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Wills and Trusts

Test Outline
Daar (Fall 2015)
1. Control of the Dead Hand: Property can be controlled by the dead, Freedom of Disposition (though not
favorable to certain people) is upheld by the law.
a. Conditions and Restraints
i. Rule: Decedent conditions a gift on the beneficiary in a certain way generally upheld
unless the condition violates law or public policy. (eg. Absolute restraints on marriage)
1. Exceptions to Restraints on marriage: partial restraints that impose reasonable
restrictions are generally not contrary to public policy. Reasonableness is fact
sensitive. (eg. Marrying within a reasonable time period/certain religion)
2. Invalid restrictions:
a. Freedom of religion
b. Encourages separation or divorce
c. Committing crime or fraud
3. Analysis (w/ constitutional/policy arguments): right to inherit is not a constitutionally
protected right, but condition can be a violation of constitutional right. Policy
arguments relates to reasonableness of the condition.
ii. Remedy and gifts over clauses
1. Rule: if the conditional gift is void and there is a gift over clause, courts will
distribute the gift to the alternate beneficiary. If there is not a gift over clause, the
condition is void and the original beneficiary receives the property.
b. Wills requiring destruction of property
i. Rule: courts will break down their analysis into a variety of factors evaluate facts and
weight the benefits and burdens for fulfilling the condition.
1. Real Property: balance public and private interests
2. Personal Property: motivation, intent and social utility
c. Challenging Wills
i. Rule: the pecuniary interest in the estate. A person who is named in a will or who would get
the property would have pecuniary interest in the will, and everyone else will not have
standing to challenge the will.
d. Posthumously Acquired Property
i. Property rights that the descendant acquired after death
ii. Rule: the disposition of property only extends to property at death, and extends to the
testators envisions of the property earned after death.
2. Terminology
a. Inherit: to gain property of the death of the individual inheritance is the passing of property at
death.
b. Devise: property that is passed through a will and Devisee is the same as beneficiary
c. Ways to inherit property (3): more than one way can happen
i. Will: a will is a written instrument that conveys property at death
1. Testator: a person who drafts the will
2. Testate Succession: the process of passing the property through a will
3. Succession: the passing of property
4. Beneficiary: person who takes property under a will
ii. Intestate Succession
1. Dies without a will/ without disposing of all property
2. Subject to state laws = intestate succession laws
3. Heir: person who inherits property through intestate succession
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Wills and Trusts


Test Outline
Daar (Fall 2015)
4. Decedent: person died without a will
iii. Will Substitutes
1. Contracts/ legal agreements other than will or intestate succession
a. Trust (intervivos trust avoids probate)
b. Joint Tenancy (right of survivorship)
c. Life Insurance (payable upon death)
3. Probate Procedure and Attorney Liability
a. Choice of Law: state law of domicile at the time of death; real property is per location.
b. Probate: the process of distributing property.
i. When a person dies with a large estate, there are four purposes served by probate and the
administrator (intestate succession) or executor/personal representative (will) has 4 specific
duties:
1. Inventory and collection of assets
2. Manage those assets during the time the probate is ongoing
3. Pay off debts of the estate
4. Distribute the remaining assets to the named beneficiary
ii. Non-probate assets are Will substitutes and do not need to go though probate (life insurance
and pension plan).
iii. Always probate
1. Real property
2. Protection from predators
3. Estate taxes (not in CA but yes in Federal)
c. Attorneys Role and Liability
i. Follow the clients wishes according to intestate succession law, or natural disposition.
ii. Liability Rules
1. Old: no liability because no privity.
2. Modern: if the privity barrier is upheld, there is no recourse, and second, there is
incentive for attorneys to do well.
a. Contract: once the client identifies the intended beneficiary, that person
becomes a third party beneficiary and is in privity with the attorney. Breach of
contract.
b. Tort: Duty of reasonable care with foreseeability of injury to the intended
beneficiary. Negligence.
