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INTRODUCTION TO ESTATE PLANNING AND THE LAWYERS ROLES

GENERAL INTRODUCTION
I.
The Statute of Wills: a law which provided legal recognition that property could
be transferred by will, a document executed with the requisite formalities.
II.
Recent Changes in Trusts and Estates Law:
a. Moved away from formalism that traditionally characterized it towards an
emphasis on clients intent
b. Laws of the 50 states are becoming more similar as a result of the Uniform
Probate Code
c. Now involves the use of instruments in addition to wills
d. Medical directives and various forms of powers of attorney allow individuals
to make advance arrangements for their incapacity
e. The judicial process for probating wills or administrating estates has been
vastly simplified.
III.
Doctrines:
a. Donative Intent: norm in American trusts and estates law has always been to
allow property owners to do what they want with their property, during life
and at death. It is subject to relatively few limitations.
i. General Principal: a governing instrument, such as a will, dictates
outcomes to the extent that it addresses a matter even if the choices
made by the testator seem unfair.
ii. Application: applies even when there is no explicit direction from the
decedent, for example, when there is no written document or an
estate planner failed to adequately consider various contingencies.
iii. Default Rules: State laws provide default rules designed to
approximate what the decedent would have wanted.
b. The guiding principle in estate planning and estate administration is
effectuating the transferors intent.
THE LEGAL SYSTEM GOVERNING TRUSTS AND ESTATES
I.
Wills the traditional method for disposing of property
a. Friedman, Dead Hands: A Social History of Wills, Trusts, and
Inheritance Law
i. Highly Formal Document:
1. Must be in writing,
2. Must have a certain number of witnesses
3. Must be signed by testator
4. Testator must intend the document to be his will
ii. Nobody HAS to have a will; the State will be happy to distribute your
property without one, using intestacy laws.
1. Only property that is owned by the decedent at death is included
in the probate estate and disposed of by will, or in the absence
of a will, through intestacy.
iii. Trust one of the most important will substitutes
1. Definition: a trust is a legal arrangement in which certain assets
land, money, stocks and bonds are put in the hands of a
trustee, who manages the assets and has control over them, but
who exercises his power on behalf of the beneficiaries.

II.

III.

The Emergence of Will Substitutes


a. Definition: Will substitutes can dispose of either property or contractual
rights, and which have the effect of removing property from the probate
estate. They are established while the donor is still living, and they
effectively:
i. Shift the right to possession or enjoyment of the property or to a
contractual payment outside of probate to the donee at the donors
death; while
ii. Substantial rights of dominion, control, or enjoyment of the property
are retained by the donor.
b. Differ from the ordinary last will and testament in three main ways:
i. Most, if not all, are asset-specific: each deals with a single type of
property, be it life insurance proceeds, a bank balance, mutual fund
shares, or whatever.
ii. Property that passes through a will substitute avoids probate
iii. The formal requirements of the Wills Act do not govern will substitutes
and are not complied with.
iv. Modern practice provides only one theory that can reconcile wills and
will substitutes in a workable manner: the rule of transferors
intent the transferor may choose to pass his property on death in
either the probate or the nonprobate system or in both.
1. The transferor who doesnt choose or disclose his intent will be
remitted to probate, the state system.
The Probate Process
a. Definition: probate is the process by which property from the estate is
distributed to the appropriate recipients
b. Monopoli, American Probate: Protecting the Public, Improving the
Process
i. A decedents probate estate is subject to administration under
applicable laws relating to decedents estates. The probate estate
consists of:
1. Property owned by the decedent at death where the beneficiary
is not already determined by a will substitute AND
2. Property acquired by the decedents estate at or after the
decedents death.
ii. Intended to perform several useful functions: An executor is supposed
to
1. Collect or marshall all the decedents assets and detail them
on a list or inventory
2. Manage those assets during the time it takes to administer the
estate;
3. Pay all debts of the decedent
4. Distribute what is left in the estate to the persons named in the
will.
iii. Personal Representatives:
1. Most probate courts allow the decedent to nominate the executor
2. A will has an Executor; intestate estates have an
Administrator
3. Fiduciary Duty of the PR: means a person having a duty, created
by his undertaking, to act primarily for anothers benefit in

matters connected with such undertakings. The Fiduciary must


act with scrupulous good faith and candor.
TESTAMENTARY FREEDOM AND LIMITATIONS ON CONTROL FROM THE GRAVE
I.
Feinberg v. Feinberg
a. Facts: The decedents grandchildren were subject to the beneficiary
restriction clause which stated that any descendant who married outside
the Jewish faith or whose non-Jewish spouse did not convert would be
deemed deceased for all purposes of the instrument and that share of the
trust would revert to Decedents children.
b. Holding: Although the plans of the decedents might be offensive to individual
family members or to outside observers, Max and Erla were free to distribute
their bounty as they saw fit and to favor grandchildren of whose life choices
they approved over other grandchildren who made choices of which they
disapproved, [so long as they did not convey a vested interest that was
subject to divestment by a condition subsequent that tended to
unreasonably restrict marriage or encourage divorce.]
THE PROFESSIONAL STANDARDS ASSOCIATED WITH ESTATE PLANNING
I.
Introduction
a. Professional Responsibility issues are raised in a variety of contexts,
beginning with the initial client consultation and continuing after the death of
the clients. Model Rules of Professional Conduct set the rules for how lawyers
should act.
b. Estate Planning Attorneys must be concerned that disappointed beneficiary
or heir may:
i. Challenge a will or other panning document (attack the will) or bring a
malpractice claim, or both.
ii. Attorneys should conduct their practice in a way that fulfills obligations
to the client and that also serves (1) to protect against a compliant
filed with the licensing agency that might jeopardize your right to
practice law; or (2) to show that you acted professionally and with due
care to meet the clients intentions in case you are called as a witness
in a will contest or as a D in a malpractice action.
II.
The Model Rules of Professional Conduct and ACTEC
a. Counseling
MPRC 1.2. Scope of Representation and Allocation of Authority Between Client
and Lawyer
(a) A lawyer shall abide by a clients decision concerning the objectives of the
representation and shall consult with the client as to the means by which they are to be
pursued
[(b) A lawyers representation doesnt constitute an endorsement of clients views]
(c) A lawyer may limit the scope of representation if the limitation is reasonable and the
client gives informed consent
- Comment: Lawyers goals should be to educate the client sufficiently about the
process and options available to allow client to make informed decision.
(d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the
lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences
of any proposed course of conduct with the client.

MPRC 2.1. Advisor


A lawyer shall exercise independent professional judgment and render candid advice. In
rendering advice, a lawyer may refer not only to law but other considerations such as
moral, economic, social, and political factors, that may be relevant to the clients
situation.
b. Confidentiality
MRPC 1.6. Confidentiality of Information
(a) A lawyer shall not revel information relating to the representation of a client
unless the client gives informed consent, the disclosure is impliedly authorized
in order to carry out the representation or the disclosure is permitted by
paragraph (b)
(b) A lawyer may reveal information relating to the representation of a client to
the extent the lawyer reasonably believes is necessary:
(1) to prevent reasonably certain death or substantial bodily harm;
(2) to prevent the client from committing a crime or fraud that is reasonably
certain to result in substantial injury to the financial interest or property of
another and in furtherance of which the client has used or is using the
lawyers services
(3) to prevent, mitigate, or rectify substantial injury to the financial interests
or property of another that is reasonably certain to result or has resulted
form the clients commission of a crime or fraud in furtherance of which the
client has used the lawyers services.
(4) to secure legal advice about the lawyers compliance with the Rules;
(5) to establish a claim or defense on behalf of the lawyer in a controversy
between the lawyer and the client, to establish a defense to a criminal
charge or civil claim against the lawyer based on conduct which the client
was involved; or to respond to allegations in any proceeding concerning the
lawyers representation of the client; or
(6) to comply with other law or court order.
Commentary: Obligation After Death of Client
The lawyers duty of confidentiality continues after death of a client.
Exceptions
i. If consent is given by the clients personal representative, or if the
decedent had expressly or impliedly authorized disclosure, the lawyer
who represented the deceases client may provide an interested party,
including a potential litigant, with information regarding a deceased
clients dispositive instruments and intent, including prior instruments
and relevant communications thereto.
ii. A lawyer may be impliedly authorized to make appropriate disclosure
of client confidential information that would promote the clients estate
plan, forestall litigation, preserve assets, and further family
understanding of the decedents intention.
iii. Disclosures should be limited to information that the lawyer would be
required to reveal as a witness.
c. Conflict of Interest
MRPC 1.7. Conflict of Interest: Current Clients
(a) Except as provided in paragraph (b), a lawyer shall not represent a client if
the representation involves a concurrent conflict of interest. A conflict exists if:

(1) the representation of one client will be directly adverse to another client;
or
(2) there is a significant risk that the representation of one or more clients
will be material limited by the lawyers responsibility to another client, a
former client or a third person or by a personal interest of the lawyer.
(b) Not withstanding the existence of a concurrent conflict of interest under
paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide
competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a clime by one client
against another client represented by the lawyer in the same litigation or
other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.
III.

Common Situations Raising Ethical Issues for Estate Planners


a. Joint Representation representing both a husband and wife, who may have
potentially different, and thus conflicting, interests. Four Options:
i. A separate lawyer for each spouse appropriate where the spouses
interests are in conflict (serious disagreement about estate planning,
etc.)
1. Problems: may be counterproductive because it creates
adversarial conflict; creates an additional expense for clients
ii. The same lawyer representing each spouse individually lawyer
establishes two attorney-client relationships, one with each spouse.
1. Pros: provides greater coordination of the spouses mutual
interest especially important in estate planning while still
permitting each spouse the advantages of independent advice
and confidentiality.
2. Cons: serious conflict of interest that informed consent cannot
reliably cure
iii. Joint representation lawyer could represent the spouses as joint
clients: clients share control of the representation, and the lawyer
shares all confidences with both clients.
1. Considered the default model the form spousal representation
takes in the absence of express consent y the parties
2. Pros: jointly represented clients work in concert with the lawyer,
promoting the common development of their interests.
3. Cons: The lawyer should not disclose adverse consequences to
the other spouse, but instead withdraw from joint representation
if failure to disclose would materially limit the lawyers ability to
represent both spouses.
iv. Entity representation instead of representing the clients as
individuals with shared interests and objectives, the entity model
returns us to a singe client. The client is a family unit.
b. Dual Roles Attorney and Fiduciary (trustee) to Client
i. As long as this occurs at the clients suggestion, and the lawyer does
not attempt to influence the choice, it is generally permissible for the
attorney to draft the planning documents AND serve as the trustee or
in another fiduciary capacity.

IV.

ii. The lawyer may disclose his own availability to serve as a fiduciary and
it is acceptable for the lawyer to be named:
1. As a fiduciary under a will or trust that the lawyer is preparing for
the client, so longa s the lawyer discusses with the client
information reasonably necessary to enable the client to make an
informed decision in selecting the fiduciary.
c. Counseling
i. Lawyers are responsible for communicating with their clients, and
ensuring that clients understand matters adequately so that they can
make informed decisions.
ii. A lawyer who proceeds reasonably to advise a client with the intent of
providing the client with legal advice on how to comply with the law
does not act wrongfully, even if the client employs that advice for
wrongful purposes or even if a tribunal later determines that the
lawyers advice was incorrect. Act reasonably and you are ok.
Malpractice
a. Definition: When the lawyers actions create a legal cause of injury that
damages a person to whom the lawyer owes a duty of care, and the lawyer
has no valid defense, he may be held liable for malpractice.
b. Avoiding Malpractice: primary reason for not precluding liability of 3 rd parties
may be that unless a 3rd party has the right to sue a lawyer for breach of
duty or malpractice, no one will have the right to bring an action for
damages.
i. Estate itself usually has not suffered harm, and the recovery may be
limited to the relatively minor cost of the state planning.
ii. For 3rd party to prevail must prove that the attorney breached a duty
owed to the decedent; standard of care is that the attorney should
exercise skill and knowledge ordinarily possessed by attorneys under
similar circumstances.
iii. Suits have been instituted for: error in execution; failure to accomplish
testator goals/intent; error law; failure to update estate plan for new
laws or facts; failure to investigate heirs and assets; failure to advise T
on effect of his intent on taxes or other Bs; breach of contract to make
will; negligent estate planning that causes addl taxes; errors in
drafting; allowing execution when T lacked capacity; delay in
implementation of plan; missed deadlines; limiting representation to
discreet issues
iv. Most causes of action are based on the tort of negligence and include
breach of fiduciary duty, professional malpractice, infliction of
emotional distress, fraud, breach of good faith and fair dealing, and/or
negligent misrepresentation.
c. Privity:
i. Important Information: you can purchase life insurance for you or
someone else; it is one of the most important forms of non-probate
assets; AND if deceased owns a policy on himself, proceeds are subject
to estate tax; if deceased originally purchased policy but transferred
ownership at least 3 years before death, proceeds are NOT taxable.
ii. Schneider v. Finmann
1. Facts: T bought policy, transferred several times then back to
himself. P says D negligently advised T to transfer, or failed to

advice T not to transfer, the policy which resulted in increased


tax liability.
2. Issue: whether an attorney may be held liable for damages
resulting from negligent representation in estate planning that
causes enhanced estate tax liability.
3. Holding: a personal representative of an estate may maintain a
legal malpractice claim for negligent advice about the tax
implications of life insurance that results in pecuniary losses to
estate.
4. Rule: the court now holds that privity exists between personal
representative of an estate and the estate planning attorney.
a. PR of estate shouldnt be prevented from raising a
negligent estate planning claim against attorney who
caused harm to the estate.
d. Malpractice for NOT executing a will?
i. Case below continues examination of parameters of lawyers duties to
client.
ii. Sisson v. Jankowski
1. Facts: T was dying of cancer and hired Ds to make a will for him
because he didnt want to die intestate. Will was to give
everything to Ts brother. D went to see T but he didnt have
capacity. Had to revise will, never got it executed (under
seemingly negligent situations..)
2. Issue: Whether D attorney owed P (intended B) a duty of care to
ensure that T executed his will promptly.
3. Holding: An attorney does not owe a duty of care to a
prospective will B to have the will executed promptly.
4. Reasoning: The potential for conflict between interests of a
prospective B and a T militates against recognizing a duty of
care.
a. The risk of interfering with the attorneys duty of undivided
loyalty to the client exceeds the risk of harm to the
prospective B.

APPENDIX B. Glossary American Probate Glossary


Administrator: The person in charge of administering the estate of an intestate decedent
Attestation: dual act of watching T of a will sign the will and then writing ones signature as
witness
Beneficiary: person who is to benefit from the income and principal of a trust or person named
to receive bequest under a will.
Executor: The person in charge of administering the estate of a testate decedent
Heirs: relatives who are legally entitled under state law to inherit the estate of a person who
dies without will or intestate
Intestacy: having died without a will
Intestacy Statutes: state laws defining who is legally entitled to inherit a Ts estate if that T
dies without will
Joint Tenancy: form of title to property that provides co-ownership and results in title to
property passing automatically to the surviving joint tenants when one co-owner dies.
Marshaling Assets: act of identifying and inventorying the deceaseds assets in an estate.
Personal Representative: Generic term for the person in charge of administering the estate of
a decedent
Power of Appointment: provision in a will or similar document that grants an individual (known
as donee) the power to direct trust assets at termination of the trust to himself, his estate, or
another individual or group named in the will or similar document.
Power of Attorney: doc that grants authority to act on ones behalf to another (known as
attorney-in-fact) creating an agency relationship between the two. Grantor of power is the
principal and the grantee is the agent. A durable power of attorney is one that survives the
incapacity of the principal. Such agents may perform a vaierty of functions on behalf of the
principal including buying, selling, and managing property.
Probate: In a broad sense, probate refers to the entire process of administering a decedents
estate. In a narrow sense, probate means to prove a document or oral declaration to be the
decedents valid will.
Probate Asset: An asset of a decedent that passes either under intestate succession or
through a will
Nonprobate Asset: An asset of a decedent that passes via a manner other than under intestate
succession or through a will. Typical nonprobate arrangements include joint tenancies with rights
of survivorship and contracts that provide for the payment of benefits upon death to designated
persons such as life insurance, retirement plans, and accounts with financial institutions.
Tenancy in Common: method of co-ownership between two or more persons under which the
interest of a deceaseds co-owner passes in accordance with her will, or if there is no will, in
accordance with the laws of intestate succession.
Testamentary Capacity: requirement that a person making a will (1) understand that she is
making a permanent disposition of estate; (2) understand the extent of assets; and (3) is aware
of which people constitute the natural objects of his bounty, in other words, his relatives. All
three must be present for T to create a valid will.
Testator: the individual who makes or executes a will is the T. If one dies with a will one is said
to have died testate.
Trustee: the person or institution designated by the grantor of a trust or appointed by the court
to assume the fiduciary duty of holding and administering a trust for the Bs.

INHERITANCE AND RELATIONSHIP


INTRODUCTION
I.
State Statutes
a. Intestacy: Each state has a default rule or a set of intestacy statutes that
governs who is entitled to inherit from a decedent who dies without a will.
b. Wills: each state has laws statutes of wills that allow citizens to opt out
of the intestacy statutes and draft a will.
c. Canons: each state has canons or rules of construction that help courts
interpret those wills and other instruments like trusts that pass property at
death.
II.
Status
a. Definition: Who constitutes a family member is a question of status
certain people are entitled to inherit from the decedent because they
connected by blood or marriage.
b. Interpretation issues:
i. When a decedent dies without a will, the interpretive issues that arise
involve applying the intestacy statutes.
ii. When an individual drafted a will or trust, the questions involve
interpreting the meaning of the instrument.
WHO IS A CHILD?
I.
In General
a. Our system is dominantly status-based for the purposes of inheritance,
rather than relationship-based.
b. Whether someone may inherit does not turn on the relationship; rather it
turns on his status as a biological or adopted child.
i. This determination matters for the purpose of intestacy distributions,
distributions under wills and trusts executed not only by the parent or
child, but also by others who may direct distributions to children or
descendants of someone named in the document.
ii. Purposes of Intestacy Statutes decedents intent is important in
creating patters of intestacy distribution; statutes assume decedents
want their property to go to family.
c. Building block of status-based system is the parent-child relationship, with
the definition of child at the core.
UPC 1-201: General Definitions
1. Child includes an individual entitled to take as a child under this Code by
intestate succession from the parent whose relationship is involved and
excludes a person who is only a stepchild, foster child, a grandchild, or any
more remote descendant.
2. Descendant of an individual means all of his descendants of all
generations, with the relationship of parent and child at each generation
being determined by the definition of child and parent contained in this
Code.
3. Issue means lineal descendants, i.e., children, grandchildren, greatgrandchildren, etc.
i. Ways to Establish the Parent-Child Relationship

1. This relationship qualifies the child to inherit under intestacy or


as a member of a class for purposes of wills or trusts.
2. A child who is either genetically related to the parent, who is
legall adopted by the parent, or whose parent has indicated his
consent to be a parent to a child conceived with reproductive
technology, even if there is no genetic connection, can now
establish such a parent-child relationship.
UPC 2-103: Share of Heirs Other than Surviving Spouse
(a) Any part of the intestate estate not passing to a decedents surviving spouse under
2-102, or the entire intestate estate if there is no surviving spouse, passes in the
following order to the individuals who survive the decedent:
a. To the decedents descendants by representation
UPC 2-705: Class Gifts Construed to Accord with Intestate Succession;
Exceptions
(b)[Terms of Relationship] A class gift that uses a term of relationship to identify the
class members includes those members in accordance with the rules for intestate
succession regarding parent-child relationships.
II.

Intestacy Interpreting Statutes


a. Intro
i. These are the rules that determine whether a person qualifies as a
child for purposes of applying intestacy statutes.
ii. There are varying rights of children depending on whether they are
marital, adopted, or conceived through ART.
b. Marital Children and the Marital Presumption
UPA 204: Presumption of Paternity.
a) The UPA presumes paternity when a man and woman are married and the woman
gives birth to a child during the marriage or within 300 days after the marriage is
terminated.
b) The presumption can be rebutted only by adjudication
i. Some courts now allow a man other than the mothers husband to
present evidence of paternity in court. The marital presumption,
however, is still very strong.
1. Michael H. v. Gerald D. (US SC 1989) interpreting CA law held
that a man whose blood tests showed a 97% chance of being the
father was NOT denied due process rights when he was not
allowed to demonstrate his paternity at hearing.
2. Evans v. Wilson (Md. 2004) held that when a child is born
during a marriage, the husband is presumed to be the father and
the putative father has no absolute right to a DNA test. [Willing
to allow it, maybe, if it was in the childs best interest]
ii. Thus, while the presumption is rebuttable, it remains very
difficult for someone other than the husband of the mother to
rebut the presumption, and courts will consider the best
interests of the child in allowing someone to do so.
c. Non-Marital Children

i. These are children who do not fall within the marital presumption
outlined above.
ii. The US SC has established a constitutional requirement that states
must provide some statutory mechanism by which nonmarital children
could try to establish paternity and inherit from their fathers.
iii. Most states responded to this by adding language to the intestacy
statutes that provided nonmarital children with several ways by which
they could establish paternity.
iv. UPC simply states that there is no difference in statuts between a
marital and a nonmarital child for purposes of inheritance form his
genetic parents.
UPC 2-117. No Distinction Based on Marital Status
(a)There is no difference in status between a marital and a nonmarital child for purposes
of inheritance from his genetic parents.
v. Statutory Presumption of Paternity. UPA 204
1. A nonmarital child must do more than a marital child to establish
that a particular man is his legal father.
UPA 204. Presumption of Paternity. provides that a child may establish the
paternity of the man from whom they are trying to inherit by either: (1) Statutory
presumption;(2) Voluntary acknowledgement; or (3)Through court proceedings, i.e., an
adjudication.
Statute Says
(a) a man is presumed to be the father of a child if:
(4) after the birth of the child, he and the mother of the child married each
other in apparent compliance with law, whether or not the marriage is or
could be declared invalid, and he voluntarily asserted his paternity of the
child, and:
(A) the assertion is in a record filed with [state agency maintaining
birth records];
(B) he agreed to be and is named as the childs father on the childs
birth certificate; or
(C) he promised in a record to support the child as his own; or
(5) for the first two years of the childs life, he resided in the same household
with the child and openly held out the child as his own
(b) a presumption of paternity established under this section may be rebutted
only by an adjudication under [Article] 6.
vi. Voluntary Acknowledgement of Paternity
1. In the absence of a presumption, a child can establish the mans
paternity if the purported father executed an effective
acknowledgement of his paternity. (UPA 201(b)(2))
vii. Adjudication of Paternity
1. Under UPA 601, in the absence of a presumption or voluntary
acknowledgement of paternity, a child, his mother, or other
parties may bring an involuntary paternity action, and a court
may issue an order establishing paternity after an adjudicatory
proceeding.
a. Genetic testing may be used if the man is still alive (UPA
502)

b. If the father has died, many courts will order relatives of


the father to provide genetic material or exhume the body
(UPA 509)
III.

Adopted Children
a. Intro
i. Legally adopted children fall within the definition of child in the
intestacy statutes of all states. Adopted children may inherit through
their adoptive parents, and their parents may inherit from or through
them.
ii. Adoption usually severs the ties between the adopted child and the
genetic parents and thus prevents inheritance from or through them,
except in some states when a stepparent adopts the child.
iii. Cahn, Perfect Substitutes or the Real Thing?
1. Statutes. Early statutes distinguished rights of adopted vs.
biological. Didnt want the adopted children to usurp legitimate
children.
a. Some statutes explicitly specified differences between the
rights of adopted children and biological children to inherit
from their parents.
b. Historically, under the stranger to the adoption rule, an
adopted child generally could not inherit from relatives who
were not a party to the adoption.
c. Adoptive children could continue to inherit from their
biological relatives in some states, and their biological
relatives could inherit from them even after the adoption.
d. Even outside the general laws of intestacy and wills, the
adoption statutes allowed the adoption agreement to
determine the adoptees rights.
UPC 2-118. Adoptee and Adoptees Adoptive Parent or Parents.
(a) [Parent-Child Relationship Between Adoptee and Adoptive Parent or Parents.] A
parent-child relationship exists between an adoptee and the adoptees adoptive parent
or parents.
UPC 2-119. Adoptee and Adoptees Genetic Parents.
(a) [Parent-Child Relationship Between Adoptee and Genetic Parents.] Except as
otherwise provided in subsections (b) through (e), a parent-child relationship does not
exist between an adoptee and the adoptees genetic parents.
(b) [Stepchild Adopted by Stepparent.] A parent-child relationship exists between an
individual who is adopted by the spouse of either genetic parent and:
(1) the genetic parent whose spouse adopted the individual; and
(2) the other genetic parent, but only for the purpose of the right of the adoptee or
a descendant of the adoptee to inherit from or through the other genetic parent.
b. Adult Adoption
i. UPC 2-115(1) defines an adoptee as an individual who is adopted,
this includes an individual who is adopted as an adult. Thus, under the
UPC, adult adoptees are children for purposes of interpreting the
intestacy statutes.
c. Equitable Adoption (aka adoption by estoppel)

i. In limited circumstances, courts use their broad power to promote


justice to find out that there has been an equitable adoption.
ii. Some courts require child to establish that an adoption proceeding had
actually begun but had not been completed. (express/implied contract
- estoppel)
iii. Other courts are more flexible, allowing a child to bring claim for
equitable adoption if the guardian and the child treated each other as
legal parent and child.
iv. Hard to establish; evidentiary threshold is steep.
v. Wheeling Dollar Savings & Trust v. Singer: Supreme Court of West
Virginia held that the doctrine of equitable adoption would be
recognized but that it must be established by clear, cogent, and
convincing proof.
1. Equitable and Formally Adopted Children are not without
differences:
a. Equitably adopted child in any private property dispute
involving laws of inheritance or private trusts must prove
by clear, cogent and convincing evidence that he has stood
from an age of tender years in a position exactly
equivalent to a formally adopted child.
2. Circumstances which tend to show the existence of an equitable
adoption include:
a. Benefits of love and affection accruing to the adopting
party, the performances of services by the child, the
surrender of ties by the natural parent, the society,
companionship and filial obedience of the child, an invalid
or ineffectual adoption proceeding, reliance by the adopted
person upon the existence of his adoptive status, the
representation to all the world that the child is a natural or
adopted child and the rearing of the child from an age of
tender years by the adopting parents.
3. One of the most important elements in proof is that child was
held out to all the world as a natural or adopted child.
a. Clear, cogent and convincing proof of treatment as a
child consistent with formal adoption is the highest
possible standard of civil proof defined as that measure or
degree of proof which will produce in the mind of the trier
of facts a firm belief or conviction as to the allegations
sought to be established.
vi. ONeal v. Wilkes: Where child argued the equitable adoption, stating
that paternal aunt had placed her for adoption, Supreme Court held
that the aunt had no authority to enter into an adoption contract with
T. Thus, the contract was invalid, and child was not entitled to share in
Ts estate.
INTERPRETING CLASS GIFTS IN WILLS AND TRUSTS
I.
Class Gifts from Parents
UPC 2-705. Class Gifts Construed to Accord with Intestate Succession;
Exceptions

(b) [Terms of Relationship.] A class gift that uses a term of relationship to identify
the class members includes a child of assisted reproduction, a gestational child,
and, except as otherwise provided in subsections (e) and (f), an adoptee and a
child born to parents who are not married to each other, and their respective
descendants if appropriate to the class, in accordance with the rules for intestate
succession regarding parent-child relationships.

II.

a. Hood v. Todd, (Ga. 2010)


i. Facts: Todd seeks to establish her right to a childs share of the estate
of T Buffington. Will provided for his children surviving him only
lawful blood descendants in the first degree of the parent designated.
ii. Issue: Whether T intended to disinherit child (Todd) of an extra-marital
affair
iii. Holding: The Court is mindful of the evolution in the law with respect to
recognizing the rights of illegitimate descendants. However, this is not
a case of intestacy, and T was free to dispose of his property as he
provided in his will. Finding no genuine issues of material fact as to
Todds status under Ts will, the court concludes that the probate court
should have granted the MSJ of the other Bs (marital children).
Reversed.
iv. Reasoning: a T may make any disposition of his property he chooses,
so long as not contrary to law or public policy, even to the exclusion of
his spouse and/or descendants.
1. Court is compelled to assign meaning to the term lawful and
can only conclude that its use, particularly in combination with
other operative language of the will, reflects Ts intent to exclude
Todd.
v. Dissent: the majoritys decision is premised on an ill-supported finding
of testamentary intent based upon the faulty and perilous conclusion
that the term lawful, when used to describe blood descendants
named in a will, necessarily precludes biological children born out of
wedlock. Holding is unwise.
1. Key in this case is the designation children, which is defined as
lawful blood descendants. Majority then leaps to the conclusion
that lawful meant for only his marital children to inherit. [Class
Note This is not ambiguous, just antiquated.]
2. The current probate code permits a child born out of wedlock to
inherit from father if child presents other clear and convincing
evidence that the child is the child of the father. construction
of wills cannot be made in a vacuum, ;but rather with full
recognition of the laws of intestacy which are modified to keep
pace with societal needs and realities.
Exception Class Gifts from Non-Parents

UPC 2-705. Class Gifts Construed to Accord with Intestate Succession;


Exceptions.
(e) [Transferor Not Genetic Parent.] in construing a dispositive provision of a transferor
who is not the genetic parent [e.g., a grandparent or sibling], a child of a genetic parent
is not considered the child of the genetic parent unless the genetic parent, a relative o
the genetic parent, or the spouse or surviving spouse of the genetic parent or of a

relative of the genetic parent functioned as a parent of the child before the child reached
[18] years of age.
a. UPC 2-115(4) functioning like a parent means behaving toward a child
in a manner consistent with being the childs parent and performing
functions that are customarily performed by a parent, including fulfilling
parental responsibilities toward the child, recognizing or holding out the child
as the individuals child, materially participating in the childs upbringing,
and residing with the child in the same household as a regular member of
that household.
i. Curious standard.. This is the ideal parent! Saying functioned as a
GOOD parent.
UPC 2-705. Class Gifts Construed to Accord with Intestate Succession;
Exceptions.
(f) [Transferor Not Adoptive Parent.] In construing a dispositive provision of a transferor
who is not the adoptive parent, an adoptee is not considered the child of the adoptive
parent unless:
1. the adoption took place before the adoptee reached [18] years of
age;
2. the adoptive parent was the adoptees stepparent or foster
parent; or
3. the adoptive parent functioned as a parent of the adoptee before
the adoptee reached [18] years of age
III.

Who is a Parent?
a. In General
i. The rules for establishing the parent-child relationship discussed above
in the context of the child also apply to the inheritance rights of their
parents. In other words, inheritance typically flows in both
directions.

UPC 2-116. Effect of Parent-Child Relationship.


