Bruce Donn Cassity
WILLS & ESTATES WINTER 2014
Professor Rust Tippett
rust.tippett@gmail.com
435-640-7350
I. FIVE JUICY QUESTIONS
WHERE THE HECK DOES PROPERTY GO UPON DEATH OF DECEDENT?
A. Was the property of decedent held in Joint Tenancy with right of survivorship?
1. YES  property goes to surviving joint tenant through right of survivorship – NO PROBATE
2. NO  continue analysis
B. Was there a Beneficiary Designation attached to the property?
1. YES  property goes to designated beneficiary as a contractual matter (clause w/in K)– NO PROBATE
a. Examples = Retirement Plan, Life Insurance Policy, Payable on Death account (bank account or brokerage firm
account that has a BFY designation), Transfer on Death Deeds (some states—deed says “on my death, deed shall
be transferred to X”) Think of it as Third Party K Matter (open account/plan- separate line>fill in BFY desig.)
2. NO  continue analysis
C. Was the property held in a Revocable Trust?
1. YES  property held in revocable trust is distributed according to terms of revocable trust – NO PROBATE
a. Revocable Trust (aka Living Trust) = will substitute containing dispositive provisions of estate that can be
revoked/altered during lifetime of Settlor
2. NO  continue analysis
D. Did decedent die with a Will?
1. YES  property distributed according to terms of will after probate – PROBATE REQUIRED
2. NO  decedent died fully or partially intestate
3. What does will do?
a. Says who get’s what of T’s property:
i. Specific gift – specifically identified property to specific people
ii. Pecuniary/General gift: monetary gift to someone
iii. Residuary gift – what’s left over
b. Names one or more Personal Representative – Fiduciary/ executor of estate > his job to martial estate assets
(identify assets, put assets in his name as executor, inventory assets, pay D’s creditors w/assets, evidence to
beneficiaries, property in estate is managed, (income and state) tax returns for assets)
i. Administrator CTA (with will attached) – not executor cause not named in will
c. Administration provisions: what powers executor does/doesn’t have
d. Names guardian of decedent’s children
e. Sometimes creates testamentary trust (terms of trust: frequency of distributions, duration, appointed trusteecontained in will)
4. Codicil = amendment to a will (re-dedicates the will)
E. Did decedent die Intestate? – property distributed under state Rules of Intestacy after probate – PROBATE REQUIRED
1. Intestacy occurs when
a. No estate planning occurred – full intestacy
b. Will does not dispose of everything (e.g., contains no residuary clause) – partial intestacy
c. Will declared invalid
i. Not executed properly
ii. Testator lacked testamentary capacity
iii. Exercise of undue influence
iv. Excessive debt and creditor demands
v. Someone brought will contest
2. BFYs are HEIRS not devisees
F. Examples
Situation
Result
A
RT & Pour over W.all to daughter in trust  No probate
(testamentary Irr T); RT=fully funded
B
Same but house not in RT
 Assets in RT avoid probate but house has to go through probate
 At end of probate, house goes where Pour Over Will says it goes 
1
C
D
E
F
Same but house not in RT & no pour-over
will
Retirement Plan to sister
No Estate Planning
Will – outright to neighbor
G
Will – testamentary trust for nephew
H
Will – house to niece – no residuary clause