4. Intestate Succession
a. Definition: a system of default rules that anticipate the next best plan for the testator. Takes place
when person dies without a valid will.
i. Rule: dead people cannot own property; dead person cannot be named in a will. Person
who benefit by intestate succession include family members or by blood or marriage.
b. Simultaneous Death Provisions
i. Rule: Generally, if the title of property depends on the priority of death, and there is no
evidence of simultaneous death then the property of each person shall be disposed of as if
he has survived.
ii. Rule Under the Uniform Probate Code (UPC): every person must survive the
descendants death by 120 hours. The survival must be established by clear and
convincing evidence. If not survived by 120 hours, then the person must be the last heir.
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Test Outline
Daar (Fall 2015)

c.

d.

e.
f.
g.

h.

iii. CA Rule: requires clear and convincing evidence that the beneficiary or heir survived
then to distribute that property but there are exceptions.
1. Joint Tenancy: if property is held by two joint tenants and both have died and no
evidence show one survived the other, the property shall be distributed under a
sharing agreement. The property would be held in tenancy of common.
iv. Avoid: create a will ahead of time.
Death of Spouse: the surviving spouse is always the preferred first taker of the intestate
succession. Even if separated, most states view the parties as legally married. Some states
disqualify a spouse if the spouse has abandoned.
i. Rules:
1. UPC: spouse gets everything if no issue/parents; share with the children
2. California: community property, surviving spouse is entitled to of the CP.
Inheritance and Gifts are not CP.
Systems of Distributing Property
i. Per Stirpes: the initial division is made at the first generation regardless if there are any
living members.
1. # of primary shares is the # of the surviving persons in that nearest generation,
plus the # of deceased persons in that generation who have descendants who
survived.
ii. Per Capita on representation: the initial division of the estate is made at the first
generation in which one or more members survived. Representation is recognized for
surviving decedents of that generation. The # of primary shares is the # of surviving
persons in the first generation with a surviving member, plus the # of deceased persons in
that generation who have decedents who survive.
Half Bloods
i. Genetically related siblings through 1 parents are treated the same as fully genetically
related.
Escheat: when a decedent has no relatives, the property will escheat to the state.
Transfers to Children
i. Adoption: formal adoption and equitable adoption (court looks to the behavior and intent
of the parties due to lack of formalities, requires clear and convincing evidence)
ii. Nonmarital Children (step children): are treated like marital children
iii. Posthumous Children: PH children can take property (Common Law); a child
conceived after death can inherit if the parent gave permission, in writing, for the use of
genetic material after death to conceive a child, and the child was in utero within two
years after death. (CA)
Advancement (lifetime gifts with possible post death consequences)
i. Common Law: if an heir receives a life time gift then that share is often counted against
any distribution that person would receive. CL presumes gifts as advancements. Requires
evidence (preponderance of the evidence standard) to rebut.
1. Advancement of the heir intestate share: an heir succeeds the estate that is
identified at the time of death; therefore a lifetime gift is counted against the heir
in the distribution.
ii. Accounting (Hotchpot): the blending of property to ensure equal distribution
1. Adding the advancement to the estate, then dividing the property, and subtracting
the advancement from the advanced devisee.
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Test Outline
Daar (Fall 2015)
2. Person who receives advancement but also owes the estate money would simply
not get a distribution, since owning money is inconsistent with the law of
gratuitous transfers.
i. Bars to Succession/Inheritance
i. Rule: Generally the relationship does not matter, but some acts will invoke the law to
intervene.
1. Slayer Rule (SR)
a. J/x without SR: 3 ways
i. Slayer receives the estate double punishment (crim. And civil
forfeiture laws)
ii. Slayer does not get the estate
iii. Slayer is a constructive trustee (giving the property to the slayer
but distributing it to the next taker)
b. SR in CA:
i. the slayer is treated as predeceased, the slayer is not entitled to:
1. Any property interest or benefit in a trust
2. Cannot receive any beneficial interest or administrative
interest (fiduciary interest executor)
3. Any property under intestate succession
4. Any quasi community property
ii. Cannot kill for the benefit of a third person.
iii. In the absence of a final conviction of murder, court may
determine by preponderance of the evidence that the accused is
liable for the resulting death.