[I]f a parent-child relationship exists or is established under this [subpart], the parent is
a parent of the child and the child is a child of the parent for the purpose of intestate
succession.
ii. There are a few notable exceptions, including parents who have failed
to support, or who have abandoned, their children or where rights have
been terminated.
b. Inheritance From or Through a Child by a Parent
i. The UPC denies all parents marital or nonmarital the right to inherit
from or through a child if their parental rights were or could have been
terminated. It makes clear that traditional grounds of parental rights
are also grounds for disinheritance.
UPC 2-114. Parent Barred from Inheriting in Certain Circumstances.
(a) A parent is barred from inheriting from or through a child of the parent if:
(1) the parents parental rights were terminated and the parent-child
relationship was not judicially reestablished; or

(2) the child died before reaching [18] years of age and there is clear and
convincing evidence that immediately before the childs death the parental
rights of the parent could have been terminated under law of this state other
than this [code] on the basis of nonsupport, abandonment, abuse, neglect, or
other actions or inactions of the parent toward the child.
ii. Majority Rule: while the parent of a nonmarital child must support and
acknowledge the child in order to inherit from child, there is no similar
rule for marital parents. A married father (or mother) who fails to
support his child may still inherit.

INTESTACY WHAT HAPPENS TO A DECEDENTS PROPERY IF THERE


IS NO WILL
INTRODUCTION
If the decedent dies without a will or if the will offered for probate is invalidated in whole
or in part, the intestacy rules apply to determine who the beneficiaries are and to what
portion of the probate estate they are entitled. Intestacy statutes = statutory will, in
effect.
I.
Who Dies Without a Will?
a. Gary, Adapting Intestacy Laws to Changing Families
i. Characteristics of those likely to die without a will:
1. Age: younger decedents are more likely to die intestate than
older decedents
2. Wealth: as an individuals estate increases in size the person is
more likely to be concerned with its disposition.
a. Wealth is also tied to age.
3. Occupation/Education: greater education correlates with greater
testacy and white collar workers are more likely to die testate
than blue collar workers.
a. Wealth is obviously also tied to occupation and education
4. Gender: women are more likely than men to die testate even
though mean re more likely to have greater wealth.
5. Marital Status: widows and widowers are the most likely of any
group (single, married, and divorced) to have wills.
ii. Why do People Choose Not to Execute a Will?
1. American Bar Foundation Study: Laziness is a primary response
of survey respondents for not having a will. Other reasons
included not having thought about it, being young and childless
and having little property.
a. NO ONE indicated that they were relying on the intestacy
statute of their state.
2. Iowa Study: sample cited have not gotten around to making
will as the primary reason for not having a will. Second most
popular reason was that the state would distribute their assets or
that the family would get their assets automatically.
a. Reflects lack of knowledge about what happens to the
property when someone dies
b. No evidence that any significant # of people are relying on
intestacy statutes to distribute their property or that
changes in intestacy statutes would adversely affect
expectations.
3. Stepfamily members may be reluctant to discuss estate planning
or execute wills because of family dynamics.
a. Inaction can result in greater difficulties, particularly for
step families.
II.
The Intestate Estate
a. Intestacy laws only apply to probate property and then only to the extent a
will does not effectively dispose of the property. Intestacy may affect a large
percentage of the property passing at decedents death or a relatively small
amount.

b. Possible for statutes to apply unexpectedly:


i. If the will is invalidated for some reason;
ii. If one or more will substitutes fails if there is no will because the T
believed it was not necessary since all his property was being disposed
of by will substitute, intestacy would control its disposition.
UPC 2-101. Intestate Estate.
(a) Any part of a decedents [probate] estate not effectively disposed of by will passes by
intestate succession to the decedents heirs as prescribed by this Code
Start here for purposes of formatting statutes!
SHARE FOR SURVIVING SPOUSE
I.
The UPC Share for Surviving Spouses
a. Comments to 2-102 explain reasons for changes in response to
transformations in law of wills and will subs and changes in society as IDed
by studied mentioned in Gary article.
i. The decline of formalism in favor of intent-serving policies;
ii. The recognition that will subs and other inter-vivos transfers have so
proliferated that they now constitute a major, if not the major, form of
wealth transmission;
iii. The advent of the multiple-marriage society, resulting in a significant
fraction of the population being married more than once and having
stepchildren and children by previous marriages;
iv. The acceptance of partnership or marital-sharing theory of marriage.
b. 2-102. Share of Spouse.
i. The intestate share of a decedents surviving spouse is:
1. The entire estate if:
a. (i) no descendant or parent of the decedent survives the
decedent; or
b. (ii) all of the decedents surviving descendants are also
descendants of the surviving spouse and there is no other
descendant of the surviving spouse who survives the
decedent;
2. the first $300,000 [+ COLA], plus of any balance of the
intestate estate, if no descendant of the decedent survives the
decedent, but a parent of the decedent survives the decedent;
3. the first $225,000 [+ COLA], plus of any balance of the
intestate estate, if all of the decedents surviving descendants
are also descendants of the surviving spouse and the surviving
spouse has one or more surviving descendants who are not
descendants of the decedent;
4. the first $150,000 [+ COLA], plus of any balance of the
intestate estate, if one or more of the decedents surviving
descendants are not descendants of the surviving spouse.
II.
Share to Lineal Descendants
a. In General
i. After the portion that is reserved for the benefit of the surviving spouse
is trimmed off the top, or if there is no surviving spouse, THEN
distribution of the remaining intestate estate is next made to the
decedents surviving lineal descendants or issue (terms are
synonymous).

ii. Only descendants by blood or adoption share under intestacy;


stepchildren do not.
iii. If the probate estate is small, the share to which the surviving spouse
is entitled may consume the entire estate to the exclusion of other
heirs.
iv. If there are any descendants of the decedent, they will take everything
that is available and collateral heirs will receive nothing.
b. UPC 2-103. Share of Heirs Other than Surviving Spouse.
i. (a) any part of the intestate estate not passing to a decedents
surviving spouse under 2-102, or the entire estate if there is no
surviving spouse, passes in the following order to the individuals who
survive the decedent:
1. to the decedents descendants by representation;
a. [Def (not in statute): only living descendants are entitled to
a share. If a descendant is not living at the time of
decedents death, lower generation descendants and other
heirs take by a system called representation. These lower
generations are entitled to share in the estate because
they represent their parents or grandparents.
III.

Share to Collateral Heirs and Escheat to the State


a. If decedent does not have a surviving spouse or descendants, the estate
passes to ancestors and other collateral relatives of the decedent. A
collateral heir is one who descends from both of the ancestors (parents or
grandparents) of the decedent (whole blood) or from only one of the
ancestors of the decedent (half blood).
b. UPC 2-103. Shares of Heirs Other than Surviving Spouse.
i. (a) any part of the intestate estate not passing to a decedents
surviving spouse under 2-102, or the entire estate if there is no
surviving spouse, passes in the following order to the individuals who
survive the decedent:
1. to the decedents descendants by representation;
2. if there is no surviving descendant, to the decedents parents
equally if both survive, or to the surviving parent if only one
survives;
3. if there is no surviving descendant or parent, to the descendants
of the decedents parents or either of them by representation;
4. if there is no surviving descendant, parent, or descendant of a
parent, but the decedent is survived by both the paternal and
maternal sides by one or more grandparents or descendants of
grandparents:
a. (A) half to the decedents paternal grandparents equally if
both survive, to the surviving paternal grandparent if only
one survives, or to the descendants of the decedents
paternal grandparents or either of them if both are
deceased, the descendants taking by representation; and
b. (B) half to the decedents maternal grandparents equally if
both survive, to the surviving maternal grandparent if only
one survives, or to the descendants of the decedents

IV.

maternal grandparents or either of them if both are


deceased, the descendants taking by representation;
5. if there is no surviving descendant, parent, or descendant of a
parent, but the decedent is survived by one or more grandparent
or descendants of grandparents on the paternal but not on the
maternal side, or on the maternal but not the paternal side, to
the decedents relatives on the side with one or more surviving
members in the manner described in paragraph (4).
ii. (b) if there is no taker under subsection (a), but the decedent has:
1. one deceased spouse who has one or more descendants who
survive the decedent, the estate or part thereof passes to that
spouses descendants by representation; or
2. more than one deceased spouse who has one or more
descendants who survive the decedent, an equal share of the
estate or part thereof passes to each set of descendants by
representation.
c. UPC 2-105. No Taker.
i. If there is no taker under the provisions of this Article, the intestate
estate passes to the [state].
The Representation Models
a. Definitions:
i. Per stirpes means bloodlines or per roots or stocks
ii. Per capita means per head or per person
iii. If members of the family die out of order, in other words some
children or grandchildren die before the decedent or their parent, it
becomes important to decide who is entitled to share in the decedents
probate estate.

Texas Probate Code 43. DETERMINATION OF PER CAPITA AND PER STIRPES DISTRIBUTION.
When the intestate's children, descendants, brothers, sisters, uncles, aunts, or any other relatives of the
deceased standing in the first or same degree alone come into the distribution upon intestacy, they shall
take per capita, namely: by persons; and, when a part of them being dead and a part living, the
descendants of those dead shall have right to distribution upon intestacy, such descendants shall inherit
only such portion of said property as the parent through whom they inherit would be entitled to if alive.
b. Rules Common to All Representation Statutes
i. If there is a surviving spouse, descendants and other heirs are entitled
to a share of the intestate estate only from what is not reserved
from the surviving spouse.
1. Entitled to portion remaining after surviving spouse takes
statutory amount.
ii. If the decedent is survived by a descendant, the decedents ancestors
and more remote collateral heirs do not take.
1. Descendants take to the exclusion of collateral heirs
iii. If all of the decedents children survive the decedent, the
representation rules are not necessary. The children will share the
portion of the estate to which they are entitled equally per capita.
1. Thus, if the decedent is survived by all of her children (1st
generation descendants), the entire portion of the decedents

iv.

v.

vi.
vii.
viii.

intestate estate not going to the surviving spouse is divided


equally among them.
If the decedent is survived only by some of her children (1st generation
descendants) and if the children who predeceased decedent did not
leave any descendants of their own, the share of decedents intestate
estate available to descendants is divided equally among the surviving
children.
An heir who predeceases the decedent cannot be represented by his
spouse; or stepchildren. Only an heirs children and grandchildren
can stand in his shoes as representatives. The representation
rules require relationship by blood (consanguinity) or by adoption, not
marriage (affinity).
1. By blood only no stepchildren and no surviving spouses of
lineal descendants
2. Definition of child and descendants/issue discussed in
chapter 2 apply here.
Only the highest surviving generation member of a family may take.
Purely status-based; behavior and intent otherwise is
irrelevant.
Class Notes: Do we need Representation Rules?
1. Upon Ds death, did:
a. Any of Ds children predecease him/her; AND
b. Leave at least one descendant?
2. If the answer to either of these is no, then the result will be
the same under all three methods as distribution is per capita to
those surviving. [Note that if a child predeceases D without
children, then that line receives nothing.]
3. If the answer to both of these is yes, then must determine
multi-generation succession by one of the three methods.

c. Strict Per Stirpes Determined by family stock at child generation


i. Procedure for Determining the Per Stirpes Share
1. Step 1: determine the number of shares by dividing the estate
into as many equal shares as there are:
a. Living children of the decedent, if any, and
b. Deceased children with descendants then living who will
represent them.
i. This system is unique in that the division occurs at
the first generation even if everyone in that
generation is DEAD!
2. Step 2: distribute one share to each living member of the
highest generation.
3. Step 3: for the children who were not alive but whose bloodlines
were entitled to a share because they were represented by their
descendants, determine the portion allocated to that bloodline in

the same manner as Step 1 and distribute the probate property


in the same manner as step 2. Repeat this generation by
generation, putting each descendant who is represented at the
top of the chart.
ii. EXAMPLE 1: D had 3 children, A, B, and C. D is survived only by her son
C, who has a young son X. Ds son B died many years ago without any
children. Daughter A died recently leaving 3 children of her own U, V,
and W.
1. Procedure and result:
a. First determine the number of shares by dividing the
estate into as many equal parts as there are living children
of the decedent, if any, and deceased children who are
represented by their living descendants.
i. Since son B did not survive and did not leave any
children to represent him, his potential share is lost.
Thus, only two shares are created, one for C and one
for the bloodline of A.
b. Second distribute to C the half to which he is entitled.
(Note that X does not get anything since his parent is alive
and has already taken the share reserved for their
bloodline.)
c. Third repeat steps 1 and 2 as to the share to which
As bloodline is entitled. Doing this, U, V, and W each get
1/3 of As = 1/6.
iii. Representative State Provisions
1. The states that use the per stirpes method of representation
describe it in a variety of ways.
iv. Drafting a Will Provision that Leaves Property to Descendants Per
Stirpes
1. Example: Where it is stated that property is to be distributed
per stirpes, the property is divied into as many equal shares as
there are (i) surviving children of the designated ancestor and (ii)
deceased children who left surviving descendants. Each surviving
child, if any, is allocated one share. The share of each deceased
child with surviving descendants is divided in the same manner,
with subdivision repeating at each succeeding generation until
the property is fully allocated among surviving descendants.
d. Original UPC Version of Per Capita with Representation determined by
family stock at first generation where there is a survivor
i. Intro
1. Sometimes referred to as modern per stirpes or modified per
stirpes hybrid between the strict per stirpes rule and the
per capita at each generation rule.
a. Allocates shares by bloodline like strict per stirpes
b. Does not make a determination of the number of shares at
a particular generation until there is a generation with at
least one descendant alive in the bloodline; in other words,
shares are not established for a generation if everyone in
that generation is dead.

i. Modern rule jumps down to the first generation


where there are actual survivors.
ii. Procedure for Determining Per Capita with Representation Share
1. Step 1: Find the first generation where there are living
descendants. Determine the number of shares by dividing the
estate into as many equal shares as there are:
a. (1) living children of the decedent, if any, and
b. (2) deceased children in the same generation who are
represented by their living descendants.
c. Do not determine the number of shares at a
generation where there are no living descendants
and everyone is merely represented. There must be
a living descendant at a generation to justify the
share determination. THUS perform step 1 at the
highest generation where someone is alive.
2. Step 2: distribute one share to each living member of the
highest generation.
3. Step 3: for the children who were not alive but whose bloodlines
were entitled to a share because they were represented by their
descendants, determine the portion allocated to that bloodline in
the same manner as Step 1 above (remembering that there must
be a survivor) and distribute the probate property in the same
manner as in step 2. Repeat for the next generation.
iii. EXAMPLE 3: D had three children A, B, and C. D is only survived by
his son C, who has a young son X. Ds son B died many years ago
without any children. Daughter A died recently leaving three children of
her own U, V, and W.
1. Procedure and Result:
a. First determine the number of shares by dividing the
estate into as many equal parts as there are living children
of the D, if any, and deceased children who are
represented by their living descendants. On these facts, we
determine the number of shares at the child or first
generation level because at least one child (C) is alive at
the Ds death.
b. From Here the procedure and result are the same as in
Example 1, reflecting the fact that this method is based on
a per stirpes philosophy.
iv. Representative State Provisions
1. The state statutes are reasonably uniform and track with the
procedures described above.
e. The Revised UPC Method Per Capita at Each Generation determined by
giving each person in a generation an equal amount
i. Approach: more concerned with equality among members of a
generation than with equality among bloodlines; it relies exclusively on
per capita methodology: no one takes by representation.
ii. While the amount one generation gets may differ from the amount
other generations get, each living person at a particular generation
gets exactly the same as other people within that generation who are
entitled to take.

iii. Procedure:
1. Step 1: Find the first generation where there are living
descendants. Determine the number of shares by dividing the
estate into as many equal shares as there are:
a. (1) living children of the decedent, if any, and
b. (2) deceased children in the same generation with
descendants then living.
c. Step one is identical to the original UPC modern per
stirpes method. In other words, perform step one at
the highest generation where someone is alive.
2. Step 2: distribute one share per capita to each living member of
the first generation where there are living members.
3. Step 3: combine the remaining shares, if any, into a pot for
sharing by lower generations. It is at Step 3 that the Per Capita
at Each Generation method breaks from the modern per stirpes
method.
4. Step 4: Move down to the net generation and basically repeat
steps 1 to 3 until the entire estate is distributed.
iv. EXAMPLE 5: D had 3 children A, B, and C. D is only survived by on C,
who has a young son X. Ds son B died many years ago without any
children. Daughter A died recently leaving 3 children of her own U, V
and W.
1. Procedure and Result:
a. First at the highest generation where there is at least 1
descendant that survives the D, we determine the number
of shares by dividing the estate into as many equal parts
as there are living descendants of the D and deceased
descendants who are represented by their living
descendants. One these facts, we determine the number of
shares at the child generation because at least one child
(C) is alive at the Ds death. Since son B did not survive
and did not leave any children to represent him, his
potential share is lost. Thus, only two shares are created,
one for the surviving child (C) and the other for As
descendants.
b. Second since C is alive, we distribute to C the half to
which he is entitled per capita.
c. Third we place the remaining into a pot by sharing by
the lower generation descendants.
d. Fourth we repeat steps 1 to 3 as to the amount in the
pot. As a result, U, V and W each get 1/3 of (1/6)
remaining in the intestate estate on a per capita basis.
2. While the answer is the same as with per stirpes and per capita
with representation, the reasons are different. Whereas with per
stirpes and the original UCP, U, V and W acquired their share as
representatives of A, which the revised UPC version they do so as
members of the next generation per capita.
Class Email:
STRICT PER STIRPES:
#1
Determine the number of shares by dividing the estate into as many equal shares as there are: (1) living

children of the decedent, if any, and (2) deceased children with living descendants. [THE ESTATE IS
DIVIDED AT THE LEVEL OF THE CHILDREN ALWAYS]
#2
Distribute one share to each living member of the highest generation.
#3
Move down to the next generation, repeat as needed.
**********MODERN PER STIRPES AKA PER CAITA WITH REPRESENTATION (TEXAS)
#1
Find the first generation where there are living descendants. [NOTE: THIS IS THE DIFFERENCE
WITH PER STIRPES]. Determine the number of shares by dividing the estate into as many equal shares as
there are (1) living children of the descendant, if any, and (2) deceased children in the same generation who are
represented by their living descendants.
#2
Distribute one share to each living member of the highest generation.
#3
Move down to the next generation, repeat as needed.
********UPC PER CAPITA AT EACH GENERATION
#1
Find the first generation where there are living descendants. Determine the number of shares by
dividing the estate into as many equal shares as there are (1) living children of the descendant, if any, and (2)
deceased children in the same generation who are represented by their living descendants.
#2
Distribute one share per capita to each living member of the first generation where there are living
members.
#3
Combine the remaining shares, if any, into a pot for sharing by lower generations. [NOTE: THIS IS
THE DIFFERENCE WITH MODER PER STIRPES].
#4
Move down to the next generation, repeat as needed.
Texas Probate Code 38. PERSONS WHO TAKE UPON INTESTACY.
(a) Intestate Leaving No Husband or Wife. Where any person, having title to any estate, real, personal or
mixed, shall die intestate, leaving no husband or wife, it shall descend and pass in parcenary to his kindred,
male and female, in the following course:
1. To his children and their descendants.
2. If there be no children nor their descendants, then to his father and mother, in equal portions. But if
only the father or mother survive the intestate, then his estate shall be divided into two equal portions,
one of which shall pass to such survivor, and the other half shall pass to the brothers and sisters of the
deceased, and to their descendants; but if there be none such, then the whole estate shall be inherited by
the surviving father or mother.
3. If there be neither father nor mother, then the whole of such estate shall pass to the brothers and
sisters of the intestate, and to their descendants.
4. If there be none of the kindred aforesaid, then the inheritance shall be divided into two moieties, one
of which shall go to the paternal and the other to the maternal kindred, in the following course: To the
grandfather and grandmother in equal portions, but if only one of these be living, then the estate shall be
divided into two equal parts, one of which shall go to such survivor, and the other shall go to the
descendant or descendants of such deceased grandfather or grandmother. If there be no such
descendants, then the whole estate shall be inherited by the surviving grandfather or grandmother. If
there be no surviving grandfather or grandmother, then the whole of such estate shall go to their
descendants, and so on without end, passing in like manner to the nearest lineal ancestors and their
descendants.
(b) Intestate Leaving Husband or Wife. Where any person having title to any estate, real, personal or mixed,
other than a community estate, shall die intestate as to such estate, and shall leave a surviving husband or wife,
such estate of such intestate shall descend and pass as follows:
1. If the deceased have a child or children, or their descendants, the surviving husband or wife shall take
one-third of the personal estate, and the balance of such personal estate shall go to the child or children
of the deceased and their descendants. The surviving husband or wife shall also be entitled to an estate
for life, in one-third of the land of the intestate, with remainder to the child or children of the intestate
and their descendants.

2. If the deceased have no child or children, or their descendants, then the surviving husband or wife
shall be entitled to all the personal estate, and to one-half of the lands of the intestate, without remainder
to any person, and the other half shall pass and be inherited according to the rules of descent and
distribution; provided, however, that if the deceased has neither surviving father nor mother nor
surviving brothers or sisters, or their descendants, then the surviving husband or wife shall be entitled to
the whole of the estate of such intestate.

NONPROBATE TRANSFERS PASSING PROPERTY BY WILL


SUBSTITUTES AND GIFTS
INTRODUCTION
I.
Couch, Probate Law Reform and Nonprobate Transfers
a. Probate refers to the body of substantive and procedural rules that govern
the devolution of decedents estates by will or intestacy.
i. A will has no binding effect until it is allowed by the court; estate
admin cannot begin until the court appoints a PR; and the PR often
remains subject to court supervision until the court orders a final
distribution and discharge.
ii. Growing number of states now provide for independent admin with
minimal court supervision, as well as informal procedures for admin
small estates and collecting specific types of assets, but
comprehensive reform proposals still encounter stiff resistance.
b. Will Subs: designed to achieve the practical effect of a will designating
beneficiaries to receive property at the owners death outside the probate
system.
i. Main obstacle: view that all property owned by D at death
automatically becomes part of probate estate.
ii. Will subs ordinarily take the form of a gift, trust, contract, or other nontestamentary arrangement that technically operates as a lifetime
transfer while leaving the transferor with substantially undiminished
ownership rights.
iii. According to the standard account of the nonprobate revolution the
rise of will subs is basically about deregulating the process of
deathtime wealth transfers and allowing private-sector competitors to
challenge the probate systems monopoly.
iv. Will subs have not, and cannot, completely displace wills because not
all Ts use will subs and those who do should be aware that most will
subs only apply to specific assets.
c. Wills and will subs should be viewed not as irreconcilable opposites, but
rather as complementary components of an increasingly varied and complex
system of deathtime transfers.
i. Will = transfer property at death; will sub = lifetime arrangement
ii. Will = easy to classify because of formalities; will sub = easy to classify
because they usually exhibit some other alternative formality such
as a revocable trust instrument or boilerplate B designation for
financial assets.
d. Wills and will subs operate side by side.
WHY THE ADVENT OF WILL SUBSTITUTES?
I.
Reasons Other Than Probate Avoidance
a. Most will subs developed (i) as a result of custom and commitment between
spouses and other family members or (ii) as a by-product of contracts
between companies and their customers not to avoid probate. Therefore,
they used joint ownership.
b. Beneficiary designation forms another type of will sub resulted chiefly
from business arrangements.

II.

c. Attractive to many people for their convenience and because they may be
executed and changed with few formalities.
Probate Avoidance
a. Probate process is judicial procedure where by the PR of the D (i) gathers
property of D from all sources and inventories it, (ii) notifies creditors of the
death of D, determines which claims are legit and pays them, (iii) IDs the Bs
of the Ds estate and the property to which they are entitled, and (iv)
distributes estate property to Bs with clear title, unencumbered by
obligations.
b. Should One Avoid Probate?
i. Reasons to Avoid Wills and Probate that are Still True
1. The will might be invalidated due to an infraction of one of the
formalistic rules that apply to the drafting, amending and
revoking of wills.
2. The formalities required to amend a will may be greater than
those required for a will sub.
3. If one owns real property in another state, ancillary probate
proceedings will be required there, adding time and cost to the
process.
4. For high profile individuals, a will is a public document, so the
media might report on matters the individual would prefer to
keep private.
5. Some statutory protections and restrictions apply to wills only.
ii. Some of the Stated Reasons to Use Will Subs are Illusory
1. Trusts are less expensive than wills. Attorneys fees for preparing
revocable trust agreement and the other docs needed to do a
complete plan are usually more expensive than preparing a
traditional will.
2. Probating a will is expensive. In most states now, fees are based
on an hourly rate. Additionally, time and cost of probating a will
is often insignificant especially for (1) smaller and simple estates
and (2) wills where no one contests.
3. Estate taxes can be avoided if probate is avoided. Most assets
owned at death are includible in Ds gross estate and subject to
estate tax regardless of whether they are probated or not.
iii. In Fact, There are Advantages to Going Through Probate
1. The claims of creditors are addressed and resolved during
probate.
2. There is an inheritance defense associated with acquiring
superfund property.
3. The proceedings are controlled by a judge. This may handle
disputes between Bs or between Bs and the PR.
4. In most cases, the PR is required to prepare an accounting and
report of her activities. Safeguard against dishonest PR.
iv. Other Matters to Consider
1. It may be better to have entire estate plan in one document.
2. The Docs used to avoid probate may be confusing to an
unsophisticated person.

3. Some planning devices are forever. Irrevocable trusts cannot be


amended; clients often get frustrated by their inability to make
changes as the familys circumstances change.
4. Even if one carefully plans to avoid probate, it is difficult to avoid
is completely. If D owns any property at death that was not titled
in the name of a trust or dealt with by another will sub, probate
is required, no matter how informal or summary the proceedings
may be.
III.
The Different Laws of Wills and Will Substitutes
a. Couch, Probate Law Reform and Nonprobate Transfers (contd)
i. 1990 Amendment to UPC: the drafters rewrote several key rules of
construction originally aimed at wills notably those relating to
survival, lapse, and divorce and expanded them to apply more
broadly to will subs.
1. Shows awareness of functional similarities between wills and will
subs;
2. Recognition that rules of construction, developed in the law of
wills, also lend themselves to filling gaps in the fragmented and
underdeveloped law of will subs.
3. Ameliorate some of the most rigidly formalistic aspects of
traditional wills doctrine
a. Example: Revision introduced harmless error provision
that allows an instrument to be admitted to probate as a
will, notwithstanding defects of execution, upon a clear and
convincing showing that the instrument was so intended.
ii. Project extends in principle to substantive restrictions that protect the
interests of third parties such as surviving spouse or creditors.
1. augmented estate as the basis for the spouses elective share
2. discourages Ts from attempting to defeat elective shares by
means of nonprobate transfers
iii. Code seeks to prevent the use of nonprobate transfers to defeat
creditors claims. Bs of nonprobate transfers are personally liable to the
Ts probate estate for allowed creditors claims to the extent the estate
is insolvent.
IV.
Determining Which Property is Probated and Which is Not
UPC 1-201. GENERAL DEFNITIONS.
(18) Governing Instrument means a deed, will, trust, insurance or annuity policy,
account with POD designation, security registered in B form (TOD), pension, profitsharing, retirement, or similar benefit plan, instrument creating or exercising a power of
appointment or a power of attorney, or a dispositive, appointive, or nominative
instrument of any similar type.

CREATION OF TRUSTS
INTRODUCTION
I.
Terminology for Trusts
a. Qualified Beneficiary
i. UTC 103. Definitions.
1. (13) Qualified B means a B who, one the date the Bs
qualification is determined
a. (A) is a distribute or permissible distribute of trust income
or principal;
b. (B) would be a distribute or permissible distribute of trust
income or principal if the interests of the distributes
described in subparagraph (A) terminated on that date
without causing the trust to terminate;
c. (C) would be a distribute or permissible distribute of trust
income or principal if the trust terminated on that date.
ii. Comment to UTC 103
1. Due to the difficulty of IDing Bs whose interests are remote and
contingent, and because such Bs are not likely to have much
interest in the day-to-day affairs of the trust, the UTC uses the
qualified B to limit the class of Bs to whom certain notices must
be given or consents received.
CREATION
I.
Trustee
a. Choosing a Trustee
b. Acceptance
i. UPC 701. Accepting or Declining Trusteeship.
1. (a) Except as otherwise provided in subsection (c), a person
designated as trustee accepts the trusteeship:
a. (1) by substantially complying with a method of
acceptance provided in the terms of the trust; or
b. (2) if the terms of the trust do not provide a method or the
method provided in the terms is not expressly made
exclusive, by accepting delivery of the trust property,
exercising powers or performing duties as trustee, or
otherwise indicating acceptance of the trusteeship.
2. (b) A person designated as trustee who has not yet accepted the
trusteeship may reject the trusteeship. A designated trustee who
does not accept the trusteeship within a reasonable time after
knowing of the designation is deemed to have rejected the
trusteeship.
3. (c) a person designated to act as trustee, without accepting the
trusteeship, may:
a. (1) act to preserve the trust property if, within a reasonable
time after acting, the person sends a rejection of the
trusteeship to the settlor or, if the settlor is dead or lacks
capacity, to a qualified B; and

II.

b. (2) inspect or investigate trust property to determine


potential liability under environmental or other law or for
any other purpose.
c. Registration of a Trustee
i. UPC 704. Vacancy in Trusteeship; Appointment of Successor.
1. (a) A vacancy in trusteeship occurs if:
a. (1) a person designated as trustee rejects the trusteeship;
b. (2) a person designated as trustee cannot be identified or
does not exist;
c. (3) a trustee resigns;
d. (4) a trustee is disqualified or removed;
e. (5) a trustee dies; or
f. (6) a [guardian] or [conservator] is appointed for an
individual
2. (b) if one or more cotrustees remain in office, a vacancy in a
trusteeship need not be filled. A vacancy in a trusteeship must
be filled if the trust has no remaining trustee.
3. (c) A vacancy in a trusteeship of a noncharitable trust that is
required to be filled must be filled in the following order of
priority:
a. (1) by a person designated in the terms of the trust to act
as successor trustee;
b. (2) by a person appointed by unanimous agreement of the
qualified Bs; or
c. (3) by a person appointed by the court.
ii. UPC 705. Resignation of Trustee.
1. (a) A trustee may resign:
a. (1) upon at least 30 days notice to the qualified Bs, the
settlor, if living, and all cotrustees; or
b. (2) with the approval of the court.
2. (b) in approving a resignation, the court may issue orders and
impose conditions reasonably necessary for the protection of the
trust property.
3. (c) any liability of a resigning trustee or of any sureties on the
trustees bond for acts or omissions of the trustee is not
discharged or affected by the trustees resignation.
Corpus (Property or Res)
a. UTC 401. Methods of Creating Trust.
i. A trust may be created by:
1. (2) declaration by the owner of property that the owner holds
identifiable property as trustee
b. Comment to UTC 401(2)
i. A trust created by self-declaration is best created by reregistering each
of the assets that comprise the trust into the settlors name was
trustee. However, such a reregistration is not necessary to create the
trust A declaration of the trust can be funded merely by attaching a
schedule listing the assets that are to be subject to the trust without
executing separate instruments of transfer. But such practice can make
it difficult to later confirm title with third party transferees and for this
reason is not recommended.

III.

Formalities Written Trusts vs. Oral Trusts and Secret Trusts


a. Oral Trusts of Personalty
i. UTC 407. Evidence of Oral Trust.
1. Except as required by a statute other than this [Code], a trust
need not be evidenced by a trust instrument, but the creation of
an oral trust and its terms may be established only by clear and
convincing evidence.