RT  goes to daughter through irrevocable trust
Assets in RT avoid probate
House=intestacy (has to go through probate)  not what T wanted
Retirement Plan would avoid probate and go to sister
Estate passes through probate  assets disposed of through intestacy
Estate passes through probate
At end of probate, assets go outright to neighbor
Estate passes through probate  assets fund irrevocable trust
Terms of trust set forth in will itself
Estate goes through probate  house to niece; all other prop> intestate
II. GOVERNING LAW HIERARCHY
A. Governing Instrument = Will or Trust
1. If it address the issue that you are trying to resolve  Will or Trust governs
2. If Will or Trust is silent  look to Probate Code
B. Probate Code = default rules that govern if and only if the Will or Trust is silent
1. If Will or Trust AND Probate Code are silent  look to State Law Cases
C. State Law Cases
1. If you still cannot find the answer  look to Traditional Common Law Principles
D. Traditional Common Law Principles
E. Other Relevant Law
1. Internal Revenue Code
2. Constitutional Law – very rarely comes into play
F. ALWAYS READ GOVERNING DOCUMENT; ALWAYS KEEP IN MIND WHO HOLDS LEGAL TITLEAUTHORITY TO SIGN DOCUMENT>> WILL ALWAYS BE FIDUCIARY.
III.
A.
PROFESSIONAL RESPONSIBILITY/REPRESENTATION ISSUES
Nature of Representation: focus= distinction btwn representing someone in individual v fiduciary capacity
1.
2.
3.
4.
First Q = Who is the Client in Trust/Estate context? (i.e., Who do I represent?)
Second Q = Do I represent that Client in his individual capacity or fiduciary capacity? (i.e., In what capacity do I
represent the client?; fiduciary? BFY?)
a. If I represent trustee who is being sued (e.g., beneficiary suing for mismanagement) is that me representing
trustee in his individual capacity? BOTH (If been representing him all along-then been representing them in
fiduciary capacity, but if now being sued>sued in individual capacity)
To whom do you owe a duty of care?
To whom do you owe a duty of confidentiality?
B. Conflicts of Interest
1.
2.
Actual–can’t rep. both clients b/c nature of conflict is such that>impossible for you to represent both
a. E.g., you cannot represent A and B when A sues B, OR A&B fighting over prop OR fighting over a certain
bequest (saying each is the “sole BFY”); OR when BFY is accusing FDY of inappropriate conduct
b. FOCUS: Cannot effectively represent both cause you’d cause one to necessarily suffer
i. Helping 1 party win would mean helping the other lose
c. If rep 2 parties & actual conflict arises, withdraw frm both of them; CAN continue w/one only if other consents
Potential – could exist whenever you represent multiple clients on a particular matter
a. E.g., representing husband and wife on a joint estate plan; 2 ppl making partnership agreement; OR representing
the same person in their FDY & BFY capacity, FDY and BFYs in same matter, or multiple BFY’s
b. Fully-Informed Written Consent REQUIRED – before can represent both/all parties involved
C. Duties Owed to Clients
1.
2.
3.
Duty of Care
Duty of Confidentiality
a. Joint: no duty of confidentiality
b. Separate: yes, duty; cannot disclose what one client tells you to the other
NOTE: for estate plans, attorney for testator owes a duty to beneficiaries of the estate plan he is drafting
a. Beneficiaries can sue on theory of
i. Tort (malpractice)
ii. Contract (3rd party beneficiary)
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4. NOTE: attorney for fiduciary DOES NOT mean he represents the BFY (unless both written approve)
D. Example – recognize that these relationships can become very complicated very quickly
1. You represent H & W for joint estate plan – they create an IrrT for benefit of kids with wife’s sister as trustee of trust
a. You represent husband and wife in their individual capacity to create estate plan
b. If wife’s sister turns to you for legal advice  represent wife’s sister in her fiduciary capacity
i. Owe duty of care & confidentiality to fiduciary; can’t communicate info> BFY w/o fid’s approval
2. Mother of wife dies  wife and wife’s sister are executors and beneficiaries
a. you represent W in her fiduciary capacity as executor-estate & in her individual capacity as estate BFY
b. You could also represent the sister in those same capacities (UNLESS conflict of interests)
3. Trustee may need 2 lawyers if he’s acting as both TRUSTEE & BFY (one advising in FDY capacity; other in BFY)
if BFY sues Trustee (cause sued in his individual capacity) Might be Prudent to get another attorney: separate advice
IV.
ESTATE & TRUST TERMINOLOGY
General Name
Will
Intestacy
Governing
Instrument
Will = signed document that
allocates assets at death
Deceased/Creater
Testator/Testatrix = person who
creates/signs will
Statute/No personal Instrument
(May be full or partial
intestacy—all through probate)
Decedent = person who dies
Assets/Governed
Body
Probate Estate = prop testator
owned at time of death
Probate Estate = prop decedent
owned at time of death
Fiduciary (hold legal
title to assets of
estate/trust in his
fiduciary capacity)
Trust (Revocable &
Irrevocable)
Trust = signed document
that allocates assets
Settlor/Trustor (Grantor
– tax) = person who
creates trust (you can have
multiple Settlors)
Trust Estate/Trust
Corpus/Trust Res =
property held in trust
Trustee (you can have
multiple trustees)
Executor = PR named in will
Administrator
Administrator CTA = PR
Personal Representative =
appointed by court if no one named general fiduciary of estate (e.g.,
or if named person unable or
Administrator CTA)
unwilling to perform duties
(CTA = “with will attached”)
Personal Representative =
general fiduciary of estate (e.g.,
Executor, Administrator CTA)
Beneficiaries (those
Devisee = person named as
Heirs = ppl who receive prop
Beneficiaries
who receive assets)
beneficiary in will
under intestacy rules(term of art)
NOTE: Usu for RT, Settlor = Trustee = BFY  Settlor = BFY while alive & RT also has remainder BFYs when Settlor dies
NOTE: For tax reasons (beyond scope of course), Settlor ≠ Trustee or BFY for Irrevocable Trust
Distinction between Fiduciaries and Beneficiaries
Entity
Estate
Creator
Testator (will) or
Decedent (intestate)
Beneficial Interest Held by
Devisees (will) or Heirs (intestate)
Settlor
Court/Conservatee
Principal
Donor
Legal Title Held by Fiduciary
Personal Representative
 Executor- named as executor
in will
 Administrator- Intestate
 Administrator CTA- died
with will but person name is
not named in the will
Trustee/Settlor
 Settlor = Trustee (often)
Trustee
Conservator
Agent
Custodian
Revocable Trust
Settlor
Irrevocable Trust
Conservatorship
Agency (Power of Attorney)
UTMA(Uniform Transfers to
Minors Act) Custodianship
Special Administration
Testator/Decedent
Special Administrator
Devisees/Heirs
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Settlor (while alive-can revoke RT
any time); Remainder BFys at death
Beneficiaries
Conservatee
Principal
Minor
(Emergency Probate)
NOTE: Fiduciary owes fiduciary duties to person holding beneficial interest
NOTE: Legal Title = held by fiduciary – property MUST be taken by fiduciary in his/her fiduciary capacity (don’t intermingle)
 Personal representative – title needs to be taken by X, personal representative of the estate of Y
 Trustee – title needs to be taken by X, trustee of the Y trust
 Conservator – title needs to be taken by X, conservator of the estate of Y
V. FIDUCIARY POWERS AND RESPONSIBILTIIES
A. Fiduciary Powers
1.
2.
General = fiduciaries have very broad powers–whatever an indiv. has over own assets subject to fid. duties
a. ie. can buy/sell assets, borrow/lend money, insure assets, manage assets, sign K, conduct litigation, etc
ALWAYS READ GOVERNING INSTRUMENT to see if it places any restrictions on fiduciary’s powers
B. Fiduciary Duties
1.
2.
3.
Arise for:
a. Estate (will/intestate: probate estate) – PR will owe fiduciary duties to devisees or heirs of estate
b. Revocable Trust – Trustee (other than Settlor) will owe fiduciary duties to Settlor/Remainder BFYs
c. Irrevocable Trust – Trustee will owe fiduciary duties to beneficiaries
Preliminary Management Responsibilities
a. Marshal assets –needs Letters from judge to transfer assets to PR’s name in his fiduciary capacity
b. Pay bills- that were outstanding at time of T’s death
c. Notify creditors– creditors have ONLY 4 months after notice in which to submit a creditor claim
i. PR’s job to evaluate claim’s validity; Paid off top: heirs disclaim, 1st secured, unsecured> pro rata
d. Get Employer ID # (EIN) from IRS for estate – estate is its own, separable income-taxable entity
e. Inventory assets – lists all assets held in estate & estimates value of those assets as of date of death
i. Determine what D owned (may need appraisals: value of business, real estate, etc.)
ii. Determine which assets are held in RT and which assets are not held in RT <PROBATE required
iii. Filed with court (No need w/Trusts, BFY designations, JT)
(a) Probate Referees (CA): additional complexity–before submitting inventory must be approved by
probate referee who independently values all assets
On-going Management Responsibilities
a. Pay taxes – PR needs to file three sets of returns
i. Personal Income Tax Returns – Form 1040– final personal income tax returns of decedent (any that have not
yet been filed—e.g., previous tax year if not yet filed and final tax year) (RT- alter ego when living)
(a) Due 4/15 of year after year when D died (income D had during calendar year prior to death)
ii. Fiduciary Income Tax Returns–Form 1041–for any income earned frm estate assets after Ds death (Trustee
of Irr Trust, PR of estate for income generated from that estate, successor of RT once settlor dies)
(a) All income of estate are accounted for on one fiduciary income tax return regardless of whether assets
are held in revocable trust or in probate estate (consolidated)
(b) Filed every year until assets are distributed to BFYs
(c) NOTE: 1041 Form for Irr Trusts: as soon its created, trustee must start filing 1041 for income generated
iii. Estate Tax Returns–Form 706–estate tax return for any estate taxes due; all paid before distribution
(a) ONLY if estate + taxable gifts is larger than tax return minimum = $5mil>$1mil
iv. Gift Tax Return – Form 709 – Must report any taxable gifts made during lifetime (this gets done during
lifetime of Testator) (and taxable gifts reduce dollar for dollar the $5mil estate tax exemption)
b. Accountings – PR needs to file accountings with court and provide them to BFYs
i. Accounting = statement of all that’s happened financially in estate during accounting period
(a) Start at: Assets & liabilities of trust/estate as of beginning of the period – beginning balance
(b) + Income Items that came during accounting period
(c) – all expenses throughout period
(d) – Distributions to BFYs throughout accounting period
(e) = Closing Balance = Assets and liabilities of trust/estate as of the end of accounting period
c. Prudently preserve and manage/sale/invest assets – properly manage real estate, keep real prop
insured/preserved, pay prop taxes, investments/assets (e.g., property, stock portfolio, etc.) need to be diversified,
ensure sufficient liquidity in asset portfolio to pay taxes, expenses, distributions, etc.
d. Keep beneficiaries fully informed with activities of trust/estate give copies of trust)
i. Annual accountings
ii. Notice of other items – anything else that would affect beneficiary’s interests (e.g., lawsuit)
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e.
f.
g.
Keep appropriate records
Segregate assets–keep trust/estate assets separate & apart from Fdcy’s own assets – NEVER comingle
Make distributions to beneficiaries
C. Post-Mortem Trust Administrator (RT) Successor trustee simply steps in&starts managing trust prop
1. Duties–all of above duties PLUS duty to send notice to BFYs of what’s going on; give opp. to object
a. Thus, similar notice to that required by probate still happens – just without court involvement
b. Objections, if any, can still be filed in probate court
c. UT – does not require that notice be given as well to intestate heirs (but this is a good idea regardless)
d. CA – § 16061.7 – requires notice to be given as well to intestate heirs
2. Additional Duties
a. Duty to Creditors – similar to duty to beneficiaries (only have for months to object)
i. Creditors: paid off-top before BFYs, so creditors, not BFYs may get anything if estate=really small
(a) EXCEPTION to getting paid off the top = family protection statutes
b. Duty of Loyalty – NO self-dealing with trust/estate assets  all transactions with trust/estate forbidden—e.g.,
lend/borrow money or buy/sell property from/to trust/estate)
i. Duty runs to beneficiaries and creditors
ii. CA: for probate estate no transaction btwn PR & estate is permitted w/o crt approval-even w/full IAEA
iii. UT: any transaction btwn fiduciary & estate is voidable–can be set aside by BFYs (even if it’s fair)
iv. NOTE: always look for more subtle situations where there could be a duty of loyalty problem
(a) E.g., trustee owns car dlrship in own individual capacity & becomes trustee of trust that owns
competing dealership  merely serving as trustee would likely be a breach of duty of loyalty
v. Remedies for Breach of Duty of Loyalty
(a) Beneficiaries can seek damages (aka surcharges)
(b) Trustee/PR could be denied trustee fees or trustee fees could be reduced
(c) Trustee/PR could be removed from office
(d) Injunctive relief – e.g., specific performance
VI.
TRUSTS
A. DEFINITION: Legal entity (legal relationship between the trustee and BFY) (RT= alter ego of Trustor)
B. TRUST BFY’S:
1. Income Beneficiary: Receives income from income-generating assets
2. Remainder Beneficiary: Typically receive trust principle upon death of income beneficiary (when trust dissolves)
3. Regular BFY: pulls from principle (Like takes $20 annually from the trust)
4. Unitrust: when person receives percentage of the principle (like 3% each year)
5. Mandatory distribution: “A shall pay B”, usu a rqmt that income be paid to income beneficiary each year.
6. Discretionary distributions: “A may pay B”, often have a safety net allowing BFYs to receive principle in case of
medical emergency, support, etc.
C. Trustee: holds legal title to assets, but holds a fiduciary responsibility to BFYs and can be held accountable for misuse of
funds. If trustee purchased something, opened account, would say: A, trustee of the J & J trust
D. Revocable Trusts
1.
2.
3.
4.
Reasons to Create (always created during lifetime)
a. Avoid Probate
b. Avoid Conservatorship- crt supervised proceeding (like probate) created for mentally incapacitated person
Revocable trusts DO NOT
a. Save Income Tax – tax ID is same as indiv’s SSN  revocable trust is simply an alter ego during your life
i. Still have to report income from assets held in RT on your individual tax return during your life
b. Save Estate Tax – assets held in RT will be included in your gross estate for fed estate tax purposes when you
die (just like assets held in your individual capacity)
i. may have provisions to help mitigate estate tax like will, but per se RT has no special way of reducing it
c. Provide Asset Protection – RT is your alter ego  assets are treated as your own
i. Trust is revocable – you can revoke/amend/defund it during your lifetime
(a) Only difference = you are doing it in your fiduciary capacity
ii. Creditors can reach RT assets (just like assets held in indiv. capacity) b/c> complete control over them
Will substitute – provides dispositive terms for the distribution of trust assets without the need for probate
a. Settlor’s death> successor trustee immediately>RT trustee>starts administering trust/ distributing assets to BFYs
i. NO PROBATE– assets are held by trustee of RT in fiduciary capacity NOT by trustee in individual capacity
(a) Assets held in your name as individual>subject to probate unless have JT or BFY designation
Funding = all assets are held in RT
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Assets with Formal Title – should be held by individual in his fiduciary capacity as trustee of revocable trust
i. Magic words = transfer deed/account from A as an individual to “A, trustee of the A revocable trust”
ii. Examples of Assets = bank account, real property, brokerage accounts, partnership, etc.
b. Assets not susceptible to Formal Title – e.g., Tangible Personal Property (or intangible if no> formal title)
i. General Assignment – broad to assign all other assets to RT (used to get tangible personal property into RT)
(a) ALWAYS do it cause want everything in RT other than retirement plans
(b) Could be a schedule attached to RT or a separate document
(c) Magic words = “I hereby transfer [all my tangible personal property] into my revocable trust”
ii. Generally, you make General Assignment broad enough to also include real estate and brokerage accounts
(a) NO GUARANTEE that broad language will actually be sufficient to avoid probate (but it might work)
(b) GUARANTEED to work for tangible personal property as well as intangible w/ no formal title
iii. DON’T USE FOR IRREVOCABLE TRUST- only used for specific transfers
c. Exception = retirement plans are an exception to rule that you should hold all assets in a RT
i. RT CANNOT hold retirement plans – fed law prohibits anyone other than employee frm owning retire plan
(a) No practical consequence – retirement plans avoid probate anyway b/c it has a BFY designation  no
real reason why you would want to put retirement plan in revocable trust even if you could
5. Pour Over Will
a. Signed when you sign a revocable trust
b. Contains only one dispositive provision = “everything that is subject to this will gets distributed at the end of
probate according to the terms of my revocable trust”
i. NOTE: pour over will must pass through probate but assets will still be disposed of according to terms of
pour over will instead of through rules of intestacy
c. Goal = fully fund revocable trust – you want to put all assets into RT if you can b/c ONLY the assets held in
revocable trust are subject to terms of revocable trust upon death
i. Pour over will = superfluous if revocable trust fully funded
ii. Pour over will = necessary to transfer to revocable trust any assets not held in revocable trust
(a) Property not held in revocable trust subject to probate under terms of pour over will
6. Administrative Trust: when settlor dies, RT becomes irrevocable Administrative Trust
a. Fiduciary duties are same that PR of estate has to do, w/o crt involvement (unless BFY file objections)
E. Irrevocable Trusts – no one can revoke
1. Reasons to Create – irrevocable trust almost always created in lieu of making an outright gift to beneficiary
a. Control Distributions – allows distributions to be controlled over time
i. E.g., Settlor does not think it prudent to give X $1MM outright  rather than gifting money outright, Settlor
can put money in trust so that X cannot access that money all at once (restrict recipient’s access)
b. Asset Protection
i. Outright gift of money to X allows creditors to come after X; BUT, creditors can’t access assets in an IrrT
c. Tax Reasons- allocate GST exemption to that trust (and no estate tax either) + all lifetime gift tax benefits
2. Two Irrevocable Trust Types
a. Inter Vivos – trust that is created during the lifetime of the Settlor
b. Testamentary – trust> comes into existence upon death of the Settlor  a new entity=recipient of a bequest
i. Created under Will OR Revocable Trust (e.g., “when I die, I want $X to go to A irrevocable trust, which
will be created upon my death and administered under these terms”)
3. Funding – functions as a gift to that irrevocable trust
a. Same way as you would fund RT – title to any property transferred to X, trustee of the Y irrevocable trust
i. Testamentary Irrevocable Trust
(a) Created by fully-funded Revocable Trust  assets do not pass through probate
(b) Created by Will  irrevocable trust would be funded after will passed through probate
b. Clearly defined assets – you need to identify specific assets and put those assets into the irrevocable trust
i. NO General Assignment
ii. You no longer own assets that are transferred to irrevocable trust – like a gift
4. Beneficiaries
a. Two Types for Irr. trusts
i. Income Beneficiaries- net income from trust (dividinds on stock, interest on bonds, income frm real estate)
(a) Could have successive Income BFY’s but won’t have Remainder until trust dissolves
ii. Remainder Beneficiaries- whatever left over is given to Remainder BFY when trust is dissolved
b. Clarity important
i. TO WHOM can assets be distributed?
ii. WHEN can assets be distributed?
iii. Under what circumstances MAY assets be distributed?
a.
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5.
6.
iv. Under what circumstances MUST assets be distributed?
Distributive Provisions – limited only by imagination of Settlor
a. Distributions can be
i. Mandatory or Discretionary
ii. Income or Principle
(a) Income= dividends, interests, etc. (generated income)- put million in stocks> income is extra that stocks
make (often have an income BFY who gets paid based on how well the $ did)
(b) Principle= original money- put million in trust> that million is the principle
b. Typical Scenario: income BFY=adult child of Settlor; remainder BFYs=grandkids of adult child of Settlor
Powers of Appointment – apply only to those assets subject to the Power of Appointment (Optional)
a. Definition = power that is given to someone else to change the BFYs of an irrevocable trust
i. Can only be exercised in the manner that the trust instrument prescribes
b. Purpose = builds flexibility into dispositive plan (allow for circs that Settlor can’t foresee when trust is created)
c. Scope = limited only by terms of trust – can be broad or narrow
i. Can say which assets it governs
ii. Can say who Permissible Appointees are
iii. Can say if assets can be put in trust or not
d. Terminology
i. Settlor = creator of PofA (grandma-donor)
ii. Holder = persons who holds PofA (daughter-donee)
(a) Usually, holder = income beneficiary of trust, but doesn’t have to be
iii. Takers-in-Default = those who will get prop if Holder does not exercise PofA (grandkids)
iv. Permissible Appointees = person to whom prop can be distributed (or held in trust) under PofA
(a) Class of Permissibles can be broad or narrow – Settlor can make them anyone he wants:
(1) E.g., everyone in world  broad Power of Appointment
(2) E.g., X’s kids, issue, or charity  narrow Power of Appointment
e. Function
i. If Holder does nothing  Takers-in-Default get property in equal shares
ii. If Holder exercises Powers  estate plan has flexibility b/c Holder can change dispositive plan
(a) E.g. can alter proportions, put some funds in trust for another, remove someone completely as BFY, etc.
iii. Example: Grandma creates IrrT for Daughter w/ D as income BFY & D’s children as remainder BFYs
(a) Problem = G doesn’t know how grandkids will turn out (e.g., drug problem; independently wealthy)
(b) So, G gives D Power of Appointment to alter percentages GC get – now D has flexibility
(1) Can reduce or eliminate share (e.g., if doesn’t need or deserve the money)
(2) Can provide that a GC’s portion is held in further trust with other conditions
f. Types
i. General Power of Appointment – term of art – if Power of Appointment is exercisable in favor of the
Holder, Holder’s estate, Holder’s creditors OR creditors of Holder’s estate  General Power
(a) Consequences = Bad
(1) Assets subject to General PofA will be taxed as part of Holder’s estate for federal tax purposes
(2) Holder’s creditors can reach assets held in trust and subject to General Power
ii. Limited Power of Appointment – term of art – limited if it is not general
(a) Almost always preferable to a general power
(1) Assets will not be taxed as part of Holder’s estate–at least PofA by itself won’t cause this
(2) PofA itself won’t cause trust assets to be accessible to Holder’s creditors
F. Amending Trusts
1.
Revocable
Trust
Trust instrument will prescribe procedures for how trust can be amended
a. Failure to follow procedures  amendment NOT valid
Why create
When create
Funding
Trustee
Avoid Probate.
Avoid
Conservatorship
Lifetime
-Real Estate
-Bank accounts
-Brokerage
accounts
-General
Assignment
-NOT retirement
plan
7
Settlor
Beneficial
Interests
Settlor
Termination
Death
Irrevocable
Trust
Control
Distributions
Asset protection
Taxes
Inter-vivos (in
life)
Testamentary
(death)
SAME but not
general
assignment
Corporate
Individual
BFYs
Whenever the terms
of the trust
terminates. There
are “dynasty trusts”
designed to last
forever
VII. INCAPACITY & CONSERVATORSHIP
A. Definitions
1. Incapacity – physical or mental inability to manage one’s own financial affairs
2. Conservatorship (aka lifetime probate)– crt supervised entity created when an individual is deemed> incapacitated
3. Conservatee = incapacitated individual
4. Conservator = fiduciary appointed to manage conservatee’s affairs
B. Process – more difficult cause crt wants to ensure that conservatee’s civil rights are not taken away from him/her
(usually for the rest of conservatee’s life) unless it is absolutely necessary
1. Similar to probate process (including all the headaches)
a. Same expenses, delays, inconveniences, and public disclosure as probate
2. Additional process– special protections to ensure necessity of taking away conservatee’s civil rights (right to manage
own assets, to K, etc.; crt wants> more careful supervision) conservatorship can be even worse than probate
a. Physician’s certificate – crt declaration that person is actually incapacitated
b. Court investigator often appointed– interviews proposed conservatee to make sure> really needs conservatorship