2. Elder Abuse: elder abusers are treated the same way as slayers, to the extent it is
proven by clear and convincing evidence that the person is liable for physical
abuse, neglect or financial abuse.
5. Will Formation and Execution
a. Formation: the statute of wills permits the disposition of property at death through a written
instrument.
i. CA Will Formation/ Requirement: 4 elements for the will to be valid
1. In writing (oral rules not permitted)
2. Signed by: the testator (by testator direction if lacks physical capacity) or a
conservator pursuant to a court order to make a will
3. Be signed by 2 witnesses: at least two persons each of whom
a. Being present at the same time witness the testators singing of the will;
and
b. Understand that the instrument they signed be the testators will
4. Testator must be at least 18 years of age (with the intent and capacity to make the
will)
ii. Function of the wills formalities
1. Ritualistic Functions: conveys to the testator this is a serious act
2. Evidentiary Functions: best evidence of the testators intent
3. Protective Function: protects the testator from undue influence
4. Channeling Function: will be upheld in a reliable system
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Test Outline
Daar (Fall 2015)
b. Execution
i. Common Law: requires strict compliance with the wills formalities, no deficiencies.
ii. Substantial Compliance with Formalities: even when not executed in strict
compliance, the court is able to probate the will if:
1. Clear and convincing evidence shows that the testator intended the document to
be a will
2. There was substantial compliance with the formalities
iii. Harmless Error Rule: a harmless error in executing a will may be excused if the
proponent establishes by clear and convincing evidence that the decedent adopted the
document as his or her will
iv. Signature of the Witness
1. Common Law: the testator must acknowledge in the presence of witness and the
witnesses must sign in the presence of the testator.
a. Line of Sight Test: presence of the testator is satisfied if the testator sees
or has the opportunity to see the witnesses
b. Conscious Presence Test: the testator needs to know that the witness is
signing form the sight, sound, and general awareness of the events.
(broader)
2. Modern UPC Rule: abolishes the requirement that the witnesses sign in the
presence of the testator. The testator must sign/ acknowledge in the presence of
the witness in reasonable time.
3. Presence: courts has not yet substitute physical presence with technological
presence
c. Execution and Interested Witness Problem
i. Rule: an interested witness is someone who receives a pecuniary under the will. A
disinterested witness is someone who does not take under the will.
1. CL: interested witness renders the will invalid
2. Newer Law: the witness has a conflict of interest only to the extent that the
witness stands to take more under the will than if the will were not valid. There is
a presumption of conflict, if the interested witness rebuts the presumption, then
the gift under the will is not valid.
3. Modern Law: the presumption shifts, the court will not invalidate an interested
will, but instead focuses on the gift that the witness is receiving in the will.
ii. Purging Statutes: purging statutes allow an interested witness to purge the excess
interest under the will.
1. To determine the excess interest
a. Calculate how much the witness would take if the will were not valid
(prior will or intestacy)
b. How much the witness stands to take under the will.
iii. California Law
1. Presumption of fraud; extra benefit test in the purging statute purge the
interested witnesses of any portion of the gift that exceeds what the witness would
have received if the will were not established
a. Steps
i. Is the witness interested?
ii. Apply the presumption of undue influence, fraud or duress
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Test Outline
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iii. If yes, then the gift is purged (the extra benefit), if no then the
interested witness will take the gift
d. Mistakes in Execution
i. Swapped Wills
1. Common Law: the will is invalid, even if the wills mirror each other
2. CA Rule: wills are valid if the wills show an overall intent to make a unified
estate plan
e. Holographic Wills
i. Rule: written by the testators hand and is signed by the testator. It does not need to be
attested to by witnesses. The material portion of the will need to be in handwriting. There
must be testamentary intent.
1. Testamentary Intent: there must be intent that the document constitutes the last
will and testament; there is not ritualistic function because there are no witnesses.
6. Revocation and Reformation of Wills
a. Overall Rule: Will are executed intervivos, but are not effective until death. A will can be
revoked, amended, or replaced at any time before death physical act and subsequent will.
i. Physical Acts: a will may be revoked by physical act as long as the act is destructive and
there is intent to revoke. A testator may physically revoke a will by destroying it.