REVOCABLE TRUSTS
I.
Structure
II.
Funding the Trust
a. UPC 2-511. Testamentary Additions to Trusts.
i. (a) A will may validly devise property to the trustee of a trust
established or to be established (i) during the testators lifetime by the
testator, by the testator and some other person, or by some other
person, including a funded or unfunded life insurance trust, although
the settlor has reserved any or all rights of ownership of the insurance
contracts, or (ii) at the testators death by the testators devise to the
trustee, if the trust is identified in the testators will and its terms are
set forth in a written instrument, other than a will, executed before,
concurrently with, or after the execution of the testators will or in
another individuals will if that other individual has predeceased the
testator, regardless of the existence, size, or character of the corpus of
the trust. The devise is not invalid because the trust is amended after
the execution of the will or the testators death.
ii. (b) Unless the testators will provides otherwise, the property devised
to a trust described in subsection (a) is not held under a testamentary
trust of the testator, but it becomes a part of the trust to which it is
devised, and must be administered and disposed of in accordance with
the provisions of the governing instrument setting forth the terms of
the trust, including any amendments thereto made before or after the
testators death.
iii. (c) Unless the testators will provides otherwise, a revocation or
termination of the trust before the testators death causes the devise
to lapse.
III.
Purposes and Advantages
a. Lifetime Purpose Planning for Incapacity provides a means to manage
property if the settlor becomes incapacitated.
i. A Trustee can manage the persons property and no conservatorship
(judicial determination of incapacity required) will be needed. The
person can choose the successor trustee and provide guidance in the
terms of the trust as to how determination of incapacity is to be made
and how the property should be managed and used thereafter.
b. After-Death Purposes Avoiding Probate popular because it avoids
cumbersome, expensive probate process of some states
i. Costs: transferring property through probate may cost more than using
a revocable trust. The concerns over the cost of probate must be
balanced with the greater cost at the front end: drafting a revocable
trust typically costs more than preparing a will.

IV.

V.

VI.

ii. Privacy: Probate is public; will is a public document. If a person wants


to keep the identity of the recipients of gifts private, use a trust. EX:
Wealthy people want privacy, along with people whose family
arrangements differ from social norms.
iii. Challenges: An unhappy heir can challenge a revocable trust on the
same grounds used to challenge a will: lack of capacity, undue
influence, fraud or duress. It is much more difficult to invalidate a trust
than will.
1. Challenger must show that the undue influence, for example,
continued during the trust: the trust is an ongoing relationship,
and the transactions involved in a trust continue from the time
the settlor establishes the trust until settlor dies.
iv. Avoiding Delays: estate admin can take a long time, and probate
process can take a year or longer. Administering revocable trust takes
time, but distributions can usually be made much more quickly than
under a will.
v. Avoiding Ancillary Probate: Real property must be probated where it is
located. I f a person owns property in a state other than where will is
probated, property has to go through another probate process in state
where it is located. This can be expensive because you might have to
get local counsel. Property in revocable trust will not be subject to
ancillary probate.
vi. Avoiding the Elective Share: a spouse can shield estate from elective
share by putting property into revocable trust.
Disadvantage Statute of Limitations for Creditors
a. Cannot be used to avoid creditors. Claims filed against property in revocable
trust may have a longer SOL, because the UTC does not provide for a
limitation on the claims period. The SOL for the underlying claim will
continue to apply.
Misconception Taxes
a. Revocable trusts have no income or transfer tax benefits. Revocable trust will
be taxed for the income tax purposes with the rest of settlors income.
Assets held in revocable trust will be included in the settlors gross estate for
estate tax purposes.
Rules for Revocable Trusts That Differ From Those Applicable to Other Trusts
a. Capacity: Under UTC capacity to create a revocable trust is the same as that
required to execute a will. Other inter vivos trusts are subject to higher
contract standard. If the state hasnt enacted the UTC, the rule for inter vivos
trusts may still apply to revocable trusts.
b. Duty to Beneficiaries: while settlor is alive, trustee owes FDs only to the
settlor/B.
i. This changes CL; different than rules for other trusts trustee owes FD
to all the Bs not just the current Bs.
c. Rules that Apply to Wills: in some states, certain rules that apply to wills also
apply to revocable trusts, but not to any other type of trust.
i. UTC takes this approach by applying a number of provisions relating to
probate transfers to nonprobate transfers, including revocable trusts.
Rules include effect of divorce, annulment and decree of separation
(UPC 2-804) and effect of homicide of the settlor by a B (UPC 2803).

VII.

Joint Revocable Trusts

FIDUCIARY DUTIES
INTRODUCTION
A trust divides title between the trustee, who holds legal title, and the B, who holds
equitable title.
Langbein, Mandatory Rules in the Law of Trusts
o Enforceable duties: a trust must create enforceable duties. A settlor may not
so negate the responsibilities of a trustee that the trustee would no longer be
acting in a fiduciary capacity. If the trustee has no enforceable duties, the B
would no enforceable interest.
o Core duties of loyalty the duty to administer the trust solely in the
interests of the Bs; impartiality the duty of due regard to the interest of all
the Bs of a trust; and the duty of prudence in the conduct of trust
administration the care norm, requiring the exercise of reasonable care,
skill and caution. None of these duties appear in the UTC, so none are
protected from settlor modification.
o Trust law allows the settlor to conclude that particular fiduciary rules would
overprotect or otherwise complicate the particular trust and its purposes;
hence, the Bs would be better served by abridging them. However, cant
abrogate them completely, because eliminating all FDs would make the trust
illusory.
o The requirement that a trust must have enforceable duties has the
consequence of placing aggregate limits on the manner and the extent to
which a settlor can oust the default law.
DUTY OF OBEDIENCE (TO THE TERMS OF THE TRUST)
Trustee must carry out the terms of the trust, as directed by the settlor. The duty of
obedience underlies the other 2 primary FDs, the duty of loyalty and the duty of
care of prudence.
Atkinson, Obedience as the Foundation of Fiduciary Duty
o Root of the fiduciary relationship is one persons acting for another. The duty
of obedience derives directly from that basic principle. The fiduciary: serve
the one the principal designates, as the principal designates. The fiduciary
must obey this directive, and the directive is the duty of obedience.
o You cannot have a fiduciary relationship without the 3 primary duties. At the
base of the fiduciary triangle is the duty of obedience: to benefit those
designated by another, one must be both loyal and careful.
UTC 801. Duty to Administer Trust.
Upon acceptance of a trusteeship, the trustee shall administer the trust in good
faith, in accordance with its terms and purposes and the interests of the Bs, and in
accordance with this Code.
DUTY OF LOYALTY TO THE BENEFICIARIES
I.
Self-Dealing Duty of loyalty prohibits the trustee from entering into a
transaction on behalf of the trust with himself in his individual capacity.
II.
Conflict of Interest Trustee must avoid transactions in which her loyalty might
be divided for indirect reasons. A trustee must avoid any transaction that serves
the interests of a 3rd person, even one not related to the trustee, or serves an
interest other than that of the Bs.
III.
Exceptions to the Duty of Loyalty

UTC 802. DUTY OF LOYALTY.


(a) A trustee shall administer the trust solely in the interests of the Bs.
(b)A sale, encumbrance, or other transaction involving the investment or
management of trust property entered into by the trustee for the trustees own
personal account or which is otherwise affected by a conflict between the trustees
fiduciary and person interests is voidable by a B affected by the transaction unless:
(1)The transaction was authorized by the terms of the trust;
(2)The transaction was approved by the court;
(3)The B did not commence a judicial proceeding within the [applicable] time;
(4)The B consented to the trustees conduct, ratified the transaction, or
released the trustee in compliance with [the UTC]; or
(5)The transaction involves a contract entered into or claim acquired by the
trustee before the person became or contemplated becoming trustee.
Comment to UTC 802
Subsection (b) states the general rule with respect to transactions involving trust
property that are affected by a conflict of interest. A transaction affected by a
conflict between the trustees fiduciary and personal interests is voidable by a B
who is affected by the transaction. Subsection (b) carries out the no further
inquiry rule by making transactions involving trust property entered into by a
trustee making transactions involving trust property entered into by a trustee for
the trustees own personal account voidable without further proof. Such
transactions are irrebuttably presumed to be affected by a conflict between
personal and fiduciary interest. It is immaterial whether the trustee acts in good
faith or pays a fair consideration.
a. Court Authorization trustee can ask the appropriate court for authorization
to purchase property from a trust or to engage in some other transaction
that breaches the duty of loyalty.
UTC 802. DUTY OF LOYALTY
.. (i) the court may appoint a special fiduciary to make a decision with respect to
any proposed transaction that might violate this section if entered into by the trustee.
b. Consent of the Beneficiaries the Bs can consent to permit a divided-loyalty
transaction. All Bs of the trust must consent. If only some consent, then
those Bs cannot sue the trustee for breach of the duty of loyalty, but any Bs
who did not consent may still do so.
c. Trustee Compensation Although payment by trustee to himself is selfdealing, trustee compensation is routinely permitted; often addressed in the
terms of the trust.
d. Intra-Family Transactions Although a transaction with a family member is a
conflict of interest transaction to which the duty of loyalty applies, some
cases have exempted the transaction from the general prohibition on
conflicts of interest and have considered fairness to the Bs in determining
whether the transaction should stand.
UTC 802. DUTY OF LOYALTY.
(c) A sale, encumbrance, or other transaction involving the investment or
management of trust property is presumed to be affected by a conflict between personal
and fiduciary interests if it is entered into by the trustee with: (1) the trustees spouse;
(2) the trustees descendants, siblings, parents, or their spouses; (3) an agent or
attorney of the trustee; or (4) a corporation or other person or enterprise in which the

trustee, or a person that owns a significant interest in the trustee, has an interest that
might
affect the trustees best judgment.
Comment to UTC 802.
This rule is less severe with respect to transactions involving trust property entered into
with persons who have close business or personal ties with the trustee. Under subsection
(c), a transaction between a trustee and certain relatives and business associates is
presumptively voidable, not void. Among the fats tending to rebut the presumption are
whether the consideration was fair and whether the other terms of the transaction are
similar to those that would be transacted with an independent party.
e. Proprietary Mutual Funds UTC authorizes a corporate trustee to invest in
proprietary mutual funds (funds the corporation manages).
UTC 802. DUTY OF LOYALTY.
(f) An investment by a trustee in securities of an investment company or
investment trust to which the trustee, or its affiliate, provides services in a
capacity other than as trustee is not presumed to be affected by a conflict between
person and fiduciary interests if the investment otherwise complies with the
prudent investor rule of [Article] 9. In addition to its compensation for acting as
trustee, the trustee may be compensated by the investment company or
investment trust for providing those services out of fees charged to the thrust. If
the trustee receives compensation from the investment company or management
services, the trustee must at least annually notify the persons entitled under 813
to receive a copy of the trustees annual report of the rate and method by which
that compensation was determined.
(h) this section does not preclude the following transactions, if fair to the Bs:
.. (4) A deposit of trust money in a regulated financial-service institution
operated by the trustee;
f. Advances by Trustee trustee can advance her own funds to the trust and
be repaid, without interest, if the advance will protect the trust estate or is
necessary for expenses of administration. A trustee may also lend money to
the trust and be repaid with reasonable interest, if funds are not otherwise
available on equal or better terms.
g. Voting Stock if trust owns corporate stock, the trustee will need to vote the
stock.
UPC 802. Duty of Loyalty.
(g) In voting shares of stock or in exercising powers of control over similar
intersts in other forms of enterprise, the trustee shall act in the bests interests of the
Bs. If the trust is the sole owner of a corporation or other form of enterprise, the
trustee shall elect or appoint directors or other managers who will manage the
corporation or enterprise in the best interests of the Bs.
PROVIDING INFORMATION TO THE BENEFICIARIES DUTY TO INFORM AND
REPORT
I.
Common Law Duty
a. In order for B to enforce interest in the trust, B must have info about trust, its
assets, transactions engaged in by trustee, and income earned by the trust.
b. Most trustees, particular those advised by lawyers, provide annual
accounting to Bs of trusts they manage.

II.

c. Providing reports and accountings is a best practice and protects trustee


because SOL begin to run once Bs have information about the trust.
d. Class Notes:
i. T must present info in goof faith and Bs best interest in mind even if
it might get T in trouble.
ii. Perils with presenting too much, or too little, information:
1. Accounting must be presented in a meaningful way. B can look
at a few pages and understand everything that is material.
2. Determine presentation based on B If B is a CEO, present a lot
more info than if B is 19 year old college kid. Take Bs
sophistication level into account.
iii. Formal demand for accounting is the last thing you want to do if you
are attorney for B. As trustees attorney you should advise sending
regular accounting.
The Uniform Trust Code
a. 813 incorporates the CL rule in paragraph (a) and then adds duties for
trustees. Under UTC, trustees now have affirmative duties to provide notice
and reports, in addition to the duty to respond to requests for info. Certain
duties are mandatory and cannot be removed by settlor.
i. UTC 105(b)(8), (9) provide that the settlor cannot waive the duties
provided in UTC 813(a), (b)(2), (b)(3). States have not adopted this
uniformly though.

UTC 813. DUTY TO INFORM AND REPORT.


(c) A trustee shall keep the qualified Bs of the trust reasonably informed about
the administration of the trust and of the material facts necessary for them
to protect their interests. Unless unreasonable under the circumstances, a
trustee shall promptly respond to a Bs request for information related to
admin of the trust.
(d)A trustee:
(1) Upon request of a B, shall promptly furnish to the B a copy of trust
instrument;
(2) Within 60 days after accepting a trusteeship, shall notify the
qualified Bs of the acceptance and of the trustees name, address, and
telephone number
(3) Within 60 days after the date the trustee acquires knowledge of the
creation of an irrevocable trust, or the date the trustee acquires
knowledge that a formerly revocable trust has become irrevocable,
whether by the death of the settlor or otherwise, shall notify the
qualified Bs of the trusts existence, of the identity of the settlor or
settlors, of the right to request a copy of the trust instrument, and of
the right to a trustees report as provided in subsection (c); and
(4) Shall notify the qualified Bs in advance of any change in the
method or rate of the trustees compensation.
(c) A trustee shall send to the distributes or permissible distributes of trust
income or principal, and to other qualified or nonqualified Bs who request it, at
least annually and at the termination of the trust, a report of the trust property,
liabilities, receipts, and disbursements, including the source and amount of the
trustees compensation, a listing of the trust assets and, if feasible, their
respective market values.

(d) A B may waive the right to a trustees report or other information otherwise
required to be furnished under this section. A B, with respect to future reports
and other information, may withdraw a waiver previously given.
III.

Representation
a. UTC provides for representation for Bs who lack legal capacity or are not yet
born. The UTC provides for representation by fiduciaries, which is consistent
with older law. In addition, UTC permits representation of minor and unborn
children by a parent of the children. [303]
b. UTC also permits representation by a person who as an interest
substantially identical to the interest of the person being represented.
[304]
i. Example: if trust provides a remainder interest for children of a person,
an adult child can represent unborn or minor children the childs
siblings.
ii. Provisions apply only if the person representing the another B
does not have conflict of interest that would affect the
representation.

UTC 303. REPRESENTATION BY FIDUCIARIES AND PARENTS.


To the extent there is no conflict of interest between the representative and the
person represented or among those being represented with respect to a particular
question or dispute:
1) a [conservator] may represent and bind the estate that the [conservator]
controls;
2) a [guardian] may represent and bind the ward if a [conservator] of the
wards estate has not been appointed;
3) an agent having authority to act with respect to the particular question or
dispute may represent and bind the principal;
4) a trustee may represent and bind the Bs of the trust;
5) a personal rep of a decedents estate may represent and bind persons
interest in the estate; and
6) a parent may represent and bind the parents minor or unborn child if a
[conservator] or [guardian] for the child has not been appointed.
UTC 304. REPRESENTATION BY PERSON HAVING SUBSTANTIALLY SIMILAR
INTEREST.
Unless otherwise represented, a minor, incapacitated, or unborn individual, or a
person whose identity or location is unknown and not reasonably ascertainable,
may be represented by and bound by another having a substantially identical
interest with respect to the particular question or dispute, but only to the extent
there is no conflict of interest between the representative and the person
represented.
CARING FOR THE TRUST PROPERTY DUTY OF PRUDENCE
I.
Introduction
a. Three duties serve as foundation for fiduciary law duty of obedience to the
purpose of the trust; duty of loyalty and the duty of care of prudence. This
section deals with duty of care.

II.

b. Duty of Care Duty to manage trust property and to administer the


trust with reasonable care, skill, and caution.
Duties to Protect the Property
a. Duty to pay property attention to the trust and to treat the property of the
trust in a way that protects the property for the Bs.
b. For example: duty to collect and protect trust property ( 809); duty to
enforce and defend claims of the trust ( 811) and duty to redress a breach
of trust committed by a former trustee ( 812) all serve to protect and
increase the value of the assets in the trust.

UTC 809. CONTROL AND PROTECTION OF TRUST PROPERTY.


A trustee shall take reasonable steps to take control of and protect the trust
property.
UTC 811. ENFORCEMENT AND DEFENSE OF CLAIMS.
A trustee shall take reasonable steps to enforce claims of the trust and to defend
claims against the trust.
UTC 812. COLLECTING TRUST PROPERTY.
A trustee shall take reasonable steps to compel a former trustee or other person to
deliver trust property to the trustee, and to redress a breach of trust known to the
trustee to have been committed by a former trustee.
Note: Settlor may want to provide in terms of trust that successor T need not pursue
against prior T if its too expensive to justify the benefits.
III.

Duties to Keep Proper Records and to Keep the Property Separate


a. Property that is commingled with the trustees own property or property for
which adequate records are not kept may be vulnerable to misuse by trustee
or claims by trustees personal creditors. UTC 810 deals with this. 810(b),
aka duty not to commingle; duty to label trust property as belonging to
trustee in fiduciary capacity in 810(c), duty to earmark; 810(d) allows
trustee to invest assets in a common trust fund as long as record keeping is
sufficient to ID the property that belongs to trust. 810 requires trust assets
be IDed as assets of the trust and that trustee keep adequate records.

UTC 810. RECORDKEEPING AND IDENTIFICATION OF TRUST PROPERTY.


(a) A trustee shall keep adequate records of the administration of the trust.
(b)A trustee shall keep trust property separate from the trustees own property.
(c) Except as otherwise provided in subsection (d), a trustee shall cause the trust
property to be designated so that the interest of the trust, to the extent
feasible, appears in records maintained by a party other than a trustee or B.
(d)If the trustee maintains records clearly indicating the respective interests, a
trustee may invest as a whole the property of two or more separate trusts.
Note: modern view is that trustee should only be liable if the failure to earmark, 810(c),
caused the loss, for example, because the trustees creditors could reach the property.
IV.

Duty to Invest Prudently


a. Trustee must manage assets in a way that protects the value of the assets
over time.

i. Goals: (1) produce income and (2) maintain value of the trust.
ii. Duty to invest prudently has evolved used to be very strict with
limited control by trustees to rules that facilitate investment decision
making based on modern portfolio theory and other developments in
investment strategies.
b. Langbein, The Uniform Prudent Investor Act and the Future of Trust
Investing.
I. OLDER STANDARDS OF PRUDENT INVESTING
1. Used to be a restricted list of presumptively proper trust
investments, like government bonds and well-secured first
mortgages. Stock was later added, with various other court or
legislature-approved corporate issues.
2. Prudent Man Rule: trustees should observe how men of
prudence manage their own affairs, not in regard to
speculation, but in regard to the permanent disposition of their
funds, considering the probable income, as well as the probably
safety of the capital to be invested.
a. Prudence = reasonableness; similar to reasonable man
rule.
b. Main idea was to avoid speculation.
II. THE UNIFORM PRUDENT INVESTOR ACT
1. Legislature retained the prudence standard. Prudent man has
become the prudent investor.
2. Act makes 3 great changes:
a. Act articulates a greatly augmented duty to diversify trust
investments.
b. In place of old preoccupation with avoiding speculation, the
Act substitutes a requirement of sensitivity to the risk
tolerance of the particular trust, directing trustee to invest
for risk and return objectives reasonably suited to the
trust.
c. Act reverses the much criticized nondelegation rule of
former law and actually encourages trustees to delegate
investment responsibilities to professionals.
c. Interest, Dividends, Rents, and Capital Gains
Prefatory Note to the UPIA. Objects of the Uniform Prudent Investor Act.
UPIA makes 5 fundamental alterations in the former criteria for prudent investing. All are
to be found in the R.3d of Trusts: Prudent Investor Rule.
1) The standard of prudence is applied to any investment as part of the total portfolio,
rather than to individual investments. Portfolio embraces all the trusts assets.
2) The tradeoff in all investing between risk and return is identified as the fiduciarys
central consideration.
3) All categoric restrictions on types of investments have been abrogated; the trustee
can invest in anything that plays an appropriate role in achieving the risk/return
objectives of the trust and that meets other requirements of prudent investing.
4) The long familiar requirement that fiduciaries diversify their investments has been
integrated into the definition of prudent investing.
5) The much criticized former rule of trust law forbidding the trustee to delegate
investment management functions has been reversed. Delegation is now
permitted, subject to safeguards.

d. Prudent Investor Rule


i. Requires that a trustee act as prudent investor and a reminds trustee
that the prudent investor rule is a default rule.
ii. Under rule, trustee must use reasonable care, skill, and caution in
making investment decisions. Every trust is unique!
iii. Standard of prudence is objective standard, not subjective trustee
should make decisions that other similarly situated trustees would
make. Reasonable person.
UNIFORM PRUDENT INVESTOR ACT
SECTION 1. PRUDENT INVESTOR RULE.
(a) Except as otherwise provided in subsection (b), a trustee who invests and manages trust assets
owes a duty to the beneficiaries of the trust to comply with the prudent investor rule set forth in
this [Act].
(b) The prudent investor rule, a default rule, may be expanded, restricted, eliminated, or
otherwise altered by the provisions of a trust. A trustee is not liable to a beneficiary to the extent
that the trustee acted in reasonable reliance on the provisions of the trust.
e. Standard of Care; Portfolio Strategy; Risk and Return Objectives; Special
Skills - 2
i. 2 provides list of factors trustee should consider, including factors
related to the trust as well as general economic factors. Trustee should
make decisions with entire portfolio in mind and shouldnt make them
on asset-by-asset basis.
SECTION 2. STANDARD OF CARE; PORTFOLIO STRATEGY; RISK AND RETURN
OBJECTIVES.
(a) A trustee shall invest and manage trust assets as a prudent investor would, by
considering the purposes, terms, distribution requirements, and other circumstances of the trust.
In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
(b) A trustees investment and management decisions respecting individual assets must be
evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an
overall investment strategy having risk and return objectives reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in investing and managing trust
assets are such of the following as are relevant to the trust or its beneficiaries:
(1) general economic conditions;
(2) the possible effect of inflation or deflation;
(3) the expected tax consequences of investment decisions or strategies; (4) the role that
each investment or course of action plays within the
overall trust portfolio, which may include financial assets, interests in closely held
enterprises, tangible and intangible personal property, and real property;
(5) the expected total return from income and the appreciation of capital; (6) other
resources of the beneficiaries;
(7) needs for liquidity, regularity of income, and preservation or appreciation of
capital; and
(8) an assets special relationship or special value, if any, to the purposes of the
trust or to one or more of the beneficiaries.
(d) A trustee shall make a reasonable effort to verify facts relevant to the investment and
management of trust assets.
(e) A trustee may invest in any kind of property or type of investment consistent with
the standards of this [Act].

(f) A trustee who has special skills or expertise, or is named trustee in reliance upon
the trustees representation that the trustee has special skills or expertise, has a duty to
use those special skills or expertise. Special Skills.
f. Diversification
SECTION 3. DIVERSIFICATION.
A trustee shall diversify the investments of the trust unless the trustee reasonably determines that,
because of special circumstances, the purposes of the trust are better served without diversifying.
g. Costs
i. Duty to incur only costs that are appropriate and reasonable for the
trust. Comment describes the provision as a direction to minimize
costs.
SECTION 7. COSTS.
In investing and managing trust assets, a trustee may only incur costs that are
appropriate and reasonable in relation to the assets, the purposes of the trust, and
the skills of the trustee.
h. Not By Hindsight
i. T must make decisions based on the information available at the time
the decision is made. T has duty to investigate the truth of info relating
to the investments and must be diligent in seeking info, but will not
be judged by the success or lack of success of investments.
Decisions will NOT be judged in hindsight.
SECTION 8. REVIEWING COMPLIANCE.
Compliance with the prudent investor rule is determined in light of the facts and
circumstances existing at the time of a trustees decision or action and not by
hindsight.
i. Delegation
i. T cannot turn things over to investment advisor but must continue to
monitor work done on behalf of trust.
ii. Rules governing delegation balance potential benefits to trust of
appropriate delegation with risks of overbroad delegation.
iii. Comment: If the T delegates effectively, the Bs obtain the advantage
of the agents specialized investment skills or whatever other
attributes induced T to delegate. But if T delegates to an incompetent,
the delegation can work harm upon the Bs.
SECTION 9. DELEGATION OF INVESTMENT AND MANAGEMENT FUNCTIONS.
(a) A trustee may delegate investment and management functions that a prudent
trustee of comparable skills could properly delegate under the circumstances.
The trustee shall exercise reasonable care, skill and caution in:
a. (1) selecting agent;
b. (2) establishing scope and terms of the delegation, consistent with the
purposes and terms of the trust; and
c. (3) periodically reviewing the agents actions in order to monitor the
agents performance and compliance with the terms of the delegation.
(b)In performing a delegated function, an agent owes a duty to the trust to
exercise reasonable care to comply with the terms of the delegation.

(c) A trustee who complies with the requirements of subsection (a) is not liable to
the Bs or to the trust for the decisions or actions of the agent to whom the
function was delegated.
(d)By accepting the delegation of a trust function from the trustee of a trust that is
subject to the law of this State, an agent submits to the jx of the courts of this
State.
NOTE: Choosing: would be reasonable to just google investment advisors
o When asked (as attorney) for referral, give THREE options
o Trustee needs to talk to people, look at credentials (letters after their name), talk to other
clients, interview several investment advisors.
o If advisor loses the money, trustee wants to be able to show that trustee did everything
possible to choose prudently. Trustee should document everything done while searching
for advisor.
NOTE Trustee must keep up with ins and outs of $. Example: if T gives B money for school, it is good
practice to get tuition bill saying why money was spent and validating amount disbursed.
SECTION 4.
Requires Trustee to review assets and apply prudent investor standards
DUTY OF IMPARTIALITY
I.
Intro
a. Trust typically provides for more than on B, and Bs interest may occur at
different times.
b. Duty of impartiality tells T to manage the trust in a way that keeps the
interest of the current B and the future Bs in mind.
c. It is not a duty to treat all Bs in the same way.
d. Related to duty to invest prudently and to the rules governing allocation of
income and principal. T must make investment decisions that do not prefer
income Bs over remainder Bs or vice versa.
ALLOCATION OF PRINCIPAL AND INCOME
I.
NOTES
a. Typical trust might provide life estate to one or more people and a remainder interest to others.
b. Determination of what constitutes income will determine what amount to distribute to the B
and what amount to leave in the trust for eventual distribution to the descendants.
c. Terms of trust can provide guidance on allocating receipts and expenses, but if the terms do not
include directions on principal and income, sate law provides these rules in the UP&IA.
i. Traditional income allocation: interest, dividends, and rents are allocated to income,
while settlors contributions to the trust and proceeds from the sale of assets (capital
gains) are allocated to principal.
ii. Trustee is permitted to make an adjustment between income and principal, if prudent
investment decisions have led to accounting results that place an inequitable amount in
either income or principal. This allows T to engage in prudent portfolio investing while
maintaining fair allocations for both income and remainder Bs.
UNIFORM PRINCIPAL AND INCOME ACT
SECTION 103. FIDUCIARY DUTIES; GENERAL PRINCIPLES.
(a) In allocating receipts and disbursements to or between principal and income, . . . a fiduciary:
(1) shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a
different provision in this [Act]; . .

(3) shall administer a trust or estate in accordance with this [Act] if the terms of the trust or the will do
not contain a different provision or do not give the fiduciary a discretionary power of administration;
and
(4) shall add a receipt or charge a disbursement to principal to the extent that the terms of the trust and
this [Act] do not provide a rule for allocating the receipt or disbursement to or between principal and
income.
(b) [A] fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the
beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the
fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with this [Act] is
presumed to be fair and reasonable to all of the beneficiaries.
SECTION 104. TRUSTEES POWER TO ADJUST.
(a) A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee
invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or
must be distributed to a beneficiary by referring to the trusts income, and the trustee determines, after applying
the rules in Section 103(a), that the trustee is unable to comply with Section 103(b).
(b) In deciding whether and to what extent to exercise the power conferred by subsection (a), a trustee shall
consider all factors relevant to the trust and its beneficiaries, including the following factors to the extent they
are relevant:
(1) the nature, purpose, and expected duration of the trust;
(2) the intent of the settlor;
(3) the identity and circumstances of the beneficiaries;
(4) the needs for liquidity, regularity of income, and preservation and appreciation of capital;
(5) the assets held in the trust; the extent to which they consist of financial assets, interests in closely
held enterprises, tangible and intangible personal property, or real property; the extent to which an asset
is used by a beneficiary; and whether an asset was purchased by the trustee or received from the settlor;
(6) the net amount allocated to income under the other sections of this [Act] and the increase or decrease
in the value of the principal assets, which the trustee may estimate as to assets for which market values
are not readily available;
(7) whether and to what extent the terms of the trust give the trustee the power to invade principal or
accumulate income or prohibit the trustee from invading principal or accumulating income, and the
extent to which the trustee has exercised a power from time to time to invade principal or accumulate
income;
(8) the actual and anticipated effect of economic conditions on principal and income and effects of
inflation and deflation; and
(9) the anticipated tax consequences of an adjustment.
Comment
Purpose and Scope of Provision. The purpose of Section 104 is to enable a trustee to select investments using
the standards of a prudent investor without having to realize a particular portion of the portfolios total return in
the form of traditional trust accounting income such as interest, dividends, and rents. Section 104(a) authorizes
a trustee to make adjustments between principal and income if three conditions are met: (1) the trustee must be
managing the trust assets under the prudent investor rule; (2) the terms of the trust must express the income
beneficiarys distribution rights in terms of the right to receive income in the sense of traditional trust
accounting income; and (3) the trustee must determine, after applying the rules in Section 103(a), that he is
unable to comply with Section 103(b).
Impartiality and productivity of income. The duty of impartiality between income and remainder
beneficiaries is linked to the trustees duty to make the portfolio productive of trust accounting income
whenever the distribution requirements are expressed in terms of distributing the trusts income.
Factors to consider in exercising the power to adjust. Section 104(b) requires a trustee to consider factors
relevant to the trust and its beneficiaries in deciding whether and to what extent the power to adjust should be
exercised. . . . If a trustee who is operating under the prudent investor rule decides that the portfolio should be

composed of financial assets whose total return will result primarily from capital appreciation rather than
dividends, interest, and rents, the trustee can decide at the same time the extent to which an adjustment from
principal to income may be necessary under Section 104. On the other hand, if a trustee decides that the risk
and return objectives for the trust are best achieved by a portfolio whose total return includes interest and
dividend income that is sufficient to provide the income beneficiary with the beneficial interest to which the
beneficiary is entitled under the terms of the trust, the trustee can decide that it is unnecessary to exercise the
power to adjust. . . .
Examples. The following examples illustrate the application of Section 104:
Example (1) T is the successor trustee of a trust that provides income to A for life, remainder to B. T has
received from the prior trustee a portfolio of financial assets invested 20% in stocks and 80% in bonds.
Following the prudent investor rule, T determines that a strategy of investing the portfolio 50% in stocks and
50% in bonds has risk and return objectives that are reasonably suited to the trust, but T also determines that
adopting this approach will cause the trust to receive a smaller amount of dividend and interest income. After
considering the factors in Section 104(b), T may transfer cash from principal to income to the extent T considers
it necessary to increase the amount distributed to the income beneficiary.
Example (2) T is the trustee of a trust that requires the income to be paid to the settlors son C for life,
remainder to Cs daughter D. In a period of very high inflation, T purchases bonds that pay double-digit interest
and determines that a portion of the interest, which is allocated to income under Section 406 of this Act, is a
return of capital. In consideration of the loss of value of principal due to inflation and other factors that T
considers relevant, T may transfer part of the interest to principal.
SECTION 401. CHARACTER OF RECEIPTS.
(b) Except as otherwise provided in this section, a trustee shall allocate to income money received from an
entity [e.g., a corporation, a partnership, or a limited liability company].
(c) A trustee shall allocate the following receipts from an entity to principal:
(1) property other than money;
(2) money received in one distribution or a series of related distributions in exchange for part or all of a
trusts interest in the entity;
3) money received in . . . liquidation of the entity . . . .
(f) A trustee may rely upon a statement made by an entity about the source or character of a distribution if the
statement is made at or near the time of distribution by the entitys board of directors or other person or group of
persons authorized to exercise powers to pay money or transfer property comparable to those of a corporations
board of directors.
SECTION 404. PRINCIPAL RECEIPTS. A trustee shall allocate to principal:
(1) to the extent not allocated to income under this [Act], assets received from a transferor during the
transferors lifetime [or] a decedents estate . . ;
(2) money or other property received from the sale, exchange, liquidation, or change in form of a
principal asset, including realized profit, . . .
(5) net income received in an accounting period during which there is no beneficiary to whom a trustee
may or must distribute income; and
(6) other receipts as provided in [Part 3].
SECTION 405. RENTAL PROPERTY.
To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall
allocate to income an amount received as rent of real or personal property, including an amount received for
cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a
deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms
of the lease and is not available for distribution to a beneficiary until the trustees contractual obligations have
been satisfied with respect to that amount.