c. PVP Attorney(Probate Volunteer Panel)-pool of attorneys some crts use to appoint attorney to represent cnsrvtee
3. Conservator Duties – same fiduciary responsibilities as PR owed to conservatee
C. Avoiding Conservatorship– assets held in your name as individual are subject to conservatorship if you are
incapacitated UNLESS
1. Revocable Trust = best way
a. If fully funded, RT allows successor trustee to step in immediately after incapacity to manage assets – assets are
held in name of trustee in his fiduciary capacity not in name of conservatee in his individual capacity
i. MAKE SURE RT is fully funded– otherwise assets subject to conservatorship (lifetime probate) regardless
of trust terms
b. Successor trustee owes incapacitated Settlor a fiduciary duty during lifetime of incapacitated Settlor
2. Durable Power of Attorney = adequate
a. Agent under durable power of attorney could manage assets held in individual’s name after incapacitated
i. But financial institutions are less leery of and more comfortable with revocable trusts b/c the fact that assets
are actually held in trust means the person really intended for the asset to be in the trust in the first place
VIII. REPRESENTATION OF MINORS
A. Problem = minors (<18) cannot protect his/her interests as a beneficiary of trust/estate
B. Solution = get someone else involved who will protect minor’s interests
1. Parents = natural guardians of minor
a. If no conflict of interest  parents can provide protection (e.g., notice can be sent to parents)
b. If conflict of interest  parents cannot effectively represent minor (e.g., two competing wills submitted to
probate where one leaves everything to parents and other leaves everything to children of parents)
2. Virtual Representation – if parents are unavailable  kid representative needs court approval
a. Doctrine of Virtual Representation = a person may represent the minor’s interest in the proceeding if he/she
has identical interests to those of the minor
i. KEY = identical interest
(a) Ex – a will leaves residue to four people in equal shares one of whom is a minor  any of the other 3
residual beneficiaries can represent that minor child b/c they have identical interest
(b) Ex – remainder BFY& a contingent remainder BFY – trust provides that X is income BFY& remainder
goes to Y when X dies, but if Y is not alive at time of Xs death, then prop goes to Ys nieces & nephews
(1) Y = remainder BFY and Y’s nieces and nephews are contingent remainder BFYs  Y can
represent his nieces and nephews b/c the only interest they would have is identical to that of Y
b. Critical ?= is person who wants to virtually represent minor really in position to look out for minor’s interest?
i. Depends on the issue involved
ii. Example – income beneficiary and remainder beneficiary  interests are not identical at all
(a) Income BFY: wants investments made to ensure as much income as possible (e.g., high-yielding bonds)
8
3.
(b) Remainder BFY – wants investments made to ensure growth of estate (e.g., growth stocks)
(c) So, if parents are income BFYs & children are remainder BFY  parents could not effectively
represent minor children’s interests (conflicts as parents and conflicts as virtual representation)
Guardian ad Litem
a. Appointed by crt for this particular issue/proceeding to represent interests of the minor who is not in a position to
represent his/her own best interests
b. Usually a trust/estate lawyer in whom the court has confidence
IX.
PROBATE= assets held in D’s name as an individual either through will or intestacy
A. Crt supervised administration of estate to make sure: 1) prop gets in the right hands & 2) make sure that the people who
get prop have clean title
1. Also, Provides orderly method of distribution
2. Clean title reached by crt: getting order for final distribution and getting transfer recorded
a. Form of Proof:
i. CA- Order of final Distribution can be used like deed & recorded to show updated title
ii. UT- PR granted authority to sign over deed that transfers title that can the nbe recorded
B. General Process: Occurs in state where decedent lived/resided at time of death
1. inventory the property AND submit inventory to court;
2. Send NOTICE to all beneficiaries,
3. Send NOTICE to creditors,
4. Send NOTICE to all who would be intestate heirs (even if not included in will),
5. File Tax returns (state/income);
6. provide accountings to beneficiaries and to court;
7. sell and liquidate assets;
8. distributions to the beneficiaries
C. Why probate is BAD thing
1.
2.
3.
4.
Lengthy- could last a year or more during which time the property in estate is tied up
a. Crt hearings can take months to schedule
Time consuming/inconvenient– court has to supervise probate
a. Lots of attorney and accountant involvement
b. Frequent need to return to court to get permission
c. Must prepare accountings and give notice
d. Court hearings can take months to schedule
Expensive– court has to supervise probate
a. Lots of attorney and accountant involvement
b. Frequent need to return to court to get permission
c. Must prepare accountings and give notice
Public– probate becomes a matter of public record and some people really care about privacy
a. Because you have to file an inventory, public knows type and value of property and who gets property
D. How to AVOID probate
1.
2.
3.
4.
revocable trusts = MOST EFFECTIVE/EFFICIENT way to avoid probate!
a. Governing instrument = trust, prop held in name of trustee of RT and terms of trust dispose of prop
beneficiary designations (Payable on Deaths)- prop passes as contractual matter w/o crt involvement
a. Governing Instrument = K, BFY designation
b. BUT not completely adequate, PROBLEMS:
i. Not all assets lend themselves to beneficiary designations
(a) Yes – life insurance, retirement plan, payable on death account
(b) No – tangible personal property, real estate
ii. Assets w/BFY designation still have to be coordinated with an estate plan to cover other assets
joint tenancy- prop passes through right of survivorship w/o crt involvement
a. Governing Instrument = deed that gave prop w/joint right of survivorship, transfers as matter of law
b. BUT inadequate, PROBLEMS:
i. Only holds for first death (what if surviving JT is already mentally incapacitated?)
ii. Creditors can access JT’s interest in prop
CPWRS: Community Property with Right of Survivorship – (CA ONLY) property will automatically pass to
surviving spouse. (no probate if have title in common)
a. Special situation, usu. CP disposed of in will or intestacy; or no probate cause in RT
9
5.
Small Estates: (value <$100K, none of which is real property)> no need for probate
a. Not much protection, but don’t need a lot because of small amounts involved
b. BFY can simply sign and notarize affidavit and use affidavit to get property (go to the bank)
i. Only danger = false affidavit, but person under penalty of perjury, and small amt of $ involved
Utah – more streamlined probate
California – very cumbersome probate
(follows uniform probate code)
ALWAYS want to avoid
Appointment of Personal Representative
Appointment of Personal Representative
1. File petition for probate in crt—either intestate or will—
 Informal = presumed (never appear before judge)
requests will (attached) to be admitted, asks for
 File application for probate with court clerk
appointment of PR (“Letters”: testamentary/will;
o Probate just ends when it’s over; no need to
admin./intestate), requests IAEA powers (if not in will)
file a petition to close it
2. Schedule Hearing (>2 months) (if want to contest, need
 Clerk sends out Notice>all BFYs & intestate heirs
to do so before or at hearing)
 BFYs & Heirs can sign waiver of notice when
3.
Send Notice of Hearing (named BFYs under will and all
application filed don’t need to wait 10 days if all
who would be intestate heirs)
waive
4.
Proof of notice
 No objections w/in 10 days clerk can issue Letters of
5.
Calendar Notes (Defects the court clerk has noticed in
Administration
procedure—i.e., proof of notice, etc. Must get all cleared
 PR now has full authority to administer estate
before hearing or hearing postponed> more 2 month
 Usu Notice of Proposed Action not required in UT
waiting periods)
 Objections (any time during probate)  moves to
6. Hearing – judge admits will, opens probate, appoints
FORMAL probate for contested issue
PR, grants IAEA powers, issues Letters of
 Formal= judge only hears & rules on objections
Administration, sets fiduciary bond (insurance policy
 BFY can file petition w/crt to object to some issue
against PR taking assets), and rules on objections> if too
 Rest of unobjected estate goes on unsupervised
complicated, sets new hearing
 Objection process still protects interested parties
7. Order for Final Distribution – issued after petition and
 Supervised Administration RARE= most crt involvement
final accounting of estate; signed by JUDGE
in estate administration
 Evidence that someone owns that property
 BFY (Have to be an interested party) can petition crt to
 Can record Order just like a deed  provides notice
grant supervised admin. if he feels crt needs to
for chain of custody of property
supervise what goes on (e.g., PR is doing a bad job
generally; lacks trust)
IAEA – Independent Administration of Estates Act
 PR can still do almost everything EXCEPT make
 Purpose = gives PR power to act w/o crt permission
distributions of prop from estate w/o crt approval
 NOTE: still always need to file petition to open/close
 PR can still sell assets unless crt says otherwise
probate actions
 if BFY wants supervision for stuff besides
 Still need to send “Notice of Proposed Action”
distribution, can file individual objections to get
 PR must notify all interested in estate (BFYs,
supervision over those specific areas
intestate heirs, creditors) about what PR plans to do
 So, MOST DIFFICULT process in UT similar to
w/asset regardless of PRs IAEA powers
EASIEST process in CA (full IAEA)  illustrates
 ObjectionsPR has to get prior crt approval
inconvenience of CA
 No objections  PR can proceed w/o crt approval
 Major differences between CA and UT
after a certain time
 Degree of court supervision
 FULL powers – least amount of crt supervision
 Need for court approval
 PR can do almost anything including
o Don’t need to file open/closing in UT
buying/selling/mortgaging real property
 Time/need to get on court calendar
 PR MAY NOT engage in transactions btwn PR (in
 Order for Final Distribution: can be signed by the
individual capacity) & estate or btwn his attorney &
PR (deed to BFY from PR granting real estate)
estate w/o crt approval (e.g. can’t personally
borrow/lend $ from/to estate w/o crt)
 LIMITED powers – intermediate crt supervision
NOTE: Even though probate in UT is not nearly as
 PR can do almost anything w/o crt approval
cumbersome as in CA, revocable trusts still provide benefits of
EXCEPT buy/sell/mortgage real estate OR
simplicity and no court involvement for the following
personally engage (or PR’s attorney engage) in
situations:
transactions w/estate
 Avoiding probate altogether – no probate is better than any
 NONE – most court supervision
probate
 PR must get court approval for everything
 What if decedent owns property in another state?
 Impact of IAEA on Fiduciary Bonds
 What if there is an emergency after decedent’s death that
 Limited IAEA allows crt to set bond for liquid
requires quick action?
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 What if person becomes incapacitated?
assets only BUT crt should increase bond if it
approves sale of real estate
 Ex– estate has $250K in stocks & $600K in real
estate & PR has limited IAEA powers
 PR can’t sell real estate w/o crt approval 
bond should be issued for $250K
 But if crt approves sale of real estate, crt
should see>is now $600K more liquid
assetsbond should increase to $850K
E. Additional Probate Procedures
1.
2.
Ancillary Probate – when D owns out-of-state real property (outside state of D’s death residence)
a. Letters of Ancillary Administration–required for PR to have authority to transfer out-of-state prop
i. Rationale – one state does not have jurisdiction over real property in another state
(a) E.g., UT Letters of Administration are not valid for property in CA
ii. Problem = ancillary probate makes probate more expensive, lengthy, inconvenient, and public
b. Process
i. CA– crt opens ancillary probate and issues PR NEW, CA Letters of Ancillary Administration
(a) Ancillary probate subject to same inconvenient process as regular probate
ii. UT- easier than CA: applicant opens ancillary by filing doc w/crt w/Letters frm other state attached
c. Revocable Trusts avoid Ancillary Probate-Successor trustee just steps in & manages that prop w/o need for
ancillary probate because the property is held in the name of the revocable trust
Special Administration-way to grant authority if emergency needs require action before PR>appointed
a. Process
i. File Ex parte petition w/crt  you quickly get a hearing before a judge
ii. Judge can issue Letters of Special Administration to the Special Administrator (fiduciary)
(a) Letters of Special Administration–narrow– only give Special Admin authority to do what needs to be
done on an emergency basis
(b) Primary Letters of Administration issued later will replace Letters of Special Administration
b. State Comparison
i. CA – more frequent because it can take months before you can get PR to have that authority
ii. UT – not as frequent because you can get a PR appointed much more quickly-informal
c. EX: D dies before real estate closing  need someone with authority to complete closing
i. OR D dies before filing CofA before stat of limits expires need someone w/authority to file CofA
d. Revocable Trusts avoid Special Administration: immediate/automatic authority granted by law
i. Successor trustee just steps in and can act immediately without court involvement
F. Miscellaneous Probate Matters
1.
Fiduciary Bond–insurance policy to protect BFYs against possibility that PR runs-off or mismanages assets
a.
2.
Usually waived in wills (but judge still has authority to require a FBond)
i. Trust PR
ii. Don’t want to pay premiums
b. Generally, bond will be in amount of assets over which the PR has control over PLUS 1 year interest
i. CA–for limited/no IAEA powers, bond will be in the amount of liquid (i.e., non-real estate assets) 
fiduciary bond should be increased if court gives approval to sell non-liquid asset
(a) If full IAEA authority, bond should cover value of real estate as well
c. Premium is usually 0.25% of estate value per year
Letters of Administration (aka Letters Testamentary) = physical evidence of your appointment as PR
X. MARITAL PROP. IN COMMUNITY PROPERTY & COMMON LAW STATES
A. Community Property States (CA)
1.
2.
Types of Property
a. Separate Property (SP) = any property that either H or W brought to the marriage (owned before marriage)
AND any gifts or inheritance received during marriage PLUS income/appreciation/sale proceeds from SP
b. Community Property (CP) = everything else  earnings by either spouse during marriage PLUS
income/appreciation/sale proceeds on CP
Distribution
a. Divorce
i. SP – each spouse keeps his/her separate property
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ii. CP – divided 50:50
Death– critical Q = what did the decedent spouse have the authority to dispose of?
i. Deceased spouse-can dispose of (or intestacy rules> dispose of) ALL his SP & ½ CP (his CP share)
(a) No ability to dispose of surviving spouse’s SP or ½ share of CP
ii. Surviving spouse – ALL her SP and retains ½ of CP
Miscellaneous Points
a. CP w/Right of Survivorship prop will pass to surviving JT by operation of law – NO PROBATE
b. Pre-nuptial/Post-nuptial agreements – can change the nature of the prop and alter what happens upon death
c. CA: Registered Domestic Partners – treated as if they were married for all purposes under the law
i. If rule applies to married applies w/equal force to RDP (only distinction = word “married”)
b.
3.
B. Common Law State (UT)
1.
Types of Property
a. NOTE: marital and separate property terms are ONLY used in two isolated cases:
i. To determine elective share of surviving spouse if he’s disinherited by titled spouse (deceased spouse had
title to all property in her name and left it to someone else)
ii. In case of divorce
b. Separate Property (SP) = same definition as SP in a community property state
c. Marital Property (MP) = same definition as CP in a community property state
2. Distribution
a. Divorce
i. SP goes to owner of SP
ii. MP distributed according to Equitable Distribution = Fair
b. Death – critical Q = how is title held? – ability to dispose of property at death follows Title
i. Rule = decedent at death has ability to dispose of whatever property is titled in his/her name
(a) No inquiry into when property was acquired – just look at how title is held at death
(b) Titled prop is disposed of through RT/Will of title-holding spouse or through intestacy for title-holder
(c) Special Cases – property titled in both names  TWOish possibilities
(1) T’s in Common – “Tim & Beth Seal”  TinC  decedent can dispose of 50% of prop
(2) JT w/ Right of Survivorship – “Tim & Beth Seal as JT or as H&W”  survivor gets prop by law
ii. Elective Share– if all prop is titled in name of only 1 spouse at death, non-titled spouse gets elective share
(a) Elective Share = 1/3 of Marital Property (MP)
iii. Relevant State Law= determined by property location
(a) Real property = law of state where property is located
(b) Tangible personal property = law of state where decedent was domiciled when he died
Community Property
Separate property – 1) Community prop – 1)
Divorce: each spouse
State (CA)
spouse brought to
Anything earned by
keeps own SP & CP is
marriage;
either spouse during the
divided 50/50.
2) gift or inheritance
marriage;
Death: Surviving
during marriage;
2) income/ appreciat. on spouse keeps own SP &
3) income/ appreciat. on community prop.
½ of CP. Decedent: can
separate property
dispose of own SP & his
½ of CP.
Common Law State
Divorce: SP goes to
Separate property –
Marital Property –
(UT)
same as community
same as CP in
owner. MP distributed
property state
community property
acc. to “equitable
state
distribution” (Stat)
Death: look to prop title
XI.
DISTRIBUTION METHODS TO DESCENDANTS
A. Terminology
1. Issue = Descendants = children/grandchildren/etc.
B. Methods
1. Per Stirpes/Right of Representation – traditional common law method of distributing property to Ds
a. Guiding Principle = follows everything down through family lines (regardless of any inequalities)
b. Inequalities can exist
i. E.g., grandkid=only child gets more than grandkid w/siblings; grandkid gets 0 if parent> still alive
c. True for ALL METHODS:
i. If all children are living  all children get equal share
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ii.
2.
If only one child is deceased  that child’s share is divided among his/her children equally
Equal Share Method/Per Capita with Representation (CA default)
a.
b.
Guiding Principle = attempt to equalize among grandchildren IF AND ONLY IF all children are deceased –
otherwise do not attempt to equalize
Process
i. Estate divided equally at the first generation in which there are living takers
ii. If any living children  same as Per Stirpes
iii. If ALL kids are deceased  divide shares equally among the next generation of living relatives
(a) This is the only deviation from Per Stirpes
iv. Example
(a) If at least 1 kid livingdistribute shares equally among kids of deceased kids(same>Per Stirp)
(b) If all kids are deceased  aggregate the entire pot and divide it equally among all grandkids
3. Per Capita at Each Generation (UT default)
a.
b.
Guiding Principle = attempt to equalize among grandchildren after living children get their share
i. Trying to equalize at each generation
Process
i. Divided into equal shares to surviving descendants of closest generation
ii. Remaining shares combined & divided equally among surviving descendants of next generation
iii. Ex If 1 kid living he gets his share; other shares>combined&divided equally among other g-kids
C. Choosing a Method
1.
Follow governing instrument – if governing instrument tells you want to do  follow instrument!
a. Per Stirpes
i. CA – § 246 – if governing instrument tells you to use Per Stirpes  use Per Stirpes
13
ii. UT – § 2-709 – “same”
Equal Share Method
i. CA – § 245 – if governing instrument tells you to use ESM  use ESM
ii. UT – does not mention this method in statute; so gov instrument would have to be really clear (like have to
describe the ES Method in DETAIL, very carefully) or else they’ll follow the default method
c. Per Capita at Each Generation
i. CA – § 247 – if governing instrument tells you to use PCG  use PCG
ii. UT – § 2-709 – if governing instrument tells you to use PCG  use PCG
Default Method – intestacy OR silent instruments (e.g., language like “to the descendants of X”)
a. CA Default = Equal Share Method
i. § 240 – use ESM if someone dies intestate
ii. § 245 – use ESM is governing instrument silent regarding method
b. UT Default = Per Capita at Each Generation
i. § 2-103 and § 2-106 – use PCG if someone dies intestate
ii. § 2-708 – use PCG if governing instrument silent regarding method
b.
2.
Intestate Distribution Methods Tables
ALL (these are the same for
all scenarios)
Per Stirpes/by Right of
Representation (most
common)
O=Alive
X=Deceased
D
O O O
1/3 1/3 1/3
OO OO O
D
O X O
1/3 __ 1/3
OO OO
O
__
1/6-1/6 ___
If decedent left three
children under all three
methods will be divided
equally to the living
children—none of
grandchildren will get
anything—grandchild only
takes if parents are
deceased.
Equal Share Method
Per Capita At Each
Generation
This method is only different
from Per Stirpes if ALL
children are deceased
Carries Equal Share one step
further
D
O X X
1/3 __ __
OO OO
O
__
1/6-1/6 1/3
D
O X X
1/3 __ __
OO OO
O
__
1/6-1/6 1/3
D
X X X
OO OO
O
1/6-1/6 1/6-1/6 1/3
D
X X X
OO OO
O
Each grandchild gets 1/5
NO effort to equalize among
grandchildren—straight on
down the family line.
Inequality among
grandchildren
UT 2-709/CA 246: use this
method if instrument says so
EVEN if some of children are
alive, if some are dead their
children will get equal shares of
what remains
D
O X X
1/3 __ __
OO OO O
__ .22-.22 .22
(.22 is 2/3 ÷ by 3)
D
X X X
OO OO
O
Each grandchild gets 1/5
CA 240/245: default
UT Default
If ALL children are dead
equalizes among
grandchildren
If you have 1+ child deceased
take what that person would
have received and distribute rest
equally to their children.
If X left a will to distribute to
children disproportionately
would not affect D’s estate
being proportionately
distributed
14
Equalize for each generation.
XII.
INTESTATE DISTRIBUTION
A. Overview
1. Intestate Distribution=how D’s prop is distributed when D dies w/o estate plan OR plan>silent bout prop
2. Needed when
a. Person dies intestate (no estate plan at all)
b. Will is contested and declared invalid
c. Partial Intestacy cases
i. RT not fully funded and there is no pour over will (poorly drafted)
ii. Will or RT lacks residuary clause- must look asset by asset to determine if each> disposed of
B. Non-Probate Transfers – UT Adjustment to Intestate Distribution
1. Non-Probate Transfer = property that is transferred at death outside of probate
2. Applies ONLY when there have been non-probate transfers at death (e.g., retirement plan, insurance policy,
revocable trust, joint tenancy) AND other property distributed under rules of intestacy  need to make an
adjustment for non-probate transfer (§ 2-102(2), § 2-103(2))
a. Analysis applies for surviving spouse AND any intestate heir receiving non-probate transfer
b. NOTE: possible for D to die with a will lacking residuary clause  will transfers are not non-probate transfers
 will transfers are not adjusted for in the same way as non-probate transfers
3. Non-probate transfers treated as Advancements under § 2-109
4. Calculating Adjustment = Hotchpot method
Hotchpot Method
1. Calculate probate estate for all property that
passes through rules of intestacy
2. Add in any non-probate transfers (NPT) to
create hypothetical estate = Hotchpot estate
3. Calculate SS’s intestate share of Hotchpot
estate
4. Deduct NPT amount  this is SS’s share of
intestate estate
Example
 Decedent dies w/ $300K intestate property and $75K retirement plan
naming SS BFY, and has decedents that are not descendants of SS
 Probate estate = $300K
 Hotchpot estate = $300K + $75K = $375K
 SS Share of Hotchpot = ($75K + ½ balance) = $75K + $150K = $225K
 SS Share of Intestate Estate = $225K – $75K = $150K
 NOTE: SS gets the whole $225K ($150K from intestate estate PLUS
$75K that she keeps from NPT)
NOTE: Balance gets distributed according to rules of intestate distribution (§ 2-103)
NOTE: Same analysis applies if non-probate transfer was received by an intestate heir other than SS
C.
Advancements – applicable when a lifetime gift has been made to an otherwise intestate heir
1.
2.
Does an adjustment need to be made to intestate shares for lifetime gifts?
a. Common Law = YES  presumption = lifetime gift was an advancement requiring an adjustment UNLESS
there was something in writing to the contrary
b. UT (§ 2-109) & CA (§ 6409) = NO  presumption = lifetime gift was NOT an advancement and no adjustment
needs to be made UNLESS there was something in writing to the contrary
Adjustments: Hotchpot method if need to> adjust for advancements-here: lifetime; other HP: NPT (occurs at death)
Common Law (or writing in UT/CA) – advancement
Scenario
 D had $1MM
 D has 2 sons (A & B)
 D made lifetime gift of $100K to
A
 D dies with $900K