1. CL: The words of the will, will have to be affected.
2. ML: any part of the will can be affected
3. Partial Revocation: partial revocation by physical act is permitted
ii. Subsequent Will: a will may be revoked in whole or in part by a properly executed will
(expressly); or by a subsequent properly executed will that is inconsistent with the
original will.
1. Express: the subsequent will must clearly indicate intent to revoke.
2. Implied: revocation by inconsistency occurs when the subsequent will disposes
of the descendants property in a way that is inconsistent with the prior will. The
prior will is deemed revoked to the extent of any inconsistencies.
iii. Will v. Codicil
1. IF the subsequent will revokes the prior will completely, the subsequent will
becomes the testators sole will. If the will is partially revoked or amended, the
subsequent will is a codicil. The prior will stand and is valid to the extent it is not
revoked by the codicil.
2. Codicil: a will that must meet the formalities, but it merely amends the original
will.
3. Revocation of a codicil does not revoke the underlying will. But revocation of a
will revokes the codicil.
iv. Revocation by Presumption/ Lost Wills: rebuttable presumption arises that the testator
revoked the will by act if the will is lost. (any evidence is admissible)
v. Revocation by Operation of Law: unless the will provides otherwise, divorce
automatically revokes any provision in the will relating to the ex-spouse.
b. Dependent Relative Revocation: a validly revoked will (in part or whole) may be possible for
probate if the revocation was based on mistake of fact or law and if the testator would not have
revoked the will if he knew the truth. It is presumed that the testator preferred the old will over
intestacy and the old will be admitted to probate in absence of evidence overcoming the
presumption.
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Test Outline
Daar (Fall 2015)
i. DDR requires the mistake of facts be set forth in writing and the mistake be beyond the
testators knowledge.
ii. DDR needs to be argued, the court does not automatically apply it.
c. Revival: when a will that was previously revoked is revived by revoking the revoking
instrument. Extrinsic evidence is allowed.
i. Minority J/x: require first will to be re-executed
ii. Majority J/x: testator must intend to revive first will. Evidence of revoke must be
demonstrated by evidence or writing.
iii. Burden of proof: person proving the first will is not revived.
7. Components of a Will
a. Doctrine of Integration: All the pieces of paper that are physically present at the time of
execution and that the testator intends to be a part of the will constitute the part of the will.
i. Doctrine of Integration Holographic Wills: so long as there is clear and convincing
evidence, the papers are meant to be a part of the will, even if they are not physically
present at the time of execution.
b. Doctrine of Republication by Codicil: Executing a codicil republishes and executes the
underlying will. Thus, the underlying will is thought of as executed on the date of the codicil.
i. No redate of the will if no express republication clauses.
ii. Curative powers if problems with original execution.
c. Incorporation by Reference: a valid will can incorporate by reference a document that was not
executed with the requisite formalities, thereby giving effect to the intent expressed in the
incorporated document as long as:
i. Intent: the language of the will must manifest intent to incorporate the document.
(actually referencing the document)
ii. Existence: the document to be incorporated must be in existence at the time of will
execution.
iii. Description: the language of the will must sufficiently describe the writing
d. Doctrine of Acts of Independent Significance: permits a testator to effectively change the
disposition of his property without changing a will, if acts or events changing the disposition
have some significance beyond avoiding the requirements of the will.
i. Generally applies to: a class of people or specific items (e.g. group of soldiers: old vs.
new soldiers/ a car: camary vs. jaguar)
e. Contracts: a contract with respect to a will can do:
i. Make a will in favor of a person
ii. Revoke an existing will
iii. To not make a will at all.