SECTION 501. DISBURSEMENTS FROM INCOME. A trustee shall make the following disbursements
from income . . . :
(1) one-half of the regular compensation of the trustee and of any person providing investment advisory
or custodial services to the trustee;
(2) one-half of all expenses for accountings, judicial proceedings, or other matters that involve both the
income and remainder interests;
(3) all of the other ordinary expenses incurred in connection with the administration, management, or
preservation of trust property and the distribution of income, including interest, ordinary repairs,
regularly recurring taxes assessed against principal, and expenses of a proceeding or other matter that
concerns primarily the income interest; and
(4) recurring premiums on insurance covering the loss of a principal asset or the loss of income from or
use of the asset.
SECTION 502. DISBURSEMENTS FROM PRINCIPAL.
(a) A trustee shall make the following disbursements from principal:
(1) the remaining one-half of the disbursements described in Section 501(1) and (2);
(2) all of the trustees compensation calculated on principal as a fee for acceptance, distribution, or
termination, and disbursements made to prepare property for sale;
(3) payments on the principal of a trust debt;
(4) expenses of a proceeding that concerns primarily principal, including a proceeding to construe the
trust or to protect the trust or its property;
(5) premiums paid on a policy of insurance not described in Section 501(4) of which the trust is the
owner and beneficiary;
(6) estate, inheritance, and other transfer taxes, including penalties, apportioned to the trust; and
(7) disbursements related to environmental matters, including reclamation, assessing environmental
conditions, remedying and removing environmental contamination, monitoring remedial activities and
the release of substances, preventing future releases of substances, collecting amounts from persons
liable or potentially liable for the costs of those activities, penalties imposed under environmental laws
or regulations and other payments made to comply with those laws or regulations, statutory or common
law claims by third parties, and defending claims based on environmental matters.
SECTION 505. INCOME TAXES.
(a) A tax required to be paid by a trustee based on receipts allocated to income must be paid from
income.
(b) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from
principal, even if the tax is called an income tax by the taxing authority.
REMOVAL OF TRUSTEES
NOTES:
Requires serious breach of trust. Trustee is required to be average, so there will
be many minor breaches. 706(b)(1) states that breach must go above minor to
SERIOUS.
706(b) Not inconsistent with material of the trust is required before trustee can
be removed.
o Purpose of the trust is that Bs cant get the money, control the assets.
Therefore Bs cant remove the trustee just because Bs all agree they want a
different on.
o On the other hand, if Bs are reasonable and have good reason to remove
trustee, then it would violate the purpose of the trust to remove trustee.

o Can be friendly removal (old uncle ready to quit, wants to appoint successor
trustee because he is tired of doing it.)
UTC 706. REMOVAL OF TRUSTEE.
a) The settlor, a cotrustee, or a B may request the court to remove a trustee, or a
trustee may be removed by the court on its own initiative.
b) The court may remove a trustee if:
(6)the trustee has committed a serious breach of trust;
(7)lack of cooperation among cotrustees substantially impairs the
administration of the trust;
(8)because of unfitness, unwillingness, or persistent failure of the trustee to
administer the trust effectively, the court determines that removal of the
trustee best serves the interests of the Bs; or
(9)There has been a substantial change of circumstances or removal is
requested by all of the qualified Bs, the court finds that removal of the
trustee best serves the interests of all of the Bs and is not inconsistent with a
material purpose of the trust, and a suitable cotrustee or successor trustee is
available.
c) Pending a final decision on a request to remove a trustee, or in lieu of or in addition
to removing a trustee, the court may order such appropriate relief under sections
1001(b) as may be necessary to protect the trust property or the interests of the
Bs.

Grounds for removal: Failure to care for trust property, self-dealing with trust
property to the detriment of the Bs or refusing to provide information to the Bs
despite repeated requests (over a period of time) can be grounds for removal.
Court can also remove trustee if co-trustees cannot or will not cooperate in
managing the trust. Removal for lack of cooperation need not involve breach of
trust, but the failure to cooperate must significantly affect management of the
trust.
o Example: if a trust has two trustees and the two trustees cannot agree, no
decisions can be made for the trust. The court may decide to remove one or
both of the trustees.
For removal for substantially changed circumstances, the court needs to determine
that removal is in the best interests of the Bs and that removal is not inconsistent
with material purpose(s).

POWERS TO DIRECT

RIGHTS OF BENEFICIARIES AND CREDITORS IN TRUST PROPERTY;


MODIFICATION AND TERMINATION OF TRUSTS
INTRODUCTION
DISTRIBUTION PROVISIONS RIGHTS OF BENEFICIARIES
I.
Overview of Distribution Provisions Bs rights in a trust depend on provisions
in the trust instrument; distribution provisions may be mandatory or
discretionary.
a. Mandatory Provisions:
i. Direct the trustee to pay something to a B, without exercising
discretion as to amount or timing. May affect present or future
interests.
ii. Example: I give these assets to M, in trust, to pay income to S for life
and on Ss death to pay the corpus to L. M cannot do more or less;
she has no discretion with respect to distributions.
b. Discretionary Provisions:
i. Direct the trustee to exercise some judgment in deciding what and how
much to distribute, when to distribute or to whom to distribute. Trust
instrument usually provides guidance for trustee. Standards may be
narrow or broad, specific or general, ascertainable or nonascertainable.
1. Some provide mandatory distributions of both income and
principal; some are entirely discretionary.
ii. Example: I give these assets to M, in trust, to pay all of the income to
kids in equal shares and so much of the principal to my kids as the
trustee, in the trustees discretion, determines is necessary for their
health and education. M has discretion only to distribute principal for
kids health and education.
c. Spray or Sprinkle Provisions:
i. Terms may direct trustee to distribute income or principal among a
number of named Bs or to one or more of a class of Bs. Distributions
may be discretionary or mandatory, but trustee being able to spray
or sprinkle the property pursuant to terms of trust among various Bs
makes the power as to whom to distribute discretionary.
ii. Example: Trustee shall distribute all of the income of the trust, at least
quarterly, to one or more of D, E, and G, in such shares as the trustee
determines to be in the best interests of these Bs. Group of Bs is
narrow and obligation to appoint all income is mandatory, the standard
is broad as to who should receive the income.
II.
Interpreting Discretionary Standards of Distribution the fiduciary duties,
including duties of prudence, loyalty and impartiality, will affect decisions the
trustees make about distributions.
a. Judicial Review of Trustees Exercise of Discretion Reasonableness and
Good Faith:
i. The court will intervene only to prevent misinterpretation or abuse of
the discretion; in will not impose its own view of how a trustee should
exercise discretion. Abuse of discretion = Ill know it when I see it
problem.
1. Must use standards of reasonableness and good faith.

ii. If trustee has discretion in how and when to make distributions, he


must take action; trustee cannot just refuse to anything or dole out
money without giving consideration to a variety of facts and
circumstances.
1. All a court will require is that trustee make a carefully
considered decision, one made in goof faith, and one that
is reasonable given the terms of the trust. Process in
making decision is important, not result.
iii. UTC 814. Discretionary Powers; Tax Savings.
1. (a) Notwithstanding the breadth of discretion granted to a
trustee in the terms of the trust, including the use of such terms
as absolute, sole, or uncontrolled, the trustee shall
exercise a discretionary power in good faith and in accordance
with the terms and purposes of the trust and the interests of the
Bs.
iv. Comment to UTC 814.
1. Subsection (a) does not otherwise address the obligations of a
trustee to make distributions, leaving that issue to case law.
2. Under these standards, whether the trustee has a duty in a given
situation to make a distribution depends on the exact language
used, whether the standard grants discretion and its breadth,
whether this discretion is coupled with a standard, whether the B
has other available resources, and, more broadly, the overriding
purposes of the trust.
3. The obligation of a trustee to act in good faith is a fundamental
concept of fiduciary law although there are different ways that it
can be expressed. Sometimes different formulations appear in
the same source.
4. A grant of discretion establishes a range within which the
trustee may act. The greater the grant of discretion, the broader
the range.
b. Specific Standards
A court will review a trustees exercise of a standard of distribution to
determine whether the trustee exercised the standard established by
the settlor.
i. Support and Maintenance: viewed as an ascertainable standard.
Court looks at the Bs basic needs; look to amount of property settlor
placed in the trust and the relationship between settlor and B. The
terms will be interpreted to imply the Bs accustomed standard of
living.
1. Courts are inconsistent as to whether the Bs other assets should
be a factor in trustees decision to make distributions.
2. Trustee must address is the scope of the duty to affirmatively
inquire into the needs of the B rather than wait for B to request
distribution.
a. Trustee can normally rely on representations of the B as to
other available assets, but trustee can also request B
provide readily available info about other financial
resources, especially if trustee thinks Bs representations
are inaccurate.

3. Conclusion
a. Trustee must first consider the intent of the settlor to the
extent it can be determined from the trust document and
any information about the relationship between settlor and
B.
b. Support usually means the Bs accustomed standard of
living, so lavish vacations and fancy cars may be within the
standard.
c. Trustee should consider needs of future Bs and the amount
of property in the trust relative to current Bs needs as well
as needs of future Bs.
ii. Education: clearly covers education; may also cover room and board,
books, fees and other costs.
1. Technical training as well as college or grad school are typically
covered.
2. Related costs for education private primary school, study
abroad, music lessons, sports instruction are less likely to viewed
as education, unless specifically provided for in the trust.
3. Trustee must consider not only the standard for distribution, but
also other resources of B (unless trust says otherwise) and other
purposes of trust.
iii. Emergency: considered a restrictive standard; distribution can be
made under the standard only if the sort of emergency the settlor
envisioned has occurred.
1. Determination of emergency depends on trustees discretion
and, if necessary, courts determination.
2. Courts tend to defer to trustees determination of whether an
emergency has occurred and will define emergency narrowly
when deciding whether the trustee has acted reasonable in not
making distribution.
iv. Welfare, Best Interest, Happiness: nonascertainable; broad
discretion in trustee. Trustee can choose to honor any reasonable
request from B for a distribution, without concern about secondguessing by another B or the court.
1. Trustee must still be reasonable and must act in good faith, but
court will give trustee a lot of latitude in exercise of discretion.
2. Trustee can choose not to distribute, or distribute for almost any
purpose.

SECTION 103. DEFINITIONS.


In this [Code]: (2) Ascertainable standard means a standard relating to an individuals health, education,
support, or maintenance . . . .
RIGHTS OF CREDITORS AND PLANNING TO PROTECT THE ASSETS IN A TRUST
I.
General

a. Issue: whether creditor can get a court to order the trustee to turn over the
trust property or pay distributions from the trust to the creditor instead of
first making payment to B.
i. Doctrine of Derivative Title creditor cannot have more rights to
property than owner (B). Creditor steps into shoes of debtor.
ii. In general, Creditor can only garnish what debtor (B) owns.
iii. With the exception of a settlor of a revocable trust, Bs are not deemed
to be the owners of the assets; they only own a right to distributions.
Consequently, Creditors may not normally garnish the assets of the
trust; they may only intercept distributions to which the B is entitled.
Creditors can still go after Bs other assets.
b. Where the B is not the settlor, the creditors of the B who have a judgment,
whether obtained before or after the Bs interest is created, can reach assets
in the trust only to the extent the B has rights to demand assets or
distributions.
i. Thus, like the B, creditors of a B may be restricted in accessing the Bs
interest in distributions of income or property of the trust by:
1. Spendthrift provisions
2. The discretion of the trustee, and
3. The standards for distribution imposed by the terms of the trust.
ii. Each of the restrictions adds a layer of protection for the B, warding off
actions by creditors to collect.
iii. These protections are more permeable with respect to preferred
creditors, like taxing authorities and children and ex-spouses owed
child/spousal support.
iv. Once property is distributed to a B, it is fair game.
c. Where the B is also the settlor, creditors may be able to attach the
property in the trust directly and not have to limit themselves to
distributions.
i. When a settlor creates either a revocable trust or an irrevocable trust,
existing creditors may attach the settlors interest without restriction.
ii. With respect to revocable trusts, later creditors of the settlor can reach
the assets in the trust unimpeded, either during settlors lifetime or
after settlors death.
iii. Even with respect to irrevocable trusts with spendthrift clause, if settlor
has retained an interest in the trust, creditors may garnish the settlors
interest to satisfy their claims, unless the settlor established an asset
protection trust in one of a few foreign or state jxs that permit such
trusts.
d. Uniform Fraudulent Conveyance (or Transfer) Act: establishes that if someone
transfers assets to another for less than adequate consideration at a time
when he is already indebted, the transfer is generally considered in fraud of
creditors, regardless of intent to defraud. Not only is debtor still liable, but so
is the transferee, even if they are innocent. These rules apply with equal
force to trusts.
See Common Types of Trust Distribution Standards Hand Out (Day 20)
II.
Creditors of a Beneficiary Who is Not The Settlor
a. Mandatory Distributions: With respect to distributions pursuant to mandatory
provision, and absent a spendthrift clause covering such distributions,
because the B has the right to demand payment of a distribution, a creditor

CAN get a court order attaching present or future mandatory distributions to


or for the benefit of the B. UTC 501.
i. Court order can require trustee to pay creditor directly rather than
garnish payments from B.
SECTION 501. RIGHTS OF BENEFICIARYS CREDITOR OR ASSIGNEE.
To the extent a beneficiarys interest is not subject to a spendthrift provision, the court may authorize a
creditor or assignee of the beneficiary to reach the beneficiarys interest by attachment of present or
future distributions to or for the benefit of the beneficiary or other means. The court may limit the award
to such relief as is appropriate under the circumstances.
b. Discretionary Distributions: Bs interest in distributions that are subject to the
trustees exercise of discretionary powers are difficult for creditor to reach.
i. Under UTC 504(b), a creditor is in a worse position than a B, because
under that subsection a B can seek judicial redress for abuse of
trustees discretion by creditor cannot compel distribution.
ii. Preferred creditors: may be able to get a cord order compelling
distribution; if individual is in arrears in child support or spousal
support, UTC 504(c) says court can order trustee to make distribution
from trust even if the power is discretionary, if it can be shown that
trustee has not complied with a standard of distribution or has abused
a discretion.
SECTION 504. DISCRETIONARY TRUSTS; EFFECT OF STANDARD.
(a) In this section, child includes any person for whom an order or judgment for child support has
been entered in this or another State.
(b) Except as otherwise provided in subsection (c), whether or not a trust contains a spendthrift
provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustees
discretion, even if:
o (1) the discretion is expressed in the form of a standard of distribution; or
o (2) the trustee has abused the discretion.
(c) To the extent a trustee has not complied with a standard of distribution or has abused a discretion:
o (1) a distribution may be ordered by the court to satisfy a judgment or court order against the
beneficiary for support or maintenance of the beneficiarys child, spouse, or former spouse; and
o (2) the court shall direct the trustee to pay to the child, spouse, or former spouse such amount as
is equitable under the circumstances but not more than the amount the trustee would have been
required to distribute to or for the benefit of the beneficiary had the trustee complied with the
standard or not abused the discretion.
(d) This section does not limit the right of a beneficiary to maintain a judicial proceeding against a
trustee for an abuse of discretion or failure to comply with a standard for distribution.
(e) If the trustees or cotrustees discretion to make distributions for the trustees or cotrustees own
benefit is limited by an ascertainable standard, a creditor may not reach or compel distribution of the
beneficial interest except to the extent the interest would be subject to the creditors claim were the
beneficiary not acting as trustee or cotrustee.
c. Class Notes: How to Decide Which to Use Mandatory; Subjective
Discretionary; Ascertainable Discretionary Standard
i. Dont just do what the client wants thats not being competent
because client does know. Ask what do you want to accomplish? The
client as the goals, as attorneys, we have the means of achieving those
goals.

ii. Follow one of these 3 methods Reason being, people who look at
documents know the intention (other attorneys, probate courts, tax
courts, professional trustees all are familiar with the methods.) It also
makes problems easier to fix. Start with a KNOWN plan = easier to
follow, then easier to fix.
iii. See Handout - Its Gold.
d. Spendthrift Clauses: adds another layer of protection from claims of creditors
beyond protection that discretionary standard provides.
i. Prevents both voluntary and involuntary alienation of trust interests by
B. Precludes a B from assigning or selling interest in a trust; prevents
creditor of B from attaching the Bs interest, with the result that the
creditor must wait until after payment is made then attempt to collect
from B.
1. UTC 502 see below
2. Comment to 505: the effect of a spendthrift provision is
generally to insulate totally a Bs interest until a distribution is
made and received by the B.
a. Restatement and UTC 505(a)(2) a settlors creditors
can reach a self-settled spendthrift trust explicitly rejecting
the protections allegedly offered by an offshore or Alaskanstyle trust.
b. Consequently, the drafters rejected the approach taken by
Alaska and Delaware, both of which allow a settlor to retain
a beneficial interest immune from creditors claim. Under
the Code, whether the trust contains a spendthrift
provision or not, a creditor of the settlor may reach the
maximum amount that the trustee could have paid to the
settlor-B.
3. Example: No B shall have any right to anticipate, sell, assign,
mortgage, pledge or otherwise dispose of or encumber all or part
of any trust estate established for his benefit under this
agreement. No part of such trust estate, including income, shall
be liable for the debts or obligations of any B or be subject to
attachment, garnishment, execution, creditors bill or other legal
or equitable process.
ii. Generally affect both mandatory or discretionary standards. See UTC
503(c) below.
iii. UTC 506 allows a creditor to reach a mandatory distribution if it has
not been made within a reasonable time after designated distribution
date. In essence, at this point, payments mandated by express terms
of the trust are in effect being held by trustee as agent for B and
should be treated as part of Bs personal assets. Comment to UTC
506.
iv. Most creditor-debtor relationships are voluntary; for these creditors,
caveat emptor applies if they rely on assets held for debtor in trust,
they are stuck with spendthrift limitation. Lender beware.
SECTION 502. SPENDTHRIFT PROVISION.
a) A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a
beneficiarys interest.

b) A term of a trust providing that the interest of a beneficiary is held subject to a spendthrift trust, or
words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the
beneficiarys interest.
c) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision and,
except as otherwise provided in this [article], a creditor or assignee of the beneficiary may not reach the
interest or a distribution by the trustee before its receipt by the beneficiary.
SECTION 503. EXCEPTIONS TO SPENDTHRIFT PROVISION.
(a) In this section, child includes any person for whom an order or judgment for child support has
been entered in this or another State.
(b) A spendthrift provision is unenforceable against:
o (1) a beneficiarys child, spouse, or former spouse who has a judgment or court order against the
beneficiary for support or maintenance;
o (2) a judgment creditor who has provided services for the protection of a beneficiarys interest in
the trust; and
o (3) a claim of this State or the United States to the extent a statute of this State or federal law so
provides.
(c) A claimant against which a spendthrift provision cannot be enforced may obtain from a court an
order attaching present or future distributions to or for the benefit of the beneficiary. The court may
limit the award to such relief as is appropriate under the circumstances.
SECTION 505. CREDITORS CLAIM AGAINST SETTLOR.
(a) Whether or not the terms of a trust contain a spendthrift provision, the following rules apply:
(1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the
settlors creditors.
(2) With respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum
amount that can be distributed to or for the settlors benefit. If a trust has more than one settlor, the
amount the creditor or assignee of a particular settlor may reach may not exceed the settlors interest
in the portion of the trust attributable to that settlors contribution.
(3) After the death of a settlor, and subject to the settlors right to direct the source from which
liabilities will be paid, the property of a trust that was revocable at the settlors death is subject to
claims of the settlors creditors, costs of administration of the settlors estate, the expenses of the
settlors funeral and disposal of remains, and [statutory allowances] to a surviving spouse and
children to the extent the settlors probate estate is inadequate to satisfy those claims, costs,
expenses, and [allowances].
(b) For purposes of this section:
(1) during the period the power may be exercised, the holder of a power of withdrawal is treated in
the same manner as the settlor of a revocable trust to the extent of the property subject to the power;
and
(2) upon the lapse, release, or waiver of the power, the holder is treated as the settlor of the trust only
to the extent the value of the property affected by the lapse, release, or waiver exceeds the greater of
the amount specified in Section 2041(b)(2) or 2514(e) of the Internal Revenue Code of 1986, or
Section 2503(b) of the Internal Revenue Code of 1986, in each case as in effect on [the effective date
of this [Code]] [, or as later amended].
SECTION 506. OVERDUE DISTRIBUTION.
(a) In this section, mandatory distribution means a distribution of income or principal which the trustee is
required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the
trust. The term does not include a distribution subject to the exercise of the trustees discretion even if
(1) the discretion is expressed in the form of a standard of distribution, or

(2) the terms of the trust authorizing a distribution couple language of discretion with language of
direction.
(b) Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a
mandatory distribution of income or principal, including a distribution upon termination of the trust, if the
trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution
date.
SECTION 507. PERSONAL OBLIGATIONS OF TRUSTEE. Trust property is not subject to personal
obligations of the trustee, even if the trustee becomes insolvent or bankrupt.

III.

e. Exceptions to Spendthrift Protection Super Creditors


i. Some creditors claims do not arise voluntarily common law of
numerous states has created exceptions to spendthrift rule for these.
ii. Examples: Child trying to enforce court order for child support or
former spouse trying to enforce order for alimony.
Creditors of a Beneficiary Who is Also a Settlor
a. Revocable Trusts
b. Irrevocable Trusts
i. Modification by Consent of the Bs: If no material purpose of the trust
would be frustrated by its termination or modification, the Bs can agree
to a modification, if all of the Bs consent. Even if all the Bs do not
consent, the court may authorize modification under certain
conditions.
ii.
c. Asset Protection Trusts Foreign and Domestic Problem

MODIFICATION AND TERMINATION OF TRUSTS


I.
Revocable Trusts
a. Power Retained by the Settlor to Modify or Revoke
i. UTC 602. Revocation or Amendment of Revocable Trust.
1. (a) unless the terms of a trust expressly provide that the trust is
irrevocable, the settlor may revoke or amend the trust. This
subsection does not apply to a trust created under an instrument
executed before [the effective date of this [Code]].
2. (c) the settlor may revoke or amend a revocable trust:
a. (1) by substantial compliance with a method provided in
the terms of the trust; or
b. (2) if the terms of the trust do not provide a method or the
method provided in the terms is not expressly made
exclusive, by:
i. (A) a later will or codicil that expressly refers to the
trust or specifically devises property that would
otherwise have passed according to the terms of the
trust; or
ii. (B) any other method manifesting clear and
convincing evidence of the settlors intent.
ii. NOTES on UTC 602.
1. 602(a) presumes a trust to be revocable unless the settlor states
otherwise. If the trust is revocable, the settlor can modify or

II.

revoke terms of the trust according to the means specified in the


trust instrument.
2. 602(c)(1) permits substantial compliance for revocation, and
(c)(2) permits revocation by other means. The comments to the
section explain that an act that demonstrates the settlors intent
may constitute revocation. That being said, the UTC sets a high
standard of evidence clear and convincing for revocation to
occur by means other than the method provided in the terms of
the trust.
a. 602(c)(1)(A) permits revocation by will or codicil that
specifically refers to the trust or that devises property that
would have passed under the terms of the trust.
Irrevocable Trusts
a. Making Modification Unnecessary
i. Settlor may want to consider including in terms of trust one or more of
the following:
1. Standards of discretion that give trustee a broad range of
discretion;
2. A definition of spouse that would include only the person to
whom the settlor or a B is currently married so that divorce will
terminate any beneficial interest for that person;
3. A provision giving the Bs the power to replace the trustee with a
different, independent trustee;
4. A provision giving the trustee the power to make loans to Bs;
5. A provision giving the trustee the power to change
nondispositive provisions of the trust;
6. Powers of appointment exercisable by a spouse or other Bs.
b. Modification or Termination With Settlors Consent

UTC 411(a) provide that if settlor and all the Bs agree, they can modify (or terminate)
an irrevocable trust. Because the settlor is included in the decision, modification can
occur even if trust had a material purpose inconsistent with modification (see Material
Purpose Doctrine)
UTC 411. MODIFICATION OR TERMINATION OF NONCHARITABLE IRREVOCABLE
TRUST BY CONSENT.
(a) [Alt #1 A noncharitable irrevocable trust may be modified or terminated
upon consent of the settlor and all Bs, even if the modification or termination
is inconsistent with a material purpose of the trust.]
[Alt #2 If, upon petition, the court finds that the settlor and all Bs consent
to the modification or termination of a noncharitable revocable trust, the
court shall improve the modification or termination even if the modification
or termination is inconsistent with a material purpose of the trust.
c. Modification or Termination Without Settlors Consent (Usually After Settlors
Death)
i. Material Purpose Doctrine:
1. Claflin v. Claflin established the rule that modification by Bs will
be permitted only if the modification is not contrary to the

material purpose of the settlor. This rule prevents modification of


many common provisions in trusts.
2. The traditional common law view is that a spendthrift clause is
presumed to be a material purpose, thus precluding modification
by Bs.
ii. Modification by Consent of the Beneficiaries
UTC 411. MODIFICATION OR TERMINATION OF NONCHARITABLE IRREVOCABLE
TRUST BY CONSENT.
(b)A noncharitable irrevocable trust may be terminated upon consent of all the
Bs if the court concludes that continuance of the trust is not necessary to
achieve any material purpose of the trust. A noncharitable irrevocable trust
may be modified upon consent of all of the Bs if the court concludes that
modification is not inconsistent with a material purpose of the trust.
(c) [A spendthrift provision in the terms of the trust is not presumed to
constitute a material purpose of the trust.]
(d)(e) If not all of the beneficiaries consent to a proposed modification or
termination of the trust under subsection (a) or (b), the modification or
termination may be approved by the court if the court is satisfied that:
(1)if all of the Bs had consented, the trust could have been modified or
terminated under this section; and
(2)the interests of a B who does not consent will be adequately
protected.
[Book Note: According to 411(c), modification will be denied only if the court
determines that the spendthrift clause constitutes a material purpose of the
particular trust or that the modification would affect other material purposes of
that trust.]
iii. Representation: Some Bs may be minors or under another legal
disability, while others may not be born. Representation may be
needed for a number of reasons, including consent for things like
modification, receipt for required notices and in connection with the
resolution of disputes involving the trust.
1. If living, competent, adult B has exactly the same interest as Bs
who are not legally able to give consent, then the consent of the
living, competent, adult B will bind unborn or unascertained Bs.
2. If the B is alive but not legally competent, a guardian,
conservator, parent, agent or trustee can represent that B. UTC
303.
3. These representation rules apply to modification and termination
and are used when the trust must distribute notices and reports
to Bs.
UTC 305. APPOINTMENT OF REPRESENTATIVE
(a) If the court determines that an interest is not represented under this [article], or
that the otherwise available representation might be inadequate, the court may
appoint a [representative] to receive notice, give consent, and otherwise
represent, bind, and act on behalf of a minor, incapacitated, or unborn
individual, or a person whose identity or location is unknown. A [representative]
may be appointed to represent several persons or interests.

(b)A [representative] may act on behalf of the individual represented with respect
to any matter arising under this [Code], whether or not a judicial proceeding
concerning the trust is pending.
(c) In making decisions, a [representative] may consider general benefit accruing
to the living members of the individuals family.
iv. Changed Circumstances Equitable Deviation
1. The Doctrine of Equitable Deviation allows a court to modify a
provision to give effect to the intent of the settlor rather than to
change it. A court can modify a provision not only due to
changed circumstances, but also due to unanticipated
circumstances.
a. Courts are more willing to use this doctrine to modify
administrative terms (those addressing operation of the
trust) rather than dispositive terms (those addressing
distributions).
b. UTC 412 provides that dispositive as well as
administrative provisions may be modified due to changed
circumstances. Even termination of the trust is possible if
doing so will further the purpose of the trust.
UTC 412. MODIFICATION OR TERMINATION BECAUSE OF UNANTICIPATED
CIRCUMSTANCES OR INABILITY TO ADMINISTER TRUST EFFECTIVELY.
(a) The court may modify the administrative or dispositive terms of a trust or
terminate the trust if, because of circumstances not anticipated by the settlor,
modification or termination will further the purposes of the trust. To the extent
practicable, the modification must be made in accordance with the settlors
probable intention.
(b)The court may modify the administrative terms of a trust if continuation of the
trust on its existing terms would be impracticable or wasteful or impair the
trusts administration.
(c) Upon termination of a trust under this section, the trustee shall distribute the
trust property in a manner consistent with the purposes of the trust.
v. Modification to Fix a Mistake: if a trust provision resulted from a
mistake, then extrinsic evidence can be used to show the mistake.
Clear and convincing evidence is required to establish mistake.
1. The mistake may be either one of inducement, when the settlor
was mistaken as to a fact or the law, or one of expression, when
the language in the document fails to carry out the settlors
intent.
UTC 415. REFORMATION TO CORRECT MISTAKE.
The court may reform the terms of a trust, even if unambiguous, to conform the
terms to the settlors intention if it is proved by clear and convincing evidence that
both the settlors intent and the terms of the trust were affected by a mistake of
fact or law, whether in expression or inducement.
vi. Small Trust Termination: Trusts often contain provision permitting
termination if the value of the assets in the trust drops below a
specified amount.