Probate Estate = $900K
Hotchpot Estate = $1MM ($900K + $100K gift)
A’s hotchpot share = ½ hotchpot = $500K
Less advancement ($100K) = $400K = A’s share of actual
probate estate (but gets to keep $100K gift)
 B’s actual share = hotchpot share = $500K
UT & CA – no
advancement
 A & B each get $450K
= ½ Probate estate
 A gets $100K he got
during D’s lifetime;
total=$550K
 B Total = 450K
D. Consanguinity Charts
1.
2.
ONLY USE when statute tells you to do so
a. CA – statutory references
i. Intestacy: § 6402 tells you to use charts b/c it refers to degrees of consanguinity (e.g., § 6402(f))
ii. Disqualified Persons: § 21350, § 21351 also tell you to use these charts
Using the Chart to Identify Next of Kin
a. Identify all the next of kin living with the lowest degrees of consanguinity
i. Number on chart is how many degrees of consanguinity that person is from decedent
15
b.
Then identify which of those are related to closest relation to D (closest ancestor/column) these= next of kin
Degrees of Consanguinity Chart
E.
FIRST QUESTION = What does the surviving spouse (SS) get?
1.
Marriage Recognition – need to be married (or equivalent) to get surviving spouse intestate share
a. UT – recognizes common law marriage (need to satisfy several tests)
i.
b.
NOTE: make HOTCHPOT adjustments for NPT given to SS (RT, BFY designation, JT, etc.)
CA – DOES NOT recognize CL marriage BUT DOES recognize registered domestic partners
Utah (§ 2-102)
California (§ 6401)
Situation – D dies with
SS Share
NO living descendants OR
all living descendants are
also SS’s descendants
Living descendants are
NOT also SS’s descendants
Entire intestate estate (all
property that passes through
rules of intestacy)
$75K off the top + ½ of any
balance that passes through
rules of intestacy
Prop.T
ype
CP
SP
16
Situation – D leaves
SS Share
ALL the CP
(keeps her ½ and
receives D’s ½)
NO issue, parents, OR issue of
parents (e.g., siblings, issue of
deceased siblings)
ALL D’s SP
NOTE: SS Share = function
of whether D had issue who
are not SS’s issue
HOTCHPOT
(§ 2-102(2), § 2-109)
for non-probate transfers
(retirement/life insurance)
1. Calculate probate estate
2. Add NPT (non-probate
transfers) received to create
hypo Hotchpot est
3. Calculate SS’s intestate
share of Hotchpot estate
4. Deduct NPT (this is SS’s
share of intestate estate)
NOTE: property subject to
rules of intestate distribution
= property titled/held in D’s
name
FLAW in stat: SS might get
probate transfer
Hotchpot Example:
 Probate Estate = $325K
 Retirement Plan =$50K
 Hotchpot Estate=$375K
 SS Share Hotchpot
($75K+ ½ bal) = $225K
 SS Share –NPT=$175K
NOTE: SS keeps NPT but it
is deducted from total
amount of intestate share 
SS still ends up with $225K
NOTE: Only add in NPTs
given to SS (or heir you’re
calculating for)
Issue through more than one line
(NOTE: doesn’t matter if living issue is
also issue of SS  different than UT)
 D leaves more than 1 child; OR
 D leaves 1 child AND issue of 1 or
more deceased children; OR
 D leaves issue of 2 or more deceased
children
All other situations (NOTE: does not
matter if living issue is also issue of SS
 different than UT)
 D leaves only 1 child OR issue of
1 deceased child; OR
 D leaves NO issue but leaves
parent(s) or issue of parent(s)
1/3 D’s SP
No, SS gets everything
UTAH 2-102: Yes: SS gets
a share
Are there other
descendants?
Yes: SS gets everything
Yes, descendants of also
SS's descendants?
No: SS gets $75K + 1/2
balance (Hotchpot)
Did the Decedent who
died intestate, leave a
Surviving Spouse (SS)?
No: SS gets everything
(6401 c1)
CA 6401: Yes: SS receives
all of decedent's CP
Are there descendants or
parents?
Descendants through 1
line/1 parent living/issue
of one parent = SS gets
1/2 (6401c2)
Descendants through
more than 1 of D's line, SS
gets 1/3 (6401c3)
F.
SECOND QUESTION = How much do other intestate heirs get?
1.
Familial Relationships
a. Half-Blood Relatives – treated like whole-blood relatives under intestacy rules – CAN INHERIT
i. UT – § 2-107
ii. CA – § 6406
b. Step/Foster Relationships – generally DO NOT count for intestate succession – CANNOT INHERIT
i. UT – § 1-201(5)
ii. CA – § 6454
(a) General Rule = does not count
(b) CA Exception = step/foster child can take in intestacy if
(1) Relationship began before child turned 18
(2) Relationship continued throughout joint lifetimes, AND
17
½ D’s SP
c.
d.
(3) Legal impediment – need clear and convincing evidence that there would have been an adoption
but a legal impediment (e.g., natural parent would not give consent) prevented it
Adoption – treated like whole-blood relatives under intestacy rules – CAN INHERIT
i. Infant adoption – inheritance occurs by and through adoptive parents ONLY
(a) Biological relationship is severed  adoptive relationship is what counts
ii. Adoption at older age – inheritance can occur through both adoptive AND biological parents
(a) Biological relationship not severed AND adoptive relationship still counts
Posthumous Children – treated as child – CAN INHERIT
i. UT – § 2-104 – child (conceived before death) can inherit but MUST live for 120 hours total (5 days)
ii. CA – § 6407 – child (conceived before death) can inherit (no 120 hour limitation)
G. Examples of Intestate Distribution
Scenario
D survived only by wife and brother
D survived by mom, sister, & two nephews
D survived by one cousin from mother’s sister
(aunt) and two cousins of father’s brother
(uncle)
D survived only by A (mother’s 1st cousin) and
B (D’s 1st cousin’s grandchild)
D survived by full-blood and half-blood sibling
UT (§§ 2-102, 2-103)
Wife gets everything b/c D died w/o issue
Mother gets everything
½ to maternal side and ½ to paternal side 
maternal cousin gets ½ and paternal cousins each
get ¼
B gets everything b/c issue of grandparent
Each sibling gets ½
CA (§§ 6401, 6402)
W gets all CP & ½ SP
and brother gets ½ SP
Mother gets everything
Each cousin gets 1/3
B gets everything b/c
issue of grandparent
Each sibling gets ½
Rules of Intestate Distribution for Intestate Heirs
Utah (§ 2-103)
California (§ 6402, § 6402.5)
Order of Intestate Distribution
Share
Order of Intestate Distribution
Share
Surviving descendants –
Per capita at each generation
Surviving issue – (a)
Equal share method
(1)(a)
D’s parents if NO surviving
Equal shares if both survive
Exception (§ 6402.5 detour)
 ONLY that Real Estate goes
descendants – (1)(b)
OR all to surviving parent if
ONLY applies if:
to relatives of PDS if PDS
only one survives
NO SS and NO issue AND D
died w/in 15 yrs of D
has predeceased spouse (PDS)  ONLY that Personal
who gave property to D (only
Property goes to relatives
prop D received from pre(issue, parents, parent’s
deceased spouse, so ONLY
issue) of PDS if PDS died
half the prop that D received
within 5 years of D
from pre-deceased spouse)
 NOTE: Does not matter
 Continue to (b) if there is
how property was received
still property left over after §
by D
6402.5 OR if § 6402.5 does
 Could be a lifetime gift
not apply
 Could be property
received at PDS’ death
 Could be PDS ½ of CP
Descendants of D’s parents if Per capita at each generation
D’s parents if NO surviving
Equal shares if both survive
NO surviving D’s descendents (treat all half siblings--at least issue – (b)
OR all to surviving parent if
OR parents – (1)(c)
share one parent--as if full
only one survives
descendents of either of them)
STEP not included (mom gets
remarried to a guy who has
kids in prior marriage)
D’s grandparents if NO
Issue of D’s parents if NO
Equal share method
 ½ to paternal grandparents
surviving descendants OR
surviving issue OR parents –
equally if both survive OR
parents OR descendants of
all ½ to 1 surviving paternal (c)
parents – (1)(d)
grandparent (if only 1
NOTE: never go to the 4th
survives) OR ½ (by PCG) to
Column, if someone is alive
descendants of paternal
in first three
grandparents if both dead
 Other ½ to maternal side
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Descendants of D’s
predeceased spouse(s) if
NONE of the above living –
(1)(f)
None of the Above – § 2-105
 If only one side has
survivors  ALL to that
side – (1)(e)
 One predeceased spouse
who has one or more
descendants  predeceased
spouse’s descendants PCG
 More than one predeceased
spouse who has one or more
descendants  equal share
to each set of descendants
with each set taking PCG
 Escheats to state
NOTE: All non-probate transfers considered advancements
under § 2-109  use Hotchpot method to determine intestate
share (do it twice, once for surviving spouse and then again for
all other intestate heirs)
D’s grandparents if NO
surviving issue OR parents
OR issue of parents – (d)
NOTE: never go to the 4th
Column, if someone is alive in
first three
Equal shares to grandparent(s)
OR if none surviving, to issue
of grandparents by equal share
method
Issue of D’s predeceased
spouse if NONE of the above
living – (e)
NOTE: § 6402.5 only applies
to property received by D
from PDS – here, there could
still be property that PDS
never owned
D’s surviving next of kin if
NONE of above living – (f)
Equal share method
NOTE: not entirely clear who
“next of kin” refers to;
presume great-grand parents
or issue  USE
CONSANGUINITY CHART
Parent of D’s predeceased
spouse – (g)
Issue of parents of D’s
predeceased spouse – (g)
None of Above – § 6404
“to the next of kin in equal
degree, but where there’re 2 or
more collateral kindred in
equal degree who claim
through diff. ancestors, those
who claim through>nearest
ancestor/COLUMN are
preferred” SO only if several
are in same degree & column
do you give equal shares
Equal shares if both survive
OR all to surviving parent if
only one survives
Equal share method
Escheats to state
XIII. WILLS
A. Overview
1. Validity Requirements
a. Decedent must have testamentary capacity
b. Decedent must be free of undue influence
c. Will must be executed in accordance with particular statutory formalities (SC erases these if have T’s intent)
2. Burden of Proof
a. Testamentary Capacity – on contestant to show that the decedent did not have testamentary capacity
b. Undue Influence – on contestant to show that decedent was subject to undue influence
c. Execution – on proponent of the will to show that the will was properly executed (person who wants the will)
i. THEN burden is on Contestant to show that something was NOT done correctly (after preliminary burden to
show basic will requirements)
ii. If self-proven, conclusive presumption that will was properly executed in accordance with statute> burden
on contesatnt to show, not really a self-proving will
3. Application to Revocable Trusts
a. Generally, principles of testamentary capacity & undue influence for wills also apply to revocable trusts
B. Testamentary Capacity – mental capacity to make will
1. Testator MUST be at least 18 years old (age of majority)
2. Focus = 3-prong Common Law Test – must satisfy all three to have testamentary capacity (3 building blocks)
a. Must know/identify natural objects of bounty–does testator understand who closest living relatives are?
b. Must know what property is owned – does testator understand what property he/she owns?
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i. An understanding – does not have to be down to the penny
Must understand nature of testamentary act – does testator understand that by signing will, he/she is leaving
property to someone at death?
d. DO NOT look at labels (e.g., conservatee)
e. DO NOT look at diagnosis (e.g., Alzheimer’s)
i. Ok to be eccentric, physically weak, distrustful, pessimistic, less than right of mind, less than alert
Burden of Proof– on contestant of will to show testator lacked test. capacity – preponderance of evidence
State Law
a. Utah – no statute address testamentary capacity – follows the 3-prong common law test
b. CA
i. §§ 810-812 – Due Process and Competence Determinations Act (DPCDA)
(a) Sets forth specific objective criteria to determine whether someone has testamentary capacity
(1) Follows the spirit of the 3-prong common law test
a. Ex: 810(c) need evidence form person’s personal functions rather than diagnosis
b. Ex: 811(d)- mere diagnosis shall not be sufficient itself, to show lack of test. capacity
(b) Applies more broadly in CA than just test. capac–measures capacity to enter any legal transaction
(1) entering into contracts, property, getting married, making medical decisions, exec. wills/trusts
ii. § 6100.5 – looks like 3-prong common law test – applies ONLY to wills
(a) If testamentary capacity is an issue in CA  really need to satisfy both §§ 810-812 and § 6100.5 tests
to determine if someone does not have testamentary capacity
iii. § 6100(a) – must be 18 to make a will
iv. § 6100(b) – convervatee can make will–illustrates you don’t look to labels to determine test. capacity
Insane Delusions
a. Even if pass 3-prong test, still may not be found to have test capacity if suffer from an insane delusion
b. Insane Delusion
i. An irrational belief;
ii. That affects the testamentary disposition (e.g., will/trust); AND
(a) NOT: if the insane delusion does not affect will/trust  then, insane delusion does not matter
iii. The person cannot be persuaded otherwise
Showing/Challenging Testamentary Capacity (evidence to look for after death)
a. KEY = timing is everything  evidence needs to be as close to time estate plan was signed as possible
b. Types of Evidence
i. Correspondence w/attorney (about what client wanted)--Attorneys Notes and Testimony
ii. Journal (from day will was signed or around same time, and it’s very lucid)
iii. Other acts that show alertness
iv. Family and friends testimonies
v. Doctor’s records
vi. Face of Will – what will says (e.g., is it a rambling diatribe, etc.?) (holographic will)
vii. Unnatural Disposition– e.g. if testator left stuff to someone/organization they did not really have a
connection w/during life (ie. imaginary friend bequest? OR inverse: identified all relatives correctly?
viii. Consistency with prior wills
Steps to Take at Planning Stage to Avert a Contest of Testamentary Capacity
a. KEY = timing is everything  evidence needs to be as close to time estate plan was signed as possible
b. Steps to Take (most effective to least effective)
i. Evaluation by Geriatric Psychiatrist immediately before signing documents (expensive)
(a) Two-edge sword
(1) Certificate from psychiatrist will be very influential (video could be pretty influential)
(2) But what if the person is having a bad day?
ii. Videotaping the Signing of a Will
(a) Same Two-edge sword as have with Geriatric Psychiatrist
iii. Memo to File by Attorney
(a) E.g.noting there’s no doubt client had test. capacity b/c. . . AND client didn’t want> pay for i & ii
c. Explanation in Will
i. Two-edge sword
(a) Can provide explanation of a certain, seemingly unnatural disposition (e.g., disinheriting a child)
(b) But what if the reason for the disposition is wrong?> if facts are wrong> backfires
c.
3.
4.
5.
6.
7.
C. Undue Influence
1.
Common Law Rule – followed in UT & CA (little stat guidance for most states–mostly case law BUT CA has
embellished common law with statutes)
20
a.
b.
2.
A will that is the product of undue influence is NOT VALID
A will is the product of undue influence if it reflects will of perpetrator and does not reflect will of testator
i. NOTE: prop does NOT have to necessarily go to perpetrator  just show that testator made disposition that
he/she would not otherwise have made (No need to show physical coercion)
ii. MUST be causal connection between something perpetrator is doing and will’s alteration
(a) Needs to be more than mere influence; must so overpower testator as to destroy his free agency
iii. Ex– neighbor who takes testator to store every week says “if you don’t leave your house to my brother, I
don’t think I can take you to the store anymore”
(a) Testator> dependent on neighbor  will would then reflect desire of perpetrator NOT of testator
California Statutory Embellishment of Common Law – common law is the still the primary rule
a. § 6104 – codifies the common law  a will that is the product of undue influence is INVALID
i. Talks in terms of both entire will and portions of a will (UTAH AND CALIFORNIA)
(a) If entire will is the product of undue influence  entire will is invalid
(b) If part of a will (e.g., particular bequest) is the produce of undue influence  that part is invalid
b. § 6112 – Interested Witness
i. Interested Witness = witness who receives a bequest under the will (witness = BFY)
ii. Rebuttable presumption = interested witness procured bequest by undue influence
(a) If interested witness rebuts presumption  interested witness gets his/her bequest under will
(b) If interested witness CANNOT rebut the presumption  special rule
(1) Will is still valid AND specific bequest to interested witness is not invalid BUT interested witness
only receives what he/she would have received if the will were invalid (intestacy or prior will)
BUT this will be less?????????????
(c) Exception – rebuttable presumption DOES NOT apply if the interested witness is receiving property
solely as the fiduciary in a fiduciary capacity
(1) “I leave Million to Kate Knowles, Trustee of Haley Jankowski Trust” Kate can be witness w/o
being interested witness.
iii. Possible problems with § 6112
(a) What if interested witness would get more? – statute seems to allow (TIPPETT WOULDN’T ALLOW)
(b) What is meant by “solely in a fiduciary capacity”? does § 6112 apply if interested witness is receiving
prop in fiduciary capacity for his own benefit (e.g. trustee of trust for his own benefit)?
(1) Maybe want 6112 to apply if BFY is child, is the fiduciary or spouse of Witness?
(c) What does “would have received if the will were invalid” mean?
(1) If it was the only will ever made = fairly simple  would invoke rules of intestacy
(2) If testator had prior will = more difficult  statute seems to direct that interested witness would
receive what he/she would have received under prior will
a. But how do you know that prior will is a valid will that should be executed> probate? wouldn’t
you have to do hypothetical probate of prior will to determine interested witness interest?
iv. NOTE: interested witness> exclusive to CA; UT DOES NOT matter if interested witness- 2-505(2)
c. § 21350 – Disqualified Persons (disqualified from receiving any prop under will)
i. Disqualified Persons include:
(a) Drafter of will/any instrument
(b) Anyone in same law firm as Drafter (employee or boss)
(c) Anyone who has fiduciary rlshp w/testator (e.g., conservator/trustee) and transcribes instrument or
causes it to be transcribed
(d) Anyone who is care custodian of testator (nurse in nursing home)
(e) Spouse or predeceased spouse of any of the above
(f) Relatives w/in 3rd degree of any of above – based on consanguinity chart (Blood or Marriage)
(1) 3rd Degree Relative; 3rd Degree Relative of Spouse; Spouse of 3rd Degree Relative
ii. Rebuttable Presumption = Disqualified persons exercised undue influence
(a) Can ONLY rebut this presumption by manner prescribed in § 21351
(b) If you fail to rebut this presumption  you are disinherited  you DO NOT get the bequest
iii. § 21351 – Exceptions to § 21350 – Can rebut the § 21350 presumption by showing:
(a) You are within 5th degree OR an heir of testator – based on consanguinity chart
(b) You have a Certificate of Independent Review
(1) Certificate signed by another attorney that says there was no undue influence
(2) Typically done when the attorney is getting a bequest
(c) Court approval
(d) Bequest does not exceed $3,000
(e) Bequest was made by an instrument executed by a nonresident of CA who was not a resident at the time
21
3.
4.
State
Utah
California
the instrument was executed and the instrument was not signed within CA
Burden of Proof
a. General–burden on contestant of will to show testator> subjected to U.I. – preponderance of evidence
i. UNLESS CA: Interested Witness & Disqualified Person
b. Shifting Burden – burden of proof will shift to proponent of the will to show the will WAS NOT the product of
undue influence if the contestant can show ALL 4 things:
i. There’s a Confidential Relationship (on which T relied)
(a) Confidential Rlshp = relationship of trust (rlshps are issues of fact)
(1) Might be confidential – e.g., parent/child, patient/doctor
(2) Presumed to be confidential – e.g., attorney/client, CPA/client
ii. Perpetrator must’ve been in superior position in rlshp of trust>testator relied upon/trusted perpetrator
iii. The alleged perpetrator MUST have participated in the making of the will
(a) Could be something blatant – e.g., alleged perpetrator types will for testator to sign; drafts it
(b) Could be some other act – e.g., alleged perpetrator selected lawyer and set up will appointment
w/draftor OR drove testator to lawyer’s office
iv. The alleged perpetrator MUST have unduly profited
(a) E.g. if alleged perpetrator receives more under will than would receive under rules of intestacy
c. Practical reality = undue influence is very difficult to prove
i. Testator is dead  you are now trying to piece together circumstantial evidence after the fact
ii. Very fact specific  hard to define how much evidence is needed to show/prove undue influence
Bequests to Attorneys
a. Two SEPARATE inquiries (violating one doesn’t nec. mean you violated the other)
i. Is the bequest valid? CA: §21350 / UT: CL
ii. Is the attorney subject to professional discipline for drafting a will for which he/she is BFY? RPR
Validity of Bequest
 Confidential Rlshp =presumed btwn attorney/client 
difficult for bequest to be valid b/c burden of proof
shifts to attorney that he did not exercise U.I.
 No counterpart to CA’s § 21350
 § 21350 – bequest will NOT be valid UNLESS one of
the exceptions of § 21351 applies
5.
Rules of PR: Subject to Professional Discipline
 If attorney solicits or drafts instrument UNLESS he is
a relative (FIRST COUSIN OR CLOSER/ Aunt or
Uncle, etc.) of the testator
 If attorney induces the bequest (seems to be same
thing as solicits) UNLESS he is a relative of the
testator  seems more lax than UT
Showing/Challenging Undue Influence (evidence to look for after death); similar to Test. Capacity
a. Inconsistency with previous wills made
b. Any Unnatural disposition (if have two kids and leaving all to neighbor) weird things
c. Vulnerability of testator
d. Evidence of actual undue influence
e. Opportunity to exercise undue influence – e.g., was testator reliant on someone? live together?
f. Nature of relationship (how much participation did alleged wrong-doer have?)
g. Motive
h. Hurried Changes (right before death) OR Opportunity to revise the estate plan afterwards?
i. E.g. did testator die next week or live for 10 more yrs during which could’ve changed the estate plan?
ii. E.g. were there a series of estate plans that left the alleged perpetrator roughly the same amount?
(a) Harder to show U.I. if testator had lots of chances to change will and never did or signed new wills
continuing to leave property to perpetrator
i. Independent legal advice– e.g. hope that attorney would have been alert to any potential undue influence
j. Secrecy of will – e.g., if the will was prepared/changed in secrecy  might show undue influence
6. Steps to Take at Planning Stage to Avert a Contest of Undue Influence
a. ALWAYS meet with the client ALONE (especially if unnatural disposition exists)
i. Even if there’s no U.I. going on – avoids any appearance/allegation later on that there was U.I.
b. Periodically update the estate plan w/Memo to the file (best to show you made memo right after meeting)
c. Include safeguards into estate plan to prevent plan from being amended w/o others knowing about it
i. “any amendment to this RT only valid if copy of amend>brought to attorney w/in Y days after signed
D. Will Contests – applies equally to revocable trusts
1. Contest = filing petition with court fighting the will or RT
a. Brought by contestant who believes he would receive more frm estate if will were not admitted to probate
i. Risk = you might not know how much you would have received if the will were not admitted
22
b.
2.
3.
Effect of presence/absence of No Contest Clause (NCC) in will
i. Absence of NCC
(a) If contestant wins  contested will thrown out
(b) If contestant loses will gets admitted to probate & contested only loses time & attorney’s fees
ii. Presence of NCC
(a) If contestant wins  will is thrown out and NCC gets thrown out with it  not disinherited
(1) Result is same as if there were no NCC
(b) If contestant loses  will is still valid & NCC is still valid  contestant disinherited  loses
whatever he would have received (if anything) under that will PLUS time and attorney’s fees
(c) Partial Contest: -DON’T DO THIS!!! (rest of will is valid> still don’t get share if win)
No Contest Clause (NCC) – General
a. Typically broad in scope–
i. “anyone who contests will is disinherited, anyone who conspires to contest will is disinherited,”
ii. “contestant’s issue are also disinherited”;
iii. “contest=any attempt to invalidate any provision of the will or RT”
iv. Cross references other instruments to further disinherit other dispositive instruments of testator, such as
having NCC in RT reference BFY designations) “if contest any plans, disinherited frm this will”
b. Incentive Bequest–typically required for NCC to have teeth (if don’t have anything, nothing to lose)
Enforceability of NCC
a. Public Policy Concerns
i. Problems
(a) NCCs are harsh in effect (if broadly drafted)
(1) Disinherits a broad group from one or more dispositive instruments
(2) Difficult to know what constitutes a “contest”
(b) Chills legitimate contests: (1) enforce will provisions (2) ensure that will is properly managed
(1) E.g. we don’t want people to profit from Elder Abuse – but NCC inhibits this contest
(2) E.g. want to encourage action to remove executor for malfeasance–but NCC inhibits this
b. Continuum of Enforceability – modern trend is moving away from enforceability of NCCs
NCC Fully Enforceable
c.
d.
e.
Carve Outs
Probable Cause
Old CA
New CA; UT; Uniform
Probate Code
NCC Never Enforceable
Practical Note
i. Contest entire will NOT just one or a few provisions- if partial challenge, THEN even if you win on that
part, you’re still disinherited because the will and NCC is still valid
ii. Before filing petition, ask crt if it could be construed as “contest” if underlying instrument has a NCC
(a) Probably less important under New CA or UT
Utah – NCC not generally enforceable as a matter of public policy
i. §§ 2- 515, 3-905– NCC is enforceable ONLY IF there is no probable cause for the contest
(a) NCC enforceable only against frivolous contests
(b) Probable Cause = ? – stat doesn’t say (probably means same as CA = rsnbl likelihood of success)
California
i. New Law (Jan. 1, 2010) – § 21311 – NCC is enforceable ONLY if there is no probable cause for the
contest (frivolous)  NCC not generally enforceable as a matter of public policy
(a) Probable Cause = reasonable likelihood of success
ii. Old Law – NCCs were enforceable BUT a number of statutes ameliorated the harsh effects
(a) § 21304 – NCC should be narrowly construed
(b) § 21305–certain actions are not deemed contests; public policy want to encourage some actions
(1) E.g. action to challenge exercise of fiduciary power ≠ contest
(2) E.g. action regarding appointment or removal of fiduciary ≠ contest
(3) E.g. action regarding an accounting or report of a fiduciary ≠ contest
(4) E.g. action to clarify or interpret a provision in the will ≠ contest
(c) § 21307– NCC not effective to disinherit someone that brings an action under § 6112 (Interested
Witness) OR under § 21350 (Disqualified Person)  § 6112 & § 21350 actions ≠ trigger NCC
(d) § 21320– Declaratory Relief can be offered to ppl deciding whether a petition would be a contest
(1) If not sure whether filing certain petition would = contest file Declaratory Relief petition with
proposed petition attached
23
a.
b.
f.
Crt will read petition you propose to file & say whether proposed petition = a contest
Problem = courts end up being flooded with Declaratory Relief petitions
Examples
Scenario
 T has 2 kids (A & B)
 T signed only will in
2004
 2/3 to Girlfriend,
G
 Residue to A & B
 G is witness
(triggers § 6112)
 Broad NCC
Old CA
Example 1
Example 2
 B objects under § 6112  B objects under §
6112
 G rebuts presumption
of undue influence 
 G fails to rebut
G gets bequest
presumption  G
disinherited b/c she
 B not disinherited – §
only gets what she
6112 action ≠ trigger
would have received
NCC under § 21307
w/o will = nothing
 G=2/3, A=1/6, B=1/6
under intestacy rules
 B not disinherited – §
6112 action ≠ trigger
NCC under § 21307
 A=1/2, B=1/2
Example 3
Example 4
 B objects under § 6104  B objects under §
(G exercised fraud)
6104 (G exercised
fraud or blatant undue
 B prevails  G gets
influence)
nothing
 G prevails  B
 Will gets thrown out
disinherited
 NCC gets thrown out
 G=2/3, A=1/3
along with will  B
not disinherited
 Rules of intestacy
govern
 A=1/2, B=1/2
New CA/Utah
Scenario
 T has 2 kids (A&B)
 T signed only will in
2010
 2/3 to Girlfriend, G
 Residue to A & B
 Broad NCC
E.
Example 1
 B alleges undue influence
 B prevails  G disinherited
 Will (with NCC) gets thrown
out  B not disinherited
 Rules of intestacy govern
 A=1/2, B=1/2





