if two or more people share the joint tenancy, decedent’s share divided equally
2. Creates joint tenancy with rights of survivorship (or if married, tenants in common)
3. Beneficiary: Other co-tenant(s) who get your share when you die
4. Creditors: While both alive, creditor of either can levy on property for a court judgment
(property at risk for creditors), but right disappears on death, so creditor has no claim against
decedent because their interest in property automatically converts
5. Probate: No probate, right of surviving party to other interest at party’s death
ix. JOINT TENANCY IN BANK ACCOUNTS:
1. At death, remaining right passes automatically to the other without going through probate
2. Agency/Convenience Bank Account: Account has an owner, has an agent who can write
checks/deposits for account owner (agent has no financial interest in account)
a. Beneficiary: No beneficiary, agent has no ownership or survivorship interests
b. Creditors: Creditors can proceed against the account to satisfy the debt against the
principal during life AND after death of principal – agency relationship ends when
the principal dies and account goes through probate with rest of estate
c. Franklin v. Anna National: Sister takes care of old man, whited out name of wife,
put sister on card saying “joint account,” she wants all account
d. Holding: After his death, she had no rights in the account, her role was limited to
acting on his behalf while he was alive. Person claiming ownership against
instrument of joint tenancy has the burden to establish by clear and convincing
evidence that a gift was not intended
e. Good Practice: Should have named daughter as an agent - make it a single party
agency account with rights passing to his estate on his death – under UPC §6-204
i. Sets out: (1) Parties, (2) Ownership (single or multiple parties), (3) Rights at
death (POD, right of survivorship, passes to estate), (4) Agency, Power of
Attorney Designations
3. Joint Bank Accounts: If small accounts at local banks, if beneficiary presents the bank with
death certificate, can get a release of the funds ($1-20k) – safe harbor provision for banks
a. Account in which people own the property in proportion to the amounts contributed
i. Follow all contributions to figure out who gets at termination
b. Banks prefer this - easy that bank can honor a check signed by either party, and they
don’t have to be involved in a lawsuit between parties to the account
c. Beneficiary: At A’s death, surviving party takes over whole account
d. Creditors: Creditors of one co-account holder can levy against whole account
i. So leave yourself vulnerable if you contribute more
ii. Creditors of deceased owner can go after account during AND after death
e. Gift Presumption: When you deposit funds into a joint bank or investment account,
presumption that you make a gift of ½ that property to other named account holder
i. Rebuttable presumption that if you’re married you contributed 50% (burden
on co-account holder A to say that B hasn’t contributed and no intent to make
a gift (then keep your money against creditors?)
f. Issues: Was there (1) a revocation of survivorship provision during lifetime, or (2)
clear evidence that deceased depositor established it only for convenience (some do
or don’t allow extrinsic evidence)
x. PAYABLE ON DEATH ACCOUNTS- Account owner designates a POD beneficiary (bank form), full
owner during account owner’s life, can close, rename beneficiary, etc.)
1. Same for “Transfer on Death” Security Accounts: Allows securities/mutual fund companies
to have their accounts in agency, true joint tenancy, or POD form
2. POD account can be changed or revoked w/o will formalities at any time before death
3. Beneficiary: Has no rights during the owner’s life (just has an expectancy like any
beneficiary under the will), owner’s creditors can go after account
a. Normally the POD designation has priority over will terms, unless it’s revoked by
law under the Modern UPC §2-804: Revocation of Transfers by Divorce
i. Revokes any revocable disposition of property made to a former spouse, or
nominating of a former spouse or their relatives from any representative
capacities (but nullified if they remarry or if divorce is invalid)
b. Pre-1990 UPC does NOT cancel out for divorce (insurance prefers this)
4. Creditors: Rights to go after account during owner’s life AND after death
5. Probate: Works just like the will, but don’t have to go through probate
xi. GIFTS: If you make a disposition in a will, can revoke it, but gifts can’t be taken back
1. Step 1: Does the donor have proper mental capacity?
a. Capacity- Same as testamentary capacity: (1) know nature of the business they’re
conducting (gifting), (2) recollect the property to dispose of (natural objects of their
bounty), (3) scope of their property, and (4) put them together in a coherent plan
b. PLUS they have to be able to understand the financial impact on themselves and
those dependent upon them, of making that gift
2. Step 2-4: Donative Intent, Delivery, Acceptance
a. Donative Intent: Three letters show that he wanted son to have remainder interest
i. The evidence established intent to make a present and irrevocable transfer of
title or the right of ownership, there is a present transfer of some interest, and
the gift is effective at that time. (Gruen v. Gruen)
b. Delivery- Actual (handing it over), constructive (giving something that provides
access to item, security code/keys to safe), or symbolic delivery (deed to something)
i. Delivery necessary to consummate a gift must be as perfect as the nature of
the property and the circumstances of the parties will reasonably permit (way
to get ritual, protective, evidentiary formalities of will)
ii. Evidence he transferred remainder interest in painting on birthday – didn’t
need actual, symbolic delivery through the letters is sufficient (Gruen)
c. Acceptance- Assumed for valuable gifts, gift that’s beneficial to donee
3. Gifts Causa Mortis: Gifts made with an implicit condition that the gift would revert to the
owner if contemplated death doesn’t happen. Normally gifts are irrevocable even if made on
one’s deathbed, but different if gift made in contemplation of death and then you survive
IV. PROBATE NEEDED:
a. Probate Assets: Using a legal document to establish their title to the property
i. Probate is a quasi in rem procedure – proceeds against the property itself
ii. “Executor” / “Executrix”: at center of probate process if there IS a will
iii. "Administrator" is a center of probate process if there is NO will
1. UPC uses “Personal Representative” for both executor/administrator
WHO IS THE PERSONAL REPRESENTATIVE (intestate) OR EXECUTOR (will)?
a. How to Pick: Can always turn down a request to serve as personal rep/executor
i. §3-203: “Priority Among Persons Seeking Appt as Pers. Rep.
1. (1) Person with priority as determined by a probated will
2. (2) Surviving spouse of D who is a devisee of D, (3) Other devisees of D,
3. (4) Surviving spouse of D, (5) Other heirs of D, (6) After 45 days, any creditor
ii. Will: Testator of will can name person to serve as PR
1. Someone who is careful and honest in their management, gets along with people in the family,
and who is local –have to physically deal with assets
iii. Intestate: Whoever shows up likely – court will decide who is valid
b. Their Duties: Personal rep/executor has to deal with decedent’s creditors – same power to settle claims
against estate as rep has for settling claims by the estate
i. Rep cant give estate assets to beneficiaries until all relevant limitations periods have expired (once
they have, all claims retired – so can’t bring some unknown patent infringement claim 5 years later
against administrator)
1. But primary allegiances are NOT to the creditors –personal representative is liable for any
claims paid to beneficiaries without satisfying debts
ii. Pre-Death Creditors: Creditor claims against estate > claims of beneficiaries
iii. Post-Death Creditors: If personal rep maintains enterprise’s going value by operating the business
after death, might have to confront post-death creditors
c. Payment: State bar usually publishes a schedule of fess to be “reasonably charged” by fiduciaries or
trustees or personal representatives
i. UPC §3-721: Proceedings for Review of Employment of Agents
ii. Reasonableness of compensation may be reviewed by the court – anyone who has received excessive
compensation for services rendered may be ordered to repay the funds
WHERE WILL THE PROBATE TAKE PLACE?