UTC 414. MODIFICATION OR TERMINATION OF UNECONOMIC TRUST


(a) After notice to the qualified Bs, the trustee of a trust consisting of trust property
having a total value of less than [$50,000] may terminate the trust if the trustee
concludes that the value of the trust property is insufficient to justify the cost of
administration.
(b)The court may modify or terminate a trust or remove the trustee and appoint a
different trustee if it determines that the value of the trust property is
insufficient to justify the cost of administration.
(c) Upon termination of a trust under this section, the trustee shall distribute the
trust property in a manner consistent with the purposes of the trust.
(d)This section does not apply to an easement for conservation or preservation.
vii. Modification to Achieve Tax Objectives: UTC permits a court to
modify a trust to achieve the settlors tax objectives, as long as the
modification is not contrary to the donors probable intent, particularly
with respect to dispositive provisions.
1. Example: a trust that provides a life estate for the settlors
spouse with a power to appoint herself or their children as the
need arises, might be modified to clarify that the right to invade
is a general one, not limited by ascertainable standards in order
to obtain a marital tax deduction.
UTC 416. MODIFICATION TO ACHIVE SETTLORS TAX OBJECTIVES.
To achieve the settlors tax objectives, the court may modify the terms of a trust in
a manner that is not contrary to the settlors probable intention. The court may
provide that the modification has retroactive effect.
viii. Combining Trusts or Dividing a Trust: trustee may combine two
trusts into one or divide one trust into two if doing so would not
adversely affect the purposes of the trust or any B.
UTC 417. COMBINATION AND DIVISION OF TRUSTS
After notice to the qualified Bs, a trustee may combine two or more trusts into a
single trust or divide a trust into two or more separate trusts, fi the result does not
impair rights of any B or adversely affect achievement of the purposes of the trust.
III.

Termination
a. According to the Terms of the Trust:
i. A trust will usually terminate pursuant to its terms.
ii. A trust will also terminate if the corpus is gone.
UTC 410. MODIFICATION OR TERMINATION OF TRUST; PROCEEDINGS FOR
APPROVAL OR DISAPPROVAL.
(a) In addition to the methods of termination prescribed by Sections 411 through
414, a trust terminates to the extent the trust is revoked or expires pursuant to
its terms, no purpose of the trust remains to be achieved, or the purposes of the
trust have become unlawful, contrary to public policy, or impossible to achieve.
b. By Agreement: if the settlor and all Bs agree, they can terminate a trust. UTC
411(a).
c. Without Settlor Consent or After the Settlors Death: all provisions discussed
in connection with modification also apply to termination.

i. For example: a court can terminate a trust if all Bs agree and if the
court determines that continuance of the trust is not necessary to
achieve any material purpose of the trust. 411(b).

POWERS OF APPOINTMENT AND THE RULE AGAINST PERPETIUTIES


WHAT IS A POWER OF APPOINTMENT?
I. Definition
a. Another way to build flexibility into a trust is to give someone other than the
trustee, often a B, a power of appointment. Through a power of appointment
the settlor can give decision-making authority to another person, to be
exercised at some later time.
b. A power of appointment means that someone the settlor names has the
power to decide who will get the rust property at some future time. A power
of appointment is a nonfiduciary power.
II.
Distinguishing Between a Power of Appointment and Fiduciary Power
a. A power of appointment, in contrast with fiduciary power, is nonmandatory.
The holder of a power to appoint property (the donee) can choose to
exercise the power or not and can choose to exercise it arbitrarily, as long as
the property subject to the power is given to a permissible appointee.
i. The holder of a fiduciary power, a T, must exercise discretion, even if
the T decides not to make a distribution, and a Ts discretionary power
to distribute property as a power of appointment.
ii. Distinction is drawn between fiduciary distributive powers and powers
of appointment.
b. Example: Go transfers property to M as trustee. Trust instrument directs the
trustee to distribute income and principal to Gs children, O and N, for their
HEMS, so that they can maintain their accustomed standard of living. On
death of the survivor of the two children, trust instrument directs the trustee
to distribute the remaining principal to Gs descendants. In addition, the trust
instrument gives O a power of appointment to appoint so much or all of the
trust property to anyone, including himself, during his lifetime or at death.
i. M holds fiduciary power. She can distribute trust property only to O and
N while either of them is alive, and she must act in good faith to carry
out Gs intentions. She has a fiduciary duty of impartiality to treat
current Bs and remainder Bs fairly. She may decide not to make
distributions, but that decision must be made after considering
circumstances of the 2 Bs and decision must be reasonable.
ii. O has a power of appointment. He can appoint the trust property
entirely to himself, entire to N, or to anyone he chooses. He can choose
not to appoint the property and need not even consider whether settlor
would prefer that he appoint the property. The settlor has given him
the power of appointment because she expects him to exercise it
appropriately, but his decisions about the exercise are entirely up to
him.
III. Terminology
a. Donor: the person who creates the power of appointment
b. Donee: the person who holds the power and makes decisions using the
power. The donee does not hold title to the property and does not have
beneficial interest in the property. The donee only holds a power to appoint
the property.
c. Appointive Property: the property subject to the power
d. Permissible Appointees or Objects of the Power: the persons in whose favor
the power can be exercised

e. Takers in Default: the persons who will take the property if the donee fails to
exercise the power and the donees power terminates (often at donees
death)
f. Testamentary Power of Appointment: a power that can be exercised only by
will
g. Presently Exercisable Power of Appointment: a power the donee can exercise
during life, through an intervivos instrument. A presently exercisable power
is exercisable when it is granted.
i. Example: E is settlor of trust. In trust she provides for J for life. She also
gives J a power to appoint, by will, the property remaining in the trust
at Js death to any descendant of J. If J does not exercise power, then
on Js death the property will be distributed to her descendants, by
representation, or if no descendant is alive when J dies, then to AGS.
1. E is Donor; J is Donee; trust property is Appointive Property; Js
descendants are Permissible Appointees, and Takers in Default;
AGS is contingent taker in default. Power is testamentary power
because J can exercise the power only by will.
2. If Es trust had provided that J could exercise the power at any
time during her lifetime, in favor of any descendant of hers, by
written instrument delivered to the trustee, then the power
would be a Presently Exercisable Power.
h. General Power of Appointment: power to appoint in favor of the donee, the
donees estate, the donees creditors, or the creditors of the donees estate.
i. A general power of appointment can be broad to anyone or can be
limited to one or more of the four categories listed for example, to
the donee.
ii. The distinction between general and nongeneral powers comes from
tax law, and different tax consequences follow depending on whether a
power is general or nongeneral.
iii. Example: E grants J the power to appoint the property not just to Js
descendants but also to her estate.
i. Nongeneral Power of Appointment: A power that cannot be exercised in favor
o the donee, the donees estate, the donees creditors or creditors of the
donees estate.
i. A nongeneral power can be broad to anyone in the world other than
the donee, the donees estate, the donees creditors or the creditors of
the donees estate or it can be narrow to the settlors descendants
or to H and G.
ii. A nongeneral power may also be called a special power or limited
power.
iii. Example: E gave J a power to appoint, by will, the property remaining
in trust at Js death to any descendant of J.
j. Power of Withdrawal: the right to withdraw the property, or a specified
amount of property, from a trust. A power of withdrawal is a general power of
appointment, because the donee can withdraw property for her own benefit.
i. Example: J may withdraw from the trust an amount not exceeding
$5k/year. If J does not exercise the power of withdrawal in any year, the
power shall lapse.

k. Exclusive Power of Appointment: a nongeneral power of appointment that


can be exercised in favor of one of a group of permissible appointees, to the
exclusion of the other appointees. Most powers are exclusive powers.
i. In original example, J has exclusive power because she can appoint
property to any descendant.
l. Nonexclusive Power of Appointment: A power that must be exercised in favor
of all permissible appointees, so that each member of the group receives
something.
i. There is no requirement of equal distribution, and the amount each
appointee must receive can be the subject of controversy among the
group of permissible appointees. (Is $1 enough?).
ii. The default rule is that nongeneral powers are exclusive. Careful
drafting should clarify donors intent.
iii. Example: to any descendant of J, and when she exercises the power,
she must appoint some amount of the trust property to each of her
living descendants.

WILL VALIDITY
There are 3 types of wills: attested will (formal with 2 witnesses; drafted by lawyer
usually), holographic will (handwritten by T), and oral will (virtually unused).
INTRODUCTION
Freedom of Testation means people can opt-out of default system of intestacy by
executing a will.
Will is a donative instrument that is custom-tailored to reflect how an individual
(the T) wants property distributed at death.
Will must meet certain requirements; requirements concern document itself as well
as Ts mental state (testamentary capacity).
LEGAL REQUIREMENTS FOR THE TESTATOR
I. Age and Testamentary Capacity
a. Typically states require that T be 18 and of sound mind to make a will.
b. Testator (1) must understand he is making a will; (2) must know the extent
and character of property; and (3) must know the natural objects of his
bounty
II.
Testamentary Intent
a. Means that the decedent intended the document to be a will and to become
operative on his death.
b. Strong but rebuttable presumption of testamentary intent exists if the will
contains language to that effect, such as this is my last will and testament.
Absent that language, court may infer testamentary intent from other words
in document itself. Some courts allow extrinsic evidence.
FORMALITIES REQUIRED IN THE WILL
Prob Code Sec. 57. WHO MAY EXECUTE A WILL.
Every person who has attained the age of eighteen years, or who is or has been lawfully married, or who is a
member of the armed forces of the United States or of the auxiliaries thereof or of the maritime service at
the time the will is made, being of sound mind, shall have the right and power to make a last will and
testament, under the rules and limitations prescribed by law.
Sec. 59. REQUISITES OF A WILL.
(a) Every last will and testament, except where otherwise provided by law, shall be in writing and
signed by the testator in person or by another person for him by his direction and in his presence, and
shall, if not wholly in the handwriting of the testator, be attested by two or more credible witnesses
above the age of fourteen years who shall subscribe their names thereto in their own handwriting in the
presence of the testator. Such a will or testament may, at the time of its execution or at any subsequent
date during the lifetime of the testator and the witnesses, be made self-proved, and the testimony of the
witnesses in the probate thereof may be made unnecessary, by the affidavits of the testator and the
attesting witnesses, made before an officer authorized to administer oaths under the laws of this State.
Provided that nothing shall require an affidavit or certificate of any testator or testatrix as a prerequisite
to self-proof of a will or testament other than the certificate set out below. The affidavits shall be
evidenced by a certificate, with official seal affixed, of such officer attached or annexed to such will or
testament in form and contents substantially as follows:
THE STATE OF TEXAS
COUNTY OF ________________
Before me, the undersigned authority, on this day personally appeared _______________,
_______________, and _______________, known to me to be the testator and the witnesses,

respectively, whose names are subscribed to the annexed or foregoing instrument in their respective
capacities, and, all of said persons being by me duly sworn, the said _______________, testator,
declared to me and to the said witnesses in my presence that said instrument is his last will and
testament, and that he had willingly made and executed it as his free act and deed; and the said
witnesses, each on his oath stated to me, in the presence and hearing of the said testator, that the said
testator had declared to them that said instrument is his last will and testament, and that he executed
same as such and wanted each of them to sign it as a witness; and upon their oaths each witness stated
further that they did sign the same as witnesses in the presence of the said testator and at his request;
that he was at that time eighteen years of age or over (or being under such age, was or had been lawfully
married, or was then a member of the armed forces of the United States or of an auxiliary thereof or of
the Maritime Service) and was of sound mind; and that each of said witnesses was then at least fourteen
years of age.
___________________________, Testator
___________________________, Witness
___________________________, Witness
Witness
Subscribed and sworn to before me by the said ____________, testator, and by the said
________________ and _______________, witnesses, this ______ day of________________ A.D.
________________.
(SEAL)
(Signed)____________________________
(Official Capacity of Officer)
(b) An affidavit in form and content substantially as provided by Subsection (a) of this section is a "selfproving affidavit." A will with a self-proving affidavit subscribed and sworn to by the testator and
witnesses attached or annexed to the will is a "self-proved will." Substantial compliance with the form
of such affidavit shall suffice to cause the will to be self-proved. For this purpose, an affidavit that is
subscribed and acknowledged by the testator and subscribed and sworn to by the witnesses would
suffice as being in substantial compliance. A signature on a self-proving affidavit is considered a
signature to the will if necessary to prove that the will was signed by the testator or witnesses, or both,
but in that case, the will may not be considered a self-proved will.
(c) A self-proved will may be admitted to probate without the testimony of any subscribing witness, but
otherwise it shall be treated no differently than a will not self-proved. In particular and without limiting the
generality of the foregoing, a self-proved will may be contested, or revoked or amended by a codicil in
exactly the same fashion as a will not self-proved.
I.

Introduction:
a. Statutory formalities include that the will be in writing, be signed by T, and
attested by 2 or 3 witnesses
b. Will formalities serve four functions:
i. Evidentiary function: assure permanent reliable evidence of Ts intent
exists;
ii. Channeling function: assure Ts intent is expressed in a way
understood by those who need to interpret it.
iii. Ritual (Cautionary) Function: assure Ts intent to dispose of property is
serious and T understands this is a will, and is final.
iv. Protective Function: assure T is protected from own lack of capacity.
c. CLASS NOTE:
i. 57 Who May Execute Will:
1. Sound mind test: substantive requirement; not really form.

2. Adult, unless: member of armed forces, married/has been


married
ii. 59 Requisites of a Will:
1. Writing doesnt have to be in English; cant be videotaped
2. Signed in person, or by another person by Ts direction in his
presence
3. Not required to be signed in a particular place. Expect it to be at
the bottom.
4. Writing defined in Govt Code 311.005.
II.
The Writing Requirement
a. Courts prefer paper writings, but the writing requirement has been broadly
construed to include a medium that allows the markings to be detected.
b. Examples: piece of wood, dirty window of a car after accident.
Govt Code Sec. 311.005. GENERAL DEFINITIONS.
The following definitions apply unless the statute or context in which the word or phrase is used requires
a different definition:
(6) "Signed" includes any symbol executed or adopted by a person with present intention to authenticate
a writing. ---- NOT ON REVIEW!
III.

The Signature Requirement


a. Where to Sign
i. All state statutes and the UPC require that the T sign the will.
ii. Valid signature = Ts act of writing name, with intent to adopt the
document as her own, constitutes valid signature.
1. Best Form = Ts handwritten name in freestanding form at the
end of the document (unquestionably satisfies the signature
requirement).
iii. Sometimes T doesnt sign will at the end, although it is signed
somewhere on the will. Courts have relaxed the requirement for it to
be at the end Rest. says courts shouldnt deem a name in an
exordium alone to meet requirement, UNLESS there is additional
evidence that person adopted the document as will.
iv. TEXAS: Sign where on document. Signed by whoever, under direction
and in presence of T. notary can sign if the Govt Code is followed.
Doesnt have to be Ts full name symbol with intent to authenticate is
enough.
Govt Code Sec. 406.0165. SIGNING DOCUMENT FOR INDIVIDUAL WITH DISABILITY.
(a) A notary may sign the name of an individual who is physically unable to sign or make a mark on a
document presented for notarization if directed to do so by that individual, in the presence of a witness
who has no legal or equitable interest in any real or personal property that is the subject of, or is affected
by, the document being signed. The notary shall require identification of the witness in the same manner
as from an acknowledging person under Section 121.005, Civil Practice and Remedies Code.
(b) A notary who signs a document under this section shall write, beneath the signature, the following or
a substantially similar sentence:
"Signature affixed by notary in the presence of (name of witness), a disinterested witness, under Section
406.0165, Government Code."
(c) A signature made under this section is effective as the signature of the individual on whose behalf
the signature was made for any purpose. A subsequent bona fide purchaser for value may rely on the
signature of the notary as evidence of the individual's consent to execution of the document.

(d) In this section, "disability" means a physical impairment that impedes the ability to sign or make a
mark on a document. ----- NOT ON REVIEW!

IV.

V.

b. How to Sign
i. Best Evidence that T intends doc to be will is a full name on signature
line. Courts have recognized that Ts may use other means to indicate
that they have intent to make this doc their will.
1. subscribe means to sign below. T can sign anywhere, but
WITNESS must subscribe, sign at bottom of the will.
ii. UPC and Rest. says T may sign name or make a cross or a mark, like an
X, or use a term of relationship like Dad. These work if done with
the intent of adopting the doc as the Ts will.
c. Who Can Sign
i. If T is physically unable to sign, even with help of someone else
guiding his hand, UPC allows for someone else to sign, but provides
certain safeguard against fraud:
1. Person must be in the range of Ts senses such as hearing: the
signing doesnt have to be in Ts line of sight.
2. Hatfield gives classroom example if he can see them (even if
out of the room), it is ok. He must be able to turn right around
and see them, not have to take even a step to adjust positioning.
3. Example: T maintained conversation with witness throughout the
events; this will suffice Witness was in Ts conscious
presence.
ii. NOTE: In Muhlbauer v. Muhlbauer, Court refused to probate will when
wife guided blind husbands hand in signing will. New will would have
substituted wife for Ts children and would have made her sole B. Court
said there was no believable testimony that T ever specifically
requested any person to assist him, and there was testimony that he
was never asked to make his own mark.
Publication
a. Most states no longer require this. T used to be required to publish the
will by signifying to attesting witnesses that the doc they were being asked
to sign was Ts will this is my last will.
b. Courts began to allow T to manifest intention by behavior that indicated that
doc was will.
c. While it is not required, most attorneys routinely have T recite the particular
magic words as a matter of good form helpful if witnesses are later called
to testify in will contests as to Ts capacity and intent to make a will.
d. NOTE As a matter of law, the witnesses MUST KNOW it is a will they are
signing.
The Witness Requirement
a. Introduction: Will must be witnessed, i.e., signed by 2-3 people other than T,
in order to be valid. Most states require 2. Witnessed will is also called an
attested will.
i. Witnessing requirement is often viewed as protective function for the T
to ensure that making the will is Ts wish and that it is not signed under
duress.
ii. If there is a contest, witnesses can be required to testify in court as to
their view of Ts capacity and circumstances surrounding the will.

iii. Class Note: historical image 2 boys would have their heads smashed
together when witnessing will so they would remember it.
1. Role of Witness: to be able to come to court and testify that he
was of sound mind, everything looked fine, no gun to Ts head,
etc.
2. T can have proxy signatures, witnesses cannot have proxy
signatures.
3. Ts can sign with a mark, witness MUST sign their own name.
4. Ts need not sign at the end of the will, witnesses must subscribe.
b. Who May Be a Witness
i. Basically, any competent person. The signing of the will by an
interested witness does not invalidate the will or any provision of it.
1. Witnesses should NOT be Bs to the will. If someone has a
financial interest in the will, there is incentive to lie.
ii. Must be over the age of 14 years under 59. (This will NEVER be a
problem. Cant imagine a situation where 2 14 years would have to
save us at will execution.)
iii. Sometimes witnesses wont swear some will affirm rather than
swear, for religious or whatever reason. Witnesses should know T
enough to know his name, age, and as long as T is not doing
something really weird, that T is of sound mind.
c. Where Must the Testator and Witnesses Be?
i. Witnesses must either observe T sign the will, or T must acknowledge
to them that it is either his signature or his will.
ii. Must the Testator Sign or Acknowledge in the Witnesss Presence?
1. Kirkeby v. Covenant House:
a. Issue: whether the trial court erred in determining that Ts
1992 will was invalid because it was not acknowledged in
the presence of witnesses.
b. Holding: Neither witness validly witnessed Ts
acknowledgement. Neither witness was close enough at
hand to have known that the instrument, which was later
presented to them, was, in fact, the instrument upon which
T had previously acknowledged her signature, or whether
T had actually signed that instrument at the time she
stated her acknowledgement.
iii. Must the Witnesses Sign in the Testators Presence?
1. The witnesses MUST sign in the presence of the T. At first,
presence was defined as being in the line of sight, still the
standard in some states.
2. UPC 2-502(3) simply requires that there be at least 2
individuals, each of whom signed within a reasonable time after
he witnessed with either the signing of the will or the Ts
acknowledgement of that signature or acknowledgement.
Majority rule.
d. When the Witnesses Must Sign
i. Within a reasonable time after witnessing either the signing of the will
or the Ts acknowledgement.
ii. What if witnesses sign before T? Courts are fine with this as long as
everyone signs in one sitting one continuous event.

1. It would be difficult to prove if the rule was otherwise: Do not


have to have timestamp the signatures. Just need to be sure that
once the execution begins, no one comes in the room and no one
leaves the room until everything is signed.
iii. Class Notes: (1) in Texas, witnesses need not sign in each others
presence; (2) in Texas, T need not sign in witnesss presence, just
acknowledge for witnesses; (3) in Texas and other jx, the witness MUST
SIGN IN TS CONSCIOUS PRESENCE; (4) Best practice for T to sign then
have witnesses sign; but as long as everyone is signing at the same
time and same place [one event], then order doesnt matter.
e. Interested Witnesses
i. CLASS NOTES: 61 has 3 exceptions:
1. Even though two witnesses signed, you only need one to testify
in court, Prob. Code 84;
2. May have another witness who is not an attesting witness.
Probably more than just T and witnesses at the signing (atty). No
rule against lawyer signing as witness, but this could cause
problems if atty HAS to testify. Bottom line is that witness in
court doesnt have to be one of the attesting witnesses.
3. Witness is an heir under intestate laws: if witness/B under will
in a will contest, all they can get is the same thing they could
under intestacy.
ii. Purpose of this statute is NOT to facilitate using interested parties as
witnesses. Need disinterested witnesses; 61 and 62 provide a safety
net.
Prob Code Sec. 61. BEQUEST TO WITNESS.
Should any person be a subscribing witness to a will, and also be a legatee or devisee therein, if the will
cannot be otherwise established, such bequest shall be void, and such witness shall be allowed and
compelled to appear and give his testimony in like manner as if no such bequest had been made. But, if
in such case the witness would have been entitled to a share of the estate of the testator had there been
no will, he shall be entitled to as much of such share as shall not exceed the value of the bequest to him
in the will.
f. The Self-Proved Will
i. When proponent of a will starts the probate process, the proponent
must prove the will before it can be admitted to probate. Proving
requires testimony of witnesses, either in court OR by affidavit.
ii. A self-proved affidavit satisfies the requirements for execution without
the testimony of witnesses.
iii. Once having attested under oath before notary that they were
witnesses to the Ts signing, and that to the best of [their] knowledge
the T is 18 or older, of sound mind, and under no constraint or undue
influence, the witnesses do not have to do so again in court.
iv. Witnesses may, however, still be called for other reasons to speak to
facts surrounding signing in case there are issues about Ts
competency or whether others appeared to be unduly influencing T.
v. There are 2 DOCS the will, and the evidence (self proving
affidavit). This is not part of the will; it is not required (though failure
to do so is malpractice per se). Document should NOT be contiguously
paginated because it is two separate documents. Language comes

STRAIGHT from 59. If witnesses sign, there is no need for them to


come to court. It is a bit of a nuisance because you have to find a
notary (but most legal secs are notaries.)
1. Issue: what if W or T signed SPA, but not the will what happens?
RULE you can count the signature ONCE. So you can count it
for the will, but then you wont have an SPA. Will is validated,
however.
2. A signature on a self-proving affidavit is considered a signature to the will if
necessary to prove that the will was signed by the testator or witnesses, or both,
but in that case, the will may not be considered a self-proved will. - 59
3. Attestation Clause: not require either. Signature is prima facie
evidence that what is said happened. If both witnesses are dead,
and no one contests, the attestation clause is fine. Usually
secretaries are the witnesses of wills use the secretary who will
be around, not the flaky secretaries who change jobs a lot.
g. The Notarized Will
i. UPC provides that a will can be valid if T acknowledges before notary,
even if there are not 2 witnesses. Different than SPA because this rule
subs the notary for the other 2 witnesses and actually validates the will
itself.
h. Putting the Formalities Into Practice
i. Johns, Will Execution Ceremonies: Securing a Clients Last
Wishes (Day 26 HO)
1. Fear of death/reminder of mortality lead to procrastination in
making will.
2. Superstitions surround will execution ceremony ceremonies
impress upon all those involved the significance of the act and to
evidence Ts wishes for disposition of property after death.
3. Will execution ceremonies in US are based on English statutes
a. Statute of Wills of 1540, which gave power to devise
certain lands held in fee simple, required devises to be in
writing, no necessity that the writing be made by the T, or
that it be signed.
b. SOF provided more formal requirements, including writing
requirement and signature requirement, attested by 3-4
witnesses
c. Wills Act of 1837 established the same requirements for
disposing of real and personal property by will. Execution
requirements included that the will be signed at the foot
(end), and that T sign the end of the will before at least 2
witnesses.
4. States adopted wither SOW or WA Wills validly executed in one
state might not be formally valid in another, unless curative
statute had been adopted by probating state, granting full
probate dignities to will executed under formalities required in
other jxs.
5. UPC is compromise between different classifications of
formalities.
6. RECOMMENDED FORMALITIES:
a. Location/Interruptions should not be either

b. Gathering/Seating of Participants attorney, T, 2


disinterested witnesses, notary public; no family members.
c. General Intro/Explanations: all parties should be
introduced; attorney should explain how ceremony will
proceed and significance and general purpose of ceremony.
No jokes during ceremony.
d. Questions to T: Notary administers oath to T. Ts
testamentary intent and mental capacity should be
established by asking him questions demonstrating that T
understands the transaction, comprehends generally the
nature and extent of property to be disposed of,
remembers who are the natural objects of his bounty and
understands nature and effect of the desired disposition.
e. Execution by T: will should be comprised of same paper
and stapled. T should sign/initial each page; read aloud the
testimonium clause; fill in date and sign at the end.
f. Attestation by Witnesses: notary should administer oath to
witnesses; witnesses sign/initial each page; sign and write
addresses next to names in attestation clause. Read aloud
clause and write, under clause, designated phrase. Other
witness does same.
g. Notary Records: notary should complete jurat and record in
journal.
h. Announce End of Execution: attorney announces will is
executed
i. Conclusion: T instructed as to safekeeping of will
7. SPECIAL STEPS IF CONTEST IS ANTICIPATED:
a. Prior to ceremony, ask about Ts meds and history of
mental issues
b. Arrangements for videotaping made DO NOT DO THIS!
c. # of witnesses should be increased, and carefully chosen
d. Attorney should ask additional questions of T during
ceremony
e. After execution, T and witnesses should execute SPA
f. Prior wills that demonstrate consistent desired plan of
distribution should be saved. Inconsistent prior wills should
be destroyed.
HOLOGRAPHIC WILLS
I. Introduction
a. State statutes usually require two witnesses to validate a will. However,
an exception to this rule is the holographic will.
b. If a will or a material portion of the will is written in the testators
handwriting, then the will may be validated without any witnesses as a
holographic will.
c. UPC 2-502(b) provides that such an unwitnessed or unattested will is
still valid if the signature and the material portions of the document are
in the testators handwriting. UPC does not require that the will be dated.
II.
Class Notes:

III.