Example 2
B alleges undue influence
G prevails  G gets her
bequest
Will admitted to probate
Court finds Probable Cause 
B not disinherited
G=2/3, A=1/6, B=1/6





Example 3
B alleges undue influence
G prevails  G gets her
bequest
Will admitted to probate
Court finds no Probable Cause
 B disinherited
G=2/3, A=1/3
Formalities of Execution – how was the will signed?
1.
2.
3.
Formalities of will execution DO NOT apply to revocable trusts
a. Revocable trust valid if Settlor simply signs the trust instrument
i. BUT pour over will REQUIRES will execution formalities (e.g., Settlor’s & 2 witnesses signatures)
b. Rationale
i. Wills have a long history of common law
ii. RT are relatively new instruments – they don’t have common law carry-over requirements
Types of Execution – offer different levels of protection for the ways in which documents become effective
a. Oral – agreement that is not reduced to writing (as long as it does not violate Statute of Frauds (ie. real prop)
b. Signature Only – document valid when reduced to writing and signed
c. Witness – document valid when reduced to writing, signed, and there are witnesses to the signature
d. Notarization: Two things Notary can do:
i. Acknowledgment– notary signs & puts his stamp on doc to verify it’s the correct signature
(a) Notary public needs to be satisfied through some proof that person who signed document really is the
person he/she purports to be
ii. Jur At Notary Procedure– swearing under penalty of perjury that info in the document is accurate
(a) Very different than notary public simply verifying the signature
Reasons for Formalities of Execution
a. Protection from forgery
b. Impress some level of finality
i. Ensures that this document is the final version and just a preliminary draft
ii. Impresses the sense of finality on the person signing document – i.e., by fixing signature you are doing
something that has a legal consequence
c. Provide safe harbor for person who is signing – person knows that document/agreement is effective/valid b/c
he/she has complied with prescribed procedures
Document
Contract
Need for Protection
 Low/medium
Requirements to be Valid
 Oral/Writing
24
Best Practice
 Notarized/Acknowledged
 Parties likely still alive
 Medium (deal with property)
Deeds
Affidavits
Powers of
Attorney
Will
Revocable Trust
Irrevocable Trust
 High (swearing something true)
 High (agent has authority to
manage your affairs)
 High (testator deceased)
 High (it is a will substitute)
 Low (it’s a living instrument;
fact that you’re funding the trust
validates that you want it)
 Low (asset transfer into trust
validates you want the trust)









Signature might be required
Signature  valid
Notarized  recorded
Jur At
Two witnesses OR
Notarized
2 witnesses (most states)
None (you could have an oral RT)
Usually in writing (signature 
valid)
 None (you could have an oral RT)
 Usu. in writing (signature  valid)
 Notarized/Acknowledged
(required for recording)
 Jur At
 Notarized
 2 witnesses
 Notarized/acknowledged
 Notarized/acknowledged
4. Witness Requirements for a Will
a.
b.
c.
d.
General Requirements
i. Must be 18 years old (UT – § 2-501; CA – § 6100(a))
ii. Must fulfill general witness requirements (as in FRE) (able to observe, recall, and recount, competent)
Common Law – 2 witnesses needed (carry over from Statute of Wills) – codified by most states
Utah – § 2-502 – will needs 2 witnesses
i. Sufficient if each witness (and they can do it independently) signs w/in a reasonable amount of time after
he/she sees the testator sign the will OR acknowledge his signature OR acknowledge his will
(a) By signing, witness is saying they
(1) Saw testator sign;
(2) Saw testator acknowledge his signature; OR
(3) Saw testator acknowledge the document as his will
(b) “Reasonable period of time” – could be done after testator dies (based on UProb.Code comments)
(c) DOES NOT matter if an interested witness signs will
California – § 6110 (c)(1) – will needs 2 witnesses – more strict than UT
i. Witnesses MUST sign in each other’s presence at the same time during the testator’s lifetime after they
see testator: sign will OR acknowledge his signature OR acknowledge his will
(a) Practically: have testator & 2 witnesses be in same room at same time so all see each other sign
ii. NOTE: witness who receives a bequest under will (interested witness) faces rebuttable presumption that will
was subject to undue influence § 6112
(a) Interested witness=exclusive to CA – under Uniform Probate Code (UT) it DOES NOT matter
5. Witness Testimony
a.
6.
By signing, witnesses is saying they are available to appear as a witness in court, what if dead?
i. 2 witnesses (at least 1 alive?)
ii. Attestation Clause (see below) (BUT witness may still have to appear in crt or prepare affidavit)
b. Three methods of testifying
i. Affidavit – witness can sign an affidavit after testator dies that is submitted to court
(a) Affidavit says “I saw the testator sign” under penalty of perjury
(b) Benefit = witness does not have to be dragged into court; BUT still have to survive testator
ii. Attestation Clause – usually seen in older wills
(a) Witnesses sign statement at the time they signed will saying “we saw testator sign” but not under
penalty of perjury  not self-proving b/c not done under affidavit procedure
(b) Created a rebuttable presumption that the will was properly executed
iii. Self-Proving Will – what everyone uses now
(a) Process = testator signs, 2 witnesses sign, and notary signs (using Jur At procedure)  creates a
conclusive presumption (absent fraud) that will was properly executed
(1) Witness essentially signs the affidavit at the time they sign will “under penalty of perjury”
(b) Benefit=Self-provid. affidavit language in will itself> no need for witness’s affidavit after T dies
Holographic Wills – do NOT need witnesses to be valid
a. Holographic will = a will that is in the testator’s handwriting & signature no need for witnesses
b. Material Portions of will that MUST be in testator’s handwriting
i. Signature
ii. Material provisions of the will = dispositive (who-gets-what) provisions
(a) Ok if lots language is typed (words “I give”) as long as actual dispositive> in testator’s handwriting
25
c.
7.
(e.g.,. “my house to X”)
Statutes
i. UT – § 2-502(2)
ii. CA – § 6111 (More details about when will=invalid & statements of T’s intent)
Substantial Compliance Statutes
a.
b.
Benefit=greatly facilitates validating more wills & not have wills invalidated cause of small technicalities
i. But you don’t want to rely on these stats especially since will execution stats give you a safe harbor
ii. NOTE: SC in UT & CA applies to both holographic and typed wills, amendments/codicils; NOT
revocations; Revival? Unclear—only applies to methods of a will’s execution
Substantial Compliance Stats – allow a will to be valid if you can establish by clear and convincing evidence
that testator intended instrument to be his/her will  permit substantial compliance w/rules
i. CL–rejected sub. comp. will had to conform to strict rules OR valid holographic will or INVALID
ii. Historical Development
(a) Traditional SC stat= “Near Miss”–how close did you substantially comply w/will requirements?
(1) Problem = hard to know what a near miss is
(b) Modern Trend = Dispensing Power statute  look to testator’s intent
(1) Did testator intend for this to be his/her will?
(2) Burden of proof = clear & convincing evidence (75%) that testator intended this to be his will
iii. Dispensing Power Statutes
(a) UT – § 2-503 (broader than CA)
(b) CA – § 6110(c)(2) – effective Jan. 1, 2010 – NO substantial compliance statute prior to this date
8. Codicils
a.
b.
c.
Codicil = amendment to a will
i. Rules are the same for codicils as they are for wills
(a) Codicils need to be holographic, comply w/will execution stats, OR comply w/sub. comp. stat
ii. NOTE: codicil can be in a different form than will (e.g., typewritten will and a holographic codicil)
Ex–T typed up valid will & later writes in margin a new disposition (e.g., “I give my antique table to X”)
i. Analysis – is codicil valid?
(a) Does it conform as a valid will under UT § 2-502(1)(c) or CA § 6110?
(1) No, T just scribbled it in the margin – did not sign or have witnesses
(b) Is it a valid holographic codicil?
(1) No, T did not sign after the sentence – if he had signed, it would have been valid
(c) Result=sentence is as if it never existedwill=still valid but added sentence=invalid codicil
(d) BUT, would sentence be valid under substantial compliance doctrine?
(1) Evidentiary ? – if can show by clear & convincing evid T intended sentence to be a codicil to his
will  sentence would be a valid codicil
Republication by Codicil
i. CL doctrine = when a codicil to a will is signed, the underlying will itself is effectively republished as of
the date of the codicil and effectively re-dated as of the date of the codicil
Implications of Republication by Codicil
Possible Result
Re-date – stat now applies to will b/c
of signed codicil
Republish – 2 disinterested witnesses
of codicil effectively cleanse taint of
interested witness
Revive #1 – could argue that codicil
republishes 1998 will and squeezes out
2001 will
Revive #2 – arguably the codicil would
revive the 1998 will
Re-date – codicil re-dates 1998 will so
arguably 2001 document can be
incorporated in will b/c> now exists
Ratification – argue>valid codicil may
be effective to incorporate and re-date
ineffective will from 1998
1998
Will signed
2001
Statute applies only to wills
signed after 2001
2003
Codicil signed (redates
will> 2003)
Codicil signed with 2
disinterested witnesses
Will signed
Will signed (revoked 1998 will
expressly/inconsistent)
Codicil to 1998 will
Will signed
1998 will revoked by physical act
Will signed
Doc to be incorporated into 1998
will (did not exist at time of will)
 can’t do this
Codicil to revoked 1998
will
Codicil signed to 1998
will (either will/codicil
had to talk bout doc)
Valid codicil signed
Will signed with
interested witness
Ineffective will (not
valid)
26
Republish – 1998 will> republished &
spouse is no longer “omitted”
9.
Will signed
Omitted spouse (testator gets
married in 2001)
Codicil signed to 1998
will
Reciprocal Wills (aka Joint and Mutual Wills)
a.
F.
Reciprocal wills = wills signed by husband & wife that essentially have mirror/reciprocal provisions
i. Each sign a will that leaves all to surviving spouse, but if he/she does not survive me, then all to X
ii. Problems = when first spouse dies, the surviving spouse gets all the property but can now dispose of all the
property however she wants to  this is not what the couple intended
(a) Solution: BFY K claim; or Irr. Trust (exists for benefit of serving Surviving spouse > then to son;
surviving spouse could still give her prop to someone else- but not other spouse’s prop)
iii. Takeaway = reciprocal wills are bad  DO NOT use them
b. Reciprocal Wills are NOT contracts (UT § 2-514; CA § 21700)
i. Merely having reciprocal wills DOES NOT prevent surviving spouse from changing will later and DOES
NOT create any rights in 3rd party BFYs because no K ensuring BFY receives anything
ii. NOTE: Ks to make wills are valid BUT mere fact that have reciprocal wills DOES NOT create a K
(a) Need something more than reciprocal wills to create a K (EX: Caretaker contracts for what he wants in
exchange for caring for person> make will K)
Different Jurisdictions – what happens if you sign a will in state A and then die in state B?
1. Probate – ALWAYS occurs in the domicile/residence state of the testator at death  laws of the state where
probate occurs are the laws that need to be satisfied
2. Statutes – will is deemed valid as long as one of the following occurred (UT § 2-506; CA § 6113)
a. State of Probate – if will conforms with law of the state where will is probated
b. State testator lived in at signing–if will conforms w/laws of state in which T lived when he signed the will
c. State in which will was signed–if will conforms w/laws of state in which it was actually physically signed
G. Incorporation by Reference
1.
2.
3.
Common law – you could incorporate another document into a will by reference ONLY IF
a. The document existed at the time the will was signed; AND
b. The will specifically, clearly identified the other document that it purported to incorporate by reference
Statutes – codify CL rule (UT § 2-510; CA § 6130)
a. Ex. Can incorporate typed doc to holographic, UNLESS material, dispositive provisions included in typed
i. BUT could argue incorporation was signed and in own handwriting, so that’s enough
TPP Exception – tangible personal property (TPP) exception: will can incorporate another document that disposes
ONLY of TPP even if that other document does not yet exist at the time the will is signed (other document must refer
to itself as the list referred to in specific paragraph of specific will)
a. UT – § 2-513 (No Monetary Limits!):
i. Writing still needs to be signed by the testator
ii. Writing must describe items and devisees with reasonable certainty
b. CA – § 6132:
i. Any document MUST be signed AND dated by the testator
ii. Imposes monetary limits
(a) No item in the list can be worth more than $5K
(b) Total amount of property on the list CANNOT exceed $25K
H. Acts of Independent Significance
1.
2.
Common Law – wills can include provisions regarding acts of independent significance (whether they occur
before or after will’s execution or T’s death)
a. Rationale – T not acting to make estate plan changes; T’s acting for independent reasons w/ind. significance
b. Examples
i. “I leave $10K to everyone who I employed at the time of my death.”
(a) Problem = you could dramatically alter estate plan by hiring/firing people BUT T likely is not
hiring/firing just to make estate plan changes  hiring/firing for independent reasons
ii. “I leave X my collection of antique cars”
(a) Problem = you could dramatically alter estate plan by buying/selling cars BUT testator likely is not
buying/selling cars just to make estate plan changes  buying/selling for independent reasons
Statutes – codify CL will can have acts of independent significance provisions (UT § 2-512; CA § 6131)
I. Revocation of Wills
1.
Three ways to revoke a will (UT § 2-507; CA § 6120)
a. Express–most common: sign new will that expressly revokes “I hereby revoke prior wills & codicils”
b. Inconsistency – older bequest is revoked by a subsequent inconsistent bequest later will governs
27
E.g. prior will says “I give table to X” and newer will says “I give table to Y”  Y gets table
NOTE – frequently even if a will did not expressly revoke a prior will, a subsequent will usually will revoke
a prior will by inconsistency if that subsequent will contains a residuary clause
(a) Residuary clause of newer will> essentially disposes of rest of the prop any bequest made in any
prior will has thus been revoked by inconsistency through residuary clause of newer will
c. Revocatory Act – any act done with the intent to revoke a will is sufficient to revoke a will
i. E.g. writing “void” across face of will, drawing “X” through will, crossing out will
ii. E.g. “burning, tearing, obliterating, some destructive act”
Dependent Relative Revocation (DRR) (mistakenly revoked)
a. CL doctrine (not codified, but accepted in most states)= treats old will as not having been revoked in the first
place if old will was destroyed ONLY on reliance on a newer but invalid will
i. If revoking will based on a mistaken assumption that a newer will would superseded it (e.g., newer will
turns out not to be valid), then the older will has not been revoked
ii. MUST show: only reason old will was torn up was b/c testator thought new will would be valid
(a) SO: if new will completely revises dispositive plan, DRR DOES NOT apply b/c you don’t know that
reliance on new will was the only reason the old will was torn up
(b) NOTE: As a general rule for mistake of fact to work, that mistake will have to be stated in the will
itself (Extrinisic evidence won’t work)
b. Effect of Substantial Compliance Stats: SC would validate newer will if can be shown by clear and convincing
evidence that T intended will to be new will rare that DRR will be an issue in future
c. Examples
i. Classic Case = Ts lawyer drafts new will; T signs new will but no witnesses  new will> not valid
(assuming no SC stat); T goes home & tears up old will; DRR says that b/c she tore up her old will on
assumption that new will would be valid>revocation of old will never really happened
(a) Old will not revoked b/c T purportedly revoked it on mistaken assumption that new will=valid
(b) NOTE:SC rules would try to validate newer will so SC stats make this classic case very rare
ii. Mistake Recited in Instrument= if new instrument that revokes old will expressly contains some mistake of
fact or law, then the older bequest will be treated as not having been revoked
(a) Ex “I give table to Y b/c X is dead” but X is not dead  older bequest of table to X>still valid
i.
ii.
2.
Examples from Class – Revocation & DRR
1
2
3
4
5
1997
Valid will
signed
Valid will
signed
Valid will
signed
Valid will
signed
2000
1997 will revoked by physical act
2003
Valid will
signed
Invalid will signed – 1997 will revoked by act
b/c reliance on 2000 will to be valid
Result
Intestacy
Valid will signed – 1997 will expressly
revoked
Invalid will – purported to revoke 1997 will
(but doesn’t actually cause invalid)
Valid will signed
2000 will governs
1997 will governs
2000 will revoked by
physical act
Presumption = 1997 not
revived> Intestacy (unless
can show T intended
revival)
1997 will governs under
DRR
J. Revival of a Will
1.
2.
Rebuttable Presumption= prior wills are not revived if a subsequent will gets revoked by revocatory act UNLESS
you can show that the testator did want the prior will to be revived (UT § 2-509; CA § 6123)
a. Can rebut presumption by showing that T did want a prior will to be revived
b. Exception – UT only (§ 2-509(2)) Presumption shifts if subsequent will revoked prior will only in part AND
subsequent will was revoked by act
(a) Rebut. Presump.=whole will revived UNLESS can show T wanted otherwise
(1) Still ONLY a rebuttable presumption> can be rebutted by showing of T’s intent
(2) NOT an exception in CA
Ex– T has will #1 (valid) & then executes will #2 (valid) that expressly revokes will #1; T revokes will #2 by act 
will #1 DOES NOT get revived UNLESS can show T did want will #1 to be revived (#4 above)
28
Examples from Casebook – Revocation, Revival, DRR & Validity of Codicils
Scenario
Result
1
T types out will with $1000
bequest to CB but T later
crosses out $1000 and writes
in $1500 with initials