a. Property in two jurisdictions, probably require separate and parallel administration proceedings
i. Many jurisdictions only allow residents of that state to be executors functioning in that state
a. Some jurisdictions don’t allow “foreign” executors to function in some states
b. Probate proceeds in the county where property is located at time of death
a. Separate probate for each real property location – domiciliary probate where you live, ancillary
probate for vacation house (avoid ancillary jurisdiction by putting real estate in a trust)
WHAT KIND OF PROCEEDING WILL IT BE?
a. Step 1: Look at State Statutes – Is it Formal or Informal? (State statue, under UPC can pick)
i. If named executor can’t proceed, others can petition to administer
ii. Court decides if it has jurisdiction and if what is presented is the last will of the decedent
iii. Court formally appoints executor and issues letters of testamentary (with a will) or letters of
administration (no will)
b. Step 2: Will (intestacy?) Offered for Probate
i. In Solemn Form/Formal: Representative goes with the will, asks for appointment
ii. In Common Form/Informal: Personal representative asks for will to be admitted to probate, and for
appointment as personal representative
c. Step 3: Notice and Administration
i. Formal: Actual notice given to all interested parties, potential beneficiaries before it can be
admitted to the court (they can contest)
1. Personal Rep has to serve a copy of petition on those who would benefit if the will was
denied probate – heirs then have to show cause why will should not be admitted, admitted if
no cause is shown or if there is a failure to appear by heirs
2. Every substantial transaction must be approved in advance by the probate court.
3. Court monitors activity of personal representative during the process
ii. Informal: Court is hands-off for proceeding, notice given AFTER will is “tentatively probated”
1. Court admits the will to probate when offered – no supervision during process
2. Executor provides notice to heirs/creditors at end, but no notice to parties before transactions
d. Step 4: Winding up Affairs
i. Formal: Then will is considered admitted for probate
1. Will not admitted into probate until conclusion of proceeding
ii. Informal: Affidavit is filed with court, court closes probate
1. Probate becomes final over time- no formal proceeding necessary if nobody objects
PART 3: TRUSTT: IS IT A TRUST?
a. Look out for (1) who the intended beneficiaries are, (2) whether there is adequate property to have
throughout the life of the trust and enough to give to everyone, and (3) whether the trustee is capable of
managing the trust sufficiently
b. TRUST: An entity in which ownership is divided between the trustee (who holds “legal title” to the trust
property), and the beneficiary (who holds “beneficial” title)
i. TRUSTEE: Has right to manage the trust property, but obligation to do so in the beneficiary’s interest
(not trustee’s), has burden to manage and administer estate (holds title, defends cases, invests, pays
taxes, etc.)
1. To sue a trustee to enforce their obligations to beneficiary, have to sue in equity (NOT LAW)
ii. SETTLOR/TRUSTOR: Person who created the trust
iii. BENEFICIARY: Has an obligation to make sure that the trustee is doing things according to trust laws
and abiding by the terms of the trust Testamentary Trusts: Created in a testator’s will
1. Transferring non-probate assets into a testamentary trust renders them probate assets – delays
distribution, so maybe use inter vivos trusts as receptacle for probate and non-probate assets
2. Testamentary trusts are irrevocable by definition, and testamentary by will
iv. Inter Vivos/Living Trusts: Created while settlor is still alive – can avoid probate
HOW DO YOU KNOW IF THE LIVING TRUST IS REVOCABLE OR IRREVOCABLE?
i. Historically, if trust said nothing about revocability (Goodman, default was that it was irrevocable)
1. The distinction only applies for living trusts
2. Now (in ½ the states, if the trust is silent on revocability, then the trust is revocable)
v. REVOCABLE TRUST: Trustee has reserved the right to revoke the trust during their life
1. Revocable living trusts are subject to the same rules of construction and policy constraints
applicable to wills (significant pressure to validate trust where you’re settlor and beneficiary)
2. Benefits: Eliminating estate costs and getting tax savings
a. Cheaper: Tax benefits - revocable trust is a ghost for tax purposes
b. Protect Elderly or Institutionalized Beneficiaries (Long-Term Care)
i. Helps create flexibility in an estate plan and providing for a beneficiary’s needs
c. Can Avoid Probate Process Better management, greater protection, more privacy
and are more efficient than property going through probate, lower commission costs or
legal fees endured because of going through probate
d. Avoid Ancillary Jurisdiction: Transfer vacation home to revocable living trust
e. Flexibility: Testator makes himself trustee and life beneficiary with broad
management powers, designate people entitled to remaining assets at their death
f. Safety From Challenges: Harder to challenge living trusts than a will – remainder
beneficiaries of revocable trusts don’t have standing to challenge during settlor’s life
g. Provides for Minor Children: Will should: (1) Nominate custodial guardian to care
for minor children in event that parents die, (2) Create a testamentary trust for the
children’s benefit (maybe different person than guardian, depends who you trust)
3. ISSUES: Some of the benefits of having an inter vivos trust, are also reasons not to use it.
a. Cumbersome: Best for wealthy old people than young people who will transfer assets
around for awhile still (bad if you’re not good with record keeping)
b. Costly: Cost of drafting a revocable trust and pour over will and then transferring
assets might be greater than drafting a will - recording fees and brokerage
commissions, costs with registering securities, etc. co-trustee gets commissions
c. Ownership: If a house is owned by a living trust, have to make a connection between
contractor and trustee (settlor still has to file an estate tax return, pay creditors)
d. Probate Inevitable: If you have some assets out of the living trust, still have to go
through probate anyway. Maybe better to use trust than life estate for: ease in transfer
(can’t sell or lease joint tenancy interest, easier to manage (because you’re “owner”))
4. Pour Over Wills: Everyone who has a revocable living trust must also have a pour over will.
a. There will always be assets that one accumulates during their life which are not in the
trust that must be disposed of by a will. A pour over provision in one’s will is used to
devise remaining assets into a standby trust (established during settlor’s lifetime)
i. Can designate trustee of the living trust as the successor to certain assets like
retirement/life insurance so that consolidates everything
b. These standby trusts are legal, but because there are no assets yet, the trustee has no
obligations and beneficiary has no rights until trust becomes funded at testator’s death
i. Some states have statute explicitly validating trust even if unfunded before
settlor’s death, and today, courts usually uphold them. (Estate of Canales)
ii. UPC §2-511: Validates will provision “pouring” assets into an inter vivos trust
c. Historically challenged because will directed assets to be distributed in accordance
with an invalid testamentary doc (revocable trust, invalid because it lacked property)
d. Now argued that the standby trust is valid because: (1) incorporation of the trust
creation document by reference, in which the will references a document already in
existence (the existing standby trust), and (2) facts of independent significance (where
creation of the trust’s has significance apart from disposing of probate assets)
i. Yet, if revocable trust is modified after the will was executed, it cannot be
incorporated by reference, as it is no longer a document in existence at the time
the will was executed. Similarly, can argue that a living trust has a standby
trust has no independent purpose other than to receive testamentary disposition.