8. Testamentary Capacity
a. Capacity to make a will: a standard of competence, testator must have capacity at the time of
execution to understand:
i. The persons who are the natural objects of his bounty (heirs)
ii. The nature and extent of his property
iii. The disposition he is making as is described by the will
iv. How the elements come together to form a desire of disposition
Four Defects: insane, delusion, undue influence, and fraud
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Test Outline
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b. Insane Delusion: A single belief, false sense of reality. An impact on a provision of the will
invalids the provision. The insane delusion must affect the disposition made by the deceased; it
does not affect the testators capacity to create a will.
c. Undue Influence: aka substituted intent. When the disposition is not free, the testator is
influenced.
i. Circumstantial Evidence
1. Age/personality/physical or mental health and ability.
2. Alleged wrongdoer had an opportunity to exercise influence through access,
communication and contacts.
3. Alleged wrongdoer had a disposition to exercise the undue influence
4. Effects of undue influence because it contains an unnatural disposition pattern
or unusual inclusions/exclusions
ii. Proof: Preponderance of the evidence or clear and convincing
1. Testator was susceptible to undue influence
2. Beneficiary had the opportunity to influence
3. Beneficiary had a disposition to influence
4. Result clearly indicated undue influence
iii. Confidential Relationship: assumption of undue influence arises when a confidential
relationship exists between the testator and beneficiary, but it alone is not sufficient to
prove undue influence.
1. Undue Influence of Attorneys: Attorney may draft a will for person who wants
to make the attorney a beneficiary under certain circumstances.
a. Cannot draft a will for a stranger in which the attorney is a devisee.
b. Attorney heir may draft the will but cannot receive a disproportionate
share.
2. Rebuttable Presumption: burden shifts to the proponent of the will to provide
rebuttable evidence.
d. Duress: threats can be physical or mental.
e. No Contest Clause (In terrorem Clause): it will not be enforced against a contestant if a
contestant is able to show probable cause for bringing a claim in the first place.
i. CA: Devisee can either take under the will as provided, or contest the will, but if the
devisee loses under the contest, then the devisee loses the gift in the will. If the devisee
wins, the will can be invalid.
9. Interpretation of Wills/ Construction
a. CL
i. Plain Meaning Rule: court should attribute to the will its plan and ordinary meaning
ii. No Reformation Rule: court should not reform or change any words within the four
corners of the will
iii. CL: extrinsic evidence only allowed for latent
1. Patent Ambiguity: appears on the face of the will
2. Latent Ambiguity: appears when the will is construed or applied to the facts
b. ML: the plain meaning rule and difference in patent/latent ambiguities have been repudiated.
Extrinsic evidence allowed, even for mistakes.
c. CA: does not per se exclude extrinsic evidence but will allow it under certain circumstances.
10. Will Lapse
a. Lapse: if a beneficiary fails to strive the testator, the gift is said to lapse. Lapse gift fails.
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Test Outline
Daar (Fall 2015)

NOTE: beneficiary dies before will executes the gift is void; beneficiary dies before
the testator the gift lapses
b. Default Takers or Failed Gifts
i. If a gift fails, it falls to the residuary, otherwise intestacy
ii. If a residuary gift fails completely, it falls into intestacy
iii. If part of a residuary gift fails, then:
1. CL: goes into the residue that did not fail
2. UPC: goes to the other devisees
c. Classification of Gifts
i. Specific Gifts: a gift or specific items or property either real or personal, a particular
piece of property anything that can be specifically identified.
ii. General: gift of monetary or pecuniary benefit gift of some pecuniary amount.
iii. Residuary: the rest of the estate
iv. Class Gifts: multiple gifts that share a common attribute. Reasonable presumption.
d. Anti-Lapse (to save failed gifts)
i. Death of Beneficiary before Testator: requires the gifts to the deceased beneficiary,
who is closely related to the testator, be given to the beneficiarys heirs.
1. Lapse
2. Predeceased beneficiary meets the statutory degree of relationship to the testator;
and
3. The predeceased beneficiary has living issue who survive the testator.
4. Result: the lapsed gift will go to the issue unless the will expresses a contrary
intent
5. CA Result: any beneficiary who is related to either the testator or the testators
spouse. Anti-lapse does not apply to the testators spouse.
ii. Death of a Beneficiary of a Class before the testator
1. CL: gift would be shared among the remaining class members
2. Majority J/x: the gift goes to the deceased members issues not the remaining
members.