2
T’s will gives $1000 to CB
but T later crosses out $1000
and writes in $500 with
initials


3
T’s will gives $5000 to JB
but T later crosses out JB and
puts in N with initials


4
T writes “void” across will
and dies before draft of new
will is satisfactory
T’s will gives $5000 to J but
T later revokes bequest to J
b/c J is dead but J is not really
dead
T dies with 2 wills and a
document; will #1 gives all
property to A; will #2 gives
all property to B; document
subsequent to #2 says “I
revoke will #2”; H = intestate
heir

5
6




Crossing out valid to revoke $1000 bequest
New request ≠ valid holographic will (no signature and possibly material disposition is
not handwritten)
 SC much easier for new bequest to be valid if can show it was T’s intent
 DRR argument = clear that T would want CB to have at least $1000
Crossing out valid to revoke $1000 bequest
New request ≠ valid holographic will (no signature and possibly material disposition is
not handwritten)
 SC much easier for new bequest to be valid if can show it was T’s intent
 DRR argument = not clear it would work  more difficult to show that DRR
should apply to give CB the $1000 if he didn’t get the $500
Crossing out valid to revoke $5000 bequest
New request ≠ valid holographic will (no signature and possibly material disposition is
not handwritten)
 SC much easier for new bequest to be valid if can show it was T’s intent
 DRR argument = not clear it would work  tough hurdle to overcome
DRR probably won’t work b/c T revoked by physical act before T even talked
w/lawyer reliance difficult to show b/c T did not wait for new will to be put into
place
DRR applies and J gets bequest b/c of mistake
Argument for Will #1 – need to show other document validly revoked will #2 and that
T intended for will #1 to be revived
 Other doc doesn’t dispose of any prop shows T wanted to revoke #2 but did not
replace it with another plan
 Will #1 kept in safe place and not expressly revoked
 Document expressly revokes Will #2 (but only a will can expressly revoke)
 Definition of will= any testamentary instrument which revokes or revises
another will strong argument that other document is a will
 SC statute could help with failures to comply with formalities
Argument for Will #2 – need to show that Will #2 was never validly revoked
 Document was not a will b/c it was not executed properly
Argument for Intestate Heir H – need to show that Will #2 was revoked
 Same arguments as A to get Will #2 revoked
 Show that T never intended Will #1 to be revived
XIV. RULES OF CONSTRUCTION
A. Overview
1. Rules of Construction=default for interpreting wills or RT if extrinsic evidence not allowed /unavailable
a. If will or revocable trust tells you what to do  ALWAYS follow the governing instrument
b. If will or revocable trust silent AND there’s an ambiguity (NOT enough if just mere drafting error):
i. FIRST ask if there’s any admissible extrinsic evidence that helps clarify the ambiguity
(a) If YES, allow it! If it clarifies, you’re done; If it doesn’t or there’s no extrinsic evidence available, then
ii. SECOND  follow the rules of construction
2. Types of Bequests
a. Specific = gift of specifically identified property (e.g., car or all money in wells fargo account to X)
b. Pecuniary/General = gift of a $$ amount (only dollar, not stox or bonds)
c. Demonstrative – gift of a specific amount of $$ (or stox) to be paid from a specifically identified account
i. Problem = if account doesn’t have enough money to cover bequest
ii. Resolution = X gets all in account and then gets the remainder from somewhere else in estate
(a) E.g. “I leave X $100K to be paid frm my account at Zions”  if there is only $80K in account at death,
then X gets $80K plus $20K from some other source in estate
29
d.
e.
f.
iii. ANALYSIS:
(a) Enough cash in rest of estate? Use that to pay rest of demonstrative
(b) If not enough cash, use other property in the estate
(c) If not enough prop to pay all pecuniary gifts, abate amounts pro rata
Residuary = gift of everything else
Pregatory= leave prop to someone & request that they do something with it, but non-binding request
Non-monetary GOL (gifts of love)
3. Extrinsic Evidence
a.
b.
c.
d.
Extrinsic Evidence= evidence from outside the 4 corners of will for purposes of interpreting the will
i. Arguments to admit it
(a) Ambiguity in will
(b) Testator’s intent – maybe will not best evid; want to let all evid in that’ll help discern intent?
(c) Could be Mistake in will
ii. Arguments to exclude it– these arguments are more persuasive than admissibility arguments
(a) Will itself = best evidence of T’s intent
(b) Reliability/probative value is questionable: 1) did testator really say that? 2) maybe said what he said to
fool family members into thinking their BFY’s when didn’t want them to be
(c) Efficiency- (more unwieldy and long process) Flood of litigation
(d) Safe harbor–T has right to feel confident>properly executed will=final word on estate distrib.
(e) Judges and juries are really not in a position to rewrite a will
(f) Judicial bias–allow extrinsic evid gives judge chance to dispose of will how he thinks is best
CL PLAIN MEANING RULE: if will is not ambiguous, CANNOT allow extrinsic evidence to supplement OR
alter will. Usu. EXCLUDE extrinsic evidence, UNLESS:
i. Used to interpret an Ambiguity  rule does not allow in very much extrinsic evidence
(a) If language not ambig CANNOT allow in evid even if it shows T intended otherwise and it’s just an
attorney mistake
(b) NOTE: silence in instrument can = ambiguity
ii. Types of Ambiguities
(a) Patent ambiguity (obvious; on its face; leave 1 thing to 2 diff ppl)evid admissible to clarify
(b) Latent ambiguity (terms of will seem clear but are not when you go to distribute property)  cases
often lead to absurd results
(1) E.g.“Leave table to niece A”; but T has two nieces named A OR never had niece named A
State Rules
i. UT = traditional common law plain meaning rule
ii. CA = Russell – (cat=Roxy) CA tried to expand PMR, but still no different from traditional CL
(a) If there is a patent ambiguity  let extrinsic evidence in
(b) Latent ambiguity – you can allow extrinsic evidence in to reveal a latent ambiguity
(1) If claim latent ambiguity, can use extrinsic evidence to reveal that ambiguity & resolve it
(2) BUT still have to find an ambiguity in will before can use extrinsic evidence to interpret it
a. Will’s language has to be susceptible to 2 or more meanings before> allow ext. evid
Problems with PMR:
i. Doesn’t account for cases when will is not ambiguous but is just plain wrong:
(a) Mahoney – T wanted property to go to 25 cousins but will said “$ goes to T’s heirs”
(1) Problem = aunt was heir, not cousins
(2) Extrinsic evidence = clear that attorney made a mistake during drafting
(3) Result = court applied plain meaning rule  aunt got property b/c will had no ambiguity
(4) Remedy = cousins could sue attorney for malpractice
(b) Gustafson – T wanted property to go to children of his friend E but will said “E’s heirs”
(1) Problem = E’s heir was E’s wife
(2) Result = crt applied plain meaning rule  E’s wife got property b/c will had no ambiguity
(c) Scottish–T wanted prop to go>Scottish Society for Children but will said Society for Children
(1) Extrinsic evidence = clear that attorney made a mistake during drafting
(2) Result = crt applied PMRprop went to diff. charity than what T wanted> no ambiguity
ii. Crts get all confused with what an ambiguity is:
(a) USC/UCLA-Black–will said “Leave $100K to Univ. of Southern Cali. known as UCLA”
(1) Result= crt applied PMRprop went to UCLA; NOT ambiguous-T meant univ. in southern CA
B. Changes in Property
1.
Situation = changes in property between time testator signs will and when testator dies
a. Inquiry= do changes critically affect disposition of estate such that you will have to make a jdmt call?
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b.
NOTE: these rules only apply if instrument=silentALWAYS follow what instrument says if not silent
2. Specific Property Not in Estate
a.
b.
c.
Situation= T makes specific bequest in will to X but doesn’t have that prop in estate at time of death
PAST CL = BFY gets nothing if property is not in estate at time of death
i. Ademption= like revocation: gifts>adeemed if not in T’s estate at death revoked or null & void
(a) Adeemed by Satisfaction= if T gave specific property to beneficiary during T’s life (STILL TRUE!!)
(b) Adeemed by Extinction=if T sold/gave prop to someone else while alive OR gift> destroyed
Modern Statutes– tend to relax/change harsh CL rule
i. CA §§ 21133-21134– carves out certain exceptions
(a) Conservatorship: Prop sold by conservator to support conservatee– if reason prop was not in Ts estate
at death was cause conservator was appointed for T AND conservator sold prop to raise money to take
care of T BFY gets a pecuniary gift equal to the value of the property
(1) Rationale: T had no control/consent in getting rid of it
(b) Unpaid sale proceeds (unpaid as of date of T’s death)–if T sold prop to Y but Y still owed money
(e.g.installment plan), T is owed unpaid sale proceeds BFY- NOT paid sale proceeds
(1) Unpaid sale proceeds = what testator has not yet received
a. Ex. T sells car to Y on installment plan; Y pays $500 & owes $15k  X gets $15k but not the
$500 of paid proceeds
b. Ex. T mortgages prop for $500k to Y (gets promissory note from Y); Y cannot pay & defaults;
T forecloses on Y> now owns Y’s home X gets home> proceeds of promissary note
(2) Same for unpaid insurance proceeds, condemnation award, foreclosure & eminent domain
ii. UT § 2-606 – effectively reverses CL rule  goes further than CA
(a) Includes same specific exceptions as CA (Conservator & unpaid sale proceeds); AND
(b) If specific prop not in estateBFY gets full value of prop UNLESS>show T intent=otherwise
3. Transformation of Specific Property
a.
Statutes – UT § 2-605; CA § 21332 – BFY gets whatever the property has evolved into
i. Stock Splits: T owns 100 Google shares>leaves to X; after will>signed & before T dies, Google’s stock has
split so that 100 shares became 500 X gets 500 shares b/c it’s really the same asset
ii. Stock Mergers: T owns 50 W. Co. shares>leaves to X; W Co. mergers w/ Y Co.> forms new Co. Z; as a
result of merger, T>issued 10 shares of Z X gets if will is not amended b/c= same asset
4. Mortgage on Specific Property
a.
b.
c.
Scenario: T leaves $600k home w/$500k mortgage to X; X get home subject to or free frm mortgage?
CL=PR must pay mortgage w/other estate funds before distributingBFY gets prop free of mortgage
Stats: reverse CLBFY gets prop subject to mortgage UNLESS instrument says otherwise
i. UT § 2-607 & CA § 21131
5. Ademption of Pecuniary Gifts by Satisfaction
a.
General Rule= pecuniary gifts cannot adeem b/c money is fungible
i. BUT can be ademption of pecuniary gifts by satisfaction by lifetime gift if T writes as intent
(a) Q = should any bequest to X be adjusted to reflect the lifetime gift? Usu. NO
b. CL Rule = will bequests are subject to adjustments for any lifetime gifts using Hotchpot method (page 15)
UNLESS you can show that the testator intended otherwise
i. NOTE: rule is same as rule for Advancements in case of intestacy
c. Stats – reverse CL presumption (UT § 2-609; CA § 21135) = no adjustments need to be made to will bequests
to account for lifetime gifts UNLESS can show that the testator, in writing, wanted the adjustment to be made
i. DIFFERENT FROM SPECIFIC because: Pecuniary-need to show something in writing from the T to
reverse the presumption; BUT Specific- ONLY need to show a change in T’s intent
C. Abatement – what to do when there is not enough money in estate to pay all of the pecuniary gifts?
1. Specific Gifts – get distributed FIRST before pecuniary gifts
a. If specific gift> no longer in estate (ademption by extinction) & BFY entitled to something under stat (UT § 2606 (BROADER); CA §§ 21133-21134) liquidated amount to which BFY is entitled is treated as a general
pecuniary gift for purposes of abatement
2. Pecuniary Gifts– abate pro rata if there is not enough assets to pay them all
a. T leaves $200K to A, $100K to B; after payment of debts/taxes/admin expenses> only $100K to distribute
reduce each bequest on a proportional basis
i. A gets 2/3 ($66K) and B gets 1/3 ($33K)
3. Demonstrative Gifts – treated as a specific gift (so paid 1st/off the top) to the extent that money exists in the
specified account; if money doesn’t exist in specified account, treated as a pecuniary gift subject to abatement
a. $$ in specific account treated like a specific gift  goes to BFY right off the top
b. If there’s less than gift amt in the account  BFY gets entire amount in account as if it were a specific gift AND
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BFY entitled to remaining amount of gift from other estate assets as a pecuniary gift
i. If> not enough assets in estate to pay ALL pecuniary gifts  all pecuniary gifts abate pro rata
4. Residuary Gifts – like an accordion that expands/contracts depending on size of estate
a. If there is nothing left due to abatement of pecuniary gifts  no residuary to distribute
D. Death of a Beneficiary (or Disclaimer by BFY) – Anti-Lapse Statutes
1. Situation = T leaves $100K to A in will but A dies before T and will doesn’t contain contingency
2. CL = gift would lapse and go to residuary beneficiaries (default rule) (gift revoked OR just falls)
a. Individual: gift Lapses “as if hadn’t been made”  goes to residuary
b. Class Gift: (“to siblings”) Lapses  other class members (goes to 4 remaining siblings if 2 died)
c. Residue: Lapses;  other living residuary BFYs; if no living residue BFY’s  intestacy
3. Anti-Lapse Statutes – new default to replace CL = gifts to predeceased BFYs will not lapse but rather go to issue
of predeceased BFY if predeceased BFY was a relative of testator
a. Effect: Gift that would have gone to BFY now goes to BFY’s issue
b. Rationale: T is leaving money to person on account of family rlshp  reasonable to assume that if BFY dies
before T, then T would want money/gift to go to that person’s children
c. Apply equally to (go through analysis for) UT & CA
i. Wills
ii. Revocable trusts
iii. Irrevocable trusts: for when named BFY does not survive for the creation of that trust
iv. Power of Appointment: use A-L analysis>see whether prop goes to BFYs issue or takers-in-default
(a) NOTE: “Relative” or “Kindred” can be either related to Settlor or Power of Appointer
(b) A exercises PofA in favor of B (“upon my death prop shall go to B”) but B dies before A
(c) “PREMATURE Appointment” – make appointment but appointee dies before PofAppointer
When to Go through A-L Analysis