e. Today under UPC §2-511, provision of testamentary additions to trusts
i. Even if trust wasn’t a legally active/funded at time of death, still valid as long
as: (1) was ID in the will, (2) its terms were in a writing separate from the will,
and (3) the trust was executed before, at the same time, or after will execution
vi. IRREVOCABLE TRUST: When created, settlor cannot change it
1. An irrevocable trust should not be revoked in a manner which is contrary to its express
provision because of the suggested expediency of the beneficiary (Nat’l Bank of Cheyenne)
WHAT KIND OF A TRUST IS IT?
a. Mandatory Trust: Direct trustee to give beneficiary specific amounts, no discretion
i. “I direct my trustee to distribute x, anything not distributed shall be added to Z”
b. Discretionary Trusts: No mandatory obligation on trustee, just act at their discretion
i. Trustee distributes “at its sole discretion” whatever principal required for something
ii. Pure: Beneficiary has NO right to receive payments of income/principal
iii. Discretionary support trust: Determining how much to pay for specific things or if you have
discretion up to some certain cap
c. Support Trust: Money set aside for the maintenance of someone (like $ for college)
i. Usually has an ascertainable standard of living, what they should be supported to
ii. “As necessary for the comfort, support and maintenance of the beneficiary”
d. Private Express Trust: Used mostly for estate planning
i. Created to manage assets for minors, incapacitated, or flexible distributions to family
e. Honorary Trusts: Not a real trust, but sometimes allowed
i. There is no possible ascertainable beneficiary, but if the purpose is honorable, not impulsive or
illegal, the trust will continue so long as the trustee will honor the terms of the trust
ii. Ex: Leona Helmsley: NY allowed dog trusts, then when dog died, went back to a charitable trust
f. Constructive Trust: Remedial device used by courts to achieve results which don’t otherwise
i. Equitable device – no “intention” to make a constructive trust but if you have legal title but can’t
in good conscience retain beneficial interest, then equity converts holder of legal title into trustee
g. Resulting Trust: When settlor intends to create a trust, but trust fails for some reason
i. A "resulting trust" is not really a trust at all but is instruction to trustee about what to do with
money left in a trust that has come to a dead end.
ii. Settlor alive usually will be sent back to settlor, if Dead  estate through will or intestacy if not
h. Purchase Money Resulting Trust: Pay for something which is to be given to someone else, you have
beneficial title to the property – recipient holds title in trust for the person who pays
i. Perpetual Care Trust: Allows for the maintenance of your burial site (but no beneficiary)
j. Charitable Trust: Has no ascertainable beneficiaries, not subject to the RAP
i. Enforced by a division of the state, not by beneficiaries, benefits for income tax purposes
ii. UTC §405 (2000): (1) relief of poverty; (2) advancement of education; (3) advancement of
religion; (4) promotion of health; (5) gov’t/municipal purposes (BUT NOT political party); or (6)
or the trust preforms other purposes which are beneficial to the community.
1. Ex: Barnes Foundation - Even though explicitly didn’t want it moved, a sufficient general
charitable purpose was found, built new museum with same layout and rooms, new lighting
HOW DO YOU MODIFY A CHARITABLE TRUST?
1. Cy Pres Doctrine of Charitable Trusts (“close enough” for changed circumstances)
2. This doctrine applies to determine what courts do with trusts that can no longer perform
their function/purpose because of changed circumstances.
a. Policy: If you just undo the wishes of philanthropists after a certain period of time,
reduces the number of people who are giving for charitable reasons
3. Court must find: (1) Settlor had a general charitable purpose broader than specific purpose,
a. If no general purpose, then there is a resulting trust  property goes to Settlor’s estate
4. (2) The purposes of which have become unlawful, impossible or impracticable to preform
a. Majority: Trust is unlawful, impracticable, or impossible to achieve; (no waste)
b. Minority /UTC §413(a): Unlawful, impracticable, impossible to achieve, or wasteful
IS IT A VALID TRUST?
a. (1): SETTLOR WITH MENTAL CAPACITY AND INTENT
i. Precatory/Mandatory Language: In deciding whether a settlor intended to create a trust or not,
courts look at whether the language was PRECATORY or MANDATORY. There is a presumption that
precatory words do not create a trust (states a wish, but no action required). Words construed as
mandatory only when the settlor expresses clear intent to impose an enforceable duty on the trustee
1. In contrast, mandatory language imposes a duty. Words will be construed as mandatory if
surrounding circumstances show that the language is meant as mandatory (Levin v. Fisch)
i. Precatory: It is my wish that this money is held for X’s education
ii. Mandatory: I instruct X as trustee to hold this money in trust for Y
ii. UTC § 402(a)(1): Settlor must have the mental capacity to create a valid trust
1. Can be subject to the same challenges of fraud, duress, or undue influence
iii. Intent for Testamentary & Revocable Inter Vivos Trust: Same as intent to make a will
1. (1) Know the nature of the business they’re conducting (making a will), (2) recollect the
property to dispose of (the natural objects of their bounty), (3) scope of their property, and
(4) put them together in a coherent plan
iv. Intent for Irrevocable Inter Vivos Trust:
1. Gift: Mental capacity to make a gift (will plus “understand the effect that the disposition
may have on future financial security of settlor/donor and of those who depend on them”)
2. Transaction: Settlor possess capacity to K (when trust isn’t a gift it’s more like a transaction)
b. (2): ASCERTAINABLE TRUST PROPERTY (specific boundaries)
i. Every trust must have some property in its protection (RST §2), definite enough to be ascertained
ii. Description: Property is properly described in a way that it’s ascertainable (attached as a schedule)
1. Even a nominal amount is enough to validate a trust, but contingent or remainder
beneficiaries only have standing to challenge management if it’s irrevocable
2. Exception: Both expectancy and standby trusts are invalid when unfunded, as they have no
legal effect until they are funded with ascertainable property
i. The two types of trusts are differentiated by the form of the expected future property
a. Expectancy – Recipient of expectancy from an estate
i. Clara Mayo Case: Living trust document signed, but no property
(pension/life insurance), BUT because the trust wasn’t funded in the
life, and this was just an expectancy trust, it was found to be invalid
b. Standby – Recipient of life insurance or pour over will
i. Speelman v. Pascal: Upheld trust funded with future profits
(considered property because they had a legal title to them)
c. (3): ASCERTAINABLE BENEFICIARY (Beneficiary has EQUITIBLE title)
i. Every trust must have at least one beneficiary (RST §44) – someone must have the power to