IV.

a. In Ts handwriting, signed by T, no witnesses required for validity BUT


you can have holographic will with witnesses, self-proving affidavit, etc.
b. ALL other requirements must be met. The ONLY thing being holographic
means is that witnesses are not required for validity.
i. Must have testamentary intention, capacity, etc. The testamentary
intention could be ambiguous because it doesnt say will at the
top or follow the usual format.
c. Historically, EVERYTHING had to be in Ts handwriting.
i. Surplusage Doctrine: extra words are ok. St. Anthonys Hotel on
stationary was deemed ok.
d. Why dispense with witnesses?
i. Quantity of evidence it is much easier to authenticate
(handwriting expert can say yep this is Nanas handwriting.)
Usually you use witnesses to authenticate, but that is not necessary
here.
ii. Takes fear of duress out will. If someone has the time to write out
their whole will chances for duress, undue influence, fraud are
very slim.
e. In In re Estate of Edward Frank Muder, Court softens 2nd generation
requirements. Result is somewhere between 2nd and 3rd generation.
Three Generations of Holographic Wills
a. First Generation a typical first generation statute provides that: A
holographic will is one that is entirely written, dated, and signed by
the hand of the testator. It is subject to no other form, and need not be
witnessed.
i. EVERYTHING must be in handwriting (except maybe stationary title);
signed and dated by T, no witnesses.
ii. Surplusage theory, invented by Courts, will be applied if equity
requires.
b. Second Generation a typical second generation statute provides that:
A will which does not comply with the requirements for an attested will is
valid as a holographic will, whether or not witnessed, if the signature
and the material provisions are in the handwriting of the
testator.
i. Requires a verb, gifting language, and the gift. Must make sense if
you only read what is in the Ts handwriting. Probably no date
requirement.
ii. UPC provision means there is gifting language, I give, I devise
focused on verb; name of B and property being gifted.
iii. Texas uses surplusage doctrine, 2nd gen.
c. Third Generation a typical third generation that: A will which does not
comply with the requirements for an attested will is valid as a holographic
will, whether or not witnessed, if the signature and the material
portions of the document are in the handwriting of the testator.
i. UPC portion means that property and B are identified focused on
WHAT and WHO.
Issues: Testamentary Intention: intention to dispose of property at death.
a. What amount must be in testators handwriting?
b. Does this document reflect testators intentions?

i. If the Ts intention is really clear, some states will allow substantial


compliance. TEXAS DOES NOT.
ii. UPC has similar statute, harmless error as long as T intended
document to be his will, then the court will enforce it as such.
UPC 2-502(b). HOLOGRAPHIC WILLS. Not on Review
A will that does not comply with subsection (a) is valid as a holographic will,
whether or not witnessed, if the signature and material portions of the document
are in the testators handwriting.
CHOICE OF LAW Not on Review
Class Notes:
Domiciled where you die = probate court with jx over estate.
Question: executed will in Texas, needs to be probated in Ohio, which states laws
apply?
o All states will accept as valid a will that was valid in the state it was
executed.
Hypos:
o Valid in Texas when executed, die in Alaska valid
o Invalid in Texas when executed, die in Alaska and will was valid in Alaska
valid. Can choose either place to make it effective.
Will doesnt become invalid just because you move.
o Best practice, however, is to execute a new will when you move. Especially if
you move out of Texas because of the community property rules. Move from
TX to OK ask attorney how property rights will be interpreted.
Real Property: Texas courts have jx over Texas dirt. Real property in Texas, die in
Ohio, must have ancillary proceeding in Texas probate court.
Formalities stay the same as state of execution, but there are other issues.
o Laws of formalities valid where you were executing or valid where you died.
Cannot add choice of law provision though telling the court what to do in
overseeing executor will not work.
o Can say regardless of where I die, heirs is interpreted under Tx statutes.
Thats defining, NOT choice of law. Effective because it reflects discretion of
T.
o Community property to separate property laws of state you move to.
ETHICAL ISSUES IN WILL DRAFTING
I. Conflicts of Interest
a. ISSUES: whether it is ethical for a lawyer (1) to name oneself as executor or
PR, (2) to name oneself as a B in a clients will, (3) to include a clause
limiting ones liability in a will, and (4) to represent husbands or wives or T
and B.
i. Whether and when the attorney might have a duty to contact a client
about changes in the law that affect estate plan if attorney keeps the
will he drafted.
b. Drafting Attorneys as Fiduciaries Its giving yourself a job.
i. Traditional Rule: atty may not seek appoint as a fiduciary though may
accept if asked. Arguably conflict of interest because it will generate
fees not only for acting as attorney for the estate but also for acting as
PR. Risk that lawyer-PR will retain himself as attorney rather than

exercising independent judgment. Good form drafting attorneys


should avoid naming themselves as executors.
ii. When is this ok? Presumption is that you should not do this, but ok if
done without influence to T, no improper solicitation, PLUS informed
consent, and no other conflict issues.
iii. T must be properly informed: in writing, in plain English, info about
what executor does; anyone can be executor (doesnt have to be
attorney); info about cost.
iv. Pros and Cons: May make sense every once in a while; presumption is
DONT do it.
1. Upsides of lawyer serving: he is familiar with will and Ts intent.
Can see big picture-knows all the dirty secrets, everyone
involved, etc. Would be efficient.
2. Downsides: most lawyers are not equipped to handle these
responsibilities because executor involves different skills set than
attorney.
ACTEC COMMENTARY ON MRPC 1.7 Not on Review. Covered in basic language above.
Selection of Fiduciaries. Lawyer advising client about selction and appointment of
fiduciary should make full disclosure to client about any benefits that lawyer may
receive as a result of appointment.
Appointment of Scrivener as Fiduciary. T is free to select and appoint whoever he
wants to a fiduciary office (trustee, executor, attorney in fact). MRPC doesnt
explicitly deal with proprietary of lawyer preparing a will/other doc naming lawyer
to fiduciary office. Atty can be appointed if it doesnt violation MRPC 1.7 conflict of
interest, is not product of undue influence or improper solicitation.
c. Exculpatory Clauses
i. Exonerates fiduciary from liability for certain acts and omissions
affecting a fiduciary estate.
ii. Limits liability. Makes it harder for B to sue executor or trustee. As
executor, you want exculpatory clause lowers standard of care.
Conflict between interests of client and attorney as executor. Routine
to have exculpatory clause when E is a non-professional.
iii. If attorney uses clause and is executor, must get informed consent
from client tell client clause is for my benefit; makes it harder for
your kids to sue me, etc.
ACTEC COMMENTARY ON MRPC 1.8
Exculpatory Clauses. Under some circumstances and at clients request, attorney
may include clause in doc drafted by attorney for client that appoints lawyer to
fiduciary office. Must get informed consent from an unrelated client. Usually
desired by client who appoints non-pro or family member as fiduciary.
d. Drafting Attorney as Beneficiary
i. An estate planning attorney should absolutely avoid naming himself
or family members as Bs of a will he is drafting for an unrelated client.
Raises presumption of undue influence.
ii. It is ok if it is a family member. Close familial relationship doesnt
mean you have to be blood-related.
iii. It is ok if it is not a substantial gift; didnt ask for it; no undue influence,
etc.

iv. STILL. Just dont do it. Clients can pay fees, not give gifts.
ACTEC COMMENTARY ON MRPC 1.8
Gifts to Lawyer. MRPC 1.8 generally prohibits lawyer from soliciting a substantial
gift from a client, including a testamentary gift, or preparing for client an
instrument that gives lawyer or person related to lawyer a substantial gift. The
substantiality of a gift is determined by reference both to the size of the clients
estate and to the sixe of the estate of the designated recipient.
e. Representing Multiple Clients
i. Husbands and Wives an estate planning attorney must always be
aware of conflicts inherent in representing husbands and wives since
rep of one may affect ability to rep the other. Complications come
down to conflict of interest theme.
1. Potential for conflict:
a. Assets the other doesnt know about, and wants to give to
someone else; bills the other doesnt know about; children
the other doesnt know about; bf/gf the other doesnt know
about.
b. One is planning to get divorced and the other does not
know
c. Difference in desires about what to do with the property
d. Fact that there is confidential information from one client
2. Separate Rep, Diff Lawyer: I only represent the one that makes $
(safest)
a. Makes your life easier. Downside is that the clients are
paying for two lawyers; more complicated; no one sees the
BIG PIC.
b. If they come in together, chances are they wont respond
positively to telling them one needs another lawyer lose
both.
c. Situations where pure separate rep is requested/needed is
obvious.
3. Separate Rep, Same Lawyer: worst choice. Risk is neither client
hires you.
a. Doesnt solve conflicts problem, client may tell you a secret
that makes it impossible for you to do your job for him. You
must withdraw cant disclose secret, and cant rep other
knowing secret.
4. Jointly: what they wanted when they came in together. Most
common.
a. Anticipate problems, want help solving those problems.
b. They need to understand confidentiality issues one
comes in without the other and tells secret, you must tell
the other.
i. I keep no secrets, means secrets that are relevant
to what is going on. Cheating is not necessarily
relevant. Cheating that has an effect on what cheater
wants to do with the will is relevant, so you must
disclose to the other spouse.

c. We have been talking husbands and wives, but these rules


on rep apply to any combination of multiple clients.
Mother/son, etc.
d. TELL THEM IN WRITING what joint rep means and that they
have chosen to use this form of representation.
ACTECT COMMENTARY ON MRPC 1.7
Joint or Separate Representation. A lawyer usually reps multiple clients jointly.
However, rep may be separate. May also rep other related clients separately with
respect to related matters. Such representations should be undertake with
informed consent of each client, confirmed in writing. Writing may be contained in
engagement letter that covers other subjects as well.
ii. Beneficiary and Testator
1. Attorneys are often asked by someone other than potential T to
draft a will for the T. While it is not unethical, attorneys must be
aware of the potential conflicts.
2. Lawyer must exercise particular care if existing client asks lawyer
to prepare will/trust for another person that will benefit the
client, especially if client is paying the cost of the services.
ACTEC COMMENTARY ON MRPC 1.7
If repping both existing client and new client would create risk of rep being materially
limited, rep can only be undertaken as permitted under MRPC 1.7(b); in any case,
lawyer must comply with 1.8(f) and should consider cautioning both clients of
possibility that existing client may be presumed to have exerted undue influence on
other client because the existing client was involved in procuring doc.
II.

Duty to Produce and Keep the Will


a. Once a will has been executed, there are several alternatives for
safeguarding it:
i. Client may take it home possibility that it could get lost or client will
change it
ii. Lawyer may suggest retaining original for safekeeping in clients file.
1. Lawyer then has a duty to keep the will in a safe place, like a
vault, regardless of whether the T continues to use lawyers
services.
2. If lawyer retires and sells practice, lawyer who takes the will from
another lawyer in this situation inherits the duty to keep the will
safe.
3. Lawyer could also, under UPC, deposit the will with the court if it
is sealed and kept confidential; During Ts lifetime the will may
only be delivered to T or to someone authorized by T to receive
the will.
b. When client or former client dies, the lawyer who has retained the will has a
duty to produce it within a reasonable time.
i. Business Practice keep the will so that they will be hired to represent
executor. This is why it is a little suspicious could be conflict of
interest.
1. Also, fear of losing doc (tort) and fear that client is your client
forever.
ii. Practical Reason what is client going to do with it?

c. Can do this as long as you make it perfectly clear in writing that you have
the will, you dont have to be hired (but can be hired) by executor, etc.
d. Problem with retaining docs estate planning involves tax planning, tax
statutes change all the time. Questions arise as to continued duty to inform
client about tax law changes that could effect the estate.
i. Example: L prepared and completed estate plan for C. At Cs request, L
retained original documents executed by C. L performed no other legal
work for C in the following two years but has no reason to believe that
C has engaged other counsel. Ls representation of C is dormant. L
may, but is not obligated to, communicate with C regarding changes in
the law. If L communicates with C about changes in the law, but is not
asked by C to perform any legal services, Ls representation remains
dormant. C is property characterized as a client and not a former client
for MRPC purposes.
e. Class Notes: Reaping/Harvesting Estates
i. There is value in people dying off. Something to think about when
buying a practice of estate planning attorney.
ii. On the other hand it is the lawyers headach to make sure you can find
the file.
iii. Worry is that there may be an ongoing duty to client to keep them
informed on changes of the law.
1. NO DUTY, but attorneys still worry about it. Murky subject.
2. When the will is drafted, letter is sent to client saying this
concludes my representation, you can call me if you need future
services, I have your will so tell the family. Later huge changes
to tax law technically no duty, but what does the client
expect?!
3. 800 clients undertake letter campaign:
a. How do you do this? Must have enough staff, correct
addresses, etc.
b. Kick a sleeping dog you contact client with update after
telling her you WONT update her. Does she expect future
updates?
c. It looks like you are trying to solicit business, and thats
cheesy.
f. Class Notes: What are the Ethics Rules?
i. Govern conduct. Violate them subject to discipline (disbarred,
suspended, reprimanded, fined). Cannot bring legal action on these
violations.
ii. Malpractice differs because it is premised on the client being damaged
attorney didnt act as a reasonably prudent attorney; could also be
predicated on contract. Can use model rules to determine how a
prudent attorney should act, though.
iii. Malpractice claims are on the rise for trust and estate attorneys
highly emotional situation; disappointed Bs; $ on table is changing
hands dead persons property is up for grabs; technical aspects it
is very easy to make mistakes.
g. Class Notes: How do discipline and malpractice differ from will contest?
i. Doesnt seek damages, seeking to have that document declared as
NOT the will

III.

ii. Purpose is to have the document tossed out


iii. Consequences: if there is a previous will, that will is controlling now if
contest is successful; if there was no will, then the property passes
under intestacy statutes
Drafting Software, Mistakes and the Unauthorized Practice of Law
a. Problems for people who use the programs. Issue for these Ts is the potential
mistakes non-lawyers may unwittingly make. Tax issues are HUGE under
forms.
b. Questions about unauthorized practice of law state bars and plaintiffs in
class action suits are pursuing software producers and internet sites under
statutes that prohibit unauthorized practice of law
i. Example: unauthorized practice because providing legal docs without
adequate atty supervision

INTERPRETING THE WILL


WHAT CONSTITUTES THE WILL?
I. Introduction
a. First question for probate courts which docs did T actually intend to be last
will and testament. Will usually consists of one doc, signed by T and
witnesses and notarized. There may be several pieces of paper that make up
the will.
b. Doctrines of integration then 4 Corners, with incorporation by reference
and acts of independent significance statutory provisions
II.
Integration
a. A probate court presented with a will must ensure that the doc being
probated consists of the pages that were present at the execution ceremony
which T intended to be par of the will.
b. Doctrine of Integration: process of recognizing various pages or docs as a
single will. If the pages of the will are fastened together, an inference arises
that the T intended them all to be part of one doc. T doesnt have to sign
every page.
c. To help courts, attorney should draft the will with the pages and lines
numbered, use one font type and size and carry sentences from one page to
the next so it is clear they were drafted at the same time. Staple doc, T and
witnesses should initial and date each page.
d. Class Hypo: 20 page will; small talk; lots of docs being signed (will, trust,
powers of atty). When client signed will, pg. 17 was left on copy room floor.
Is it part of the will?
i. NO. Only pages present at time of execution and intended by testator.
At that point, gather everyone up, go to the clients house and reexecute; dont bill client. Who would ever know?! Impermissible
waters dont do it people have incentives to find out if anything
went wrong.
III. Incorporation by Reference
a. Certain docs in addition to will itself may be relevant to understanding Ts
overall intent.
b. Incorporation by Reference doctrine: permits court to include additional doc
or writing as part of Ts will if (1) the T intends it to be so included, (2) the
doc or writing is in existence at the time the will is executed, and (3) is
sufficiently described so it can be readily identified.
i. RULE: if the doctrine applies, the incorporated document as it existed
on the day it was executed is deemed to be part of the will as if the
doc were literally typed into the will or attached as an exhibit.
c. Later Changes to incorporated doc generally are NOT incorporated by
reference; like any other change to estate plan, the require compliance with
will execution formalities.
d. Class Hypo: T has holographic will, names E as executor instructs E to
distribute property according to little black book in nightstand.
i. Problem: Allows T to get out of using will formalities - for the rest of his
life he can change the contents every night, get his wife to change it,
etc. We have formalities for a reason (protection from fraud,
evidentiary concerns, etc.) These are invitations to litigation no
telling when each page was written.

ii. Clients want to be able to do this because they want to be able to


change their minds without consulting lawyer. Use Pour over
instead pours over to trust; if pour over isnt operative or trust has
been revoked, then will incorporates terms of trust. Brings instrument
back to life.
iii. UPC 2-510 must be in existence at time will is executed; nothing
may be added.
UPC 2-510. INCORPORATION BY REFERENCE.
A writing in existence when a will is executed may be incorporated by reference if
the language of the will manifests this intent and describes the writing sufficiently
to permit its identification.
IV.

V.

Republication by Codicil
a. Ts often execute codicils (instruments that partially revoke a prior will)
these have the same effect as if they were executed as part of the orginal
will. Codicils are like mini-wills
b. Doctrine of Republication by Codicil: a codicil incorporates all the provisions
of the will it is updating. Rep. by Codicil is typically CL.
i. Provides that if a T executes a will and later executes a codicil to that
will, the will begins to run again from the date of execution of codicil.
So codicil not only includes its own provisions but it also includes
provisions of original doc.
ii. Republication moves the date of the will forward and changes
applicable dates for application of other doctrines inc. by reference,
revocation by marriage, and omitted children.
c. Class Notes: Technically a codicil is a will. Not two different types of docs like
will vs trust
i. Intended to AMEND rather than revoke prior will.
ii. Formalities same as will. 2 witnesses, testator, SPA Codicil to will
executed on..
iii. Not very common now because you can just change & reprint the will
on computer
iv. Hypo: Will (3/1/2010); Codicil (3/1/2012). Whats date of will? 3/1/2012.
This is important because there could be changes in property or
persons. Deemed to have re-executed the will codicil affirms
previous will and makes changes.
Events of Independent Significance
a. Doctrine of events of independent significance allows the probate court to
look to events or acts outside the 4 corners of the will to determine which
property goes to which Bs.
i. Events of independent significance are otherwise objective events that
occur in the outside world without regard to Ts specific intent as to
who should receive what property at Ts death. Good drafting refer to
events that are clearly independent of Ts dispositive plan.
ii. Examples: birth, death, and adoption of children as well as act of
acquiring or disposing of property. Things that happen that affect the
will, but not done with intent to affect the will You dont have
children to manipulate will formalities.

b. Class notes: significant to the will, but significance is independent to the will
somehow.
i. Example: I give $ to my children. Then 10 years later T has another
child.
ii. Example: put tape on things you want from Nana. These are NOT
things of independent significance these are done so Nanas
intentions are carried out. Doing this solely to make gifts at death.
iii. Example: Car and bank account #123456 to B, if he survives me but if
not to my sister L. Under the doctrine, a court may declare this
provision valid because Bs survival (or not) is an event that has
significance apart from its effect upon the dispositions made by Ts
will. The will as written and which complies with the required
formalities anticipates this event.
1. Type of car didnt buy and sell cars to manipulate who gets it
2. Bank account doesnt matter if amount changes, B gets
balance.
iv. IMPORTANT: depositing items in a safe, safe deposit box, then
referencing the location is fine as an act of independent significance. If
she had said the items in the top desk drawer, NOT independently
significant.
v. Rationale these acts/events are UNLIKELY to be easily manipulated
by a third party. It is easy to take things out of a drawer; it is not easy
to take things out of a safe.
vi. Goal protect Ts intent so, we want to prevent manipulation by 3rd
party. It is unlikely that T can be tricked into putting something in a
safe deposit box.
UPC 2-512. EVENTS OF INDEPENDENT SIGNIFICANCE
A will may dispose of property by reference to acts and events that have
significance apart from their effect upon the dispositions made by the will, whether
they occur before or after the execution of the will or before or after the Ts death.
The execution or revocation of another individuals will is such an event.
INTERPRETING THE MEANING OF A WILL USING EXTRINSIC EVIDENCE
I. Class Notes
a. Interpretation relies on plain meaning of the words, looks at will as a whole,
integrating all provisions = 4 Corners Doctrine. Sometimes more than one
interpretation is possible (ambiguity). (a) Which interpretation do we use? (b)
use extrinsic evidence?
i. Courts are hesitant to use extrinsic evidence (anything outside the 4
corners) because of slipper slope we wouldnt need wills eventually.
Courts TODAY are much more willing to look at extrinsic evidence to
be fair to Ts intent. Pushing us away from FORM towards FAIR.
b. If ambiguities cannot be resolved, the gift fails. It is VOID.
II.
Resolving Ambiguities The Historical View
a. Test: in order for court to determine Ts wishes and not defeat them, it must
consider language interpreted in light of all of the surrounding
circumstances.
i. 4 Corners Doctrine: Use plain meaning of language; Read various
provisions together to give effect to as many provisions of the will as
possible. Historically was the RULE, now it is the GOAL.

III.

IV.

b. Patent Ambiguity: one that appears on the face of the will itself. Example: I
leave all of my property as follows to A, to B, and to C. Did T make
mistake and forget to leave the last to someone, or mean to say 1/3 to A,
B, and C? Court can tell there is problem just by looking at the will.
Ambiguous because of things within the 4 corners.
c. Latent Ambiguity: a provision that is not apparent upon reading the will but
rather becomes apparent when the provisions are applied. Example: I leave
$10k to John Smith. T knew 2 John Smiths very well and it is not clear which
one he meant. The court does not know until they look for John Smith that
there is a problem.
i. Courts historically would consider latent ambiguities with extrinsic
evidence. These ambiguities are only noticed when we consider
extrinsic evidence, so dont stop there look at EE until ambiguity is
resolved.
Resolving Ambiguities The Modern View
a. Modern rule focuses on the substance rather than the form of the ambiguity.
No distinction between latent and patent; if ambiguous, all relevant extrinsic
evidence is used to resolve.
b. Rest. 3d 10.2: in seeking to determine the donors intention, all relevant
evidence, whether direct or circumstantial, may be considered, including the
text of the donative doc and relevant extrinsic evidence.
i. Extrinsic Evidence time to which evidence relates primary focus is
on Ts intention at time of execution, but post-execution events can
sometimes be relevant in determining donors intention. Example: post
execution statements of T can relate to donors intention at time of
execution. Additionally, if donative doc was ambiguous when executed,
post-execution evidence of intent may be considered in resolving
ambiguity if they shed light on donors intent at time of execution or on
what donors intent would probably then have been had ambiguity
been recognized or subsequent event anticipated.
c. Courts impose constraints on considering such evidence if will is not
ambiguous first question is whether there is an ambiguity with regard to
intent in the first place.
Extrinsic Evidence and Mistake Reformation of Wills
a. Restatement and UPC support the view that reformation for mistake should
be allowed. Require clear and convincing evidence. NOTE -- a mistake isnt
really an ambiguity.
b. Texas does NOT allow mistakes to be fixed. The lawyer should have been
more careful; remedy shouldnt be reformation of the will, the remedy is to
sue the lawyer.
c. Drafting lawyers like when the court fixes mistakes; down side is that you
have to go in and admit your mistake. Mitigates damages, though.
d. Texas: B cannot sue drafting lawyer for malpractice because no one has
privity with lawyer lawyers client is DEAD. Therefore, no remedy for Bs.
The executor, however, can sue if ALL property went down in value.

INTERPRETING THE MEANING OF A WILL USING THE RULES OF CONSTRUCTION


I. Classification of Devises
a. Classification matters because certain doctrines, like ademption, apply only
to specific devices; also important in doctrine of abatement.

REST. 3D OF PROP: WILLS & OTHER DONATIVE TRANSFERS 5.1.


CLASSIFICATION OF DEVISES.
Devises are classified as special, general, demonstrative or residuary:
(a) A specific devise is a testamentary disposition of a specifically Ided asset
(b)A general devise is a testamentary disposition, usually of a specified amount of
money or quantity of property, that is payable from the general assets of the
estate.
(c) A demonstrative devise is a testamentary disposition, usually of a specified
amount of money or quantity of property, that is primarily payable from a
designated source, but is secondarily payable from the general assets of the
estate to the extent that the primary source is insufficient. [Counterintuitive]
(d)A residuary devise is a testamentary disposition of property of the Ts net
probate estate not disposed by a specific, general, or demonstrative devise.
Example: T leaves a will that makes the following bequests: My house at 123 Main to L
(specific devise); $100k to Red Cross (general devise); $25k from the proceeds of the
sale of IBM stock (demonstrative devise); and the rest, residue and remainder of my
estate to B (residuary devise).
II.

Rules of Construction Applicable Only to Wills


a. What is included in a Bequest of All My Property will may provide for the
passage of all property the T owns at death and all property acquired by the
estate after Ts death.
b. Lapse and Anti-Lapse What Happens to a Bequest
i. At CL, bequest to someone who died before T died would fail or
lapse. UPC says:
UPC 2-604. FAILURE OF TESTAMENTARY PROVISION.
(a) Except as provided in 2-603, a devise, other than a residuary devise, that fails
for any reason becomes a part of the residue.
(b)Except as provided in 2-603, if the residue is devised to 2 or more persons, the
share of a residuary devisee that fails for any reason passes to the other
residuary devisee, or to other residuary devisees in proportion to the interest of
each in the remaining part of the residue.
[(b) reflects CL rule that if a bequest is made to members of a class and one of the
class dies before T, the gift to that class member lapses, and that gift is divided
among the remaining members.
UPC 2-603. ANTILAPSE; DECEASED DEVISEE; CLASS GIFTS.
(b)[Substitute Gift.] If a devisee fails to survive the T and is a grandparent, a
descendant of a grandparent, or a stepchild of either the T or the donor of a
power of appointment exercised by the Ts will, the following apply:
a. (1) Except as provided in paragraph (4), if the devise is not in the form of
a class gift and the deceased devisee leaves surviving descendants, a
substitute gift is created in the devisees surviving descendants. They
take by representation of the property to which the devisee would have
been entitled had the devisee survived the T.
b. (2) Except as provided in paragraph (4), if the devise is in the form of a
class gift, other than a devise to issue, descendants, heirs of the
body, heirs, next to kin, relatives, or family, or a class described
by language of similar import, a substitute gift is created in the surviving
descendants of any deceased devisee. The property to which the devisees

would have been entitled had all of them survived the T passes to the
surviving devisees and the surviving descendants of the deceased
devisees. Each surviving devisee takes the share to which he would have
been entitled had the deceased devisees survived the T. Each deceased
devisees surviving descendants who are substituted for the deceased
devisee take by representation the share to which the deceased devisee
would have been entitled had the deceased devisee survived the T. For
the purposes of this paragraph, deceased devisee means a class
member who failed to survive the T and left one or more surviving
descendants.
c. (3) For the purposes of 2-601, words of survivorship, such as in a devise
to an individual if he survives me, or in a devise to my surviving
children, are not, in the absence of additional evidence, sufficient
indication of an intent contrary to the application of this section.
d. (4) if the will creates an alternative devise with respect to a devise for
which a substitute gift is created by paragraph (1) or (2), the substitute
gift is superseded by the alternative devise only if an expressly
designated devisee of the alternative devise is entitled to take under the
will.
NOTE: 4 elements must be met in order for the antilapse statute 2-603 to apply:
The intended B must predecease the T or be deemed to have predeceased T
The intended B must leave living descendants
The intended B must be a family member, defined as the Ts grandparents, a
descendant of the grandparents or the Ts stepchild; the reach of the statute is
very inclusive, covering almost all relatives who would receive property if the T
died intestate.
The will must neither provide for an alternative gift (to a taker in default) nor
state specifically that the antilapse rules are not to apply, because such a
statement would supercede application of the default rules.
NOTE: if the antilapse provisions of UPC 2-603 do not apply, the gift will lapse and
become part of the residue.
ii. Contrary Intent and Words of Survivorship
1. COMMENT: drafters note that one of the most significant
questions in lapse cases is whether mere words of survivorship
such as in a devise to my daughter, A, if A survives me, or to
my surviving children automatically defeat the antilapse
statute. If they do, then As gift would lapse and would not be
saved for her descendants under the antilapse statute. If they do
not, then As gift will be preserved and will be given to her
descendants. statute should be given the WIDEST POSSIBLE
CHANCE to operate and should be defeated ONLY by finding of
intention that directly contradicts the sub gift created by the
statute.
c. Ademption by Extinction
i. T may refer to property in his will that he owns at date of execution but
no longer owns many years later when he dies. If this happens
issue: whether to ignore bequest as if it does not exist (to adeem the
gift) or to substitute something else and give the sub to the B.

ii. Ademption by extinction only applies to specific devises and not to


general or residuary devises.
iii. Two theories:
1. Identity theory: majority and historical approach; you identify
property on date will is executed. If you cant find property, no
gift.
2. Intention theory: UPC: property is gone, what would T want? Look
at all facts and circumstances to determine what T would want.
Even under UPC, the default rule is the Identity Theory though;
3. UPC 2-606 adopts intention theory, but only in 6 limited
situations (see statute)
iv. UPC 2-605 provides another exception to ademption by extinction.
Exception applies to bequests of securities (whether specific or
general) owned by the T.
UPC 2-606. NONADEMPTION OF SPECIFIC DEVISES; UNPAID PROCEEDS OF
SALE, CONDEMNATION, OR INSURANCE; SALE BY CONSERVATOR OR AGENT.
(a) A specific devisee has a right to specifically devised property in the Ts estate at
the Ts death and to:
(1) any balance of the purchase price, together with any security
agreement, owed by a purchaser at the Ts death by reason of sale of the
property;
(2) any amount of a condemnation award for the taking the property
unpaid at death;
(3) any proceeds unpaid at death on fire or casualty insurance on or other
recovery for injury to the property;
(4) any property owned by the T at death and acquired as a result of
foreclosure, or obtained in lieu of foreclosure, of the security interest for a
specifically devised obligation;
(5) any real property or tangible personal property owned by T at death
which the T acquired as a replacement for specifically devised real
property or tangible personal property [Authors note: the drafters note
that this section does not import a tracing principle into the question of
ademption, but rather should be seen as a sensible mere change in
form principle]; and
(6) if not covered by paragraphs (1) through (5), a pecuniary devise equal
to the value as of its date of disposition of other specifically devised
property disposed of during the Ts lifetime but only to the extent it is
established that ademption would be inconsistent with the Ts manifested
plan of distribution or that at the time the will was made, the date of
disposition or otherwise, the T did not intend ademption of the devise.
(b)If specifically devised property is sold or mortgaged by a conservator or by an
agent acting within the authority of a durable power of attorney for an
incapacitated principal or a condemnation award, insurance proceeds, or
recovery for injury to the property is paid to a power of attorney for an
incapacitated principal the specific devisee has the right to a general pecuniary
devise equal to the net sale price, the amount of the unpaid loan, the
condemnation award, the insurance proceeds, or the recovery.
Class Note:
(a)(1)-(4): self explanatory

(a)(5): applies when there is replacement property I leave A my 2000 Toyota


Camry; later T gets a 2006 Toyota Avalon. T replaced Camry with new property, so
A gets Avalon.
o NOT a tracing issue. You have replaced specifically gifted property with
similarly functioning property.
(a)(6): catchall. If you look at all of the facts and circumstances and T wouldnt
want the gift to adeem, then gift doesnt adeem.
o Look at what happens to the property T is mugged and murdered, stole
watch that was in the will for Sally. Very different than T selling the watch 5
years before death.
UPC 2-605. INCREASE IN SECURITIES; ACCESSIONS.
(a) If a T executes a will that devises securities and the T then owned securities
that meet the description in the will, the devise includes additional securities
owned by the T at death to the extent the additional securities were acquired by
the T after the will was executed as a result of the Ts ownership of the
described securities and are securities of any of the following types:
(1) Securities of the same organization acquired by reason of action
initiated by the organization or any successor, related, or acquiring
organization, excluding any acquired by exercise of purchase options;
(2) securities of another organization acquired as a result of a merger,
consolidation, reorganization, or other distribution by the organization or
any successor, related, or acquiring organization; or
(3) securities of the same organization acquired as a result of a plan of
reinvestment.
(b)Distributions in cash before death with respect to a described security are not
part of the devise.
d. Ademption by Satisfaction basically the same as advancement from
Chapter 3. UPC 2-609 follows the same policy of requiring written evidence
that lifetime gifts are to be taken into account in distribution of an estate,
whether testate or intestate. Never have to guess, because there is a writing
saying the gift has been made.
e. Exoneration
i. Class Hypo: gift of house worth $300k T dies with a mortgage. Does B
get the house subject to the mortgage? YES. Historically, the rules was
that executor was to pay off the mortgage. Now, however, B just steps
into shoes and starts paying the mortgage.
UPC 2-607. NON EXONERATION.
A specific devise passes subject to any mortgage interest existing at the date of
death, without right of exoneration, regardless of a general directive in the will to
pay debts.
f. Abatement
i. If T made bequests to individuals that cannot be fully satisfied, the
doctrine of abatement held probate court decide who gets what.
Doctrine of Abatement specifies which bequests will be reduced or
eliminated altogether and in what order it will be done.
ii. 3-902 doesnt apply if the will gives us a different order T can
provide for order in the will.

1. Remember: must satisfy claims of creditors first, so give


everything a $ amount so that if we have to sell
anything/everything to pay off creditors, this is the amount the
estate has to pay such claims. If youre the B, you want
everything appraised LOW.
2. Also Note: when bequest of stock says all my stock in X
company, it is a specific bequest. Usually when you say my its
specific bequest.
UPC 3-902. [DISTRIBUTION; ORDER IN WHICH ASSETS APPROPRIATED;
ABATEMENT.]
(a) Except as provided in subsection (b) and except as provided in connection with
the share of the surviving spouse who elects to take an elective share, shares of
distributes abate, without any preference or priority as between real and
personal property, in the following order: (1) property not disposed of by the
will; (2) residuary devises; (3) general devises [normally monetary bequests];
(4) specific devises. Abatement within each classification is in proportion to
the amounts of property each of the Bs would have received if full distribution of
the property had been made in accordance with the terms of the will.
(b)If the will expresses an order of abatement, or if the testamentary plan or the
express or implied purpose of the devise would be defeated by the order of
abatement stated in subsection (a), the shares of the distributees abate as may
be found necessary to give effect to the intention of the T.
Example: T dies with will that provides that A is to receive her diamond ring valued
at $10k, B is to receive a general devise of $10k, and C is to receive the residue. If
there is only $10k and the ring in Ts estate at her death, the B will receive the
$10k bequest and A will receive the ring. However, C will receive nothing since the
residuary estate abates before the general and specific devises.
g. Apportionment: paying estate taxes. Many states have statute that provides
that in the absence of a clear direction to pay taxes out of the residue, each
bequest shares the tax burden pro-rata.
i. Estate taxes (thus apportionment) is imposed on EVERYTHING you own
when you die probate and non-probate. E has primary duty to pay
these. BUT some of the property is non-probate, so the E pays the
taxes of probate, then directs tax man to who has the non-probate
assets.
ii. In re Estate of Kuralt
1. Issue: whether the Estate or Kuralts girlfriend was responsible
for the estate taxes associated with the bequest of the Montana
property to Shannon (gf)
2. Holding: the DC correctly concluded that Shannon had satisfied
the burden of proving that Kuralts will directs, clearly and
unambiguously, in Article 12, against statutory apportionment,
and that all estate taxes are to be paid by the residual Estate,
including those generated by the bequest of the Montana
property to Shannon.
3. Reasoning: there is no question but that the direction to avoid
apportionment against specific devises in Kuralts 1994 will
(letter that the court said was a codicil even though Hatfield
says NO testamentary intent) is both clear and unambiguous,
and that this was Kuralts intention.