YES
Named BFY (or residuary) in will or RT dies before T OR
is considered predeceased (e.g. divorce, 120 hrs) OR disclaims
property (they are treated as predeceased)
Member of Class of Persons predeceases testator OR is
considered predeceased OR disclaims property
 Class = ascertainable category of BFYs
 E.g.class= “my siblings” or “nieces & nephews”
 If A-L applies, proppre-dec. member’s issue

NO
Prop left to “ISSUE” or “DESCENDANTS”
 Use per stirpes, per capita at each generation, equal
share method diagrams to solve problem
Anti-Lapse Statute Analysis
Utah § 2-603(2)
1. Is the instrument explicit?
 YES  follow instrument
 NO  continue analysis
2. Was beneficiary a relative of Testator/Settlor?
 Relative=grandparent, GP’s issue, OR Ts step-child
 NOTE: usually, we don’t consider step-children part
of inheritory scheme
 YES  continue analysis (A-L stat probably applies)
 NO  A-L stat>NOT apply use CL default= lapse
3. Does instrument have survivorship language? (“if he
survives me” language implies T wants gift> lapse)
 YES  A-L stat DOES NOT apply CL = lapse
 NO  continue analysis
4. Does the predeceased beneficiary have living descendants
(issue)?
 YES  A-L statute applies
 NO  A-L stat DOES NOT apply b/c there’s no one for
prop to go to  use CL default rule = lapse
5. Application of A-L Statute
California §§ 21110(b), 21111(a)(1)
1. Is the instrument explicit?
 YES  follow instrument
 NO  continue analysis
2. Was beneficiary “kindred” of Testator/Settlor?
 Kindred=not defined  look for “kindred” (BROADER)
 YES continue analysis (A-L stat probably applies)
 NO  A-L statute DOES NOT apply  use CL default
rule = lapse
3. Does instrument have survivorship language? (“if he
survives me” language imply T wants gift to lapse)
 YES  A-L stat DOES NOT apply CL = lapse
 NO  continue analysis
4. Does the predeceased beneficiary have living
descendants (issue)?
 YES  A-L statute applies
 NO  A-L stat DOES NOT apply b/c there’s no one for
prop to go to  use CL default rule = lapse
5. Application of A-L Statute
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

If A-L applies use per capita at each generation
method (UT default)
If A-L DOES NOT apply  use CL default rule = bequest
falls to residue under § 2-604
 NOTE: if bequest is residuary gift, then it passes to
other residuary BFYs OR to intestacy (if no other
residuary BFYs)


If A-L appliesuse equal share method (CA default)
If A-L DOES NOT apply  use CL default rule = bequest
falls to residue under § 2-1111(a)(2)
 NOTE: if bequest is residuary gift, then passes to
other residuary BFYs §21111(2)(b) OR intestacy (if
no other residuary BFYs) (§ 21111(a)(3))
E. Four Unique Scenarios
 NOTE: law assumes that typical testator/settlor would want these results if these events happen and instrument does
not anticipate them (which most won’t)
1. Omitted Spouse- Marriage after Will is Signed
a. Omitted Spouse (aka “pretermitted spouse”)= new spouse (after instrument signed) who’s not a BFY
b. Statutory Rules
i. CA §21610-21612–omitted spouse entitled to her intestate share of estate BUT no more than ½ SP
(a) Intestate share= all CP + SP he/she is entitled to (1/3, ½, or all SP depending on what other relatives
decedent has living)  BUT stat says surviving spouse CANNOT get more than ½ SP
(1) If omitted SS entitled to all SP  omitted SS only gets ½ SP
ii. UT §2-301–OS entitled to his intestate share of prop that doesn’t pass to T’s kids by prior marriage
(a) Double Hit – omitted spouse gets little if anything if testator has kids by prior marriage
(1) Intestate share reduced first by any prop going to kids by prior marriage
(2) OS then gets her reduced share ($75K + ½ balance of what’s left) b/c T’s kids by prior marr.
(b) OS only gets intestate share of property not left to D’s issue
c. Exceptions (UT § 2-301; CA §§ 21610-21612) – omitted spouse statutes DO NOT apply if:
i. It appears the omission was intentional (e.g., T makes new will day before getting married)
(a) NOTE: remember republication of will by codicil
(1) If D signs a new will after getting married  OS is no longer an omitted spouse
(2) If D signs codicil after marriageentire will>republished>OS is no longer omitted
ii. Omitted spouse is otherwise provided for by T (e.g.T puts together IrrT for benefit of omitted spouse)
d. Prop paid From:
i. Property that originally was designated to the OS (Ex if dating when made will & included g/f in will)
ii. Then from Intestacy
iii. Then from Residue
iv. Then from pecuniary gifts
v. Then from specific gifts
2. Omitted Child- Birth after Will is Signed
a. Omitted child (aka “pretermitted child”) = new child who is not a BFY under the instrument
b. Statutory Rules
i. CA §§ 21620-21623 – omitted child gets his/her intestate share
ii. UT § 2-302 – more complicated than CA:
(a) Did D have children at time will was signed?
(1) NO  omitted child gets his/her intestate share
(2) YES  figure out what those children receive under instrument then divide that pot equally to
determine omitted child’s share & abate the rest of the children’s shares pro rata
a. E.g. T left child A $100K and child B $50K and then had omitted child C
i. A+B = $150K  C gets 1/3 of this = $50K and remainder abates pro rata
 A gets $66K and B gets $33K
c. Exceptions (UT § 2-302; CA §§ 21620-21623) – omitted child statutes DO NOT apply if:
i. It appears that the omission was intentional
ii. OC was otherwise provided for by T (e.g. T puts together Irr. trust for benefit of omitted child)
iii. Substantially all of the estate went to the other parent of the omitted child
d. Paid from: Same as CA’s omitted spouse (above)
3. Divorce after Will is Signed
a.
Statutory Rule (UT § 2-804; CA §§ 6122, 6122.1) – quite expansive – effectively revokes any revocable gifts to
former spouse AND fiduciary nominations of the former spouse
i. NOTE: stats revoke only REVOCABLE gifts (e.g., gifts under will, revocable trust, beneficiary
designations, life insurance policy, nomination of fiduciary in favor of surviving spouse, etc.)
(a) NOTE: Divorcee can still serve as trustee of irrevocable trust cause trust is irrevocable
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b.
c.
ii. NOTE: CA § 6122.1–revokes all same revocable gifts if registered domestic partnership is terminated
Revocation of Gifts to Relatives of Former Spouse
i. UT – these gifts are also revoked
ii. CA – these gifts are NOT revoked
Revoking Gifts
i. Stat do not use term “revoke”–they either treat former spouse as predeceasing D or disclaiming prop
(a) Disclaiming property = same effect as predeceasing decedent
(b) CA – property treated as though former spouse has predeceased decedent
(c) UT – property treated as though former spouse has disclaimed the property
ii. Example – H and W each have one child from different marriage and then divorce
(a) UT – W’s child does not get property
(1) Statute revokes any gift to relative of divorced spouse (would include W’s child)
(2) A-L statute would not apply (W’s child is no longer a step child)
(b) CA – W’s child does not get property
(1) A-L statute would not apply – only applies to kindred – a former spouse is not kindred
4. Beneficiary Kills Testator
a.
Stat Rule (UT § 2-803; CA § 250)– revokes all revocable gifts to slayer AND revokes fiduciary nominations of
the slayer  slayers cannot inherit something under decedent’s estate plan
i. CA – slayer is treated as though he has predeceased decedent
(a) statute strongly suggests you would need a conviction
(b) statute specifically says that A-L statute (§ 21111) DOES NOT apply
ii. UT – slayer is treated as though he has disclaimed what he has received
(a) Conviction NOT required; needs PREPONDERANCE of the evidence
(b) stat doesn’t specifically say A-L stat doesn’t applyA-L stat arguably could apply
(1) If T leaves prop to bro & bro kills Targuable>bros kids should get what bro should’ve got
iii. NOTE: no difference between being deemed predeceased and disclaimed
F. Special Protections
1. Protection of Surviving Spouse
a.
b.
c.
Ancient CL = dower/curtesy (does not exist anymore) = gives surviving spouse an inalienable protection
regardless of whether deceased spouse left property to someone else
Community Property States = protection of spouse exists by virtue of nature of community prop
i. CP belongs equally to each spouse ½ CP belongs to surviving Sp. regardless of how it’s titled
(a) Deceased spouse can dispose of his ½ CP but CANNOT dispose of other half of CP
Common Law States (most or all of prop is tied up in 1 spouse who leaves to someone other than SS)
i. Do NOT have CP protection  deceased spouse can dispose of any property titled in his name
ii. Protection = Elective Share = surviving spouse has ability to elect against the will (deceased spouse’s
estate)  can elect between what she gets under will and elective share
(a) Elective Share = 1/3 of augmented estate (in UT)
(1) Augmented Estate= marital prop + marital prop given away within 2 years of death
a. Marital Prop: roughly same def. as CP=prop earned by either spouse during marriage
2. Family Protections
a.
b.
Purpose = ensure family is not left completely destitute if they are otherwise disinherited
i. NOTE: applies only to small estates b/ if it were larger estate, then elective share would be bigger
ii. Applies only if spouse does not take elective share
Protections (comes off top before specific gifts and creditors) SS or minor children (if no SS) get:
i. Homestead Exemption = money to buy home/apartment/dwelling
(a) UT = $22,500
(b) CA = discretionary
ii. Family Exemption = to buy furniture in house (amenities for living)
(a) UT = $15,000
(b) CA = discretionary
iii. Family Allowance = living expenses during probate administration
(a) UT- For period during which probate is open = $27,000
(b) CA- For period of probate administration = discretionary
G. Intentional Disclaimers
1.
Three circumstances
a. Taxes
i. E.g., grandparent leaves property to child (C) (subject to 50% estate tax)  C leaves property to grandchild
34
2.
3.
(GC) (subject to 50% estate tax)  GC only gets 25 cents on the dollar
(a) C might disclaim if C has plenty of money and does not want money going to taxes  doubled GC’s
inheritance by disclaiming
b. Avoid environmental liability
c. Avoid creditors – if you know that any property would just go to creditors
i. Caution – this does not always work
Validity – disclaimers MUST be made within 9 months of death to be valid
a. NOTE: you CANNOT benefit from the property in the interim and then disclaim
Effect of Disclaiming Property
a. You cannot direct where property goes
b. Beneficiary treated as though he/she has predeceased decedent
XV. TIMELINES
Beneficiary Dies Before Date of
Decedent’s Death
Intestacy: Follow Diagrams
Will or Trust: Follow instrument
(A-L stat or CL lapse situation)
Beneficiary Dies After Death but
Before Distribution
Intestacy: To heir’s estate
W or T: Follow Instrument
OR to Beneficiary’s estate
Beneficiary Dies After Distribution
I: To Heir
W or T: To Beneficiary
120 hrs post-death (moved ahead)
Death
To D’s Heirs/Children
To Beneficiaries’ Kids or lapse
Date of Distribution
To Heir’s Estate
To Beneficiary’s Estate
To Heir or Beneficiary
Part of her Estate
A. Beneficiary Death
1.
Beneficiary predeceases decedent
a. Intestacy – apply rules of intestacy as though that person is already deceased (use diagrams)
b. Will or Revocable Trust
i. If instrument contains a contingency  ALWAYS follow instrument
ii. If instrument is silent  look to Anti-Lapse Statutes
2. Beneficiary survives decedent but DOES NOT survive until date of distribution
a. Intestacy – property gets distributed to heir’s estate b/c heir has a vested interest in that property even though
probate is still open and property has not yet been distributed
i. Prop gets distributed acc. to heir’s estate plan (if had one) OR acc to rules of intestacy
b. Will or Revocable Trust – property gets distributed to the beneficiary’s estate b/c beneficiary has a vested
interest in that property even though probate is still open and property has not yet been distributed
i. Prop gets distributed acc. to BFY’s estate plan (if had one) OR according to rules of intestacy
3. Beneficiary survives decedent AND survives until property is distributed
a. Intestacy – heir gets prop & can do w/it whatever he wants prop becomes subject to heir’s estate plan
b. Will or Revocable Trust – beneficiary gets the property and can do with it whatever he wants
B. Simultaneous Death – MUST survive by 5 days (120 hours)
1. Stat Default (UT § 2-104; CA § 6403) – if 2 people (any intestate heir) die within 5 days (120 hours) of each other,
each of them is deemed to have predeceased the other for purposes of intestate distribution
2. NOTE:lots governing instruments> impose much longer period of survival (e.g. 30/60/90 day survival period)
XVI. ANATOMY OF WILLS AND REVOCABLE TRUSTS
Anatomy of Wills and Revocable Trusts

Will
Two Types
 Dispositive Will – standalone document with
dispositive provisions
 Pour-over Will – pours assets subject to will over to
revocable trust

35
Revocable Trust
Funding
 Transfer assets into name of trust
 General Assignment
 Pour-over Will – pours assets subject to will over to
revocable trust










Bequests – specific, pecuniary, demonstrative, residuary
Incorporation by Reference
 Document MUST exist at time of signing OR doc
can only dispose of TPP (CA has $$ limits)
Contingency Clauses – ALWAYS ask “what if?”
PR Appointment (also designate successor PR)
Fiduciary Bond Provisions
 Usu waived b/c you trust PR and/or don’t want to
pay premiums (e.g., 0.25% of estate per year)
Testamentary Trust – sets out terms including
designation of BFYs, trustees, and successor trustees
Fiduciary Powers – ALWAYS read this section
 Stat give fiduciary powers BUT will instrument
contains this clause to easily allow someone else to
know what powers fiduciary has without having to
look at probate code
Guardian Provisions (also designate successor
guardians)
Self-Proving Provision – creates conclusive presumption
of validity
 Testator signs
 Witnesses sign
 Notary signs







NOTE: federal law prohibits retirement plans from
being transferred to revocable trust
Bequests – specific, pecuniary, demonstrative, residuary
Incorporation by Reference
 Document MUST exist at time of signing OR doc can
only dispose of TPP (CA has $$ limits)
Contingency Clauses – ALWAYS ask “what if?”
Trustee Appointment (also designate successor PR)
Fiduciary Bond Provisions
 Usu waived b/c you trust PR and/or don’t want to pay
premiums (e.g., 0.25% of estate per year)
Testamentary Trust – sets out terms including designation
of BFYs, trustees, and successor trustees
Fiduciary Powers – ALWAYS read this section


NCC
Revocation and Amendment – sets forth terms describing
how trust can be revoked and amended

Guardian Provisions (also designate successor guardians)