3. DOES NOT APPLY: if the member dies before the will is executed and the
testator is aware.
11. Change in the Testators Property
a. Ademption (death of the property): applies to specific gifts, does not apply to general or
residuary gifts.
i. Ademption by Satisfaction: Descendant/ Heir acknowledge advancement was made or
the decedent receives the property during the testators lifetime.
1. Advancement: Hodge podge scenario and advancement is not presumed unless
the decedent or heir has acknowledged the advancement. (Decedent
acknowledges intervivos gift satisfies entire amount)
ii. Ademption by Extinction: property is no longer available because it is not owned by the
testator at death. Gifts that changed form is not adeemed, and is given to the beneficiary.
Gifts that change in substance is adeemed.
1. Change in Substance
a. CL: with specific gift, the executor is required to go back through the
testators probate estate to see if the gift can be identified. If the gift
cannot be found, then it is adeemed.
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b. Modern Intent Theory: using extrinsic evidence of the testators intent.
b. Abatement: lack of sufficient funds in the testators estate to pay the devises in a will.
i. Order of reduction (first to last):
1. Residuary Gifts
2. General Gifts
3. Specific Gifts
12. Rights of Spouses and Issue omitted from the Will
a. Marital Property Distribution: presumption that a spouse did not intent to omit the surviving
spouse. The law imposes an omitted or preterminated spouse share.
i. Typically equal to the intestate share
1. Exception:
a. Intent in the will to exclude
b. Gifts provided outside the will
c. Whether there was a prenuptial agreement
ii. If the testator devises all property to child or decedents from a prior marriage, the
surviving spouse will not receive an omitted share.
b. Protection of Issue Omitted Children: generally not protected by disinheritance. Exception is
presumed unintentional.
i. Will made prior to birth with no change, codicil or updates. The law will presume the
omission was unintentional and allow the child an intestate share.
13. Trusts
a. Use of Trust in Estate Planning: a trust is a method of holding title to property and transferring
private wealth.
1. Trustor: person that has the property to transfer
2. Trustee: responsibility to manage the property on behalf of the beneficiaries.
3. Trust Property: corpus, res or principle.
ii. Reasons to put property into trusts
1. Avoid Probate: trust created during someones lifetime is a will substitute and as
a will substitute it avoids probate for the property that is placed in the trust.
2. Assures proper management of the property
3. Allows for interfamily wealth transmission
iii. Transfers in trust and declaration of trust: follow the same rules and needs to have a
declaration of trust
b. Required Elements of a trust
i. Settlor: person placing property in a trust. Does not have to be a living person, can be a
testator.
ii. Trustee: owes fiduciary duties for the management of the property. Court can take over
as a trustee if one is not named.
iii. Beneficiaries: who enjoys the property, does not have to be a living person. Cannot have
a trust for a pet, needs to be a human being.
1. Private Trusts: must have one or more ascertainable beneficiaries to whom
trustee owes fiduciary duties and who can call trustee to account. It must be for
the benefit of the beneficiaries. The beneficiaries need not be ascertained when
the trust is crated only ascertainable. If at time trust becomes effective,
beneficiaries too indefinite to be ascertainable, the attempted trust will fail for
want of an ascertainable beneficiary.
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iv. Property: A present, identifiable interest in property. It can be a future interest, but it
must be presently identifiable.
v. Intent to Create: Clear language
vi. Valid Trust Purpose: cannot be for illegal purposes or against public policy.
vii. Delivery: the trust property in a testamentary trust must be delivered by the executor into
a testamentary trust. Settlor must show intent to deliver asset to the trustee in an
intervivos trust.
c. Intervivos Trust: will substitute, does not have to follow formalities
i. Revocable Trust: the settler remains the right to revoke, alter, to amend during the
settlors life time. The modern presumption is that a trust is presumptive revocable unless
it is specifically irrevocable.