enforce the trust – sometimes issues if defined vaguely, or don’t name entirely
1. Moss v. Axford: Some courts allow extrinsic evidence to identify the intended beneficiary
2. Non-Human beneficiaries: Historically not allowed, but NY has a statute (Leona Helmsley)
3. Charitable Trusts: Don’t need named beneficiary (and not for unborn kids either!)
d. (4): COMPLIANCE WITH APPLICABLE FORMALITIES FOR THAT TYPE OF TRUST
i. Declaration of Trust: If trustee and settlor are the same (can be oral or written)
1. Transfer: Most jurisdictions don’t require transfer because settlor doesn’t have to transfer
property to themselves (but not all – some require change of deed to say “settlor as trustee”)
ii. Deed of Trust: A trust document that creates a trust but names someone other than settlor as trustee
1. Transfer: Evidence of showing transfer, through recording deed/account chain of title
i. Could be accomplished through a schedule attached to the trust instrument
iii. Express Trusts: NY Express Trust: Requires signatures of settlor and one trustee (unless settlor is
sole trustee), and acknowledgement by a notary OR 2 witnesses’ signatures
1. Heapes v. Heapes: Under the trust instrument, some affirmative action beyond merely a
change in property title was required to take assets out of the trust
i. Reasoning: Language of the trust like a K – when assets are being withdrawn,
something beyond taking title to them is required to take them out of the trust
ii. Trust required a “duly executed instrument” to amend trust – like a signed memo
iv. Oral Trusts: Most states only allow oral trusts to be for personal property
1. Most transfers of real property run into statute of frauds issues requiring a writing
i. UTC/Minority: sanctions oral trusts for both land and personal property but require
trust's terms and intent be proved by clear and convincing evidence
ii. Majority: most states require no writing to establish a trust of personal property (only
require that there be sufficient proof of terms of trust and intent) but most require
some kind of writing to create trusts of land;
2. Goodman v. Goodman: Did the father orally give the tavern to his mother to hold in trust for
his children until they reached the age of majority, or was it a gift to the mother?
i. Holding: Express oral trust. Even though no writing is required in most states, the
grandmother had an obligation to hold the tavern in trust for the grandkids because
there was a valid oral trust created.
ii. Rule: A trust can arise or be implied from the circumstances as a result of the
presumed intention of the parties as gathered form the nature of their transaction
e. (“5”): VALID TRUSTEE (Not required to have, but usually do – trustee has LEGAL title)
i. If the trust doesn’t name a trustee or if the named trustee doesn’t qualify (they’re dead, decline to
serve, incapacitated), not valid if clear intent to create a trust – court can appoint a trustee
ii. Duties: (1) Fiduciary - Must act in good faith in the best interests of the beneficiaries and in
accordance with settlor’s objectives, (2) Communication - Notify beneficiaries of the trust,
trustee’s ID, nature of beneficiary’s interest, right to receive info about management
1. Application: If a trust imposes no active duties on the trustee, then it’s a “passive” trust, and
beneficiary has legal AND equitable title – normally invalid today
2. Merger Doctrine: Can name the sole trustee as one of the beneficiaries, or multiple trustees
as multiple trustees BUT CANNOT have sole trustee be sole beneficiary (UTC §402(a)(5))
iii. Good Practice: T can protect himself by carrying out regular accounting given to ben’s (notice for
things gone wrong, starts SOL for mistakes occurring during the accounting period)
HOW CAN A TRUST PROTECT BENEFICIARIES FROM CREDITORS?
a. Trusts are a mechanisms for protecting assets the settlor knows a beneficiary isn’t capable of managing
i. Normally, a beneficiary can execute an assignment of his rights to the trust to another person as a
way to get around it and get cash now BUT if trustee is limited to paying sums for beneficiary’s
support or maintenance, then there may be limits on their ability to cover creditor’s demands
b. Spendthrift Trusts: Most common mechanism for keeping assets away from a beneficiary’s creditors
i. Merger doctrine applies to spendthrift trusts – so if sole beneficiary becomes sole trustee, trust
terminates and creditors can get access to property
ii. VALID IF: Beneficiary (1) is prohibited from voluntarily assigning or selling his or her interest in the
trust, and (2) Has their interest protected from involuntary garnishment by creditor/legal process
iii. INVALID IF: (1) Self-Settled Trust, (2) (child support, spousal maintenance (UTC §503(a) states)
a. (3) Creditor who provided services for protection of a beneficiary’s interest in the trust
i. For attorney’s fees defending a beneficiary’s interest in their trust property
a. (4) State or federal government claim, and (5) claims for necessaries (if maintenance trust??)
b. Scheffel v. Krueger: Molested son, sent to prison, had a discretionary support thrust with a
spendthrift clause, plaintiff claims assets were fraudulently moved to hide $$ from her
i. Issue: Can the tort creditor get access to funds from his discretionary trust?
ii. Holding: No. Courts deferred to the legislature, said that neither of the two exceptions
applied, so there was nothing he could do – bad case but can’t overrule legislature
b. Creditors have no right to rely on property held in trust, because that property is inalienable and
not liable for debts of beneficiary. The beneficiary only gets interest in accrued income from
trust, not the right to alienate the trust property itself (Broadway Bank v. Adams)
i. Imposes a duty on creditors to search the database for wills and find restrictions,
iv. Policies For: Ensure settlor’s intent - freedom of testation for settlor to do what he wants with $$
a. Nichols v. Eaton: Spendthrift trusts aren’t unfair to creditors – they can ascertain restrictions on
beneficiary’s income and decide whether to credit
b. NY has a default spendthrift provision unless the trust explicitly writes it out
v. Policies Against: Then beneficiary can’t voluntarily assign interest in trust property
a. John Gray: Testamentary trusts are public records, but inter vivos trusts are not, so no way for
a creditor to know, might not be a reckless creditor
b. Better for society to allow a claim for tort/child support than to protect ben. from bad habits
HOW DO CREDITORS NORMALLY GET ACCESS TO TRUST ASSETS, HOW CAN SETTLORS PROTECT ASSETS?
1. Garnishment: Creditor can garnish a stream of income/trust disbursement available to debtor
a. If it’s not a spendthrift trust, trustee can be served with process by creditor seeking to attach claim
to beneficiary’s interest in the trust
2. BENEFICIARY’S CREDITORS FOR NON-SELF-SETTLED TRUSTS (where settlor is not a trust B)
i. Mandatory Trusts: Creditor steps into Ben’s shoes – can force trustee to distribute income
ii. Discretionary Trusts: Creditor steps into Ben’s shoes – but can’t force discretion
1. Support Trusts/Discretionary Support Trusts: Creditor can force trustee to distribute
money ONLY IF they are a “support” creditor
2. Pure Discretionary: Step into the shoes of the beneficiary, so if trustee decides to
make an distributions either directly to B or payments on behalf of B, then they must
go to the creditor first (Wilcox v. Gentry) (unless trust has a forfeiture provision)
3. Smart trustee that knows of creditor’s judgment will just decide to NOT make any
distributions  Court/creditor CANNOT force trustee to make a distribution
4. RST 2nd and 3rd: In a discretionary trust a beneficiary CANNOT compel the trustee to
pay over part of the trust property to him, but if the trustee pays over part of the trust
to the beneficiary with knowledge that he transferred the interest in that property to a
creditor – trustee is personally liable to the creditor for the amount paid
3. REVOCABLE TRUSTS – Settlor can access everything, so the settlor's creditor can too
a. UPC §505: Under a revocable trust, creditors have access to everything in the trust estate
i. After settlor’s death, trust property revocable during settlor’s life is still subject to settlor’s
creditor claims, estate administration costs, funeral and statutory allowances to SS
4. IRREVOCABLE TRUSTS – Settlor/beneficiary can only access what the trustee gives them in the
trustee's discretion, so the creditor can only access any payments made by the trustee
a. UPC §505: Under an irrevocable trust, creditors only have access up to the maximum amount that
under any circumstances could be distributed to the beneficiary (same position, but no better)
5. SELF-SETTLED TRUST
a. Trust where you are settlor and beneficiary, always inter vivos (can be revocable or irrevocable)
i. But can’t be the sole beneficiary and trustee (Merger Doctrine applies)
a. Creditors: Revocable, creditors take all, Irrevocable, stand in your shoes
b. During Life: Look at whether it’s purely discretionary or a mandatory or support
i. Spendthrift Clause – Will NOT be enforced in a self-settled trust
1. Policy: You shouldn’t be able to shield your assets by putting them in a trust
c. At Death: At Common Law: If the settlor had a life estate in the trust, at his death the life
estate is terminated and the creditors can’t touch the trust
i. Modern Trend: Creditors can reach the property in the trust to the extent the settler had
the power to use them during life (so is it revocable or irrevocable?)