Spendthrift Clause – for irrevocable trusts
 Provides a measure of asset protection to BFYs by
protecting assets of trust from creditors of BFYs
 Provisions
 BFYs may not assign trust interests to someone else
 Creditors cannot reach assets in trust
XVII. ESTATE AND GIFT TAX SYSTEM
A. Estate Tax System
1.
Gross Estate (Taxable Estate)
a. INCLUDED – anything D owns at time of death is subject to estate tax
i. Anything you own in your own name
ii. Anything you hold in your revocable trust
iii. Anything held in joint tenancy if D contributed to that property
iv. Any property held under beneficiary designation
v. Any property held in irrevocable trust where beneficiary has general power of appointment (general = can
appoint to herself, her creditors, her estate, or creditor’s estate)
vi. Any prop held in IrrT where trustee = BFY WITHOUT ascertainable standard for discretionary
distributions (e.g., health, education, maintenance, and support)
vii. Life insurance policies owned by decedent or where BFY is D’s estate
B. NOT INCLUDED
i. Lifetime gifts (including any gifts to an inter vivos irrevocable trust)
ii. Trust assets merely b/c you are Settlor of irrevocable trust – you don’t own those assets anymore
iii. Trust assets merely b/c you are Trustee of an irrevocable trust – trust assets NOT taxed in Trustee’s estate
when Trustee dies b/c legal title only in fiduciary capacity
iv. Trust assets merely b/c you are BFY of an Irr.T with limited power of appointment – trust assets NOT
taxes as part of beneficiary’s estate UNLESS you have a general power of appointment
v. Any prop held in irrevocable trust where trustee = BFY WITH ascertainable standard for discretionary
distributions (e.g., health, education, maintenance, and support)
vi. Life insurance policy where decedent is NOT the owner or BFY
2. Exclusions
a.
b.
c.
Marital Deduction – anything you leave to spouse NOT subject to estate tax
Charitable Deduction – anything you leave to tax-exempt charity NOT subject to estate tax
$5MM>$1M Exemption – anything you leave up to $5MM to others NOT subject to estate tax
B. Gift Tax System
1. Non-Taxable Gifts
a.
$13K to as many people you want every year (for Irr T you can give $13K per BFY in trust per year)
36
i.
ii.
No gift tax consequences AND no estate tax consequences
Benefit= reduces amount in estate that will be subject to estate tax AND income appreciation of that prop
(time value of money) is also transferred out of estate
b. Unlimited medical expenses – MUST be paid directly to medical service provider
c. Unlimited educational expenses – MUST be paid directly to educational service provider
d. Charitable Gifts
2. Taxable Gifts = everything else beyond the non-taxable amounts
a. Effect= any taxable gift reduces the remaining estate tax exemption dollar for dollar
i. You don’t pay gift tax when make taxable gift–just keep track & reduce estate tax exemp. at death
ii. Once estate tax exemption exhausted gift tax is due and payable by the donor (not recipient)
C. Lessons Learned
1. READ the DEFINITIONS section of code/trust/K> treasure trove of embarrassing or brilliant opportunities
2. ASK 2 Questions: Who has the legal authority? What authority do they have?
3. Make as many non-taxable gifts as possible w/o jeopardize client’s standard of living  gets assets + appreciation of
those assets out of estate for free
4. Make tax gifts up to estate tax exemption amtstill get assets & appreciation of those assets out of estate
5. Seriously consider having client make large gifts (e.g., $5MM gifts) especially this year (since exemption will drop to
$1MM) b/c of possibility of having $4MM gift treated as free gift
6. Make taxable gifts and pay gift tax (assuming you have used up your exemption)  you can get more to BFYs doing
this than if you held onto money until you died
7. Consider Fractional Interest Discounts  by fractionalizing what you still own at death, you have reduced the value
of what is included in your estate  reduces payable estate tax
a. E.g.you give X 1% interest in a $10MM building = $100K but no one would buy this from you at that
pricegift may only>worth $70K-discountedfor gift tax purposes, not made $100K gift only $70K
D. Time Value of Money
1. Central Principle of Estate Plan = get $ out of client’s estate>into BFYs: take advantage of time value of $
a. Gets assets and appreciation of those assets out of client’s estate where it can grow in hands of BFYs  this
money will not be taxed in client’s estate
b. Compound Interest – at 7%, investment doubles every 10 years
E. Estate Planning
1. Types of Trusts
a. Credit Shelter Trust = Irr. trust funded from D’s share of assets in the amount of Ds remaining estate tax
exemption (whatever that is of the $5million>$1million) where surviving spouse=BFY & probably trustee
i. Purpose = “shelter” decedent’s “credit” (estate tax exemption>so doesn’t get wasted) saves estate tax
ii. MAKE SURE distributions made to surviving spouse are limited by ascertainable standard (4 magic words:
health, education, maintenance, and support) keeps trust assets out of SS’s taxable estate when she dies
iii. If also granting SS a Power of Appointment, DO NOT let SS (as BFY) have a general PofA  keeps trust
assets out of SS’s taxable estate when she dies
iv. Another benefit = asset protection  BFY’s creditors cannot get to those assets
b. QTIP Marital Trust= Irr. T used to protect balance of D’s money to make sure it gets where D wants it to go
(i.e. make sure after SS dies and is finished using it, it goes to D’s kids NOT SS’s kids by another marriage)
i. Requirements – for QTIP to qualify for the marital deduction
(a) All income from trust MUST be paid to SS as long as SS is alive
(b) No principal can be paid to anyone other than SS as long as SS is alive
ii. Usually SS is trustee
iii. NOTE: helps prevent any estate tax at D’s death but DOES NOT save estate tax  will be subject to estate
tax when SS dies
iv. Another benefit = asset protection  BFY’s creditors cannot get to those assets
2. Basic Estate Plan #1
a. Revocable Trust (or will) disposes of property to
i. Credit Shelter Trust – in the amount of decedent spouse’s remaining estate tax exemption
ii. Balance to surviving spouse
b. Example: married couple has $16MM: H = $8MM and W = $8MM  H dies
i. If H leaves everything to W  W = $16MM but H’s $5MM exemption will be wasted  $11MM subject to
estate tax when W dies
ii. With credit shelter trust
(a) Trust funded with $5MM (assume no lifetime taxable gifts)
(b) SS receives balance = $3MM  now has $11MM and has her own $5MM exemption  $6MM subject
to estate tax when W dies
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3.
4.
Basic Estate Plan #2 – goal = zero estate tax at first death; minimize estate tax when SS dies
a. Revocable Trust (or will) disposes of property to
i. Credit Shelter Trust – funded with decedent’s remaining estate tax exemption
ii. QTIP Marital Trust – funded with remainder of decedent’s property
iii. SS Trust – funded with SS’s share  will be SS’s own revocable trust
b. Example: married couple has $16MM: H = $8MM and W = $8MM  H dies
i. Credit Shelter Trust funded with $5MM
ii. QTIP Marital Trust funded with balance = $3MM  no estate tax for first spouse b/c of marital exemption
iii. SS Trust – funded with SS’s share = $8MM  will be SS’s own revocable trust
GST Tax (Generation Skipping Transfer Tax) – completely different than estate tax
a. GST Tax= if you leave $$ to someone that skips a generation (actual relatives or to someone 37.5 yrs
younger) 50% estate tax still applies AND a 50% GST tax on that same transfer is also imposed
i. Designed to create same result you would have had you passed property through each generation
ii. If prop is used to fund trust:
(a) 50% estate tax when G1 dies AND 50% GST tax imposed on distributions out to G3
iii. Examples
(a) G1 leaves $ to G250% estate tax AND G2 leaves $ to G350% estate tax=G3 gets 25 cents on the $
(1) W/o GST tax could leave prop directly frm G1 to G3  G3 gets 50 cents on $ avoids estate tax
(b) G1 puts $ in trust for future generations distributions can be made to G2 & G3 while they’re alive
50% estate tax when G1 dies but all subsequent generations avoid estate tax w/o GST
b. GST Tax Exemption
i. Every person has GST Tax Exemption – always the same as estate tax exemption (now $5MM)
(a) Don’t overlap (don’t get 10 million- just $5mil total)
ii. If G1 leaves $ to G3  transfer would be GST exempt after applying GST tax exemption
iii. If G1 puts $$ in trust, you can allocate GST tax exemption to the trust to make it an exempt trust
(a) GST Exempt Trust becomes exempt such that distributions are NOT subject to GST tax
(1) Whatever trust goes to is still exempt from GST tax
iv. Could make Credit Shelter Trust a GST exempt trust e.g., fund Credit Shelter Trust with $5MM AND
allocate GST tax exemption to trust so>whole $5MM could grow w/o GST consequences.
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Topic
Descendant
Distribution
Methods
Intestacy:
Advancements
(Lifetime Gifts)
Intestacy: Escheat
Intestacy: Nonprobate Transfers
Intestacy: Other
Heir Share
Intestacy: Surviving
Spouse Share
STATUTE INDEX
Utah
§ 2-103, § 2-106, § 2-708, § 2-709 (page 12)
Default = Per Capita at Each Generation for
intestacy and silent instruments
§ 2-109 (page 15)
Presumption = Lifetime gifts are NOT
advancements  no adjustment necessary using
Hotchpot method UNLESS something in writing to
contrary
§ 2-105
§ 2-102(2), § 2-103(2), § 2-109 (page 15)
 Adjust intestate share using Hotchpot method
ONLY when non-probate transfers at death AND
other property distributed under rules of intestacy
§ 2-103 (page 17)
§ 2-102 (page 15)
 Entire estate if D left no surviving descendants
OR if all D’s surviving descendants are also SS’s
issue
 Otherwise first $75K + ½ balance of intestate
estate
 Use Hotchpot adjustment for non-probate
transfers
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California
§ 240, § 245, § 246, § 247 (page 12)
Default = Equal Share Method for intestacy and
silent instruments
§ 6409 (page 15)
Presumption = Lifetime gifts are NOT
advancements  no adjustment necessary using
Hotchpot method UNLESS something in writing to
contrary
§ 6404
None
§ 6402 & § 6402.5 (page 17)
§ 6401 (page 15)
 All CP plus
 All SP if D left no issue, parent, or issue of parent
 1/3 SP if D leaves issue through one or more
lines
 ½ SP for all other situations
CALIFORNIA v. UTAH
CALIFORNIA
UTAH
120 Hour Rule
120 Hour Rule
6403 Rule applies unless it leads to escheat. Or if they died before 1991
2-104, 2-702 Same as CA. But UT lists certain circums; 702 is long.
Act of Independent Significance
Act of Independent Significance
6131 Amt of bequest can change by AIS w/o formalities.
2-512 Same as CA.
Ademption (long)
Ademption
21135 Same as UT for writing, predeceasing and valuation EXCEPT
2-609 Must have written proof of ademption. Valuation at
valuation in the writing is conclusive.
death/enjoyment. If predeceased full/partial ademption according to 603604
Advancements
Advancements
6409, 21135 (see above) Intestate. Adv only if contemp writing or heir
2-109 Same as CA. Except states no refund necessary and valuation
acknowl. Valuation like ademption. If heir predeceases, presumed not adv.
difference. Presumption of no adv. Need writing. (Note: adv in SS’s 2-102)
Anti-lapse
Anti-lapse
21110, 21111 Same as UT except: “kindred” instead of listed relatives,
2-603, 04, 2-706 (trusts) Is the person a relative? Survivorship language?
ESM instead of PCG, and related person can be settlor OR POA holder.
Living descendants? PCG. To residue if failed. Class gifts/POA count.
Bond/Waiver of Bond
Bond/Waiver of Bond
301, 8481 No bond if trust company. No bond if will waives, benef waive,
3-603-605 Bond not req unless will requires it or beneficiaries request it.
or PR is a trust bund. Court or interested person can require.
Corporate PR never has to post bond.
Burden in Contest
Burden in Contest
8257 Same as UT.
3-407 BOP on contestant to prove lack of TC, UI, fraud, etc. POTE but it
may be more. (Cases say “substantial facts”-may not be more than 51%)
Capacity (Who may make will) (short)
Capacity (Who may make will)
6100, 6100.5 18 or older and of sound mind.
2-501 Same as UT but add may be conservatee, and description of who is
not mentally competent (3 things and delusions). See TC 810-12.
Choice of Law/Validity
Choice of Law/Validity
6113 Same as UT.
2-506 Valid if acc to law of place where residing or where executed at the
time or where domiciled at death.
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CALIFORNIA
UTAH
Class Gifts
Class Gifts (Relationships)
21115 adds adopted, foster and step to UT list, but not req statute.
2-705(1) Adopted/illegitimate included in class gifts and other rel. If not
specified half blood not distinguished from whole blood.
2-708 Class gift distributed by PCG.
Contract to Make Will
Contract to Make Will
21700 4 ways: provisions of will state contract, express ref., signed writing,
2-514 Same as CA.
or C&CE. Joint/Mutual wills not presumed to create contract not to revoke.
Disqualified Persons
Disqualified Persons
21350-51 List of disqualified persons (drafter and relatives, etc.) If
No statute.
disqualified, gift is invalid but rebuttable. Exceptions (51): Relative w/in 5
But UT sanctions attorneys for preparing a will that gives a bequest to
degrees, Independent Review, gift of less than or equal to 3K, nonres. of
themselves (CA only does for soliciting bequests).
CA, Court determines w/C&CE that there’s no undue influence (rebuttable).
UT Rules of Professional Conduct 1.8(c).
Disposable Property (short)
Disposable Property
6101 Entire SP, 1/2 CP, 1/2 QCP.
No statute. (But it will be according to title in a MP state.)
Distribution Methods
Distribution Methods
240, 245, 246, 247 ESM defined, default (A-L & if ambiguous like “per
2-106, 2-709 Per Stirpes (ROR) if it says it. Default is PCG. (No ESM).
capita and per stirpes”). Per Stirpes (ROR) if it says it. Follow instrument!
Class gifts distributed by PCG.
2-106 (long) Terms in instruments. PCG.
Divorce (long)
Divorce
6122, 6122.1 Applies to RDP. As if predeceased (for appts too), but
2-804 Revokes gifts to former spouse AND their relatives. Powers of
remarriage revives it. (No mention of gifts to former spouse/RDP’s family.)
Appointment too.
Escheat/No Taker
Escheat/No Taker
6404, 6402 Escheat if no taker. (Last in intestate distribution order.)
2-105, 2-102 Same as CA. (1-103 amendment adds escheat.)
Execution (Signing/Witnesses)
Execution (Signing/Witnesses)
6110 Will signing: 2 witnesses in the presence of the testator. Signed by
2-502 Will signing: 2 witnesses signing within a reasonable time. Signed
testator or under the direction of the testator (same as UT).
by testator or under the direction of the testator (same as CA).
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CALIFORNIA
UTAH
Extrinsic Evidence
Extrinsic Evidence
6111.5 Permissible for interpretation & for substantial compliance (allowed
7-502 Intent that the document constitutes the testator’s will can be
in to test for ambiguity: Russell case; not really broader than Pl M Rule).
established by extrinsic evidence, including for HO wills, portions of
document that are not in the testator’s handwriting.
(also allowed to prove contract to make a will. 2-514)
(also allowed to prove contract to make a will. 2-514)
UPC = "unless the testator intended otherwise" = the court should use
extrinsic evidence more freely
Failed Bequest
Failed Bequest
21111 Goes to residue (if failed for one of various reasons).
2-604 Goes to residue (if failed any reason). Residuary prorating.
Half Blood
Half Blood
6406 Just like whole blood, if the governing instrument is silent
2-705 Same as CA. And 2-107 rel. of half blood inherit like whole.
Homestead Exemption
Homestead Exemption
Discretionary – Court can let SS + issue live in house during period during
2-402 Family has right to live in home subject to rights of creditors.
probate.
Family gets $22,500 if creditors sell home. (Effective May 11, 2010)
(Prior to May 2010 was $15k)
Holographic Will
Holographic Will
6111 Dispositive parts in handwriting. Signed. Timing (not having date
2-502(2) Dispositive part in handwriting. Signed. Extrinsic evidence can be
could make it invalid), Testamentary Capacity, Intent.
brought in to establish intent (like portions not in handwriting).
Incorporation by Reference (ex and nonex docs)
Incorporation by Reference (ex and nonex docs)
6130, 6132 Can incorporate existent document if clear intent, description.
2-510, 2-513 Same as CA (minus dollar amounts and some other
Nonexistent document if referred to in unrevoked will, writing: is dated,
restrictions for non-existent document).
clearly describes prop/recipients with reas certainty, no one item worth
more than 5K and total worth less than 25K.
Interested Witness
Interested Witness
6112 Presumption of UI unless 2 others also witness. Provision not invalid
2-505 The signing of a will by an interested witness does NOT invalidate
though. Consequence: take amt of the devise not exceeding intestate share.
the will or any part of the will.
42
CALIFORNIA
UTAH
Intestate Distribution Order
Intestate Distribution Order
6402 Issue, parents, issue of parents, grandparents, issue of grandparents,
2-103 Issue, parents, issue of parents, grandparents, issue of grandparents,
issue of predeceased spouse, next of kin, parents of pred spouse, issue of
issue of predeceased spouse, escheat (from 2-105).
parents of pred spouse, escheat.
Mortgages/Debt w/Property
Mortgages/Debt w/Property
21131 Debt passes with prop despite gen provision to pay debts.
2-607 Same as CA.
Murder
Murder
250 As if predeceased and A-L doesn’t apply. Needs conviction:
2-803 As if predeceased BUT A-L can apply (statute is silent).
“feloniously and intentionally.”
No-Contest Clauses
No-Contest Clauses
21311 NCC only enforced for direct contest w/o Probable Cause. (And
2-515, 3-905 NCC only enforced for contest w/o Probable Cause. (Two
ownership/creditor contests if specifically mentioned in the NCC.)
statutes are almost identical.) (No details like CA.)
No-Contest Clauses (OLD CA LAW)
21304-05, 21307 Strictly construed. Exceptions (not enforced if): (long list)
fiduciary actions and appts, accounting, interpretation, etc.). Not enforced
for disqualified persons claims and with PC.
Omitted Child
Omitted Child
21620-23 Intestate share but it can’t be more than 1/2 of SP. Unless
2-302 If no children: intestate share. If one or more children: aggregated
intentional omission, outside transfer, or agreement. Manner of distribution:
gifts are divided among all children. Manner of distribution (other than
intestate prop and then any gifts pro rata (protecting intent/specific gifts).
among kids) same as CA. Same (almost) exceptions as CA.*
Omitted Spouse
Omitted Spouse
21610-12 Intestate share but it can’t be more than 1/2 of SP. Unless
2-301 Intestate share of whatever wasn’t given to separate existing kids or
intentional omission, outside transfer, or agreement. Same manner as ⇧.
their issue. Manner of distribution (from OS’s gifts first then others). Same
exceptions (without agreement provision) as CA.
Posthumous Child
Posthumous Child
6407 They are children like any other.
2-108 Same as CA. As long as they live 5 days (120 hours).
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CALIFORNIA
UTAH
Revival
Revival
6123 no revival (after revocation second will or execution of a third will)
2-509 Same as CA, but adds if second will is partly revoked a revoked part
unless evident (by circumstances of revoking the second or terms of the
of the previous will IS REVIVED unless evident from circumstances or
third) that the testator intended the first will to take effect.
contemp. declarations that testator intended prev. will to take effect.
Revocation (long)
Revocation
6120 within intent: express, by inconsistency, physical act.
2-507 Same as CA (basically)
Self-Proved Will
Self-Proved Will
No statute.
2-504 Will may be sim executed, attested, and made self-proved by
affidavit. Form included. (And more details.)
Specific Gifts/Nonademption (long)
Specific Gifts/Nonademption
21133, 21134 right to gen. pecun. gift if proceeds are unpaid, conserv sold.
2-606 right to gen. pecun. gift if proceeds are unpaid, conserv sold OR if
(No mention of intent or right to amt if the specific gift was sold. UT)
sold/replaced. Unless intent is clear or T survives conserv 1 yr.
Step/Foster Children
Step/Foster Children
6454 step/foster children NOT issue unless rel. begins in child’s minority
1-201(5) step/foster kids NOT issue. (Excluded in definition of “child.”
and continues through life & would adopt but for a legal barrier.
Also excluded from definition of “parent.”)
Stock/Security Changes
Stock/Security Changes
21132 changes are included in gift, but not distributions.
2-605 Same as CA.
Substantial Compliance
Substantial Compliance
6110 If proponent establishes by C&CE that the testator intended the will to
2-503 Prove testator’s intent with C&CE to validate will, partial/complete
be a will, will valid (In general will-requirements statute.)
revocation, alteration, revival...
Surviving Spouse’s Intestate Share
Surviving Spouse’s Intestate Share
6401 For SS or RDP. 1/2 CP, 1/2 QP, of SP: if no issue or parent or siblings
2-102 If only issues who are SS’s, all to SS. If desc who aren’t SS’s, 75K
or sib’s issue= all; if one line = 1/2; if multiple lines = 1/3 (written diff.).
plus 1/2 of the balance. If passing to SS and others: Non Probate transfers
charged against SS’s share (like advancement).
Testamentary Capacity
Testamentary Capacity
No statute like CA’s, just 2-501 about capacity: 18 and sound mind.
810-812 (Attempt to make 3 prong test more obj.) General statements,
doctor’s list, disorder alone isn’t enough. Must understand/appreciate.
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CALIFORNIA
UTAH
Undue Influence
Undue Influence
6104 Exec or revoc of a will ineffective to the extent it was procured by
No statute. But he quoted model jury instructions: “mind of decedent
duress, menace, fraud, or undue influence.
overcome... destroys the will of the decedent...”
Who May be a Witness?
Who May be a Witness?
6112(a) Anyone who is competent to serve as one: remember & recall.
2-505 Same as CA.
45