4. Tax consequences: give money to your wife it is tax free; give


money to your gf it is taxable. Wife gets residuary, will said to
take taxes out of reside not apportioned. So the wife paid the
taxes on gfs property. [Statute says that wife and charity receive
estates over $5M tax free.]
iii. UPC makes clear that Apportionment is the default rule where T has
not declared specifically that estate taxes are to be paid in a different
manner.
III. Rules of Construction Applicable to Both Wills and Will Subs
a. Determining Death
i. Determining who survives whom is an essential component of deciding
who gets which assets in inheritance law. UPC 1-107(1)(2) and (5)
provide guidance.
UPC 1-107. EVIDENCE OF DEATH OR STATUS.
In addition to the rules of evidence in courts of general jx, the following rules
relating to a determination of death or status apply:
1. Death occurs when an individual [is determined to be dead under the
Uniform Determination of Death Act] [has sustained either (i) irreversible
cessation of circulatory and respiratory functions or (ii) irreversible cessation
of all functions of the entire brain, including the brain stem. A determination
of death must be made in accordance with accepted medical standards.]
2. A certified or authenticated copy of a death certificate purporting to be
issued by an official or agency of the place where the death purportedly
occurred is prima facie evidence of the fact, place, date, and time of death
and the identity of the decedent.
3. (5) An individual whose death is not established under the preceding
paragraphs who is absent for a continuous period of 5 years, during which he
has not been heard from, and whose absence is not satisfactorily explained
after diligent search or inquiry, is presumed to be dead. His death is
presumed to have occurred at the end of the period unless there is sufficient
evidence for determining that death occurred earlier.
b. Requirement of Survival
i. When decedent and his B die close together in time, issues arise. The B
under a will must survive the T in order to take a bequest. Doc (will or
will sub) can define what survive means. UPC 1-702 adopts a 120hour rule, in the absence of any contrary provision in Ts will. Prevents
the bequest/devise from being probated in Ts estate then immediately
in the Bs estate, incurring addl probate fees and possible taxes.
UPC 2-702. REQUIREMENT OF SURVIVAL BY 120 HOURS.
(a) [Requirement of Survival by 120 Hours Under Probate Code.] For the purposes
of this Code, except as provided in subsection (d), an individual who is not
established by clear and convincing evidence to have survived an event,
including the death of another individual, by 120 hours is deemed to have
predeceased the event.
(b)[Requirement of Survival by 120 Hours under Governing Instrument.] Except as
provided in subsection (d), for purposes of a provision of a governing instrument
that relates to an individual surviving an event, including the death of another
individual, an individual who is not established by clear and convincing
evidence to have survived the event by 120 hours is deemed to have
predeceased the event.

(c) [Co-Owners with Right of Survivorship; Requirement of Survival by 120 Hours.]


[if there are more than 2 co-owners and it is not established by clear and
convincing evidence that at least one of them survived the others by 120 hours,
the property passes in the proportion that one bears to the whole number of coowners.]
(d)[Exceptions.] Survival by 120 hours is not required if:
a. (1) the governing instrument contains language dealing explicitly with
simultaneous deaths or deaths in a common disaster and that language is
operable under the facts of the case;
b. (2) the governing instrument expressly indicates that an individual is not
required to survive an event, including the death of another individual, by
any specified period or expressly requires the individual to survive the
event by a specified period; but survival of the event or the specified
period must be established by clear and convincing evidence;
NOTE: under subsection (d), the T who wants to override the 120-hour rule must specify
the alternate period required for survival. It is common to use a period of 30, 60, or 90
days.
CLASS NOTE: Is there a duty as familys attorney you are husbands best friend. Do you
tell him he must keep his wife alive for 2 more days so that husband and kids gets the
bequest? Not clear.
ii. Simultaneous Death results in a failure of each person to survive the
other and the bequest to that person lapses.
DISCLAIMERS AND DEEMED DEATH
I. Book Notes
a. An intended B can renounce, or disclaim, all or part of the bequest to
which he is entitled. A disclaimant is deemed to have predeceased the
decedent, and the interest to which the disclaimant would have been entitled
(the disclaimed interest) passes as if the decedent died before T, even
though disclaimant did not actually die.
b. Disclaimant may not specify who will take the property after he disclaims it.
It must pass to the person or persons who would have taken if the
disclaiming B had died before T.
i. If disclaiming B tries to exercise any control over where property goes,
this will disqualify the disclaimer and interfere with the reason for
disclaiming the property, which is often to avoid having the property
included in disclaimants estate for tax purposes and to avoid
triggering gift tax on the transfer.
c. Disclaimers are important post-death estate planning tools avoiding taxes
and creditors.
II.
Class Notes
a. This is similar to 120-hour rule in that you are saying you are dead when you
really arent.
b. Disclaim for many reasons: evade liability; personal reasons; equalize wealth
among other Bs; minimize taxes; evade creditors.
c. Difference is between OWNING the property and giving it away, and NEVER
OWNING the property at all. Owning and assigning vs. disclaimer (never
owning).

d.

e.
f.

g.

i. If you get a nasty piece of property, then sign deed over to sister
you did own it, so you may have liability. Creditor claims go with it, tax
consequences (income).
Disclaimers can be dangerous.
i. Valid disclaimer is NOT an assignment. Treated as having never owned
it. Invalid disclaimer IS an assignment.
ii. Valid = disclaim; invalid = assign. WORST of both worlds if you screw
up!
iii. Probate Code vs. Internal Revenue Code Rules if you follow IRC, you
will always satisfy the probate code.
Must be filed within 9 months of death and before disclaimant takes
possession or derives benefit in any way.
Irrevocable once it is filed; Disclaimant has NO POWER over what happens.
Just saying treat me as if Im dead. So you really must explain to B what
happens.
i. Think about antilapse statute if will abrogates this, then property may
NOT go to your children like you intend when you disclaim.
ii. Cannot say I will disclaim only if it goes to my children.
You can disclaim by part or fraction. Can disclaim one of three gifts, can
disclaim so much of X that equals $__.

UPC 2-1105. POWER TO DISCLAIM; GENERAL REQUIREMENTS; WHEN


IRREVOCABLE
(a) A person may disclaim, in whole or in part, any interest in or power over property,
including a power of appointment. A person may disclaim the interest or power even if
its creator imposed a spendthrift provision or similar restriction on transfer or a
restriction or limitation on the right to disclaim.
(c)
To be effective, a disclaimer must be in a writing or other record, declare the
disclaimer, describe the interest or power disclaimed, be signed by the person making
the disclaimer, and be delivered or filed in the manner provided in 2-1112.
(d)
A partial disclaimer may be expressed as a fraction, percentage, monetary
amount, term of years, limitation of a power, or any other interest or estate in the
property.
(f)
A disclaimer made under this part is not a transfer, assignment or release.
UPC 2-1106. DISCLAIMER OF INTEREST IN PROPERTY.
(b) Except for a disclaimer governed by Section 7 or Section 8, the following rules
apply to a disclaimer of an interest in property:
. (2) The disclaimed interest passes according to any provision in the instrument
creating the interest providing for the disposition of the interest, should it be
disclaimed, or of disclaimed interests in general.
(3) If the interest does not contain a provision described in paragraph (2), the
following rules apply:
(B) If the disclaimant is an individual, except as otherwise provide in
subparagraphs (C) and (D), the disclaimed interest passes as if the disclaimant had
died immediately before the date of distribution.
UPC 2-1113. WHEN DISCLAIMER BARRED OR LIMITED.
(b) A disclaimer of an interest in property is barred if any of the following events occur
before the disclaimer becomes effective:
(1) the disclaimant accepts the interest sought to be disclaimed;

(2) the disclaimant voluntarily assigns, conveys, encumbers, pledges, or transfers


the interest sought to be disclaimed or contracts to do so

REVOKING THE WILL AND WILL CONTESTS


INTRODUCTION
Once T has created a valid will, it will become effective upon death unless revoked or
successfully challenged. The requirements to revoke are much less onerous than the
formalities required to create a valid will.
REVOCATION BY SUBSEQUENT INTSTRUMENT OR PHYSICAL ACT
I. Class Notes: Several ways to revoke a will.
a. Common element to all: whether T had had intent to revoke will.
b. Most obvious way is under UPC 2-507, revocatory act so long as T intended
to destroy the WILL itself.
i. Can write CANCELLED all the way across, especially across signature
(facts must show intent writing cancelled in the margin of one section
probably wont revoke the whole will); writing VOID; tearing up or
burning.
c. Most common is to execute a new will, writing I revoke all prior wills.
ALWAYS WRITE THIS WHEN DRAFTING.
d. Hypos:
i. 2 Wills. Presumption is intention to revoke prior will if the subsequent
will disposes of the entire estate.
ii. 1st Will: estate to Bobby. 2nd Will: $10k to Donny. Put these together
codicil intended to amend the first will is the presumption.
iii. If you revoke a codicil be specific; include date, etc.
iv. Client is leaving town, too busy to come in to change will.
v. Client has will in his possession tell him to strike through the gift,
write in the gift with revocatory language, he signs and gets it signed
by 2 witnesses. Holographic will tell T to write will out in his own
handwriting, with revocatory language. Walk him through all issues
that need to be in there.
vi. You have will in your possession Proxy cant revoke because T isnt
there and this must be done in Ts presence. Destroy it and die with
previous will or intestate; or just keep the gift as is.
vii. NOTE: Overcome either presumption with clear and convincing
evidence. Avoid this problem by writing something on both docs. These
problems only arise because of bad drafting.
e. Remember that when a will is revoked, especially if just revoked in part, the
bequest may fall into the residue, thus changing who receives the property.
UPC 2-507. REVOCATION BY WRITING OR BY ACT.
(b)A will or any part thereof is revoked:
(1) by executing a subsequent will that revokes the previous will or
part expressly or by inconsistency; or
(2) by performing a revocatory act on the will, if the T performed the
act with the intent and for the purpose of revoking the will or part or if
another individual performed the act in the Ts conscious presence and
by Ts direction. For purposes of this paragraph, revocatory act on the
will includes burning, tearing, canceling, obliterating, or destroying
the will or any part of it. A burning, earing, or canceling is a
revocatory act on the will, whether or not the burn, tear, or
cancellation touched any of the words on the will.

II.
III.

IV.

(b) If a subsequent will does not expressly revoke a previous will, the execution
of the subsequent will wholly revokes the previous will by inconsistency if the T
intended the subsequent will to replace rather than supplement the previous
will.
(c) The T is presumed to have intended a subsequent will to replace rather than
supplement a previous will if the subsequent will makes a complete disposition
of the Ts estate. If this presumption arises and is not rebutted by clear and
convincing evidence, the previous will is revoked; only the subsequent will is
operative on Ts death.
(d) The T is presumed to have intended a subsequent will to supplement rather
than replace a previous will if the subsequent will does not make a complete
disposition of the Ts estate. If this presumption arises and is not rebutted by
clear and convincing evidence, the subsequent will revokes the previous will
only to the extent the subsequent will is inconsistent with the previous will;
each will is fully operative on the Ts death to the extent they are not
inconsistent.
Revocation by Subsequent Instrument
a. Can be express (I hereby revoke all prior wills; or implied (inconsistent
subsequent will that changes disposition of property completely.).
Revocation by Physical Act
a. Burn, tear, write CANCELLED or VOID.
b. T may also revoke only part of the will; T can do this by writing CANCELLED
or VOID across a provision, or just by drawing a line through the provision.
Presumptions with Regard to Revocation
a. Mutilated Will If will is found with revocatory marks, rebuttable
presumption is that the T intended to revoke the will. Can be rebutted by
evidence that establishes that T did not mutilate the will with intent to
revoke it. Example: single mark or tear could be a mishap.
b. Lost Will presumption is that T destroyed the will with intent to revoke.
Extrinsic evidence can be used to overcome this presumption.
i. Class Notes: there is a difference between a original will and copy a
copy of a will is NOT a will because a destroyed will is revoked,
therefore we dont know if the copy is that of a revoked will. The court
has 2 options: (1) Nana must have destroyed the will, therefore
revoked, therefore she died intestate. (2) Nana lost the will, therefore
lets open a can of worms as to the content.
1. Undisputed copy may be alright.
2. To prove contents you must rely on extrinsic evidence. Copy
could be extrinsic evidence.
3. Witnesses who signed the will can testify that he did in fact have
a will. Now we must prove the contents these witnesses wont
KNOW the contents.
4. Drafting lawyer could theoretically testify, but he probably wont
remember the will without seeing the copy to refresh memory.
Lawyer could look at file for notes and copies of the will. May
have letter to T summarizing will.
5. Burden is on proponent to prove will was not destroyed, then to
prove contents. DONT have to prove how the will was
destroyed/lost.

6. Anyone else who read the will could come testify accountant,
etc.
ii. In re Estate of Beauregard
1. Facts: T died at 40, roommate K had a copy of Ts will, but not
the original.
2. Issue: whether K presented enough evidence to rebut the
presumption that T had destroyed the lost will with intent to
revoke.
3. PH: Trial Court found that because K could only submit a copy of
Ts will, presumption that where a will once known to exist
cannot be found after death of T, there is a presumption that it
was destroyed by the maker with intent to revoke. K failed to
rebut this presumption.
4. Holding: exam of evidence does not lead to inevitable conclusion
that DCs findings were clearly erroneous; affirmed.
5. Reasoning:
a. Whether evidence is sufficient to rebut presumption is
determined by facts and circumstances of each case.
Presumption rebutted if a preponderance of evidence
establishes T didnt intend to revoke.
b. Trial Judge weighed (1) that T was fully competent so
unlikely he would have lost will, short period of time for T
to lose will. (2) competent so he would have destroyed
copies; little time to change his mind. Supreme Court judge
said not enough to show that a different conclusion might
well have been reached.
6. Court basically said K skipped a step the first step is dealing
with the presumption that the will was destroyed. K did not
overcome this there was no evidence that would say lost rather
than destroyed.
REVOCATION BY CHANGED CIRCUMSTANCES
I. Revocation by Marriage Omitted Spouse
a. A few states still revoke the will in its entirety if the T marries, but marriage
will generally not revoke the will if evidence shoes that T did not intend that
marriage revoke the will or that T executed the will contemplation of
marriage.
II.
Revocation on Divorce
a. Reasonable inference is that divorce should remove gifts to ex under the will
so divorce revokes any gifts to the ex spouse. If the exes still want to give
each other stuff, they can execute a new will.
b. Divorce ITSELF revokes the gifts default provision. Rule applies to wills and
will substitutes, like revocable trusts. It revokes bequests to former spouses
and converts interest in jointly held property to a tenancy in common.
UPC 2-804. REVOCATION OF PROBATE AND NON-PROBATE TRANSFERS BY
DIVORCE; NO REVOCATION BY OTHER CHANGES OF CIRCUMSTANCES.
. (b) [Revocation upon Divorce.] Except as provided by the express terms of a
governing instrument, a court order, or a contract relating to the division of the marital
estate made between the divorced individuals before or after the marriage, divorce or
annulment, the divorce or annulment of a marriage:

(1)revokes any revocable (i) disposition or appointment of property made by a


divorced individual to the former spouse in a governing instrument and any
disposition or appointment created by law or in a governing instrument to a
relative of the divorced individuals former spouse, (ii) provision in a governing
instrument conferring a general or nongeneral power of appointment on the
divorced individuals former spouse, and (iii) nomination in a governing
instrument, nominating a divorced individuals former spouse to serve in any
fiduciary or representative capacity, including a personal representative,
executor, trustee, conservator, agent, or guardian; and
(2)Severs the interest of the former spouses in property held by them at the time
of the divorce or annulment as joint tenants with the right of survivorship [or as
community property with the right of survivorship], transforming the interests of
the former spouses into equal tenancies in common.
(c)[Effect of Severance.] A severance under subsection (b)(2) does not affect any
third-party interest in property acquired for value in good faith reliance on an
apparent title by survivorship in the survivor of the former spouses unless a writing
declaring the severance has been noted, registered, filed, or recorded in records
appropriate to the kind and location of the property which are relied upon, in the
ordinary course of transactions involving such property, as evidence of ownership.
(d) [Effect of Revocation.] Provisions of a governing instrument are given effect as if
the former spouse and relatives of the former spouse disclaimed all provisions
revoked by this section or, in the case of a revoked nomination in a fiduciary or
representative capacity, as if the former spouse and relatives of the former spouse
died immediately before the divorce or annulment.
Revocation Due to Homicide works very similar to divorce statute.
a. If a B named in a will killed the T, the B should not receive the bequest. If the
statute applies, the provisions of the will take effect as if the killer
disclaimed the gift or predeceased the decedent.
b. UPC 2-803 revokes a bequest if the killing was felonious and intentional.
Rule applies only to killings that could be prosecuted as felonies and that
involve the element of intent. If the killer is convicted of a felonious and
intentional killing, then the conviction, after all right to appeal has been
exhausted, will cause the application of the revocation provisions.
c. Even if the killer is not convicted, or if the conviction is not final, an
interested person (someone who will take if the killer does not) can petition
the court for a determination of a felonious and intentional killing under a
preponderance of the evidence standard for purpose of inheritance.
UPC 2-803. EFFECT OF HOMICIDE ON INTESTATE SUCCESSION, WILLS, TRUSTS,
JOINT ASSETS, LIFE INSURANCE, AND BENEFICIARY DESIGNATIONS.
. (c) [Revocation of Benefits Under Governing Instruments.] The felonious and
intentional kill of the decedent:
(1)revokes any revocable (i) disposition or appointment of property made by the
decedent to the killer in a governing instrument, (ii) provision in a governing
instrument conferring a general or nongeneral power of appointment to the
killer, and (iii) nomination of the killer in a governing instrument, nominating or
appoint killer to serve in any fiduciary or representative capacity, including a
personal representative, executor, trustee, or agent; and
(2)Severs the interests of the decedent and killer in property held by them at the
time of the killing as joint tenants with the right of survivorship [or as
III.

community property with the right of survivorship], transforming the interests of


the decedent and killer into equal tenancies in common.
. (e) [Effect of Revocation.] Provisions in a governing instrument are given effect as
if the killer disclaimed all provisions revoked by this section or, in the case of a revoked
nomination in a fiduciary or representative capacity, as if the killer predeceased the
decedent.
. (f) [Wrongful Acquisition of Property.] A wrongful acquisition of property or
interest by a killer not covered by this section must be treated in accordance with the
principle that a killer cannot profit for his or her wrong.
. (g) [Felonious and Intentional Killing; How Determined.] After all right to appeal
has been exhausted, a judgment of conviction establishing criminal accountability for the
felonious and intentional killing the decedent conclusively establishes the convicted
individual as the decedents kill for purposes of this section. In the absence of a
conviction, the court, upon the petition of an interested person, must determine whether,
under the preponderance of evidence standard, the individual would be found criminally
accountable for the felonious and intentional killing of the decedent. If the court
determines that, under that standard, the individual would be found criminally
accountable for the felonious and intentional killing of the decedent, the determination
conclusively establishes that individual as the decedents killer for purposes of this
section.
d. Will Subs Statute extends to will subs. UPC 2-803 and 2-804 applies to
both wills and will subs.
e. Class Notes: ex/murderer deemed dead. Usually you dont want them to
take.
i. Unless it is a mercy killing. In most states that remains an intentional
and felonious killing, but Ts intent would still be to have murderer
inherit.
ii. Concern was that poor people would start offing themselves, but
statistically it is rich people.
iii. Some states have statutes (growing trend), some use CL; all have this
idea. In TEXAS the theory is unjust enrichment it is like fraud, you
cant keep the money if you killed to get it.
THE IMPACT OF REVOCATION
I. Class Notes
a. Likely to appear much more different than they seem two completely
difference concepts (revival and revocation).
b. In both Revival and DRR, the court must decide whether it can actually
probate the first will or whether it has to allow the T to die intestate.
II.
Revival Court giving effect to will T thought/intended to be invalid always the
case that you are following Ts intent.
a. Subsection (a) refers to T revoking the will; (b) refers to T revoking a codicil;
and (c) refers to T writing a third will.
b. Subsection (a) and (b) involve revocatory acts; (c) uses a 3 rd will to revoke.
c. Hypos: W1 (2000); W2 (2003); W3 (2005) I revoke all prior wills and
codicils.
i. T tears up W2. Do we have W1? No, T dies intestate, but can provide
evidence that W1 will be effective to revive. (a)

ii. W2 is actually a codicil, and in 2005 T tears up W2 (codicil).


Presumption is that W1 is revived - parts of W1 that were revoked by
codicil are revived. (b)
iii. 2010 T dies; 2005 will is in effect W3. (c) accounts for this situation.
UPC 2-509. REVIVAL OF REVOKED WILL.
(a) If a subsequent will that wholly revoked a previous will is thereafter revoked
by a revocatory act under 2-507(a)(2), the previous will remains revoked
unless it is revived. The previous will is revived if it is evidence from the
circumstances of the revocation of the subsequent will or from Ts
contemporary or subsequent declarations that the T intended the previous
will to take effect as executed.
(b)If a subsequent will that partly revoked a previous will is thereafter revoked by
a revocatory act under 2-507(a)(2), a revoked part of the previous will is
revived unless it is evidence from the cirucmstances of the revocation of the
subsequent will or from the Ts contemporary or subsequent declarations that
the T did not intend the revoked part to take effect as executed.
(c) If a subsequent will that revoked a previous will in whole or in part is thereafter
revoked by another, later, will, the previous will remains revoked in whole or in
part, unless its revoked part is revived. The previous will or its revoked part is
revived to the extent it appears from the terms of the later will that the T
intended the previous will to take effect.
III. Dependent Relative Revocation never follow Ts intent; doing something else
than T intended, Plan B. T revokes one will, intending to leave second will, but the
second will is invalid. Whats the best alternative (Plan B)?
a. I revoke this on the condition that my new will is effective. Usually involves
a mistake of law T thinks W2 will be valid, revokes W1, but W2 is invalid.
Court cannot do what the T wanted, which was W2 to control, so must do
something else.
b. This doctrine is employed to determine whether the intent of the T would be
better implemented if the revocation is given effect or if it is ignored. In other
words, since the Ts first choice cannot be accomplished because the later
will is actually invalid, what would the Ts second choice be to die with
previous will revoked or not revoked?
c. Distinguish Revival from DRR
i. Revival is applied when T has revoked the second will. The question for
the court in revival is what the T had in mind when T revoked the 2nd
will did T mean to revive the provisions of the first will or did T mean
to die intestate?
ii. If T did not intentionally revoke the 2nd will but died thinking the 2nd will
was valid, the question becomes what was in the Ts mind when T
revoked the 1st will (as opposed to the second will as in revival
doctrine.) Did T intend revocation of the 1st will (or some part of it) to
take effect only if 2nd will were later deemed valid? If 2nd will was
deemed invalid, would T have preferred the revocation of the first NOT
to take effect?
iii. Drr is CL doctrine. It involves facts and circumstances analysis on caseby-case base
d. Evidence for DRR The evidence that courts use to divine Ts intent as to
DRR include:

i. The nexus between the revocation of the old will (or part of it) and the
attempted execution of a new will or provision in terms of how close in
time the two events were; and
ii. How similar the terms of the two wills (or provisions) are.
iii. The closer in time revocation and execution are and the more similar
the terms of the two documents, the more likely it is that a court will
find that DRR is appropriate to apply.
e. Courts less frequently need to employ DRR to resolve cases under the new
provisions of the UPC since they are based more on an intent-furthering
framework than an absolute concern about formalities.
f. Comment to UPC 2-507. DRR Each court is free to apply its own DRR. . . .
Note, however, that DRR should less often be necessary under revised
provisions of the Code. DRR is the law of second best, i.e., its application
does not produce the result T actually intended, but is designed to come as
close as possible to that intent.
i. When there is good evidence of Ts actual intention, however, the
revised provisions of the Code would usually facilitate the effectuation
of the result the T actually intended.
WILL CONTESTS IMPROPER EXECUTION, LACK OF CAPACITY OR INTENT AND
UNDUE INFLUENCE
I. Class Notes
a. Putting together documents atty must make sure will is defended if it is
ever attacked.
b. Could be contested on a variety of grounds lack of legal or testamentary
capacity; undue influence; fraud; duress; any given doc could be attacked
saying thats not the will.
i. Most end up ebing settled Family Settlement Agreement everyone
named in will and everyone who could take agrees to basically ignore
the will and allows them to do what they would do indirectly/eventually.
c. Procedural Issues: Interested persons, creditors, named executor, nosey
neighbor do NOT have standing. In Texas, 4 years to admit the will; 2 years
to bring will contest.
d. Court Hearing (probate hearing) is ministerial process takes 30 seconds.
Client comes into office and says there is reason to question what the other
Bs are doing (admitting a will that is questionable) RUN to the court house to
stop it. This preserves the burden on the proponent of the will. After will is
admitted, then burden is shifted to anyone contesting the will.
i. You have the right to a jury trial, but may not want one clients dont
always come across as likeable in will contests.
e. Deceased owned property someone needs to take care of the property.
Court appoints a temporary administrator who has NO dog in the fight to
deal with bills, pets, etc.
II.
Estate of Graham
a. T had no kids, was uncle to several. T left his estate to 2 nieces, daughters of
his full sister. Nieces and nephews of half sister challenge the will. They
argue T didnt execute under formalities of Texas Probate Code 59; T lacked
testamentary capacity; will executed under undue influence and fraud; T
lacked testamentary intent; T mistaken as to contents of will.
b. Issue: whether T possessed requisite mental state to leave will.

III.

IV.

c. Holding: no argument or evidence on issue of Ts intent; no indication that


mistake occurred; evidence produced by the will contestants is not sufficient
to raise a genuine issue of material fact on the issue of whether Ts will was
executed as a result of undue influence; no proof of fraud.
Improper Execution proponent of the will has the burden of presenting a
properly executed document. If will appears to be regular on its face, i.e., if it is in
writing and all requisite signatures of T and witnesses exist, then it will be deemed
properly executed. Challenger has burden of establishing that the requisite legal
requirements and formalities were not complied with.
Testamentary Capacity General Capacity and Insane Delusion allegations of
this type presume testamentary capacity. (Alzheimers on the other hand, clear
that there is no TC.) You cannot allege insane delusion, fraud, undue influence
UNLESS T had TC.
a. Whether T had sufficient mental ability to know what he was doing.
b. General Capacity T must understand (1) who the natural objects of his
bounty are; (2) that he is making a will; and (3) the extent of his property.
The Ts understanding of these three things must exist at moment of
execution. T may be a bit unsure of these things prior to or after execution,
but as long as he is aware of them at the moment he begins his will, then he
has met the standard of testamentary capacity.
i. Attorney under MRPC has duty to assess Ts testamentary capacity.
Any question means lawyer should consult Dr. or take similar action to
confirm capacity.
c. Insane Delusion will contestant must show that the delusion had no basis
in reality and that there was a connection between the delusion and the Ts
bequest in the will. T is still generally functioning, he just has one REALLY
crazy belief.
i. Elements: (1) usually T is in weakened condition already. Old, sick or
weak. But this is not enough. (2) susceptible to other peoples
influence. (3) Someone with opportunity to exert influence. (4) some
otherwise inexplicable change in the will. And (5) show that the
allegedly bad B had some hand in getting the will changed. The law
excepts the right of each and everyone to ask for a gift; in undue
influence cases, the B crosses the line. Substantially unhealthy
relationship coercion we are alleging isnt outward, and is not one
particular event.
ii. Breeden v. Stone
1. Spicer Breeden committed suicide after being involved in hitand-run accident; there was evidence that he suspected the
govt of planting listening devices on him and his dog.
2. Issue: whether the probate court correctly applied the insane
delusion and Cunningham elements tests
3. Holding: Probate court thoroughly considered all of the evidence
presented by the parties and concluded that (1) the T met the
Cunningham test for sound mind and (2) the insane delusions
from which T was suffering did not materially affect or influence
his testamentary disposition.
4. Reasoning:
a. Cunningham Test: mental capacity to make a will requires
that: (1) the T understands the nature of his act; (2) he

knows the extent of his property; (3) he understands the


proposed testamentary disposition; (4) he knows the
natural objects of his bounty; and (5) the will represents his
wishes.
b. Insane Delusion: persistent belief in that which has no
existence in fact, and which is adhered to against all
evidence.
i. Test: whether the delusion materially affects the
contested disposition in the will.
ii. Court holds that before a will can be invalidated
because of lack of testamentary capacity due to an
insane delusion, the insane delusion must materially
affect the disposition of the will.
c. An objector may challenge a Ts soundness of mind based
on both or either of the Cunningham and Insane Delusion
tests.
d. Probate court applied insane delusion test to hold that
although the decedent was suffering from insane delusions
at the time he executed his will, his insane delusions did
not affect or influence the disposition of property he made
in the will.
V. Lack of Testamentary Intent T must have testamentary intent. States have
moved away from this and the UPC does not contain such a rule.
a. Lacked intention to intend that doc (will) was to dispose of property.
i. Intent to produce doc may just be making notes to give attorney to
draft the will
ii. Kuralt case was letter to the gf a will or just notes? (NOTES!)
iii. Defend with execution procedures.
VI. Undue Influence
a. Undue influence is difficult to establish and requires the contestant to prove:
(1) the existence and exertion of an influence; (2) the effective operation of
that influence so as to subvert/overpower the Ts mind at the time of the
execution of the will; and (3) the execution of a testament which the maker
would not have executed but for such influence.
VII.
Fraud and Duress
a. Fraud. Wills can be invalidated if the contestant can establish that they are
the result of fraud wrongdoer knowingly or recklessly made a false
representation to the donor about a material fact that was intended to and
did lead the donor to make a donative transfer that the donor would not
otherwise have made.
i. Some lie or trick to get T to leave stuff to someone; representation
intended to mislead T is fraud.
b. Duress. Bequest is procured through duress if someone threatens to or
actually does something that coerces the T into making the bequest. While
an act may not constitute coercion or duress because the person does have
a right to do it, it may rise to the level of undue influence.
i. Undue influence + Threat (or actual bad thing done); more overt than
undue influence. Im not going to wheel you out of your bedroom to
the bathroom or the kitchen until you sign this will.
8.3 Undue Influence, Duress, Or Fraud

(a) A donative transfer is invalid to the extent that it was procured by undue influence, duress, or fraud.
(b) A donative transfer is procured by undue influence if the wrongdoer exerted such influence over the
donor that it overcame the donor's free will and caused the donor to make a donative transfer that the
donor would not otherwise have made.
(c) A donative transfer is procured by duress if the wrongdoer threatened to perform or did perform a
wrongful act that coerced the donor into making a donative transfer that the donor would not otherwise
have made.
(d) A donative transfer is procured by fraud if the wrongdoer knowingly or recklessly made a false
representation to the donor about a material fact that was intended to and did lead the donor to make a
donative transfer that the donor would not otherwise have made.
VIII.