ii. Policy: Power to revoke is essentially the same as settlor’s power over $ in a bank
account – he can access it at any time – don’t shield assets by putting them in a trust
6. DOMESTIC ASSET PROTECTION TRUSTS
a. An asset protection trust is a statutorily permitted self-settled spendthrift trusts under which
creditors are barred from reaching the trust assets (not valid under traditional trust doctrine)
i. This type of trust provides an exception to the general rule that creditors can reach
assets of self-settled spendthrift trust up to max amount that settlor-beneficiary could
reach (not recognized in most states)
b. Good Practice: Ask if the person requesting an asset protection trust has had any bad days, can
identify any known or foreseeable creditors
i. US legislators wanted to bring some of that business back that was drawn abroad
ii. Asset protection trust has to be purely discretionary, always inter-vivos
c. Valid if: (1) Trustee must be local and have some administrative duties (2) trust is an
irrevocable trust, (3) trust is a pure discretionary trust, (4) not created to defraud creditors,
(5) AND some or all of assets must be locally situated (reason states brought them back)
d. Exceptions: Invalid if the assets were transferred in a fraudulent transfer
1. (1) Transfer intending to delay or defraud creditor (ACTUAL FRAUD)
2. (2) If transfer made without receiving equivalent value OR if size of transfer was
bigger than amount liable to creditor for (CONSTRUCTIVE FRAUD)
3. Infer fraudulent intent by considering: If transfer was to an insider, debtor
retained possession of transferred property, transfer was concealed, whether
debtor had been threatened with suit before the transfer
i. MR 1.2: Can’t counsel a client as to a way to defraud creditors, act illegally
1. But creditors are either known actual creditors (already have a judgment for the
creditors on a given debt), or foreseeable creditors (victim’s family)
ii. Criminal penalties under HIAA for anyone who knowingly counsels or assists a person in
disposing of assets so that someone can become eligible for gov’t medical assistance
7. SUPPLEMENTAL NEEDS TRUST
a. Some government programs (like SS) are not means-tested, however, some federal government
programs (administered by states) to help pay for incapacity, like Medicaid, require that an
individual have an income of $1k/month or less, or assets of $3k or less.
1. Agencies look at the assets of both spouses to decide if either is eligible, but “spending
down” to reach this level may leave the “community spouse” in a lower standard
b. There are TWO kinds of trust interests that are NOT counted for Medicaid eligibility purposes.
1. Both are Supplemental Needs Trusts, as other types of trusts will be counted on the
resource side to determine a person's Medicaid eligibility.
2. Supplemental needs trusts must explicitly state its purpose to provide beneficiaries with
comforts and medical support beyond that given from government assistance. State has
no right to reimbursement from a supplemental needs trust at beneficiary’s death but
instead assets distributed according to trust doc
c. (1) NON-SELF SETTLED SUPPLEMENTAL NEEDS TRUST:
1. If you have a trust that qualifies as a third-party supplemental needs trust, distributions
must be purely discretionary and can only be made to provide for services beyond
Medicaid’s coverage (beneficiary cannot have any mandatory support right)
d. (2) SELF-SETTLED SUPPLEMENTAL NEEDS TRUST:
1. Disabled persons over the age of 65 can have funds placed in a trust for their benefit.
2. The funds in trust are “non-countable” for governmental assistance determination, but
are to be used to supplement public assistance for them while preserving principal for
estate beneficiaries
a. Unlike third party supplemental needs trusts, this self-settled trust does NOT
need to be purely discretionary – the beneficiary can have mandatory support
b. Funds set up by a third party with money from tort claims are “self-settled”
3. Payback Trust: Trust created for disabled person, when they die, anything left in trust
reimburses the government for costs incurred for their care until death, and remaining
funds are distributed according to the patient’s estate
4. Pooled Trust: Created and managed by a non-profit agency
a. Pool assets form other ben’s to invest, but all have separate sub-account, on
individual’s death, remaining amount left in sub-account is distributed to other
disabled individuals known by agency – can be created by disabled individual
HOW CAN A SETTLOR OR BENEFICIARIES/TRUSTEES REVOKE A TRUST?
a. SETTLOR ALIVE: Settlor can reserve the power to revoke/modify (but need to craft language right).
i. To Revoke: Trust instrument normally specifies a time for termination, will articulate directions
for distribution upon termination
1. Majority of states presume trust is irrevocable
2. Minority of states/UTC: presume revocability, unless trust states otherwise
3. UTC §602: Unless the terms of a trust expressly provide that the trust is irrevocable, the
settlor can revoke or amend the trust at any time (presumed to be revocable)
a. No common law that trust can be revoked by physical act like a will, but maybe
demonstrates necessary intent under UTC §602, (trend toward this)
b. Property in the trust, legal relationships exists – but a will has no legal effect until a
person dies, so tearing up a will doesn’t affect a legal relationship
4. Irrevocable inter vivos trust – Settlor and all ben’s can revoke trust (only interested parties)
5. Revocable inter vivos trust – Beneficiaries have no standing to sue until testator dies
6. RST of Trusts: If the trust doesn’t express the manner of revocation, then any action that
gives clear and convincing evidence of settlor’s intent to revoke is sufficient
ii. Connecticut General Life Insurance v. First National Bank: Wrote will, trust, but then
later made new will “cancelling my previous wills and trusts”
a. Holding: The trust could only be revoked by written instrument as detailed in the
trust document itself, which didn’t include revocation by will
b. Reasoning: Settlor can reserve power to revoke a trust by a transaction inter vivos
(ex: notice), but can’t revoke it by will if that’s not an option given in the trust doc
ii. To Modify: – NEED SETTLOR CONSENT IF THEY’RE ALIVE!
1. But if settlor’s incapacitated – act like they’re dead because they can’t make decisions
b. SETTLOR DECEASED:
i. Calfin Doctrine: Beneficiaries of an irrevocable trust can agree to terminate the trust if the trust
has no material purpose yet to be performed unless termination would frustrate the settlor’s wishes
1. If a material purpose still exists, a court can authorize it if it deems that the reason for
termination outweighs the material purpose (Bank of Cheyenne)
2. Calfin Doctrine Material Purpose: Discretionary trusts/discretionary support trusts,
spendthrift trusts, support trusts, trusts where property isn’t supposed to be disbursed until
the beneficiary reaches a certain age – all have material purposes – EASIEST
3. RST Second Material Purpose: Discretionary trusts are a material purpose - EASY
4. UTC Material Purpose: Under UTC §411(3) a spendthrift provision is presumed to
constitute a material purpose of the trust - material purposes are easy to find, keep the trust
i. Court supports the most efficient trust termination/distribution - EASY
ii. The UTC moves away from the strict limitations on trust modification or termination
and thus deemphasizes the dead hand control by the deceased settlor.