1. Leskar Rule: beneficiaries under a revocable trust have no legally enforceable
interest in the trust as long as it is revocable. A trustee owes no duties to the
expectant beneficiaries, and there is no standing to sue.
d. Oral Trust
i. UPC: permits oral trust, but needs clear and convincing evidence of the oral trust.
e. Type of Trusts
i. Mandatory Trusts: trustee must make a distribution of either principle or income to a
beneficiary according to express terms.
ii. Discretionary Trusts: 3 types
1. Pure Discretionary Trust: disperse of assets is in the sole discretion of the
trustee. Beneficiary or creditor cannot compel the trustee to make a certain
distribution.
a. Beneficiary can bring an action against the trustee if there is an arbitrary
or fraudulent reason for the trustee to not distribute the property. The
creditors cannot bring an action.
b. Creditors can receive a cutting off distribution procedure how to pay the
creditors first.
2. Support Trust: discretion has to be exercised to provide support for the
beneficiary. The support is tied to a group of standards the settler wants to give
the beneficiary (traditionally: health, maintenance, and education).
a. Creditors cannot compel the trustee to make payments. Creditors can ask
for distribution if the purpose of the support is for the creditors (i.e. food
supplies or medical services)
b. Family obligations, child support, alimony, or maintenance upon
dissolution also seek to reach trust.
3. Discretion Support Trust: settler uses explicit discretionary language with
language that in itself, would be deemed to create a support trust. The effect is to
establish the minimal distribution a trustee must make to comport with the
settolors intent of providing basic support, while giving the trustee broad
discretionary powers.
iii. Spendthrift Trusts: only valid if it prohibits both voluntary and involuntary. It places
restrains on the alienation and encumbrance of beneficiarys interest in the trust, thus
keeping it safe from Beneficiarys creditors and preserving it for future generation.
1. Beneficiary may not assign his interest to have his interest reached by creditors
until the trustee makes payments of trust income or principal to beneficiary.
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f.

g.

h.
i.

iv. Remedial Trusts: operations of law, implied intents. Results in Constructive Trusts.
1. Arises:
a. An express trust fails to make an incomplete disposition of the trust
property
2. Constructive Trusts: used as a remedy for unjust enrichment. There is no trustee,
but the constructive trust orders the person who would otherwise be unjustly
enriched to transfer the property to the intended party.
a. Elements:
i. Confidential or fiduciary relation
ii. Promise, express or implied
iii. Transfer made in reliance on that promise; and
iv. Unjust enrichment
Testamentary Trust: created in a testators will, and must be in writing. If the testamentary trust
fails for wont of writing, the result will depend on if the trust was a secret or semi-secret.
i. Secret and Semi-secret
1. Secret Trust: a testamentary trust that fails because the terms of the trust are not
set forth in the will. On the face of the will, the secret trust looks like a gift, and it
lacks indication that the devisee is taken as trustee. Court uses extrinsic evidence
to impose a constructive trust.
2. Semi-Secret Trust: includes no terms of the trust but hints at the devisee being
the trustee. Courts will not take extrinsic evidence, but the gift will fail. The court
will impose a resulting trust falls to the residuary or if the trust was the
residuary, then falls to intestacy.
Modification and Termination of Trusts
i. Rule: administrative provisions and disposition provisions.
1. Administrative Provisions: provision to the trustee stating its duties and
power/discretion.
2. Disposition Provisions: states the details and terms of the payments.
ii. CL (Claflin Doctrine): a trust cannot be modified or terminated if doing so would
interfere with the trusts material purpose. It can be modified if the settler and all
beneficiaries agree.
iii. ML (Changed Circumstances Doctrine): changed in unforeseeable circumstances, and
the modification or deviation will further the interests of the trust.
Pour-Over Will: has a will and trust. The will directs the executor to pour over any existing
assets to a trust. Intervivos revocable trust may be funded during the lifetime of the testator/
settler.
Trustee Duties
i. No self Dealing, unless court ordered; settler gives power; or all the beneficiaries
consent.
ii. Court looks to good faith and fair dealing.
iii. Prudence Investor Rule: trustee has a duty to the property
1. To not speculate
2. To not diversify
3. To not comingle
4. To not earmark
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