Class Notes
a. Remember no one knows EXACTLY what they own (I dont know exactly
how much money is in bank account, interest is always changing; dont know
exactly how much my house is worth because I havent sold it) So TEST is if
someone told you they have $100k in the bank, and they wanted it to be
used in a certain way, they probably pass the test. Alzheimers patients, on
the other hand, do not understand this type of stuff.
i. The test only requires a lucid couple moments if you get the client at
a good time of day and they understand questions about money and
family and can relate them all together, then they have passed the
test.
ii. Attorneys have a duty of care to see if they can get their client in their
moment of clarity if this is becoming an issue. This is low standard
because it is only effective after T is dead much lower than standard
of capacity to enter a K. Example: People with Downs Syndrome can
leave a will, but cannot make a K.
iii. May have to make several trips to the nursing home to find this lucid
moment. DUTY
RESTATEMENT (THIRD) OF PROPERTY: WILLS & OTHER DONATIVE TRANSFERS
8.1 Requirement Of Mental Capacity
(a) A person must have mental capacity in order to make or revoke a donative transfer.
(b) If the donative transfer is in the form of a will, a revocable will substitute, or a revocable gift, the
testator or donor must be capable of knowing and understanding in a general way the nature and extent
of his or her property, the natural objects of his or her bounty, and the disposition that he or she is
making of that property, and must also be capable of relating these elements to one another and forming
an orderly desire regarding the disposition of the property.
(c) If the donative transfer is in the form of an irrevocable gift, the donor must have the mental capacity
necessary to make or revoke a will and must also be capable of understanding the effect that the gift may
have on the future financial security of the donor and of anyone who may be dependent on the donor.
Comments:
f. Burden of proof. The party contesting the validity of a donative transfer has the burden of persuasion in
establishing that the donor lacked mental capacity to make the transfer. Section 3407 of the Uniform Probate
Code captures the prevailing view on the burden of proof and the view adopted in this Restatement:
UPC Section 3407. [Formal Testacy Proceedings; Burdens in Contested Cases.]... Contestants of a will have
the burden of establishing lack of testamentary intent or capacity, undue influence, fraud, duress, mistake or
revocation. Parties have the ultimate burden of persuasion as to matters with respect to which they have the
initial burden of proof. . . .
h. Effect of adjudication of mental incapacity. . . .An adjudication of mental incapacity to manage property does
not conclusively establish that the protected person subsequently lacked capacity to make, revoke, or amend a
will or a revocable will substitute. Such an adjudication does, however, raise a rebuttable presumption that the

protected person lacked the requisite capacity, shifting the burden of proof to the proponent to show that the
protected person possessed the requisite capacity when taking the action in question.
m. Lucid interval. A person who is mentally incapacitated part of the time but who has lucid intervals during
which he or she meets the standard for mental capacity . . . can, in the absence of an adjudication or statute that
has contrary effect, make a valid will or a valid inter vivos donative transfer, provided such will or transfer is
made during a lucid interval.
Illustrations:
5. G executes a will leaving his property to his friend, A. G's family contests the will on the ground of
mental incapacity. G had suffered from mental illness after suffering a stroke. The will is valid if, at the
time he executed the will, G satisfied the standard for mental capacity for executing a will as set forth in
Comment c.
6. G's daughter D contests the will of her father on the ground of mental incapacity. G had suffered from
schizophrenia and had been in and out of mental hospitals for 20 years. G was on medication when
executing the will. The will is valid if G, when executing the will, was experiencing a lucid interval
during which he satisfied the standard for mental capacity for executing a will as set forth in Comment
c. . . .
s. Insane delusion. An insane delusion is a belief that is so against the evidence and reason that it must be the
product of derangement. A belief resulting from a process of reasoning from existing facts is not an insane
delusion, even though the reasoning is imperfect or the conclusion illogical. Mere eccentricity does not
constitute an insane delusion.
A person who suffers from an insane delusion is not necessarily deprived of capacity to make a donative
transfer. A particular donative transfer is invalid, however, to the extent that it was the product of an insane
delusion.
PREVENTING CHALLENGES IN TERROREM OR NO CONTEST CLAUSES
UPC 2-517. PENALTY CLAUSE FOR CONTEST.
A provision in a will purporting to penalize an interested person for contesting the
will or instituting other proceedings relating o the estate is unenforceable, if
probable cause exists for instituting proceedings.
8.5 NOCONTEST CLAUSES
A provision in a donative document purporting to rescind a donative transfer to, or a fiduciary appointment of,
any person who institutes a proceeding challenging the validity of all or part of the donative document is
enforceable unless probable cause existed for instituting the proceeding.
Comment:
a. Scope. A no-contest clause, also called an in terrorem clause, is enforceable unless probable cause existed for
instituting the proceeding. A no-contest clause typically provides for the rescission of any benefit to a devisee,
beneficiary, or donee who challenges the validity of the document, or of a term of the document.
b. Rationale. The starting point for analyzing the validity of no-contest clauses is the policy in favor of the
freedom of disposition. The donor's intentionexpressed in this case in the no-contest clauseis given effect
to the maximum extent allowed by law. See 10.1. A no-contest clause may serve several worthwhile purposes.
Such a clause may deter unwarranted challenges to the donor's intent by a disappointed person seeking to gain
unjustified enrichment at the expense of others. The clause may prevent costly litigation that would deplete the
estate or besmirch the reputation of the donor when the donor is no longer alive to provide a defense. Such a
clause may also discourage a contest directed toward coercing a settlementthe so-called strike suit.
Against the benefits of a no-contest clause is the concern that the jurisdiction of the court to determine the
validity of a donative transfer not be defeated. A purported donative transfer by a donor who lacked the capacity
to make the transfer, or a transfer that was procured by wrongdoing, should be invalid. This Restatement,
therefore, supported by Restatement Second, Property (Donative Transfers) 9.1, the Uniform Probate Code
3905, and the majority of decisions and statutes, provides that a no-contest clause is valid and enforceable

unless the challenge was based on probable cause.


Under that standard, the persons restrained by the no-contest clause retain the right to litigate, and if the
litigation is successful, the no-contest clause fails along with the challenged transfer. If a beneficiary
litigates unsuccessfully and then seeks to claim under the donative transfer, the beneficiary suffers the
penalty imposed by the transferor for such conduct unless that beneficiary can establish that there was
probable cause for instituting the proceeding. When the contestant establishes that there was probable
cause for instituting the proceeding, it would be a contravention of public policy to enforce the nocontest clause.
c. Probable cause. Probable cause exists when, at the time of instituting the proceeding, there was evidence that
would lead a reasonable person, properly informed and advised, to conclude that there was a substantial
likelihood that the challenge would be successful. A factor that bears on the existence of probable cause is
whether the beneficiary relied upon the advice of independent legal counsel sought in good faith after a full
disclosure of the facts. The mere fact that the person mounting the challenge was represented by counsel is not
controlling, however, since the institution of a legal proceeding challenging a donative transfer normally
involves representation by legal counsel.
CLASS NOTES:
- MUST BAIT THE HOOK! If you contest the will, you lose your gift. This threatens Bs,
tells them that if they do not think they got enough and they contest, the T is going to
take away whatever the gift was. However, the gift must be enough to make the B
consider NOT contesting if it is $1, B has nothing to lose and will contest.
a. You can disinherit children, but you must give them something for the no-contest
clause to work. No bequest = nothing to lose. Explain this to clients as insurance
that B (child, or whoever) will not contest the will because they do not want to
gamble losing their inheritance.
- This is like insurance it is only effective against someone who is getting less than
they wanted, but still getting something, and has no probable cause to bring the will
contest.
- If there is probable cause to bring the will contest, the one contesting will not lose
their share, even if they lose.
- SINGLE MOST IMPORTANT THING TO REMEMBER IS THAT YOU MUST BAIT THE
HOOK.
-

PROTECTING THE FAMILY


DIFFERING PROTECTIONS UNDER COMMUNITY PROPERTY AND COMMON LAW
PROPERTY SYSTEMS forms of spousal protection depend on whether state is
community or separate property.
COMMUNITY PROPERTY
o Community property is property accumulated by either spouse from earnings
or other work during the marriage. All property acquired during the marriage
is jointly owned in a manner similar to tenancies in common. Title is
irrelevant when it comes to actual ownership and control of the property
each spouse owns equal, undivided share in all of the property. Explicitly
recognizes marriage as a partnership.
o The spouse however may receive more or less than of the community
property if: (1) the couple migrated between community property and
separate property states throughout the marriage; or (2) the spouses have
agreed otherwise in a marital agreement.
COMMON LAW PROPERTY
o Title vests in the person who earns or otherwise acquires the property in his
name. Spouse with title has sole ownership and control over the property
during marriage. Except to the extent the spouses acquire and title property
jointly, the non-title holder has no rights in property.
o Divorce: property distributed equally based on all assets acquired during the
marriage. Pretty much the same as community property.
o Death: the spouse who owns the property can devise it without the surviving
spouse obtaining any rights. Therefore, elective share was enacted as
replacements for legal life estate. So if Ts bequest is less than that required
by the statute, she can take her statutory share instead of what T left her.
UPC takes into account surviving spouses need, earning capacity, duration
of marriage into account.
DIVISION AT DEATH FOR MIGRATING COUPLES applies to both CL and community
property:
o Real property: the law of the state in which the property is located controls
its classification; and
o Personal Property: the law of the marital domicile at the time the property is
domiciled controls its classification.
o If couples move between CL and CP state, the move does not affect the
classification of the property interests.
Texas Family Code 3.001. SEPARATE PROPERTY. A spouse's separate property
consists of:
(1) the property owned or claimed by the spouse before marriage;
(2) the property acquired by the spouse during marriage by gift, devise, or
descent; and
(3) the recovery for personal injuries sustained by the spouse during marriage,
except any recovery for loss of earning capacity during marriage.
Texas Family Code 3.002. COMMUNITY PROPERTY. Community property consists of
the property, other than separate property, acquired by either spouse during marriage.
Texas Family Code 3.003. PRESUMPTION OF COMMUNITY PROPERTY.
(a) Property possessed by either spouse during or on dissolution of marriage is
presumed to be community property.

(b) The degree of proof necessary to establish that property is separate property is
clear and convincing evidence.
THE SPECIAL CASE OF OMITTED SPOUSES AND CHILDREN
OMITTED SPOUSES
o Pretermitted spouse is a person who was left out of a spouses will that was
written prior to marriage. Many states provide protection to this spouse,
generally giving rights to property included in the probate estate, not the
more expansive augmented estate.
o Omitted spouse statutes usually presume that T would have wanted to
change the will to cover the new spouse, just never got around to doing it.
Can be rebutted if:
The parties entered into premarital or marital agreement to waive
inheritance rights;
After marriage, the T uses other means, such as trusts or insurance
policy benefits to provide substantially for the spouse; or
The spouse was given something in the will even though the will was
written prior to the marriage AND the will expressly states that it
excludes any persons the T might marry in the future.
OMITTED CHILDREN
o Unlike omitted spouses, children intentionally omitted from a will are not
entitled to demand a share of the estate. Generally, you have the right to
disinherit children, for cause or not.
o Texas: rely exclusively on community property and homestead rights, but do
provide SOME protection.
Family allowance is not automatic. Even if the judge does grant it the
amount is low.
o Intentional Disinheritance Doesnt always have to be because parents are
mean (rare)! Lots of reasons to disinherit kid addicted to drugs, OR kid
wants $ to go to favorite charity.
UPC 2-302. OMITTED CHILDREN
(a) Except as provided in subsection (b), if a T fails to provide in his will for any of
his children born or adopted after the execution of the will, the omitted afterborn or after-adopted children receives a share in the estate as follows:
a. (1) If the T had no children living when he executed the will, an omitted
after-born or after-adopted child receives a share in the estate equal in
value to that which the child would have received had the T died
intestate, unless the will devised all or substantially all of the estate to the
other parent of the omitted child and that other parent survives the T and
is entitled to take under the will.
b. (2) If the T had one or more children living when he executed the will, and
the will devised property or an interest in property to one or more of the
then-living children, an omitted after-born or after-adopted child is entitled
to share in the Ts estate as follows:
i. The portion of the Ts estate in which the omitted after-born or afteradopted child is entitled to share is limited to devises made to the
Ts then-living children under the will.
ii. The omitted after-born child is entitled to receive the share of the
Ts estate, as limited in subparagraph (i), that the child would have

received had the T included all omitted after-born and after-adopted


children with the children to whom devises were made under the
will and had given an equal share of the estate to each child.
iii. To the extent feasible, the interest granted an omitted after-born or
after-adopted child under this section must be of the same
character, whether equitable or legal, present or future, as that
devised to the Ts then-living children under the will.
iv. In satisfying a share provided by this paragraph, devises to the Ts
children who were living when the will was executed abate ratably.
In abating the devises of the then-living children, the court shall
preserve to the maximum extent possible the character of the
testamentary plan adopted by the T.
(b)Neither subsection (a)(1) nor subsection (a)(2) applies if:
a. (1) it appears from the will that the omission was intentional; or
b. (2) the T provided for the omitted after-born or after-adopted child by
transfer outside the will and the intent that the transfer be in lieu of
testamentary provision is show by the Ts statements or is reasonably
inferred from the amount of the transfer or other evidence.
(c) If at the time of execution of the will the T fails to provide in his will for a living
child solely because he believes the child to be dead, the child is entitled to
share in the estate as if the child were an omitted after-born or after-adopted
child.
(d)In satisfying a share provided by section (a)(1), devises made by the will abate
under section 3-902.
I give my stuff to my children. Therefore, if you make will with one child, die with 10, all
accounted for.

PLANNING FOR INCAPACITY


INTRODUCTION
FINANCIAL DECISIONS DURING INCAPACITY
WHAT HAPPENS WHEN THERE IS NO PLANNING?
WHAT IS POSSIBLE WITH ADVANCE PLANNING?
o Advance planning allows an individual to control who should make financial
decisions in the event of the individuals incapacity, keeping the process
private rather than court-supervised.
o Powers of Attorney
General: a power of attorney authorizes one person (the agent,
who is sometimes also called the attorney in fact) to act on behalf of
someone else (the principal) in a legal, health or business matter.
Durable Power of Attorney: designed to operate even after the
principal is incapacitated.
Springing Power of Attorney: dormant until the occurrence of
some event specified in the power, such as the principals
incapacity (dont use this!)
Powers of attorney can enhance the principals autonomy and
ensure continuity in an individuals financial matters. There is
little oversight though, so fraud is prevalent.
Agents Responsibilities: the utility of a power of attorney depends on
the trustworthiness of the agent. The agent has a fiduciary obligation
to the principal, but the parameters of this obligation are not entirely
clear. UPC and Uniform Power of Attorney Act do not specify the scope
of this fiduciary obligation.
An agents fiduciary duty is described by Rest.3d of Agency as a
duty to act loyally for the principals benefit in all matters
connected with the agency relationship. 8.01. Conduct by an
agent that would otherwise constitute a breach of duty .. does
not constitute a breach of duty if the principal consents to the
conduct. 8.06(10).
Breaches can begin at the time the power of attorney is created,
as when the principal is defrauded into signing a form; breaches
may also occur when the agent engages in:
o Transactions that exceed the intended scope of authority,
such as making gifts of the principals property when not
granted gift-making authority;
o Transactions conducted for self-dealing purposes, as when
an agent spends the principals money to buy himself a car
rather than pay for the principals nursing home care; or
o Transactions conducted in contravention of the principals
expectations, such as when an agent has gift-making
authority, but makes gifts that undermine the principals
estate plan.
Uniform Power of Attorney Act : effort to curb abuses. Establishes
straightforward procedures so people can arrange for a surrogate to
handle their property if they are incapacitated. Focuses on protecting
principal.

UPAA 110. TERMINATION OF POWER OF ATTORNEY OR AGENTS AUTHORITY.


(a) A power of attorney terminates when:
(1) the principal dies;
(2) the principal becomes incapacitated, if the power of attorney is not
durable;
(3) the principal revokes the power of attorney;
(4) the power of attorney provides that it terminates;
(5) the purpose of the power of attorney is accomplished; or
(6) the principal revokes the agents authority or the agent dies.
(b)An agents authority terminates when:
(1) the principal revokes the authority;
(2) the agent dies, becomes incapacitated, or resigns;
(3) an action is filed for the [dissolution] or annulment of the agents
marriage to the principal or their legal separation, unless the power of
attorney otherwise provides; or
(4) the power of attorney terminates.
(c) Unless the power of attorney otherwise provides, an agents authority is
exercisable until the authority terminates under subsection (b), notwithstanding
a lapse of time since the execution of the power of attorney.
(d)Termination of an agents authority or of a power of attorney is not effective as
to the agent or another person that, without actual knowledge of the
termination, acts in good faith under the power of attorney. An act so
performed, unless otherwise invalid or unenforceable, binds the principal and
the principals successors in interest.
UPAA 114. AGENTS DUTIES.
(a) Notwithstanding provisions in the power of attorney, an agent that has accepted
appointment shall:
a. (1) act in accordance with the principals reasonable expectations to the
extent actually known by the agent and, otherwise, in the principals best
interest;
b. (2) act in good faith; and
c. (3) act only within the scope of authority granted in the power of attorney.
(b)Except as otherwise provided in the power of attorney, an agent that has
accepted appointment shall:
a. (1) act loyally for the principals benefit;
b. (2) act so as not to create a conflict of interest that impairs the agents
ability to act impartially in the principals best interest;
c. (3) act with the care, competence, and diligence ordinarily exercised by
agents in similar circumstances;
d. (4) keep a record of all receipts, disbursements, and transactions made on
behalf of the principal;
e. (5) cooperate with a person that has authority to make healthcare
decisions for the principal to carry out the principals reasonable
expectations to the extent actually known by the agent and, otherwise,
act in the principals best interest; and
f. (6) attempt to preserve the principals estate plan, to the extent actually
known by the agent, if preserving the plan is consistent with the
principals best interest based on all relevant factors.

(c) An agent that acts with care, competence and diligence for the best interest of
the principal is not liable solely because the agent also benefits from the act or
has an individual or conflicting interest in relation to the property or affairs of
the principal.
(d)Absent a breach of duty to the principal, an agent is not liable if the value of the
principals property declines
(e) Except as otherwise provided in the power of attorney, an agent is not required
to disclose receipts, disbursements, or transactions conducted on behalf of the
principal unless ordered by a court or requested by the principal, a guardian, a
conservator, another fiduciary acting for the principal .
COMMENT. There is little clarity in state power of attorney statutes about what fiduciary
means. (d) is a departure from traditional CL duty of loyalty which required an agent to
act solely for the benefit of the principal. This is a policy decision because most agents
under powers of attorney are family members who have inherent conflicts of interest
with the principal arising from joint property ownership or inheritance expectations. (h)
codifies agents duty to account to principal. Rather than create affirmative duty of
period accounting, (h) says agent is only required to disclose receipts in certain
circumstances.
UPAA 119. ACCEPTANCE OF AND RELIANCE UPON ACKNOWLEDGED POWER OF
ATTORNEY.
. (c) A person that in good faith accepts an acknowledged power of attorney
without actual knowledge that the power of attorney is void, invalid or terminated, that
the purported agents authority is void, invalid, or terminated, or that the agent is
exceeding or improperly exercising the agents authority may rely upon the power of
attorney as if the power of attorney were genuine, valid and still in effect, the agents
authority were genuine, valid and still in effect, and the agent had not exceeded and had
not properly exercised the authority.
HEALTH CARE DECISIONS DURING INCAPACITY
In the event of incapacity, an individual may be unable to make his own decisions
about health care, treatment, and end of life matters. Here are the default rules of
what happens without a plan.
WHAT HAPPENS WITHOUT PLANNING? Most states provide hierarchy of default
health care decision makers, called surrogates. Spouses usually first, kids
clergyman.
o History
Quinlan NJ SCt found that Ms. Quinlan should have the choice to be
removed from life support, with that right exercised by her father, and
that drs could not face criminal punishment for ending medical
treatment pursuant to patients right of privacy. Right of privacy is
broad enough to encompass a patients decision to decline medical
treatment under certain circumstances.
Cruzan US SCt held that Cruzans parents had not met the proper
evidentiary requirements (C&C), but the Court did not reject an
individuals right to EOL decision making.
Basic Boundaries involving right to privacy with respect to medical
treatment In Quinlan and Cruzan (the right to die is within the
individuals constitutionally protected interests and can be expressed
by a proxy via C&C evidence of the patients intent) facilitated the

creation of a basic rubric under which state courts could, within the
confines of their state constitutions, decide EOL disputes.
Patient Self Determination Act requires that federally funded health
care institutions and health maintenance organizations show that their
patients have been informed that they have the right to make
decisions concerning medical treatment, including through advance
health directives.
o Schiavo
Schiavo was in an incurable state she would always remain in an
unconscious, reflexive state, totally dependent on others to feed her
and care for her private needs. She could remain in this state for many
years.
Three Issues: (1) whether trial court was required to appoint guardian
ad litem; (2) whether trial court erred in admitting social science
evidence from Beverly Tyler; and (3) whether conflicting testimony was
insufficient to support trial courts decision by C&C evidence.
Whether Sciavo would choose to continue the constant medical
care and the supporting tubes in hopes that a miracle would
recreate her missing brain tissue, or whether she would wish to
permit a natural death process to take its course and for her
family members and loved ones to be free to continue their lives.
Holding: The evidence was sufficient to allow death; C&C standard of
proof, while very high, permits a decision in the fact of inconsistent or
conflicting evidence.
Court reconfirms that a courts default position must favor life.
COVERING THE COSTS OF MEDICAL AND LONG-TERM CARE
MEDICARE for people 65+, and for individuals with certain disabilities. Doesnt
cover prescriptions, but does cover hospital care.
MEDICAID for poor people, and for nursing home care, covers prescriptions.
o Requires Medical Assistance
o Cannot Have Too Many Assets ($2k)
o Cannot Have Too Much Income (more than average cost of nursing home
care)
o Estate Recovery Liens
PLANNING FOR THE CARE OF CHILDREN ON THE DEATH OR DISABILITY OF A
PARENT
DEATH OF A PARENT
o When one parent dies, the surviving parent is generally assumed to be the
custodian of the child, regardless of what the deceased parents will
provides. The parent who is last to die nominates the guardians.
o When both parents die, their wills may nominate a guardian, who will be
given physical custody of the child, and/or a conservator, who becomes
legally responsible for managing the childs financial assets. Usually they are
the same person.
o While parents nominations are not legally binding, most courts will give
great deference to the parents preferences. Some statutes say courts will
give due regard to preferences.

Court has to appoint guardian based on the best interest of the child.
The court is probably going to appoint the person named, but doesnt
have to.
o A guardian must accept an appointment before it becomes effective; merely
probating a will is insufficient. If the parents have not appointed a guardian
or the appointed guardian declines, the courts typically choose a relative
who is next of kin.
o Guardians typically take physical custody of the minor, decide where child
will live, make educational and medical decisions, and decide on religious
training.
They do NOT have to provide for the child from their own funds and
may receive money payable for the support of the child to the minors
parent or guardian under the terms of any statutory benefit or
insurance system or any private contract, devise, trust;
Unless the custodian adopts the child then financial
responsibility, but the child probably still has all the $ from the
dead parents.
Typically ends when the child is no longer a minor.
Uncertainties:
The parent cannot be certain that the court will accept
nomination because the appointment only takes effect once the
will is probated
If the other parent is still living and is not legally incapacitated,
then that parent generally assumes legal custody upon death of
the first parent, and the testamentary appointment is irrelevant.
o Texas: guardian of the estate (deals with money and property) =
conservator; and guardian of the person (custody of the child) = custodian.
Can only nominate one person or married couple per role, and then
you can name successors.
Can name these guardians through anything that has the same
requirements as a will signed by 2 witnesses, acknowledged by
notary; durable power of attorney. In Texas, put this in the will or in a
separate document. Separate document is better because (1) it may
be a while before the will gets probated (4 years, then 2 years to bring
contest); (2) this is the single reason over which married couples fight.
There are dumbasses in both families have to pick the LEAST
ridiculous of all the dumbasses.
o UGMA Uniform Gift to Minors Act precedent to UTMA
o UTMA Uniform Transfers to Minors Act completely inflexible, basically a
statutory trust. It is not great, but it is better than nothing. Terms are
specified by statute; lasts until the minor reaches 21. Not the best way to do
things; causes all sorts of complications, especially tax complications.
STANDBY GUARDIANSHIP
PARTIAL DELEGATION EDUCATIONAL AND MEDICAL CONSENTS
CHILD WITH DISABILITIES
FINANCIAL PLANNING FOR A CHILD

ETHICAL ISSUES IN REPRESENTING A PERSON WITH DISABILITIES

THE END OF LIFE PHYSICIAN ASSISTED SUICIDE


STATE APPROACHES Only two states allow this
IS PHYSICIAN ASSISTED SUICIDE CONSTITUTIONAL? Yes

ADMINISTRATION OF THE PROBATE ESTATE


INTRODUCTION
General
o This section deals with procedural aspects of administering the estate.
The probate process is a useful tool for transferring ownership of the
decedents probate property free of the claims of the decedents
creditors or other potential Bs.
Probate procedures are state-specific, but there are common themes.
o Lewis v. State Bar of California
Atty charged with violating his oath and duties as an attorney in that
he (1) negligently and improperly conducted the administration of an
estate without any probate experience and without associating or
consulting a sufficiently experienced attorney; (2) obtained a loan from
a client without appropriate disclosure and without written consent; (3)
failed to maintain complete and accurate records of funds belonging to
a client.
Issue: the propriety of the discipline recommended by the State Bar.
Holding: Court adopts Disciplinary Boards recommendation of
suspension for 30 days, but that suspension be stayed and probation
for 1 year
Reasoning:
No showing of bad faith or a desire to benefit himself at the
expense of his client. Nearly all of his problems appear to be a
direct or indirect result of his complete lack of familiarity with
probate law.
o Paula Monopoli, American Probate: Protecting the Public, Improving
the Process
Probat process is intended to perform several useful functions: (1)
collect or marshal all the assets and inventory them; (2) manage the
assets while administering the estate; (3)pay all debts, including
hospital, doctor, and funeral bills, and taxes; and (4) distribute what
left in estate to the persons named in will.
PR performs these functions. Executor appointed in will; administrator
appointed by court for intestate decedent. The court can name
someone other than the executor named in the will if it is necessary
(felony convictions, in jail, etc.)
PR must inventory and transfer assets to a common pot. Give
notice of decedents death to creditors unless the death was
more than a year earlier. Pay taxes must get everything
appraised, which usually means hiring experts who also must be
paid. When money must be distributed, probate system has rules
to determine who is entitled to it and the PR must know these
rules. Finally, in some jx, PR must file an accounting, detailing
the assets received at the beginning of the process, all the
money spent for creditors, tax authorities, and finally the hears
and Bs.
Underlying Philosophy of UPC is that the state should act in probate
matters only when called upon by the parties. While it does provide for

an alternative for a supervised process, the UPC assumes that most


estates will not require a supervised process.
Theory: unless there is a compelling reason, once a PR is
appointed, the court should step back and let the fiduciary
administer the estate and close it without court intervention.
Reflects growing importance of non-probate assets.
Supervised Administration: means that the PRs letters of
appointment (aka letters testamentary) must be endorsed, to
indicate to third parties, like bank or brokerage houses, that the
PR needs permission from the court to take actions like buying or
selling securities.
Nonprobate Property is Outside the Process
o Responsibility of Nonprobate Property to Pay Claims of Creditors and Taxes

MATTERS THAT NEED IMMEDIATE ATTENTION


WHERE TO PROBATE THE ESTATE JX AND VENUE
PROCEDURE TO PROBATE SMALL ESTATES BY AFFIDAVIT
FORMAL AND INFORMAL PROCEDURES TO PROBATE ESTATES IN GENERAL
OPENING THE ESTATE GETTING THE WILL ACCEPTED FOR PROBATE AND THE
PERSONAL REPRESENTATIVE
Appointing the PR: UPC 3-103 requires that a person be appointed to acquire the
powers and undertake the duties and liabilities of a PR and be issued letters.
UPC 3-203 governs who may be appointed the PR. It provides for a hierarchy of
appointees.
UPC 3-203. PRIORITY AMONG PERSONS SEEKING APPOINTMENT AS PR.
(a) Whether the proceedings are formal or informal, persons who are not
disqualified have priority for appointment in the following order:
1. The person with priority as determined by a probated will including a person
nominated by a power conferred in a will;
2. The surviving spouse of the decedent who is a devisee of the decedent;
3. Other devisees of the decedent;
4. Other heirs of the decedent;
5. 45 days after the death of the decedent, any creditor.
Formal: where proceedings are initially filed or where informal appointment is
contested, the court will normally decide who to appoint as the PR based on the
order provided in UPC 2-302. The court may deviate from the order and make an
independent judgment if it is established that the more superior person had a
conflict of interest, lacked mental capacity, or was too young.
Informal: if informal probate is sought, the Registrar of the court is bound by the
hierarchy of the persons entitled to appointment in UPC 3-203; deviation is NOT
permitted. Registrars determination is conclusive unless superseded by an order
of the court in a formal testacy proceeding or agreement of or renunciation by
those with superior rights.

o In contrast to determination of heirship, which requires formal proceeding,


appointment as administrator in intestacy may be sought by application with
Registrar.
Once PR determined, the PR assumes the powers and duties pertaining to the
office. UPC 3-307.
GENERAL DUTIES, POWERS AND LIABILITY OF THE PERSONAL REPRESENTATIVE
Duties of the PR
o Duties imposed by law on PR fall into two broad categories: (1) general
fiduciary duties and (2) probate-specific procedural duties.
PR owes general fiduciary duties to the estate and to all persons
entitled to the estate, including creditors, surviving spouses, children
and other devisees. These FDs are similar to FS owed to Bs of a trust
by a trustee.
UPC codifies CL obligations.
Most common duties: duty of loyalty, duty of care and prudence,
duty not to commingle assets of the estate with the personal
assets of the PR, duty to maintain accurate records, duty of
impartiality, and duty to avoid self dealing.
PR has other duties unique to probate administration and is responsible
to settle and distribute the estate of the decedent in accordance with
the terms of any probated and effective will and the UPC, and as
expeditiously and efficiently as is consistent with the best interests of
the estate. UPC 3-703.
Duty to notify heirs and devisees and certain other interested
parties
Duty to gather the assets of the decedent and to prepare and file
or mail an inventory of property owned by decedent at the time
of his death, listing with reasonable detail, and indicating FMV as
of the date of death, and type and amount of any encumbrance
with respect to any item.
Duty to take control of the estate property and to take all
reasonably necessary steps for the management, protection, and
preservation of those assets. Pay taxes.
Duty to notify creditors, determine the validity of their claims,
and pay amounts properly due.
Duty to prepare a financial accounting of the administration of
the estate and to distribute the property to the devisees and
heirs.
UPC 3-715(21) allows the PR to employ persons, including
attorneys, auditors, investment advisors, or agents, even if they
are associated with the PR, to advise or assist the PR in in the
performance of his administrative duties; act without
independent investigation on their recommendations; and
instead of acting personally, employ one or more agents to
perform any act of administration, whether or not discretionary.
o This absolves PR of all liability that may occur because of a
poor decision by the trusted agent unless there is gross
negligence or fraud
Powers of the PR

o Come from two sources: the will and the probate law of the domiciliary state.
o Law grants the PR the same power over the title to the property of the estate
that an absolute owner would have, in trust however, for the benefit of the
creditors and others interested in the estate.
o UPC 3-711 authorizes 27 powers, including managing (retaining, selling,
insuring, voting stock, abandoning, repairing, etc.) assets and business,
litigating, settling and paying debts and taxes, retaining other professionals
to help in decision-making, etc.
Liability of the PR
o Failing to uphold these duties can make PR individually liable for damages
that occur. PR may have to reimburse injured parties from his own funds if PR
breached FDs to the estate or violated the states probate law.
o There may also be a penalty or surcharge of up to 100% imposed on PR by
statute.

DUTY TO GATHER, INVENTORY AND VALUE THE ESTATE


Gather the Decedents Property
Inventory and Value the Decedents Property