5. RST Third Material Purpose: A spendthrift provision by itself isn’t enough to be a
“material purpose,” have to look deeper at what settlor intended (intent of settlor of purpose)
i. Discretionary trust not enough – need “because Margret’s discretion is good” - HARD
6. American National Bank of Cheyenne: Kids were over 35, and U. Wyoming consented to
termination of trust, and person getting $200/month died, contingent beneficiary renounced
i. Holding: All beneficiaries consented to the early termination and continuation of the
trust served no remaining material purpose of the Grantor – so allowed ben’s to revoke
HOW CAN A SETTLOR OR TRUSTEE MODIFY A TRUST?
a. Problems from unforeseen circumstances are becoming more common b/c there is a trend to extend the
time period that a trust can endure w/o violating the Rule Against Perpetuities
b. RST of Trust §66: Power of Court to Modify- Unanticipated Circumstances
i. Court can allow/instruct trustee to deviate from administrative/distributive trust provision because
of a change in circumstances not anticipated by settlor, if modification will further trust purposes
ii. Law developing in direction to give trustee an obligation to ask to modify the trust in bad economy
c. EQUITABLE DEVIATION: Allows changes only if they further the purposes of the trust
i. Type 1: ADMINISTRATIVE DEVIATION: CHANGE IN CLASSIFICATION OF TRUST
1. If subsequent rules frustrate purpose of trust or if the rules in the trust instrument frustrate
the success of the trust – still be the same function, just different way to abide by laws
2. Ex: Pulitzer: Trust with stock assets, trust said never sell newspaper stocks – but primary
purpose was to provide for his family, so prioritized the purposes over keeping stocks
ii. TYPE 2: DISPOSITIVE/DISTRIBUTED DEVIATION: CHANGE IN STRUCTURE/HOW ASSETS DISTRIBUTED
1. For an uneconomic trust – trustee’s fees are too high to maintain trust, so dissolve it
2. Ex: Beneficiary in mental hospital – transfer to third party supplemental needs trust
3. Ex: If person sets up a trust for surviving spouse, trust saying that they receive “all income
for spouse’s support,” trustee can go and ask for dispositive deviation to dip into the trust
principal, not just limited to trust income – but is fundamentally changing trust
WHAT DUTIES DOES A TRUSTEE HAVE TO THE BENEFICIARIES?
a. If trust document says nothing about trust powers, then rely on statutory standards
i. Legal obligation under fiduciary duties (similar for trustees and executors)
b. (1) DUTY OF LOYALTY
i. Must manage assets for the exclusive benefit of the beneficiaries of the estate or the trust (can’t deal
with property to personally benefit them directly or indirectly)
1. Duty of loyalty prevents fiduciary trustee from accepting employment from a third party
entering into a business transaction with the trust (Estate of Rothko)
ii. CONFLICT OF INTERESTS: Presume that there is a conflict if transaction is between trust and trustee’s
spouse, descendants, agent of trustee, corporation with interest in the trustee UTC §802
1. UTC finds no prohibition on indirect self-dealing but fiduciary has burden of showing that
transaction was fair to beneficiaries despite potential conflict
a. Legal fees trustee for defending trust is self-dealing, but allowed if court approved
b. When someone is defending trust, and they win, paid out of trust funds, but if trust
beneficiaries challenge it and lose, they pay out of pocket for fees
2. (f): Authorize trustee banks to invest in proprietary mutual funds, but requires disclosure to
beneficiaries, in an annual report of compensation earned by trustee
iii. REVOCABILITY IN A BREACH:
1. “No Further Inquiry” Rule: Ben’s can void self-dealing transactions even if a “fair price”
a. UTC §802: Beneficiaries has the power to DISAFFIRM OR VOID transactions between
fiduciary and trust property or between fiduciary’s property and the trust unless:
b. It was authorized by trust terms, approved by court, beneficiary didn’t object within
SOL, beneficiary consents or transaction of a K made before person became trustee
2. Matter of Kinzler: Executor sold the decedent’s house to the daughter, but the trust had a 1/3
interest in the home, trustee was son in law (daughters always fighting)
a. Holding: A person acting in their fiduciary capacity cannot deal with or purchase
the property in reference to which he holds that relation
b. Reasoning: The fiduciary selling the assets of the trust to themselves is a clear case
of self-dealing, but here it was indirect (trustee/son in law authorized the sale of the
property to his sister in law, when his wife was a co-beneficiary)
c. Rule: Wherever legal services have been rendered for the benefit of the estate as a
whole, reasonable compensation should be granted from the funds of the estate
3. Breach of Duty of Care – Sold too Low: Damages in amount that the estate should have
charged for the painting at the time of the sale (Matter of Estate of Rothko: Painter died)
a. Policy: Want them to make the sales to keep the trust functioning, don’t want them
to not act by deterring them with significant appreciation damages, but just say duty
of care damages are difference
4. Breach of Duty of Loyalty- Not Authorized to Sell: Appreciation damages awarded as an
extra deterrent against this kind of self-dealing transaction
a. Get the paintings back, or if they’re not there, make these two pay appreciation
damages for value of painting at time case decided
i. Sale to Third Party: If buying company still had paintings, beneficiaries
can void the transaction and they get the physical paintings back
ii. Re-Sale to BFP: If 3rd parties had sold paintings to a bona fide third party,
can’t get paintings back –compensated through appreciation damages
c. (2) DUTY OF CARE
i. US developed Securities Acts after 1930s – wanted trusts to invest in corporate stocks
1. In 1954, Uniform Prudent Investors Act (UPIA) created modern responsible investment
theory (flexibility but guidance) – default rules (can contract around)
a. Allows trustee to invest in any asset – Focus on being careful and cautious
b. Have to balance a trusts’ tolerance for volatility and circumstances of the
beneficiaries against the prudence of the trustee
ii. RST §50: Discretionary power conferred upon trustee to determine benefits of a trust is subject to
judicial control only to prevent misinterpretation or abuse of discretion by the trustee – have to give
deference to settlor’s intent to give trustee greater than usual latitude in determining discretion
iii. DUTIES: Put the same time and effort necessary to safeguard the interests of the beneficiaries
1. Duty to Inquire: Even if not requested by the beneficiary, trustee has a duty to inquire about
beneficiary needs for support (Marsman), and if they do request money, duty to research to
determine whether the request falls within the ascertainable support standard (Dunkley)
a. Marsman v. Nasca: Had trustee he inquired, he would have made such payments as
were needed to let him stay in the house – will gave him discretion above stated amts
i. Rule: Breach of fiduciary duty to beneficiary if you involve people outside
of named beneficiaries in the distribution and not making it known that the
trust is theirs for their benefit, whether or not the beneficiary assents
2. Duty to Inform: Tell B’s of rights under trust and inform of changes affecting those rights
3. Duty to Remainderman AND Life Beneficiary: Make sure you grow principal and income
a. Dunkley v. People’s Bank: Trustee breached fiduciary duties to remaindermen by
authorizing ben to take out $ when not needed ($ for third home for “medical issue”)
iv. Exculpatory Clauses drafted by trustee:
i. MINORITY (Marsman) - Generally upheld, but construed narrowly (indep counsel?)
ii. MAJORITY: strike the exculpatory provision written by atty/trustee where no evidence
that meaning of clause was discussed and accepted
v. Uniform Prudent Investor Act §2: Standard of Care
1. POLICY: Pushes trustees to invest in mostly in corporate equities/ stock and a little in bonds,
and away from investing in land, corporate bonds, collectibles, etc.
2. (a) The trustee shall invest and manage trust assets as a prudent investor would, by
considering the purposes, terms, distribution requirements of the trust. In satisfying this
standard, the trustee shall exercise reasonable care, skill, and caution
a. Skill – manage the trust as would a person of ordinary intelligence
i. A trustee who has special skills has a duty to use those special skills
b. Care – Have to gather all necessary facts and understand all options
c. Caution – Necessary for trustee/executor to reach conclusions not on decisions about
how they would invest their own money, but on the purposes of the trust or estate and
the needs of the beneficiaries
i. Harvard College v. Amory: Prudent person – prohibition against risky stocks
1. How do prudent men manage their affairs, considering probable
income as well as probable safety of the capital to be invested
ii. Allard v. Pacific National Bank: Bank was trustee, one building as asset, 99
year lease, no rent jump, sold for $200k worth about $2.5M, didn’t tell ben’s
1. Even though held to prudent standard, not higher (skill), trustee
should have gathered more information about value, put on market
(care), and given notice to beneficiaries (caution) they could have
outbid the buyer, in everyone’s best interest
3. (b) Portfolio Concept: Look at decisions from the context of the portfolio as a whole, look at
resources of beneficiaries, economic conditions at the time, tax and inflation consequences,
asset’s special intrinsic value to beneficiaries
a. Courts normally believe that trust settlor wanted: (1) to preserve corpus of the trust
intact for the ultimate remainder beneficiary and (2) to generate as much income as
possible consistent with the safety of the corpus
i. Rejects notion that risky investments are imprudent investments – all assets
can be wise investments if they’re managed correctly (need to diversify)
ii. Then look at UPIA to decide how to match risk and expected return within
the limits of the investments (how much risk can beneficiaries withstand,
what is the economy like, etc.?)
b. Option 1: Mutual Funds – Uniform Trust Code and Uniform Prudent Investor Act
i. Both approve of use of mutual funds as “safe,” but depends what kind it is
c. Option 2: Index Funds: Boat floats with general economic tide, don’t pick anything
4. (c) Things to Consider: Needs for liquidity, regularity of income, expected tax
consequences, expected total return from income, general economic conditions
vi. Uniform Prudent Investor Act §3: Diversification
1. A trustee shall diversify the investments of the trust unless the trustee reasonably determines
that, because of special circumstances, the purposes of the trust are better served without
diversifying (same as under RST of Trusts §227(b))
a. A “retention” clause appears to allow the successor trustee to retain assets that are
part of the trust estate at the time the successor takes office.
b. Ex: “Stock of X or their successor can be held in a larger portfolio percentage than
would otherwise be permitted by law”
2. Good Practice: Ask client what discretion they wanted trustee to have
a. Settlor’s ultimate decision about how much flexibility to give on diversification –
need more guidance than given in Onassis will
b. Ex: Trustee authorized to retain assets but sells them is not liable merely because the
securities later rise in value, or vice versa. Trustees should not be judged on hindsight
3. Special Circumstances: Duty to diversify unless trust instrument, or unusual circumstances
restricts this duty. “Special circumstances" generally means holdings important to a family, or
if the administration costs of diversifying outweigh benefits (Wood v. US Bank)
a. Ex: UPIA: Allows socially responsible investment if it’s authorized by the settlor,
especially if it’s aligned with the specific purposes of the trust (like charitable cancer
trusts avoiding Phillip Morris) Need connection between purpose, might be allowed
as long as it doesn’t interfere with the financial viability of the trust
b. Wood v. US Bank: $8M trust, 80% of the trust’s stock was in Firstar Bank Stock
i. Holding: Yes. Even if the trust document allows the trustee to "retain" assets
that would not normally be suitable, the trustee's duty to diversify remains,
unless there are special circumstances
ii. Rule: To abrogate the duty to diversify, the trust must contain specific
language authorizing or directing the trustee to retain in a specific investment
a larger percentage of the trust assets than would normally be prudent.
c. Court/Beneficiary Consent: Not dispositive, but might be able to give effect to a
beneficiary’s consent to not diversify (can’t complain later)
i. Not held to be legal consent unless beneficiary gives informed consent
vii. Uniform Prudent Investor Act §4: Duties at Inception of Trusteeship
1. Trustee shall review trust assets and implement decisions concerning retention and
disposition of assets, to bring the trust portfolio into compliance with the purposes of the Act
viii. DUTY OF IMPARTIALITY – SUBSET OF DUTY OF LOYALTY
i. Frequently the interests of the beneficiaries conflict, and trustee has duties to all, as an investment
that looks attractive overall might not be for all beneficiaries as it doesn’t benefit proportionally
a. Disclosure about reasons for more or less disbursement (don’t need to give same amount to
each, but that each are judged on same criteria of determinations)
i. Maintain them both in the same standard of living they had before the trust
b. Impartiality frequently comes up in stress between principal and income
i. Unitrust: Avoids distinctions between “income” and “principal”
ii. Trustee makes payments from the unitrust – don’t worry about whether the “income” is
cash or stock dividends
c. Uniform Principal and Income Act §104: Trustee’s Power to Adjust
i. An alternative to trustee power of adjustment where an otherwise prudent fiduciary
investment portfolio would not fairly benefit income and remainder Ben’s
ii. Allows trustee to treat income and principal beneficiaries with impartiality
1. Have to diversify between level of risks as well as different forms of capital
appreciation and income stream investments
2. Step 1: Classify interest as income
3. Step 2: Then adjust interest from income to principal (equitable adjustment)
iii. (a) A trustee can adjust between principal and income to the extent necessary if the trustee
invests and manages the trust assets as a prudent investor
iv. (b) In deciding whether and to what extent to exercise the power conferred, consider
nature, purpose and duration of the trust, intent of the settlor, identity and circumstances of
the beneficiaries, needs for liquidity, regular income and preservation of capital
1. To what extent the terms of the trust give the trustee power to invade principal or
accumulate income, extent to which the trustee has exercised this power if it
exists in the trust instrument
2. Actual and anticipated effect of economic conditions on principal
d. Uniform Principal and Income Act §401: Character of Receipts
i. (b) A trustee shall allocate to income money received from an entity
ii. (c) A trustee shall allocate the following receipts from an entity to principal:
1. (1) Property other than money; (2) Money received in one distribution or a series
of related distributions in exchange for part or all of a trust's interest in the entity;
2. (3) Money received in total or partial liquidation of the entity
e. Uniform Principal and Income Act §404: Principal Receipts
i. A trustee shall allocate to principal: (1) Assets received from a transferor during the
transferor’s lifetime, a decedent’s estate, a trust with a terminating income interest, or a
payer under a contract naming the trust or its trustee as beneficiary; (2) Anything
(money/property) received from the sale, exchange, liquidation, or change in the form of a
principal asset, including realized profit
HOW SHOULD YOU PLAN FOR INCAPACITY?
a. (1) Establish a Conservatorship
i. Concerned relative can bring a conservatorship proceeding, serve person who you think is
incapacitated with the proceeding, try to appoint a committee or guardian of the person’s property
1. Appoints a conservator to take on the role of managing that person’s affairs
2. If appointed, conservator becomes similar to a trustee – manages finances of conservatee
and must make annual accountings to the court
a. Cumbersome and expensive, person doesn’t want to be deemed incapacitated
3. Alternatives: Revocable living trust, joint tenancy or agency bank accounts
ii. Uniform Probate Code §5-401: Protective Proceeding
1. Court may appoint a conservator or make a protective order to manage affairs of (1) a
minor who owns property requiring management or (2) any individual that is shown, by
clear and convincing evidence, to be unable to manage their property and affairs because of
an impairment in the ability to make decisions (preponderance of the evidence the
individual has property that will be wasted unless management is provided)
b. (2) Establish a Power of Appointment:
i. A power of Appointment is not subject to a fiduciary duty, so failure to use the power does not
expose the person appointed to legal liability (set up takers in default if donee fails to exercise)
1. Common Law: Creditors could NOT access the property UNLESS donee exercised the
right (even if exercised in someone else’s favor)
ii. STRUCTURE: Similar to a trust, but instead of dictating how the trust principal will be distributed
when the trust is terminated, leave that decision to someone else
1. Donor (Person who creates the power), Donee (Person who exercises the power)
1. Estate of Hamilton: Power of appointment exercisable only by specific reference to
the wife’s final will, and if she didn’t specify in her will
a. Issue: Was the donee’s exercise of power valid even though it did not
specifically reference the correct will in its exercise of the power?
b. Holding: No. Her power of appointment was valid under his first will, but
she referred to the wrong will of her husband in her will, and so the power
she was referring to had been retracted in a secondary will
c. Notes: Still have incentives to discourage inadvertent exercise of the power
i. Creditors of donee of a general power may reach the appointive
property if and only if the donee exercises the power
2. Permissible Appointees: People to whom the donee appoints the property
1. Normally donor restricts the people to whom donee may appoint
3. Objects of Power/Class of Permissible Appointees: Class eligible to receive property
4. Takers in Default: People who would take without exercise of power of appointment
iii. SCOPE OF POWER: Determines if there is unlimited or limited power to choose ben’s
1. General Power: A general power grants to donee the right to appoint the property to: (1) the
donee himself, (2) to donee’s estate, or to the creditors of (3) either the donee or (4) the
donee’s estate (if any one of those 4 are present, then it’s a general power)
a. General if trust gives a beneficiary an unqualified power to invade principal, then
that beneficiary has a general power of appointment over the principal
b. Creditors can reach property even if Donee doesn’t exercise the right b/c holding the
power is essentially the same as owning the assets
c. Marital Deduction Trust: To be a gift and to qualify for tax deduction purposes,
have to at least give them the general power of appointment to direct where the
property goes at death (legal tax evasion)
2. Special/non-general power: Donee can choose among a restricted class of potential
appointees (“among my relatives” or “among my children”)
a. If you say “you can give it to anyone, except the donee” then special
b. Done doesn’t have to distribute to all people within the class of permissible
appointees – free to exclude objects of the power (so has exclusive power)
c. But if donor requires donee to appoint some assets to each member of the class, then
the power is non-exclusive, or non-exclusionary
d. Can’t appoint the property to themselves – so creditors CANNOT reach property
e. Test: how much is the minimum amount that must be distributed to each member of
the class for the appointment to be valid?
iv. TIMING OF POWER: Some instruments limit the timing when donee can exercise power
1. Presently Exercisable: Donee can exercise power of appointment immediately
2. Postponed Power: Power exercisable by donee allowed only after expiration of a stated
time or after occurrence of a specified event
3. Testamentary Power: When the donor requires that the power be exercised by will
v. BENEFITS: Can add flexibility into any estate plan, generate tax advantages
1. Blind Exercise: Exercising a power of appointment without specifying where it is or you
came from (“I hereby leave all my property, including property over which I have a power
of appointment to x”)
c. (2) Establish a Power of Attorney
i. In giving a PoA to someone, the principal authorizes an agent, signed, in writing, to perform
specified acts on behalf of the principal (agent stands in principal’s shoes)
ii. At CL, the powers of attorney terminate at death or when principal becomes incapacitated
1. Today, all states have statutes allowing PoA to be durable (survive principal’s incapacity)
a. UPAA – Power of attorney is presumed to be durable unless explicitly says its
not, and also allows multiple people to have power of attorney
2. Powers of attorney subject to same attacks as wills (undue influence, formalities, capacity)
iii. To create a valid power of attorney, there must be a WRITTEN doc, SIGNED by the principal.
1. Duties: Agent has to act with care, caution and diligence (similar to Prudent Investor Act),
keep records and accounting, preserve principal’s estate plan
a. Power of Attorney shall not be construed to grant authority to an attorney in fact
to make a gift or revoke a gift of the principal’s property in trust or otherwise
2. Majority/UPAA: An agent operating under a power of attorney is prohibited from making
gifts to themselves BUT within the power of attorney document, principal can allow for an
agent to give another agent a gift (or give a gift to themselves) if they expressly authorize it
3. Under UPAA, complicated with §217 of IRS code (for $14k/ year annual gift exclusion),
and then additionally need to include special instructions the right to make a gift to himself,
and need special instructions to allow for a gift above §217 allowance
a. Any act has to be ratified in writing to be valid (Estate of Houston)
4. Benefits: Can be used in place of an inter vivos trust
5. Drawbacks: How to enforce the duties of the principal ($3B stolen under color of title)
iv. Good Practice: Good to have both an irrevocable inter vivos trust AND PoA – PoA can make
decisions while property is being transferred to trust AND transfer property that later comes into
the estate into the trust – need a trust that’s broad, but with Power of Attorney, can act quickly
1. Need to integrate– have person trustee of revocable living trust be the agent under the POA
d. (3) Establish your Durable Healthcare Power of Attorney or Advanced Directive
i. Individual appoints an agent to make health care decisions that the individual would make if he had
the capacity – intended to use “substituted judgment
ii. DURABLE POWER OF ATTORNEY FOR HEALTHCARE/PROXY FORM:
1. Creates agency relationship where someone appoints an agent to make healthcare decisions
on their behalf if the individual is incapacitated and can’t make decisions on their own
a. Can give agent “substituted judgment” substitute the perspective of the patient into
your own mind, make decisions based on their judgment
2. If you can’t show substituted judgment (what the patient wanted or would have wanted),
then look at what’s in the best interest of the patient
a. Weiland v. Weiland: Require conservator to show that withdrawing the artificial
support is commensurate with the person’s best interests – worse when they’re not
in a coma but no brain function
ii. ADVANCE DIRECTIVE OR “LIVING WILL” FOR END OF LIFE DECISIONS
1. Legally enforceable document about when a physician should authorize life-extending
treatment, how to treat when they become incapacitated
2. Good Practice: Best form is a combination of both